Advantages of Solar Energy

There are many reasons why so many homeowners are switching to solar energy to power their homes:

  • Solar energy is renewable and the most abundant source of energy - approximately 173,000 terawatts of energy from the sun hits the earth continuously (https://energy.gov/articles/top-6-things-you-didnt-know-about-solar-energy).
  • Solar energy saves money. While there may be an expensive up-front cost to purchasing solar panels for your home, you'll never have to pay for electricity again. Your solar panels will pay themselves off and you'll get to enjoy saving a lot of money on energy bills.
  • New advances in solar energy technology are making solar panels blend in more easily with a home. MIT is creating transparent solar panels that can allow windows and doors to become solar generators (http://energy.mit.edu/news/transparent-solar-cells/).
  • Solar energy saves the planet by using clean, renewable energy from the sun instead of harmful fossil fuels (http://www.solarcity.com/residential/benefits-of-solar-energy).
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Cost for Solar Panels

There are two main ways to get your own solar energy system - purchase it yourself or lease it through a company. There are pros and cons to both methods (https://www.energysage.com/solar/financing/should-you-buy-or-lease-your-solar-panel-system/).

  • Advantages to Buying:
    • You can fully maximize the financial benefits of your solar panels
    • You could save 70%-100% on your energy bills
    • You could be eligible for a federal tax credit
    • You will increase the value of your home
    • If you generate more energy than you consume, you could get paid by
    • You will increase the value of your home electric companies for the excess
  • Disadvantages to Buying:
    • Up-front costs are expensive
    • You are responsible for the maintenance of your panels
  • Advantages to Leasing:
    • Lower up-front costs - generally for little or no money down
    • If you only want to be more eco-friendly without maximizing the financial benefits, leasing may be a good option
    • Maintenance is taken care of by the company
  • Disadvantages to Leasing:
    • You will not receive a tax credit
    • You probably won't save as much money on your monthly bills - most homeowners who lease saved only 10%-40%
    • Homebuyers tend to stay away from a solar panel system with a lease attached to it
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Solar Panel Installation Costs

Solar Panel Installation Costs

So how big of a price difference is it to buy solar panels versus leasing them? When it comes to purchasing solar panels, you first have to determine how many kilowatts you'll need. If you only want to partially power your home with solar energy, you'll most likely need 1 kW or 2 kW, especially if your home is already energy-efficient. A 1 kW system will cost around $10,000 to $15,000. A 2 kW system will cost about $16,000 to $20,000. However, if you want your entire home to run on solar energy (and your home isn't completely energy-efficient), you'll most likely need a 5 kW system, which can cost up to $45,000 or more (http://home.costhelper.com/solar-panels.html).

However, depending on where you live, you may qualify for federal tax credits - up to 30% of the cost of the panels (https://www.energysage.com/solar/cost-benefit/solar-investment-tax-credit/) - or state tax credits that can help lower the cost of solar panel installation (https://turbotax.intuit.com/tax-tools/tax-tips/Tax-Deductions-and-Credits/Federal-Tax-Credit-for-Solar-Energy-/INF14243.html).

Leasing, on the other hand, generally has little or no money down, but does have a monthly bill, usually of $70-$100. You are not eligible for any tax credits if you lease your system.

In most cases, purchasing your solar panels with cash or even getting a loan is the best option if you wish to maximize the financial benefits and increase the value of your home. If you only want to cut down on some energy costs and don't plan on selling your home anytime soon, leasing could work for you.

Since solar panels last 25-30 years, it's a good idea to install them on a new roof so you won't have to worry about trying to get your roof repaired with solar panels attached to it. Replacing your roof can also be expensive, with an average cost of $6,000.

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Solar Panel Repair Costs

Solar Panel Repair Costs

While solar panels require little maintenance and last for up to 30 years, they can get damaged by severe weather such as hail, strong wind, and tornadoes. You may also run into small maintenance issues like needing a new converter or a new battery. The cost to repair solar panels can range from $100 to $2,500 or more depending on the severity of the damage. Most homeowners tend to spend an average of $500-$600 for repairs.

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Cost for Solar Heating

Cost for Solar Heating

Solar panels aren't only for generating electricity - they can also be used to heat your home or even your swimming pool! Having a solar-powered pool heater costs $2,500 to $7,000 with an average cost of $3,500. Keep in mind that the solar heater will pay itself off within a few years from the money you save on your swimming pool's heating bill.

As for water heaters, those can also be solar powered. Having a solar-powered water heater installed ranges from $1,000 to $3,500 and can generally be used in any type of climate since there are two types of solar-powered water heaters to choose from - direct circulation systems which are great for climates that rarely freeze and indirect circulation systems which are great for climates that experience freezing temperatures (https://energy.gov/energysaver/solar-water-heaters).

If you want to heat your entire home using solar power, expect to pay a bit more - around $25,000 to $100,000. This could be a great option if you live in a climate that gets a lot of sun but it generally cold since it provides up to 80% of the heat your home needs.

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Tax Credits for Solar Energy

If you're planning on buying your solar panel system, you'll be happy to know that there are federal and state tax credits and incentive programs available to help lower the cost of your system. The biggest is the Federal Investment Tax Credit (ITC) which is a 30% tax credit that is available to both residential and commercial systems (https://energy.gov/savings/residential-renewable-energy-tax-credit). The ITC applies to the three major types of solar energy systems (http://www.seia.org/about/solar-energy/solar-faq/what-rebates-incentives-are-available-solar-energy):

  • Photovoltaic
  • Solar heating and cooling
  • Concentrating solar technology

Depending on which state you live in, you could also qualify for a state incentive program. State incentive programs vary greatly (http://www.dsireusa.org/), but they all help make your solar panel system more affordable.

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References

  1. "Top 6 Things You Didn't Know About Solar Energy". Energy.gov. Retrieved 9 August 2017.
  2. Stauffer, Nancy. "Transparent Solar Cells". MIT. Retrieved 9 August 2017.
  3. "The Benefits of Solar Energy". SolarCity. Retrieved 9 August 2017.
  4. "Should You Buy or Lease Your Solar Panel System?". Energy Sage. Retrieved 9 August 2017.
  5. "Solar Panels Cost". CostHelper. Retrieved 9 August 2017.
  6. "Investment Tax Credit for Solar Power". Energy Sage. Retrieved 9 August 2017.
  7. "Federal Tax Ceedit for Solar Energy". TurboTax. Retrieved 9 August 2017.
  8. "Solar Water Heaters". Energy.gov. Retrieved 9 August 2017.
  9. Residential Renewable Energy Tax Credit". Energy.gov. Retrieved 9 August 2017.
  10. "What Rebates and Incentives are Available for Solar Energy?". Solar Energy Industries Association. Retrieved 9 August 2017.
  11. "Find Policies and Incentives by State". Database of State Incentives for Renewables & Efficiency®. Retrieved 9 August 2017.
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