There’s a lot of talk about solar energy. It saves the planet. It’s free energy. And you can save money on your utility bills when you install solar panels. But how much can you save with solar energy? What are the advantages?
Your Electric Bill
One of the reasons you don’t often see actual numbers about solar savings is that much of the savings depend on where you live. For example, if electricity is particularly expensive where you live then your potential savings will be more than those who live in an area where electricity is cheaper.
The U.S. Department of Energy reports average electricity rates of 6.1 cents in Seattle, WA and 13.6 cents in Concord, NH. That’s a significant difference. It’s also important to factor in that the average cost increases 4.3% annually.
To understand how much you can save on electricity simply look at your utility bill. With solar panels you can all but get rid of this monthly payment. If your energy bill is $150 during the summer months then solar energy can save you up to about $150 each month.
Tax Incentives and Rebates
Many states offer tax incentives and rebates for solar panel installations. Solar panel purchases are not taxed, so you’ll save money on the sales tax as well. Additionally, in many states you can receive a credit or rebate of up to $1,000 when you purchase a new solar system. It generally ranges from 15%-25% of your cost depending on the state where you live. You can add that savings onto the top of the amount you’ll save on your monthly utility bill.
If you own a home then you can also factor in the increased value of your home. Additionally, homes with solar panels generally sell more quickly than homes without.
Calculating Your Solar Energy Savings
Want to figure out exactly how much you can save with solar panels? Calculate the following:
- Get a quote for a solar panel installation.
- Calculate your state and federal tax savings.
- Add up the cost of energy for one year.
- Divide the cost of your solar panel installation after tax incentives by 25 years, the life of the solar panels, to find the annual cost of the system.
- Compare the annual cost of your system with your annual electricity bills. This is your estimated savings.
Solar energy is not only the cleanest energy available, it is extraordinarily inexpensive. It’s one of the most abundant forms of energy and installing solar panels in your home will allow you to not only reduce your carbon footprint but also save money each year. Not to mention everything you can do with all that extra money!
Posted September 15, 2013
by Gabriel Posternak.