Is Solar Energy For Your Home Worth It?
Many homeowners are wondering whether solar energy is worth their while. The answer depends on several factors, including home value and electricity rates.
Consider state and local policies such as net metering programs that enable you to sell any excess electricity back to the utility company.
Cost
Home solar systems offer an affordable way to reduce our reliance on non-renewable energy sources and meet our commitment to renewable energies. Many homeowners report paying back their system in six to ten years; breaking even depends on several variables including total system cost plus installation expenses, any available incentives and electricity bill savings.
Solar photovoltaic systems represent an initial investment, yet one with decades of benefits and returns. Plus, research suggests buyers are willing to pay more for homes equipped with solar energy systems.
Rebates and tax credits may help offset the upfront cost of solar, while an energy service company (ESCO) could also offer solar PPAs as an affordable way of buying, installing, and maintaining your system in exchange for discounted electricity rates – making PPAs ideal for those without sufficient resources to buy their own system outright.
Energy Savings
Solar power can reduce or even eliminate electricity bills for homeowners who take advantage of state and local solar incentives and rebates, not only saving them money on energy costs but also decreasing fossil fuel dependency while making an environmental difference.
Solar power is an amazing renewable energy resource, which offers a cleaner alternative to traditional forms of energy production. Solar resources outnumber all fossil fuel resources combined.
Solar energy can increase resale value of homes by drawing prospective buyers who appreciate its green technology to pay more. Homeowners must keep in mind, however, that solar systems only generate power when the sun shines; otherwise they must supplement it with batteries which may prove costly and inconvenient. Solar is often an ideal option for many homeowners but it’s important to carefully consider all aspects before making a final decision.
Tax Credits
Rebates and net metering are great ways to lower the upfront costs associated with switching to solar, but there’s also a federal tax credit available that can further lower out-of-pocket expenses.
Residential Clean Energy Credit, recently extended through the Inflation Reduction Act of 2022, covers up to 30% of the costs associated with installing solar systems at home. It can be applied against your taxes owed; any unused credit may roll forward for five years.
This credit is available to all homeowners regardless of whether or not they itemize their taxes, taking either itemized deductions or opting for standard deduction. The IRS provides an easy-to-follow video that walks homeowners through how to claim this tax credit and step-by-step instructions. Be sure to install your system prior to any state or local incentives expiring; doing so will ensure you maximize the return on your investment.
Home Value
Solar power renovations provide homeowners with long-term returns, making solar an appealing home renovation choice. Some may even pay more for homes equipped with solar energy than those without it.
Solar’s impact on home value largely depends on local electricity rates; Zillow research estimates that homes equipped with solar are typically worth approximately 4% more than comparable properties without solar installations – though this varies according to state and region.
To maximize the return on your investment, it is wiser to own rather than lease your solar system. If leasing is your choice, be sure it can be transferred easily before listing your house for sale. In addition, make sure your real estate agent and appraiser understand how to factor solar energy systems into appraisal calculations by using tools like PV Value which assist real estate agents and appraisers in calculating what the additional line item they add to a home’s value is.
