How much money you save overall using solar panels is determined by several different factors. Solar Opportunities brings to you an analysis of it.
Do solar panels truly provide a return on investment?
The amount of time that it takes to earn back your initial investment is called the payback period. Solar panels can help you save enough money on your monthly energy bills over time to make up for the initial investment required to get them. The size of your solar system, the amount of energy your home consumes every month, and a number of other factors will determine how much money you save each month.
Determine the costs involved upfront.
To begin, you will need to estimate the amount of money required for your initial investment. As part of setting up your service, in addition to the prices associated with the system, you should factor in any potential charges associated with installation and any other fees. First, get several cost estimates for the work in your location, and then go from there.
Financial incentives can be of great assistance.
A one-time tax credit of up to 26% of the system's purchase price can be made available to homeowners that install solar panels. If the initial investment in solar panels in your region is normally approximately $20,000, then the tax credit you are eligible for would net you $5,200 when you file your next set of taxes.
You are responsible for being aware of the amount you spend monthly on your power bill.
This estimate is based on the premise that all of your power will come from solar sources. Some houses will be able to acquire all of their power from the sun, and they may even be able to sell any extra power they produce back to the utility company. However, other houses will still have to pay for some of their electricity through traditional means. This will vary greatly from property to property, based on factors such as the number of solar panels placed, the average amount of electricity used, and more.
Determine how long it will take for your solar panels to pay for themselves.
First, take the cost of your solar panels and multiply that number by 0.26, which is the percentage of the federal tax credit you will receive for installing your system. If you originally invested $20,000, you will be eligible for a tax credit of $5,200. This brings your total initial investment to $14,800 rather than $15,000.
Now, let's consider how much money we'll save on energy. The time it takes for your savings to match the amount you spend on electricity can be calculated by dividing your initial investment by the typical annual payment of $1,500 to the electric company. Using the above illustration as a guide, you would divide the total amount of your first investment, $14,800, by $1,500: As a consequence, the repayment term comes to a little under ten years.
On the surface, this may appear to be a significant amount of time, but solar panels can endure for 25 years in reality.
You can shorten the time it takes for your investment to pay for itself by selling renewable energy certificates, often known as RECs. The amount of electricity generated by a renewable source is measured in megawatt hours. Because electric companies are required to purchase a certain amount of electricity from renewable sources, you may be able to save more money by selling the energy that your solar panels produce.