Is Going Home Solar Worth It?

Home solar panels, also known as rooftop photovoltaic (PV) systems, allow homeowners to generate their own electricity. The number of homes with rooftop solar panels has increased rapidly in recent years, but many homeowners still wonder if going solar is really worth the investment. This article will examine the key factors to consider when deciding if home solar is worth it, including upfront costs, available rebates and tax credits, electricity bill savings, increased home value, environmental benefits, required maintenance, warranties offered, and alternatives to owned systems.

Table of Contents

Upfront Costs

The upfront costs of installing solar panels on your home can seem daunting. According to EnergySage, the average cost of an 11 kW solar panel system in 2024 is around $22,022 after federal tax credits [1]. Costs vary depending on the size of your system, your location, available rebates and incentives, and more. For example, a 5 kW system may cost $10,000 to $15,000 while a 10 kW system ranges from $15,000 to $25,000 [2].

While the upfront investment is significant, the electricity bill savings typically make up for the costs over the system’s lifetime. Installing solar lets homeowners lock in lower energy rates for 20+ years. For the average home, a solar system saves $9,835 to $14,175 in electricity costs over 20 years compared to no solar. These bill savings offset the purchase and installation costs to provide a strong return on your investment.

Available Tax Credits and Rebates

There are a number of federal, state, and local incentives that can help offset the upfront costs of going solar for your home. The main federal incentive is the solar Investment Tax Credit (ITC). According to the Department of Energy, the ITC offers a 26% tax credit for systems installed in 2020-2021 and 30% for systems installed from 2022 onward.

The ITC applies to both residential and commercial solar installations and there is no cap on the amount that can be claimed. The credit is based on expenditures and must be claimed in the year the solar system is installed. If the tax credit exceeds your tax liability for the year, any excess amount can be carried forward into future years. According to the IRS, the credit remains at 30% for systems installed through 2032.

In addition to the federal ITC, many states and utilities offer additional incentives like rebates and tax credits to go solar. These can further offset the costs. For example, California offers tax credits worth thousands for residential solar installations. It’s important to research state and local incentives available for your area.

Electricity Bill Savings

Installing solar panels can significantly reduce monthly electricity bills. According to MarketWatch, at an electric rate of 16 cents per kWh, expected annual power bill savings range from $1,280 to $1,600 for a typical residential system.

EcoFlow Blog estimates that the average 5 kW home solar system can save $100 to $150 per month on electricity bills. However, the actual savings depends on several factors like electricity rates, system size, solar radiation in your area, net metering policies, and electricity usage.

An analysis by EnergySage found the average homeowner saves between $20,000 and $96,000 over the 25-30 year lifetime of a solar panel system. Areas with higher electricity rates like California and New England see greater savings than low-cost electricity states.

The orientation and tilt of the solar panels impact production and savings. Optimal solar orientation is true south facing in the Northern hemisphere. Panels tilted at latitude receive maximum annual solar radiation. Tracker systems increase output but add costs.

Net metering policies also determine savings. With net metering, excess solar energy is exported to the grid, offsetting electricity drawn from the utility at night. Areas without net metering receive lower savings from home solar systems.

Energy efficiency upgrades like LED lighting, insulation, and EnergyStar appliances combined with solar panels provide the greatest long-term savings on monthly electricity costs.

Home Value Increase

Multiple studies have shown that installing solar panels can increase the value of your home. According to a study by Zillow, homes with solar panels sold for 4.1% more on average compared to similar homes without solar panels [1]. The increased value varies based on location, with certain states like California seeing larger increases in home value from solar panels.

Research by the Lawrence Berkeley National Laboratory found that for each 1 kW of solar panels installed, a home’s value increased by $4,290 [2]. So a 5 kW system could increase your home’s value by over $20,000. This makes solar panels an attractive investment for many homeowners looking to increase their home’s resale value.

It’s important to note that larger solar panel systems don’t necessarily result in larger increases in home value. The value increase depends more on the local real estate market and how much buyers value solar panels in your area. But overall, having solar panels installed has been shown to provide a return on investment when it comes time to sell your home.

Environmental Benefits

Installing solar panels provides numerous environmental benefits compared to fossil fuel energy generation. Solar power produces no air pollution, greenhouse gases, or waste products when generating electricity (1). Harnessing energy from the sun reduces dependence on finite fossil fuel supplies, helping preserve these non-renewable resources for other important uses in the future. Widespread adoption of solar power could significantly reduce greenhouse gas emissions that contribute to climate change (2).

Generating 1 kilowatt-hour of electricity from a residential solar system avoids emitting around 1 pound of carbon dioxide into the atmosphere. Over 20 years, a 5 kilowatt solar array can offset more than 100 tons of carbon emissions, equivalent to planting over 1,500 trees (3). Solar energy production causes no noise or habitat disruption. Solar farms can be designed to minimize land usage and allow vegetation growth under panels.

In summary, solar power provides clean, renewable energy while minimizing negative impacts on the environment. Wider deployment of solar energy systems can help mitigate climate change and preserve natural resources for future generations.

Sources:

(1) https://www.eia.gov/energyexplained/solar/solar-energy-and-the-environment.php

(2) https://www.energysage.com/solar/health-environmental-benefits-of-solar-energy/

(3) https://www.energy.gov/eere/solar/solar-energy-wildlife-and-environment

Maintenance Requirements

Solar panels require some regular maintenance to keep them operating efficiently. The most common maintenance task is cleaning the panels to remove any dirt, dust, bird droppings, leaves, etc. that can accumulate on the panels and block sunlight. It’s recommended to clean solar panels at least 2-4 times per year, especially during the spring and fall when more debris tends to accumulate.

In addition to cleaning, it’s important to visually inspect the panels and electrical connections for any damage or issues. Checking for cracked/broken panels, loose wiring, corrosion, etc. can help identify problems early. Most solar companies recommend an annual inspection by a qualified solar technician.

System monitoring is also an important aspect of solar maintenance. Most solar arrays come with a monitoring system that tracks system production and can alert homeowners to any drops in output. Monitoring production can help diagnose issues quickly so they can be addressed. System monitoring can often be done through a smartphone app or online dashboard.

According to Fixr, typical maintenance costs range from $300 – $700 per year for a standard residential solar system, with most homeowners paying around $400 annually. Proper maintenance helps solar panels perform optimally and extend their usable lifespan.

Warranties

Solar panel manufacturers typically offer warranties that guarantee system performance and cover defects for a certain period of time. According to the solar experts at MarketWatch^[1], the standard solar panel warranty includes:

A performance warranty, which guarantees a certain level of power output over time. This is usually 25 years.
A product warranty, which covers defects and workmanship. This ranges from 5-10 years.

For example, Canadian Solar provides a 12-year product warranty and a 25-year performance warranty that guarantees at least 80% power output through year 25^[2]. These manufacturer warranties ensure you’re covered in case any issues arise after installation.

In addition to solar panel warranties, most installers offer workmanship warranties on the full system installation, typically for a period of 5-10 years. This protects against any improper installation or craftsmanship defects.

When comparing solar panel warranties, consider the product and performance warranty lengths, as well as the guaranteed performance level over time. Also confirm any installer workmanship warranties. This provides peace of mind on your investment.

^[1] https://www.marketwatch.com/guides/solar/solar-panel-warranty/

^[2] https://palmetto.com/learning-center/blog/solar-warranty-guide-how-to-compare-solar-panel-guarantee

Alternatives to Owned Systems

Besides purchasing and installing solar panels on your own roof, there are some alternative options to go solar that don’t require owning the system yourself:

Leasing Solar Panels: Solar leases allow homeowners to lease solar panels from a solar company. The homeowner pays a fixed monthly payment, while the solar company handles installation, maintenance, etc. Leasing can provide cost savings without high upfront costs.

Community Solar: With community solar, customers buy or lease part of a larger, shared solar array located offsite. Participants receive credits on their electricity bills for their share of the energy produced. This allows access to solar savings without installing on your own property.

While owning your own solar panels has its advantages, leasing and community solar offer more flexible and affordable solar options for those who can’t purchase their own system.

Conclusion

So is going solar worth it for your home? There are several key factors to weigh as you consider this major investment:

Costs: What are the total upfront costs, available rebates and tax credits, estimated bill savings, and payback period? The financials may make sense for some homes but not others.

Home Value: Research shows solar can increase a home’s value and appeal to buyers. But magnitude depends on your local market.

Environment: Going solar reduces your carbon footprint. Determine if those environmental benefits make the investment worthwhile.

Maintenance: Solar panels require little maintenance but inverters may need replacement after 10-15 years.

Warranties: Quality solar equipment comes with 20-25 year product and performance warranties. Understand coverage.

Carefully weighing these factors will determine if home solar power is a smart investment for your specific situation.