Financial & Environmental Benefits of Solar
Benefits Of Installing Solar Panels on Your Home
We are in a time when climate change is affecting almost everything that mother nature has given us. Every day we hear about the negative impact that global warming is causing: Extreme weather patterns that are causing flooding and severe winds and severe temperature fluctuations which affect the geography where wildlife resides. It is time that we do whatever we can to decrease the negative influence of climate change.
One way that we can help save our planet is through the use of solar panels. Solar panels were first used in the 1950’s and 1960’s to power satellites and spacecraft. It is thought that humans have been harnessing solar power to create fire for centuries, through the use of glass magnifiers and mirrors.
Recent natural disasters such as wildfires, heat waves throughout Europe, and extreme ice melt events have inspired many to seek more eco-friendly lives. Interest in buying solar panels in order to fuel our homes is ever-increasing, as solar power systems derive clean, pure energy from the sun. Installing solar panels on your home can help to combat greenhouse gas emissions and reduce our collective dependence on fossil fuel. In addition to these well-known environmental benefits of solar power there are a handful of personal financial benefits to consider as well:
1. Off-set Energy Costs
Ideally, the use of solar panels should save you a 100% of your electrical energy cost but it is not realistic to expect that level of panel production every day of the week. According to EnergySage.com, solar manufacturers recommend that homeowners factor in an average of 25% cushion when calculating their target for solar panel offset. The main reason for this is that solar panels cannot operate at maximum efficiency all the time. There will be certain days when grid connection is necessary to fully cover power usage. However, the beauty of net-metering is that you can benefit from surplus production days and never pay anything to your utility while still relying on the grid for backup storage.
2. Tax Credits and Rebates
According to the U.S. Department of Energy, homeowners are eligible for federal tax credits when purchasing a “residential photovoltaic system” (i.e. solar panel system). A tax credit is a dollar-for-dollar reduction in the amount of income tax you would otherwise owe. For example, claiming a $1,000 federal tax credit reduces your federal income taxes due by $1,000.
There are also the state and local rebates and Solar Renewable Energy Credits (SREC), and total costs can be cut in half. You can sell these SREC credits to utility companies, which could generate a return of investment. For current information on incentives, including incentive-specific contact information, visit the Database of State Incentives for Renewables and Efficiency website at www.dsireusa.org.
It is sometimes possible to receive a cash rebate from your state, municipality, utility company, or other organization that wants to promote solar energy. Rebates are generally available for a limited time and end once a certain amount of solar has been installed. Rebates can help to further reduce your system costs by 10 to 20 percent. Some states or utilities offer performance-based incentives (PBIs), which pay solar energy system owners a per kilowatt-hour credit for the electricity that their systems produce. Certain PBI programs require that you install equipment manufactured in your state to qualify. Unlike SRECs, PBIs don’t have to be sold through a market, and incentive rates are determined when the system is installed. PBIs may replace or exist alongside net metering policies.
3. Increase Your Home Value
Just as paying thousands of dollars for renovations to your home, such as a new bathroom or a pool, will increase your home’s value, so will adding a solar power system.
Installing solar panels in a home not only helps to reduce current monthly utility bills, home values may also increase an average of 4% in a recent nation-wide survey conducted by Zillow.
“There is increased demand for green living. More than 80% of buyers now say energy-efficient features are important in selecting their home,” said Sarah Mikhitarian, Zillow senior economist. “We are increasingly finding that these attributes are important to prospective homebuyers. This is part of the reason that there is a premium associated with it. The other piece is that there is true value provided by solar panels — namely, future energy savings.”
Here are the top 10 states in which a solar power system increases the value of a home:
- New Jersey: 9.9% or $32,281 for the median-valued home.
- Pennsylvania: 4.9% or $8,589 for the median-valued home.
- North Carolina: 4.8% or $8,996 for the median-valued home.
- Louisiana: 4.9% or $7,037 for the median-valued home.
- Washington: 4.1% or $15,916 for the median-valued home.
- Florida: 4% $9,454 for the median-valued home.
- Hawaii: 4% or $24,526 for the median-valued home.
- Maryland: 3.8% or $10,976 for the median-valued home.
- New York: 3.6% or $10,981 for the median-valued home.
- South Carolina: 3.5% or $5,866 for the median-valued home.
4. Protect Against Rising Energy Costs
One of the most clear cut benefits of solar panels is the ability to hedge utility prices. In the past ten years, residential electricity prices have gone up by an average of three percent annually. By investing in a solar energy system now, you can fix your electricity rate and protect against unpredictable increases in electricity costs. If you’re a business or homeowner with fluctuating cash flow, going solar also helps you better forecast and manage your expenses.
5. Create Jobs and Help your Local Economy
According to The Solar Foundation, the solar industry adds jobs many times faster than the overall U.S. economy. This growth is expected to continue. Because solar-related jobs tend to be higher paying and cannot be outsourced, they are a significant contributor to the U.S. economy.
6. Protect the Environment
Solar power systems derive clean, pure energy from the sun. Installing solar panels on your home helps combat greenhouse gas emissions and reduces our collective dependence on fossil fuel. Traditional electricity is sourced from fossil fuels such as coal and natural gas. When fossil fuels are burned to produce electricity, they emit harmful gases that are the primary cause of air pollution that contributes to global climate change. Not only are fossil fuels bad for the environment, but they are also a finite resource. Because of this, the price is constantly fluctuating and can increase in a short period of time.
Although fossil fuel production requires significant water resources and causes water pollution, solar energy requires little to no water to operate. So, not only does solar power not pollute water resources, it also doesn’t put a strain on the world’s water supply.
Solar power works during a drought or heat wave. During heat waves or severe droughts, as we’ve experienced in recent years, electricity generation is at risk. Solar power systems do not require water to generate electricity.
Solar Power: The Cleanest Energy Available
Solar power systems derive clean, pure energy from the sun. Installing solar panels on your home helps combat greenhouse gas emissions and reduces our collective dependence on fossil fuels. Traditional electricity is sourced from fossil fuels such as coal and natural gas. When fossil fuels are burned to produce electricity, they emit harmful gases that are the primary cause of air pollution that contributes to global climate change. Not only are fossil fuels bad for the environment, but they are also finite resources. Because of this, the price is constantly fluctuating and can increase in a short period of time.
Although fossil fuel production requires significant water resources and causes water pollution, solar energy requires little to no water to operate. So, not only does solar power not pollute water resources, but it also doesn’t put a strain on the world’s water supply.
Solar power works during a drought or heatwave. During heat waves or severe droughts, as we’ve experienced in recent years, electricity generation is at risk. Solar power systems do not require water to generate electricity.
Benefits of Living in a Solar-Powered Home
As we all know, most sources of renewable energy such as coal and gas plants are big factors in polluting our air and water. So, yes, we are all for the collective effort of saving the planet from the dangers of the continued use of fossil fuel. But are there practical benefits of living in a solar-powered home?
Solar Panels could also raise the market value of your homes. Research shows that your house can have an improvement in value for as much as $18,000. Do you know that your roof can also be protected from the elements? Solar panels can shield the roof from the heat, wind, snow, rain, and other elements?
To sum it all up, whether your home is grid-connected or off-grid in terms of solar power, you can save a ton of money in the long run from energy bills. Since the sun is an inexhaustible resource, the long term savings benefit of solar living can not be underestimated.
“Here’s How Much Adding Solar Panels Will Boost Your Home’s Value.” Money, 23 Apr. 2019, money.com/home-value-solar-panels/. Accessed 23 Jan. 2021.
“Homeowner’s Guide to the Federal Tax Credit for Solar Photovoltaics.” , Jan. 2020.
Richardson, Luke. “Low Cost Solar Panels for Your Home: How Expensive Is Solar Electricity in 2019?” Solar News, EnergySage, 5 Jan. 2021, news.energysage.com/residential-solar-panels-for-home/.
Sanchez, Valentina. “Solar Power Can Boost Your Home’s Value — Especially in These 10 States.” CNBC, CNBC, 5 Oct. 2019, www.cnbc.com/2019/10/05/solar-power-can-boost-a-homes-value-in-these-10-states-the-most.html. Accessed 23 Jan. 2021.
“Solar Incentives, Rebates & Tax Breaks by State | EnergySage.” Energysage.com, EnergySage LLC, 15 July 2020, www.energysage.com/solar/cost-benefit/solar-incentives-and-rebates/.