Home Solar Panels: Worth the Hype?
With the array of renewable energy sources we have today, solar power is still the most viable alternative source of household energy. Federal, state, and local tax incentives have made it cheaper than ever to install a solar power system. Additionally, solar panels have gotten more affordable and are improving in efficiency, which also makes installation more economically feasible. Although home solar panels are becoming more plausible financially, they are still far from making economic sense. In this post, we’ll discuss if home solar panels are right for you.
About Solar Power
Did you know that heating needs account for about half of the average American home’s entire energy costs? Capitalizing on solar appliances can alleviate this burden, which has generated quite a buzz about solar power recently. Solar panels typically refer to photovoltaic, or PV, modules. Photovoltaic modules convert sunlight directly into electricity, and they are the fastest-growing energy technology in the world. In addition to solar panels, a PV system also requires a mounting structure to angle panels toward the sun, an inverter to convert DC to AC, battery storage for inclement weather conditions, and a charge controller to modulate battery operation. Clearly, the installation of a PV system is quite involved and requires more than just the much-hyped solar panels.
Does It Make Financial Sense
Whether a solar panel system makes sense for you depends on your reasons for purchasing one. If you want to save the planet, then solar energy is an excellent way to reduce your carbon footprint and make your home more eco-friendly. However, if you’re interested in solar power to save money, you should probably hold off. Currently, even with large tax incentives, the inefficiency and cost of solar power makes it impossible for the typical household to save money by installing them. To illustrate why solar panels don’t make economic sense, we’ll provide an example based on the Department of Energy’s online solar power calculator. If a homeowner in New Jersey had a higher-than-average $100 per month electricity bill, he/she could purchase a solar panel system for $54,000. After the state tax rebate of $18,648 and a $2,000 federal tax credit, the system would cost $33,532. The homeowner would then have to wait 11-22 years before any savings were realized.
In Defense of Solar Energy
Depending on where you live, the benefits of solar energy may be more substantial. For instance, in California, which has some of the most enticing financial incentives, a household might be paying $250 per month just to stay cool in the warmer months. In this case, it’s feasible that the homeowner might break even just three to eight years after installing solar panels. Similarly, some solar energy advocates argue that the installation of solar panels drastically increases a home’s value, thereby justifying the initial cash outlay. For example, the Department of Energy estimates that the New Jersey property discussed previously would increase in value by $11,000-$21,000.
