If you’re a homeowner, you’ve probably had someone tell you, “solar panels will save you money because they’ll cut your electricity bill.” They will definitely cut your electricity bill, but keep in mind that solar panels require an investment up-front that may significantly affect how much you actually save.
According to the U.S. Office of Energy Efficiency and Renewable Energy, solar panels are more affordable and accessible than ever before. Although, they can still cost between $10,000 and $20,000 for installation.
With that in mind, are solar panels worth it? The following will cover five factors that can help you determine whether or not solar panels will be a worthwhile investment for you in the year ahead.
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How to Determine If Solar Panels Are Worth It
From an environmental perspective, solar panels are absolutely worth it. Solar energy is great for the environment and will play a key role in combating climate change and creating more sustainable cities.
Of course, if you’re asking yourself, “are solar panels worth it?” then you’re probably wondering about the numbers, not the green factor.
When you install solar panels on your rooftop, you’re basically putting a mini power plant on your home that generates electricity for you. Solar panels can significantly offset or eliminate your electricity bill, which can save you a ton of money over a long period of time.
But the equipment and installation are expensive, running anywhere from $10,000 to $25,000. Many homeowners are concerned that the upfront costs will negate any savings on electricity.
There are five steps you can take that will help you determine whether or not solar panels are right for you:
[Pro Tip: If you’re thinking about getting solar panels, you must act quickly! Solar energy is getting cheaper every year, so many government tax incentives are being rolled back. We’ll discuss this later on.]
1. Review Your Electric Bill
Here’s a fundamental rule for solar panels: the higher your electricity bill, the more you’ll benefit from solar panels. If your electric bill is very high, then you’re probably going to save more money with solar panels. If your electricity bill isn’t very high, then you’re less likely to save money.
Take a look at your electric bill, and try to determine how much money you spend on electricity in one year, five years, and ten years. That should give you a pretty good idea of how much you stand to save with solar panels.
Keep one thing in mind: electricity rates can fluctuate sharply. If there are national changes in energy consumption or electricity prices, then the amount of savings can change.
For example, assume that you’re paying 12 cents per kilowatt-hour for electricity. If electricity consumption in your area increases (if more people are using more electricity), then your bill may increase from 12 cents per kilowatt-hour to 20 cents. That would increase your electricity bill, and you may now find it more worthwhile to install solar panels.
Keep an eye on your local housing market and make an educated guess on what your area’s average electricity costs will be over the next several years.
2. Estimate Solar Panel Costs
A solar cost calculator can give you a rough estimate on how much it would cost to install solar panels on your home and how much you could save.
When using a calculator, you’ll have to know how much energy you consume on average. That information should be listed on your monthly utility bill. Your monthly average will determine what size solar system you need to cover your electricity needs.