Receiving electricity bills every month is like a continuous punishment for your bank account.
Find out how can solar panels help you to save money, but first you have to learn what to choose when going solar.
If you’re looking to reduce your impact on the environment and your wallet, you have to invest in a free form of power such as solar energy.
Installing a solar panel system at home can save you hundreds of dollars on electricity bills each year.
At the same time, your impact on the environment will be seriously reduced due to the reduced carbon footprint of your home.
How much money do solar panels save? Keep reading to find out!
The Cost of Electricity in the U.S. is Going Up
One of the reasons why homeowners decide to switch to solar is represented by the possibility to reduce energy consumption from the grid, which means reduced electricity bills.
The national average is around 13 cents per kWh (kilowatt-hour). This equals about $1,330 a year for an average consumption per household of 10.2 MWh (megawatt-hour). Additionally, the nation sees a 2.2% rise in electricity costs each year.
Of course, electricity costs vary from state to state, and this way in New Jersey the average consumption per household is around $2,200, which is way higher than the country’s average.
It’s clear that energy costs in the U.S. are already high and will get even higher in the future.
Let’s see how solar energy can save you hundreds of dollars each year on electricity bills.
How Much Money Do Solar Panels Save?
Solar energy is a long-term investment that also yields long-term savings.
Solar panels can save homeowners between $10,000 and $40,000 over a period of 25 years.
How are these savings calculated? Here’s where it gets a little tricky.
The estimated savings produced by a solar PV system can be difficult to forecast, because predicting the economic value of solar energy produced by the panels for a period of 10 to 25 years in the future is a bit challenging.
Things like utility inflation is an element that makes forecasting solar energy savings tricky. Though, experts use an assumed electricity price inflation rate of 3.5% to estimate solar energy savings.
Does this mean that the forecasts are inaccurate? No. For the most part, solar savings forecasts are predictable. This is because solar panel production in each area of the country could be predicted.
The return on investment also depends on which solar payment option you choose from the start: cash purchase or financing. Each of these options has its financial benefits and variable timelines for you to see a return on your investment.
For more information on solar energy savings forecasts, go to Smart Power Solutions – Solar Panel FAQ.
Solar Energy Installation and Tax Credits
Aside from lower energy bills, installing a solar energy system also provides federal and local incentives and also tax credits. The U.S. Department of Energy and the Environmental Protection Agency offer credits to homeowners who install solar panels at home.
You can claim 26 percent of the installation costs associated with the system in service in 2020 and 22 percent in 2021. This credit is non-refundable which means that you can’t receive this credit as a tax refund.
To receive the credit, you have to meet certain criteria. If your property and system qualify, you will then have to file the IRS Form 5695.
Switch to Solar
Hopefully, we managed to answer your questions related to “How much money do solar panels save?”.
Your total savings will depend on a variety of factors including the place you live, the way you finance your solar panel installation, etc.
Conclusion
It seems that what ever PV (photovoltaic) system you choose to install, producing your own energy at home which is also clean, will certainly benefit the environment and your wallet too.
