Installing solar panels for your home is a long-term investment that not only reduces your energy costs and increases the value of your home, but also helps reduce our own environmental impact around us.
The best way to find out if solar energy is right for you is to talk to your local installer who can guide you through the process.
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Whether you just want to get back on your feet in a sunny living environment or install solar panels in your own home, here are twelve important facts that everyone should know about installing solar panels on your roof this year.
The source of the image: Public space via Pixabay
12 Facts about installing solar panels for your home in 2020
1. The cost of solar energy on the roof has decreased by 60% since 2010
The cost of installing solar panels has fallen much faster than anyone in the energy industry could have imagined. In 2010, you would have paid $7.34 per watt to install a solar panel on your roof. That means you’d have to pay $51,380 for a medium-sized system. Oh.
In 2019 everything has changed radically. Installing a solar panel costs only $3 per watt. This 7-kilowatt system, which cost more than $50,000 in 2010, now costs just $21,000! The huge drop in installation costs is mainly due to the lower cost of the solar panels themselves, which tended to bring prices down rapidly in the jaw area. Installers have also simplified the installation process, which has led to further price reductions.
As we have seen over the past decade, this loss of value has caused the solar industry to explode. By 2019, the United States will have 69 GW of solar collectors, enough to power nearly 10 million homes! This number is expected to double in the next five years. By 2024, the United States will have installed 15 GW of solar energy per year.
2. Solar system costs vary depending on the size of the system
The size of the installation is the most important factor when calculating installation costs. Larger houses often need more energy and therefore also more solar systems. As the size of your installations increases, you need more solar modules, more cables, more installation material and a larger inverter.
Because the size of the installation is so important for the total cost of the installation, the solar industry actually estimates the costs based on the total capacity or size of the installation. As you have seen in Fact 1 above, an average solar system at home costs about $3 per watt. For solar roof systems with a typical power output of about 7000 W, an average roof installation of will cost $21,000 to generate.
However, these costs depend directly on the size of the installation. A small installation costs less; a large installation costs more. The cost estimates for the three total plant sizes are as follows:
As mentioned above, the energy consumption determines the size of the device. If you use more electricity, you need a large solar system. If you use less, you need a smaller system.
You will invest a lot less money in a smaller system, allowing you to minimize power consumption before installing solar panels to reduce costs and save even more money. It may seem surprising, but simple energy saving measures such as installing LEDs and tap fans, adding weather conditions around doors and windows and adding insulation in the attic are actually less expensive than installing solar panels to reduce the energy bill! Once you have reduced your energy consumption as much as possible, it’s time to switch to solar energy!
3. Allowed for depreciation between 5 and 15 years
A solar roof battery can take five to fifteen years to pay for itself, usually seven to twelve years. The time required to recoup your investment depends on the cost of installation, utility tariffs, location, network measurement standards and many other factors.
If you live in an area with high utility prices and good sunshine, you will get a faster return on your investment than a homeowner in an area with low utility prices and cloudy skies. However, some states with less sunny weather, such as New York, offer tax credits and discounts to lower the price of solar energy so that homeowners can enjoy a much better economy than they would otherwise do.
Let’s make a quick turn: Say you live in Colorado and you install a 9,000-watt system for $18,900 after federal tax. Their 9,000-watt system in Denver will produce 14,400 kilowatt hours per year. In 25 years of operation of your installation you will produce 195,072 kWh of electricity.
If you had bought 195,072 kWh of electricity from the average Colorado utility in those 25 years, you would have spent $63,400. This means a net saving of $44,500 over the life of your system and you will see a return on your investment in just eight years.
4. The rental for solar energy is terminated, property in.
Parallel to the falling costs of solar collectors, the rental of solar cells led to an explosive growth of the solar industry for private households at the end of the 2000s. Large companies such as Sunrun and SolarCity (now Tesla) experienced significant growth between 2008 and 2015 due to the popularity of solar contracts and Power Purchase Agreements (PPAs, which are very similar to lease agreements).
As part of a rental contract for solar energy, your company installs a solar system on your roof. The solar company remains the owner of the system (as well as the tax benefits), and you pay your installer a monthly fee for the use of all electricity produced by the system. When Sunrun and SolarCity started offering rentals in the mid-2000s, solar power systems were still much more expensive than most homeowners could afford. Zero Rent offers owners the opportunity to move to a sunny location without having to make a large initial investment.
At the end of 2015 – the level of solar rent – the rent for solar panels and the PPA amounted to 59% of all new solar panels for residential buildings.
Since then, however, leasing and PPAs have disappeared. Homeowners now use cash or loans to finance their solar energy systems. This is largely due to the collapse of SolarCity, whose installation figures fell sharply after the acquisition by Tesla in 2016. Today, small solar power systems – most of which do not offer solar rental or APP – install most solar power systems in private homes. From 2018, the rental of solar panels will represent only 33% of all new solar panels for private households.
Renting solar panels has real advantages: you don’t have to pay a deposit! – There are also some real drawbacks. First of all, you save less money in the long run compared to cash or credit financing. Secondly, since your system is the property of the installer, he is the one who is entitled to a federal tax refund, not you. After all, a rented solar system, unlike a solar system owned by the real owner, has no added value for your house (more about this in a later chapter).
Buying your solar system in cash or on credit allows you to save more money over the lifetime of your system, increases the value of your property and allows you to take immediate advantage of all available tax and other benefits.
5. Tax credits still available
Although the federal tax credit of 30% expires at the end of 2019, it is not over yet! In the course of 2020, you can benefit from a tax credit of 26% of the value of your investment. In 2021, this value will drop to 23% of your installation. He disappeared completely in 2022.
So for an average installation, this staggered installation will affect the total cost of your investment for a 7,000 watt installation, which costs $21,000:
You can see that by phasing out the loan, you are adding about $1,000 to your installation costs, which means you will have to wait another year or two to recover your total costs and save money.
Of course, the federal tax credit is not the only incentive for homeowners to install solar panels. Many states offer their own tax incentives, property tax incentives and tax incentives for the sale of solar homes. Local cities and districts also offer discounts on building permits for your solar system, as well as general discounts and other benefits. Finally, the utilities will also give discounts for the installation of solar collectors.
For example, New York homeowners are entitled to various incentives to reduce the cost of solar energy. In addition to the federal tax credit, the state of New York also offers a 25% tax credit on installation costs, up to $5,000. In addition, the government offers discounts on solar panels for private households in certain areas in the order of $0.30 to $0.35 per watt (from the end of 2019). That means you receive more than $2,000 less than the average solar system. After all, homeowners in New York City are exempt from both property tax and the sale of their solar energy systems.
Your installer knows what incentives are available in your area.
6. Solar collectors increase the value of the land
Installing solar panels on the roof is a financial investment because the cost of installing a solar system (which produces electricity for free for the next 25 years) is lower than the cost of continuing to buy electricity from the utility company for those 25 years.
However, if you buy your own solar energy system, there is an additional advantage.
In 2015, the National Lawrence Berkeley Laboratory examined the cost of homes in 8 states over 14 years and found that homes with solar panels sell on average $4 more per watt than comparable homes without solar panels. With an average installation of 7,000 watts, this equates to an extra $28,000, which is more than the cost of the installation itself.
This of course depends on the rates of your local energy supplier and the housing market, on the added value that solar energy provides for your own home. In the LBNL study, the researchers found that the age of the solar cells largely determines the value of this property. Newer systems (< 2½ years) added up to $5.90 per watt, while older systems (6-14 years) added $2.60 per watt. But even the bottom end of the spectrum almost completely covers the initial installation costs.
It is important to note that these prices only apply to solar energy systems owned by the homeowner. In another study, NBLL found that equipment financed through leasing or PPAs does not create additional property value, although it does not detract from the value of the home and does not discourage buyers, contrary to the opinion of many potential owners of solar homes.
7. You can cover 100% of your energy consumption with solar energy
Most homeowners install a solar system large enough to cover 80-100% of their energy consumption. Suppose you consume 10,800 kilowatt hours of electricity per year. If you want to cover 100% of your energy consumption with solar energy, you want a system that can produce 10,800 kWh of electricity per year.
Solar collectors produce different amounts of energy, depending on the location (desert southwest or rainy Washington), the orientation of the collectors (south or southwest) and the inclination of the collectors (horizontal or flat). Solar panel installers take all this into account when planning the exact number of panels to meet your energy needs.
In some cases, the physical limitations of your roof may limit the size of your solar system. Maybe your roof isn’t big enough to hang as many panels as you want. Maybe your favorite tree in the front yard is too much shade. In these cases, installers have several options:
- Move some of your solar panels to another roof surface. Solar cells produce the most electricity if you look south, directly in the sun. But sometimes your roof on the south is not big enough for all your solar panels. In this case, your installer can move part of the panels to the west or east. You will probably need a few extra panels because west or east-facing solar panels do not produce as much electricity as south-facing panels, but it is a common solution to a common problem.
- Reduce the size of your installation to. If you don’t have enough space on the roof for all your panels, you’ll probably have to reduce the size of your installation. Instead of covering 100% of your energy needs, you could drop to 80 or 70%. At this size, you will continue to produce clean energy and save money on your energy bills.
- Selection of high quality panels. High-efficiency panels, such as Sunpower’s solar panels, tend to produce about 20 percent more electricity than the standard panels used by most solar companies. You can produce the same amount of electricity and use 20% less space. They’re great for small roofs, but their high cost means you’ll need more time to recoup your investment, which can affect the higher energy efficiency you enjoy.
If you’re smart, you might think you can make some money with a metering grid by installing more solar panels than you need. That would be true, but there is actually no money to be made with net instruments. In fact, most utilities cover the size of your solar system to cover 100% to 120% of your energy consumption.
8. Local installers can offer the best prices
While big names like Sunrun and Tesla are the best-known solar energy companies, there are thousands of small, local solar panel installers that are also active throughout the United States. Today, these local installers represent the largest percentage of solar energy systems for private households. Early 2018 they installed ⅔ of all solar panels for private households in the United States!
In a 2017 study, the Lawrence Berkeley National Lab found that small local installation companies tend to give estimates that are 10% lower than those of large national companies. Local installers do not have high sales and marketing costs for large companies, so they can offer lower prices. For an average installation, this 10% difference represents about $2,100 – a significant saving that can take two to three years of your time to repay your investment.
Local installers generally do not offer capital-intensive leases or power purchase agreements. Instead, they support cash payments or loans. If you are looking for a rental or PPA solution, you need to focus on large installers.
9. Your solar system is connected to thesupply network.
If you do not install solar panels in a mountain hut or an insulated building, you remain connected to the electricity grid, even if your solar panels are on your roof. Your panels only produce electricity during the day. At night you still need a utility company to provide you with electricity. You can add batteries to your system that allow you to use solar power at night, but they are still expensive and unprofitable outside a few key regions such as Hawaii and California.
If you connect your solar energy system to the grid, you can also sign up for a metering program for your distribution system, which will allow you to recoup your investment in solar energy much faster (for more information on metering grids, see the next section).
When you install the system on the roof, your solar company sends a request on your behalf to your utility company for permission to connect to the grid, a process known as logging in. This allows your solar electrician to physically connect your solar installation to the grid, so the electricity can flow from to of your house and from to of your house.
10. Net dosage provides a faster return on investment.
Grid accounting is a program offered by many utilities (usually carried out by state authorities) to encourage homeowners to install solar panels. When you connect your solar system to the grid, any solar energy you produce, but do not use directly at home, is fed into the grid for use by nearby homes or businesses.
On a net accounting basis, the utilities actually pay you – usually by crediting your account – for the excess electricity you inject into the grid. A real net account means that your utility company credits your account for all excess solar energy at a retail rate. For example, if you pay the utility $0.13 per kWh for your electricity, the utility will also credit your bill with $0.13 for every kilowatt hour of solar energy you add to the grid.
Grid measures allow you to recoup your investment in solar energy much faster, because you benefit from every kilowatt hour of electricity generated by your solar panels, whether you use them in your home or not.
If your solar system is well-designed, you probably won’t have that many credits left after a year. However, if your system produces more energy than you used last year, you will probably have multiple accounts. Every year utilities usually check their accounts and credit accounts, which can mean a lot of different things:
- Your utility company will send you a cheque for all accounts you have not used. This can be done at retail or wholesale cost. Wholesale prices are generally around the selling price of ⅓.
- Loans on invoice in continuous progress. In this way, you can receive funds in your accounts at any time. But because your system is probably designed to cover 100% of your electricity consumption in a given year, you probably won’t have a lot of transferable credits.
- You lose all accounts that have not used. In some states, utilities can simply waive all payments, losing all credit on your accounts every 12 months.
If your state does not require utilities to bill you for the grid, you can still connect your solar system to the grid. However, your utility company will probably only offer you the wholesale rate for all your excess solar energy production, which is usually about one third of the retail rate.
11. Batteries increase your versatility, but remain expensive
Like the solar panels themselves, the cost of batteries has dropped dramatically over the last decade, and homeowners in states with high electricity prices – particularly in Hawaii and California – are already adding batteries to their solar systems.
Batteries increase the versatility of your solar system and offer a number of benefits, both for your lifestyle and your wallet.
Firstly, if the electricity grid fails, the solar system can continue to supply electricity both during the day and at night. With the right size solar system and battery, you can keep your devices, TVs, computers and other devices running almost forever. If you have life support devices at home, use CPAP or other necessary electronics, you can keep your solar system operational for a long time after a power failure by adding batteries at another location.
Second, if you don’t have net retail prices, adding batteries can help reduce the return on your solar roof investment by allowing you to use more of your solar energy at home instead of sending part of it online and receiving loan accounts at wholesale prices from your utility company (usually at ⅓ retail prices, see above section for more information). Regardless of the selling price, your solar energy is actually worth more if you use it at home instead of feeding it into the electricity grid.
Finally, if you travel with your utility company, you can store solar energy for use during peak hours, when electricity is most expensive. This process, known as tocharge transfer, can help you reduce your electricity bills and increase the cost-effectiveness of installing solar panels and batteries. Solar batteries only produce electricity when the sun is shining. Depending on your location and the season, this means that your solar system will no longer produce electricity between 4pm and 8pm. If you use TOU rates, peak power prices are usually between 4pm and 9pm. With a battery, the solar energy can still be used from 18:00 to 21:00 and these precious peak loads can be avoided.
All major solar panel installers now also offer batteries. Tesla installs the energy wall and Sunrun and Vivint Solar install the RESU battery from LG Chem. In countries where energy costs and TOU rates are high, batteries give the solar system a new level of versatility. But although the price of batteries has fallen sharply over the past decade, they are still far from profitable in many parts of the United States.
12. Tenants may continue to use solar energy
If you rent a house or apartment, you can still participate in the solar revolution! Shared solar gardens enable tenants and those who can’t install a solar system on their own roofs to invest in solar energy – all without having to install the system on their own roof!
With a communal solar power plant (also called Solar Garden) a solar panel developer (usually a non-profit organization or your utility company) builds a large solar system on unused land. Individuals can then buy a solar panel (usually in pieces of about 4 panels) to cover a percentage of their energy consumption. Via a virtual measurement program in a network, all solar energy produced by your part of the modules is credited to your utility account, just as if you had installed solar panels on your own roof.
Currently there are public solar projects in 40 states, and across the country the total capacity is 1,523 megawatts – the same size as a coal-fired power station! Solar energy is also expected to grow enormously over the next five years, to 3.5 GW in 2024.
If you are considering installing solar collectors for your home, but simply cannot install them on your own roof, a solar garden plot is a simple and economical solution! Receive free quotes from solar panel installers at UnderstandSolarPower.com
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