Should I Get Solar Panels And Are They Worth It?

Thinking about going solar? You wouldn’t be the only one. An estimated 67% of non-solar households are interested in solar because of its numerous long-term benefits. Installing solar panels can help you reduce or eliminate energy costs and provide many other benefits to you and your home.

If you’re still on the fence or unsure whether your home is a good candidate for solar energy, let’s break down the case for switching to this green energy option and explore all the pros, cons and costs you can expect.

What Are Solar Panels?

Solar panels contain solar cells that collect light from the sun and convert it to electrical energy that can power your home. Installing solar panels can be a great way to lower your electricity bill and help reduce your carbon footprint to achieve a more energy-efficient household.

How Do Solar Panels Work?

During the day, solar panels absorb energy from the sunlight that hits them. The sun’s energy creates an electrical charge an inverter converts into a form of energy your home can use. Excess energy is usually stored in photovoltaic batteries, so even when it’s dark or cloudy, you can still use the power generated by your solar panel system. With enough solar panels and enough sunlight, you can potentially power everything in your home.

Do Solar Panels Save Money?

Depending on where you live and your current electricity rates, solar panels may save you a lot of money. This is especially true if you live in a sunny state like California, Hawaii, Florida or Arizona. Solar energy saves you the money you would have spent on an electricity bill – so if your monthly bill is through the roof, you can benefit from the switch to solar.

According to ConsumerAffairs, the average cost to install solar panels in the U.S. is $12,000 (after tax incentives). While the upfront price may seem steep, you should know that most solar panels pay for themselves after 8 years. In sunnier states, you may recover your costs in as short as 3 years.

So yes, solar panels can save homeowners a significant amount of money, which is one of the main reasons they’re one of the most sought-after energy-saving products for a home. But keep in mind that savings can vary depending on where you live, how many panels you can fit on your roof and the average cost of your monthly electricity bill.

How To Calculate Solar Panel Costs

So, what would it cost to get solar panels? We’ve already established that the average cost tends to be around $12,000 for an entire solar setup, but that sum can vary significantly depending on where you live, how many hours of sunlight your home receives in a day, etc.

To help you better estimate how much you can expect to spend, let’s go over the steps to calculate your potential solar panel power needs and costs.

1. Evaluate Your Electricity Bill

The first step you should take if you’re interested in getting solar panels is to look at your current electric bill. In 2019, the average U.S. resident paid $115 a month for electricity, according to the U.S. Energy Information Administration. By using solar power, you can lower that monthly cost – or potentially eliminate it. If you paid $115 a month, you could save roughly $1,380 a year by switching to solar energy. Of course, this number doesn’t account for higher bills during scorching summer months or states with higher energy consumption due to weather.

2. Review Costs For Panels And Installation

The savings solar panels provide are great – but they aren’t free. It can be pretty costly (upfront at least) to install solar panels on your roof. Depending on the wattage, each solar panel typically costs $150 – $300. Your total costs can start to add up once there are multiple panels and installation costs involved. According to the Center for Sustainable Energy (CSE), the average 5-kW residential solar panel system costs around $15,000 – $25,000 before tax incentives (more on that later).

Keep in mind that there may be other additional charges coming your way in the future. Solar panels can break down over time or become damaged, and you’ll need to pay for the maintenance and upkeep of your solar energy system.

3. Assess Your Home’s Sunlight Exposure

Your home’s daily sunlight exposure (or lack thereof) can also be a big factor in what you can expect to spend and save when investing in solar panels. If you live in a very sunny state, your panels will produce more energy, which means you stand to save significantly more on electricity costs. If you live in a less sunny state – like either of the Dakotas, which are consistently rated some of the “worst” states for solar power – you may not save as much thanks to cloudy weather and fewer solar companies operating in the states.

4. Consider Solar Panel Financing

Another important thing to consider is how you’ll pay for your solar energy system. Some home buyers purchase a house with solar panels. And some homeowners may have $12,000 – $20,000 on hand to pay for solar panel installation. But the rest of us will likely have to find another way to finance this investment.

One option to consider is paying for solar panels with a personal loan. Unsecured personal loans are a popular choice for solar panel financing. You can also finance a solar system with a cash-out refinance, a home equity loan or a home equity line of credit (HELOC). You can also lease solar panels, though leasing may not make financial sense for all homeowners.

5. Research Government Incentives

While they generally pay for themselves and help you save thousands in the long run, solar panel systems can be very costly to install. Luckily, the federal government and state and local governments offer plenty of incentives – like tax benefits and rebates – to make adopting solar power more affordable.

To see what policies and incentives there are in your state, check the Database of State Incentives for Renewables and Efficiency (DSIRE).

Pros And Cons Of Solar Panels

Not sure if solar panels are right for you or whether they’re a good investment? Let’s break down some pros and cons of solar panels and installing a solar system.

Pros

• Solar power reduces electricity bills. Solar energy can replace the electricity you pay for and lower your bills – or do away with them.
• Solar panels minimize carbon footprint. Unlike other forms of power, solar energy is renewable, has low operating costs and doesn’t produce harmful emissions.
• Net metering allows homeowners to profit from excess energy. Net metering is a process that allows homeowners in some states to sell excess energy produced by their solar panel system back to their area power grid for a profit.
• Government programs incentivize solar power installation. Many government programs will give you a tax credit for installing solar panels. For systems installed in 2023, you can get a federal solar tax credit of 30%.
• Solar technology is more advanced and longer lasting than ever. While installation may be costly upfront, your solar system could power your home for 20+ years. That’s a lot of money saved over time – and great for the environment.

Cons

• Upfront solar panel costs can be high. It’s not cheap to switch to solar power. Installing a solar panel system can cost as much as $15,000 – $20,000 upfront. And even after tax credits, the average cost of installation is $12,000.
• Solar efficiency depends on the weather. If it’s usually dark or cloudy where you live, solar panels may not be worth the investment and may not provide the savings you want.
• There may be solar power limitations in your region or state. Some regions or states have rules that prohibit homeowners from using solar energy to power their homes. This kind of rule would make it impossible for you to get solar panels.
• Lower electricity costs add up to lower savings. If your electricity bill is already low, investing thousands in a solar system won’t pay off right away. In this case, installing solar panels may not be a financially sound decision for you.

Should I Get Solar Panels On My House?

Most homeowners eventually see a benefit from their solar power system but may wait up to 10 years to see an energy payback, according to the U.S. Department of Energy.

Here are some situations when it may make sense for homeowners to consider investing in a solar panel system:

• Home gets sufficient sun exposure
• Homeowner has high energy bills
• Homeowner qualifies for solar tax incentives

Whether getting solar panels is right for you will depend on the factors we outlined above in addition to your answers to how long you plan to stay in the home and how committed you are to contribute to a cleaner environment with clean energy.