Solar energy continues to gain popularity among homeowners and, by now, you've likely heard of its benefits. From saving you money on your electric bills to improving the environment, solar panels may sound like the greatest thing since sliced bread.
However, deciding to install solar is a huge investment, one that you shouldn't take lightly. While they may prove both practical and profitable to some, solar panels can be more work and money than their worth if you don't do your research.
So, are solar panels a practical investment for your home? Here are a few questions to ask yourself before committing to this renewable energy source.
1. How High Is Your Electric Bill?
The more expensive your electric bill, the more potential you have to save by switching to solar. Currently, the U.S. average price for residential electricity is about 13 cents per kilowatt-hour. If you pay more than this, you might save a substantial amount of money through solar. Of course, electricity rates are volatile and fluctuate, so your savings may do the same. Review your statement history to determine how often these fluctuations might occur.
2. How Much Does Solar Cost?
The price of installing and maintaining residential solar panels varies depending on where you live, which solar company you hire and what kind of equipment you decide to purchase. That being said, you can expect to pay anywhere between $10,000 and $30,000 for a six to 10 kW system after a 26% federal tax credit. However, the average price for a six kW system is $12,810 in the U.S.
3. Must You Live Somewhere Sunny?
If you live in a state with high energy prices and lots of sun, installing solar panels could save you hundreds or even thousands of dollars every year. Yet, solar panels may still prove practical even if you experience more cloud cover. In fact, states like New York and Massachusetts — which experience plenty of cloudy days — install more solar than anywhere else in the country. Therefore, even if you don't live in California, you may still benefit from solar.
4. Should You Buy or Lease?
Whether you choose to buy or lease your panels will directly affect their practicality and their long-term value. If you have enough money to purchase them outright, doing so will allow you to save more money. On the other hand, if you lease, you'll save far less than if you were to purchase them outright or with a loan. Plus, at the end of the lease, the company has the liberty to remove the panels, taking your savings along with them.
5. Are You Planning to Move?
Trying to take solar panels with you when you move can be incredibly costly. Therefore, if you plan to install panels on your home, plan to live there for another decade or two before moving. By then, your savings will have either offset the cost or helped you make a small profit. Then, you can sell the panels with your home and earn even more return on your investment. On average, homes with solar sell for 4.1% more than those without.
6. Do You Have Enough Space?
Most solar panels take up 15 square feet of roof space each and, in the U.S., the average residential system includes 20 panels. This adds up to 300 square feet. Even if your roof does have this much surface space, it'll do you no good trees or other houses shade it. Moreover, the International Fire Code requires you to set panels at least three feet from the edge of the roof. Measure your roof to determine how many panels are practical.
7. What Will You Save?
Just how much will you save, then? Depending on how sunny it is and how you choose to finance your solar panels, you'll either reduce or completely eliminate your electric bill. On top of that, the grid may pay you for any excess energy your panels produce. Plus, installing panels will increase your home's resale value. Thus, solar panels may save you tens of thousands of dollars, but you'll have to wait a few years before savings offset your investment.
Compare All Your Options
Installing solar is a huge investment. While it may not be as expensive as purchasing a home, you should approach the decision with a similar amount of caution and consideration. Just as you would with a home, shop around to find the company that offers the best bang for your buck. Moreover, remember to consider small, local companies with good reviews. They tend to offer lower rates compared to larger companies with a stronger marketplace presence.
If you make the right decision by choosing a system that works for you and your budget, installing solar panels can be profitable and practical.