One of the most significant costs to maintain a home is electricity which is why solar panels are ideal solutions for homeowners. It does not take much to understand why solar in Los Angeles markets are larger than any other United States city. When it comes to calculating the benefits, it can be difficult to compare the upfront cost against the long-term savings when unaware of all the perks of solar panels. Before committing, let’s look at a few factors that matter.
Calculating Electric Bills and Solar Panels
To understand solar panels, you first must calculate how much you are spending on electricity annually. According to the Energy Information Administration (EIA), the average electric bill in the U.S. is around $1,425 a year. Even though past bills have only increased by 2.2 percent through the years, inflation is an unknown variable which may fluctuate the price models considerably.
When thinking about future bills, it is within the scope of possible savings, which is another benefit to install solar panels now while there are still government incentives and lower solar panel prices. As solar panels have upfront costs, the only expense you pay for later will be the maintenance expenses, which you can offset by producing additional electricity.
Sharing the Wealth
If you use more than you produce, you might have small monthly bills. On a positive note, your panels still connect to the power grid. Many utility companies reimburse you for the power feed when your meter has a negative reading. Net metering programs enable solar panel owners who produce an abundance of power to feed the neighbors’ homes as well. Participants will receive a credit for both commercial and residential providers. The national average of homes that meet their utility demand is 93 percent, which means the incentive supports profit production.
Experts suggest taking the time to research models to find an affordable solar panel system. The national average for 20-year savings varies based on installation, usage and cost of electricity. The first primary factor that offsets savings is the cost of solar panels. The average cost of a 5-kilowatt system is between $15,000 and $25,000. You then must factor in the savings of tax credits and other incentives available to you. As solar panels have a shelf life of 20 years, the likelihood of turning your installation costs into long-term savings is high.
What Incentives Reduce Expenses?
The most significant incentive that lowers costs is the federal tax credit for residential installations. If you install before the end of the 2019 tax year, you will save 30 percent of your installation expenses. In 2020, you will only save 26 percent. By the last year available, 2021, your savings reduce to 22 percent. There are also additional credits available for certain locations that include incentives like property tax exemptions, cash back offers and expedited permits. You can search the state database for additional incentives available to you.
When gauging the value of solar panels, homeowners generate savings between $10,000 and $30,000 during a 20-year span. Adding to that the benefit of home value increases, they make for a very sound and risk-free financial decision.
Have you invested in solar panels yet?
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