Solar energy is seeing exciting growth: 2022 marked the first time renewable energy generation (solar and wind) surpassed other forms of energy generation (coal and nuclear) in the U.S. electric power sector. Growth is happening in both large-scale utility production and small-scale individual residential and business use, and consumers are seeing significant financial benefits at all levels.
Going solar offers many returns, including contributing to the reduction of greenhouse gas emissions, lowering the overall environmental impact of energy generation, and increasing energy security. We covered many of the benefits of going solar in this previous post, but in this article, we will focus on the financial benefits your household can enjoy by purchasing solar panels and harnessing Earth’s sunlight.
1. Reduce and Stabilize Your Energy Costs
In the United States, the average annual electricity consumption for a residential utility customer is 10,632 kilowatt-hours (kWh). Averaged over the course of a year, this is about 900 kWh per month. The price Americans pay per kWh for this electricity varies greatly from state to state, even differing by region within a state. Data from the U.S. Energy Information Administration (EIA), shows 2021 costs ranging from $0.10 to $0.33 per kWh, and EnergySage reports the average residential electricity rate in the U.S. in February 2023 as $0.23 per kWh.
These savings are based on 2023 rates. Utility rates regularly increase and by having your own solar energy system you are protected from the financial impact of electricity price increases.
Adding a battery or alternative home storage solution to your solar system can further increase your energy independence and security. While these additions do add to the initial installation cost, they allow you to capture and store electricity for use when your solar panels are not actively producing electricity (at night) or when you are unable to pull electricity from the grid. This gives you freedom and allows your electricity to also remain operational during rolling utility blackouts or other potential disruptions.
2. Receive Federal Government Tax Incentives
To offset the initial installation cost of a solar energy or solar plus storage system, the Federal Investment Tax Credit (ITC) reduces a homeowner’s federal income tax liability by a percentage of the cost of the system the year it is installed. For systems installed between 2022 and 2032, the tax credit is 30%. This credit applies to both residential and commercial systems, and there is no cap on its value. The ITC is a dollar-for-dollar reduction in the income taxes that a person or company would otherwise pay the federal government.
Other saving incentives or rebates may also be available through state and local governments or utility providers to help offset the initial cost of the solar panels, equipment, and installation. Blue Raven Solar’s experts will help you explore the options available to you in going solar, providing details on different financial programs available in your specific area. We always recommend you contact a tax professional regarding applying for the ITC and other state tax programs as each homeowner’s situation is different. You can also find more information in this blog post.
3. Increase the Value of Your Home or Property
An often-overlooked financial benefit of solar power is the resale value it adds to your home or property. Buyers recognize the value of having a builtin power source as part of their home and are willing to pay for it.
One recent study confirmed solar installations can increase a home’s resale value by over $5,000 for each kilowatt of solar panels installed. Another study estimated an increase of around 4% of the home’s value. The exact findings of various solar resale studies vary, but they all come to the same conclusion: Though the exact numbers change depending on the system, home size, geographical area, real estate market, and other factors, installing a solar energy system is a measurable home improvement which often results in an increase of your property’s value.
4. Profit from Your Solar Investment
With solar panels on your home capturing the sun’s energy the extra energy you generate can flow back to your local utility grid. Many utility providers offer homeowners credits for the energy they contribute through a process called net metering.
According to the Solar Energy Industries Association, “If the home is net-metered, the electricity meter will run backward to provide a credit against what electricity is consumed at night or other periods when the home’s electricity use exceeds the system’s output. Customers are only billed for their ‘net’ energy use. On average, only 20-40% of a solar energy system’s output goes into the grid, and this exported solar electricity serves nearby customers’ loads.” For a more in-depth look at how net metering works, check out this blog post.
With a net metering program and a solar system designed to offset your energy usage, you can eliminate your power bill (with the exception of a small connection fee), using only energy generated by your solar panels or equivalent energy credits during the times when your panels are not producing.
5. Reduce Your Carbon Emissions
Solar energy is the most abundant energy resource on the planet. At any given time 173,000 terawatts of solar energy hit the Earth—which is more than 10,000 times the world’s total energy use. As the ultimate source of free, limitless energy, solar power offers many benefits over nonrenewable energy sources, which are more environmentally damaging, dangerous, and expensive. In contrast, the sun’s power is freely available, and it’s clean.
After your solar system is up and running, solar panels do not need additional fuel to work nor do they emit greenhouse gases or generate toxic waste. Adopting solar energy—even one household at a time—reduces carbon emissions coming from traditional coal and gas burning electrical generation, which still dominates US production.
Go Solar Today
If you’ve wanted to install solar on your roof, the financial benefits of solar energy are bright and clear: you can increase your energy independence and security and stabilize your costs, take advantage of government rebates, increase your home or property values, give back to the power grid, decrease your carbon emissions, and do your part to live in a more environmentally beneficial way.
A knowledgeable and helpful Blue Raven Solar representative is ready to assist you with making the switch today.