Do They Really Make a Difference? How Much Money Do Solar Panels Save Residential Homeowners?

You’re environmentally conscious, and you do your part.

You’ve swapped out all your plastic water bottles for a reusable one.

You compost.

You’ve heard a lot of great things about solar panels, and have been considering switching to solar energy for a while.

But let’s get real—why should anyone spend thousands of dollars on new solar panels if they only really save you a few cents a year?

How much do solar panels save?

The answer to this question will be different for each family. There are a lot of moving parts to consider.

Keep reading while we shed some light on this…

The Big Expense: Cost of Installation

The huge upfront cost is what scares most homeowners away from installing energy-saving solar panels.

An average 6kW home system costs anywhere from $15,000 to $25,000 to install before tax breaks.

Why so expensive?

  • 30% of that installation cost goes toward purchasing the solar panels.
  • 20% of what you’re spending will pay for BoS, or Balance of System. Your solar panels are useless without the right technology to help them tilt toward available sunlight.
  • 20% pays for inverters and the cost of operation. You’ll need to be able to convert all that direct current (DC) sunlight power into the alternating current (AC) your home’s power grid can use.
  • 15% will cover installation labor.

The remaining 15% is accounting for any maintenance or permit fees in the future.

Sounds like a lot, right?

But here’s the thing, there are…

Tax Incentives For Homes Going Solar

That’s right!

You get free government money the year you switch to solar energy.

After coughing up the intimidating price of solar panel installation, you qualify for:

  • Cash rebates from your state that may help pay for 10-20% of installation costs while the solar panels are being installed
  • State tax credits that can subtract a percentage of your solar installation costs from the total tax amount you owe the state
  • The Investment Tax Credit or ITC from the Federal Government that pays for 30% of your installation costs (valid until the year 2022)

Sounds like Uncle Sam really wants you to switch to solar energy.

Alright, so how does all this labor and tax math end up being worth it?

Long-Term Solar Paneling Benefits

Your solar panels will generate more than enough energy to power everything you use in your home.

This means you won’t need to buy your energy from your state municipality anymore. In fact, you’ll have extra solar energy you can sell to the state if you want.

For argument’s sake let’s assume you use the same 11,000kWh in a year as the average American household.

When you buy your electricity from a local energy company, you’re at the mercy of whatever price per kWh they want to charge you. Because there are so many different energy companies, each state has a different average price per kWh.

For example, in 2018 the average price per kWh in Los Angeles was $0.1877.

The average family would have spent $2064 that year on electricity bills. Let’s pretend this is the average cost of electricity every year.

What if that same family spent $12,000 after tax credits to install energy-saving solar panels?

In about six years, their solar panels will have paid for themselves. For every year after, that family is saving $2,000 per year.

So, How Much Do Solar Panels Save You?

As you can see there’s no one answer to this.

The real question is: How much do solar panels save you after you apply solar tax credits to help pay for installation, and after several years of no electric bills at all?

Want to find out?

Contact us today to see exactly how much you could save.

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Summit Energy offers a wide range of cost-effective solar energy solutions. We work with homeowners and businesses to help them reduce their energy bills, while also reducing their carbon footprint.