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Are Solar Panels Worth It?

6-Minute Read
Published on November 3, 2022
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If you want to jump on the wave of green energy, adding solar panels to your home might be at the top of your to-do list. But before you jump into this expensive project, it’s critical to ask yourself are solar panels worth it for your situation.

Let’s take a closer look at the costs and benefits of solar panels so that you can answer this question for yourself.

What Are Solar Panels?

Solar panels, otherwise known as PV panels, are devices that collect solar energy to generate an electric current. Once the electric current is generated, an inverter covers the DC solar power source into an AC power source for household use.

When you install a solar panel system in your home, it will consist of several panels. With a larger home, you’ll need more solar panels than a smaller home. But in either case, the system will include the necessary inverter required to transform solar energy into usable electricity.

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Is Solar Worth It?

Not every home is well-suited for a solar panel installation. Before moving forward, explore the following factors to determine whether or not solar is right for your home.

1. Sunlight Exposure

Sunlight exposure is a critical factor to consider before installing solar panels.

For example, homes closer to the equator can tend to bank on a stronger intensity of sunlight. The higher intensity can translate into more energy production. However, that doesn't preclude homes in northern latitudes from making a worthwhile investment in solar panels.

Take the time to determine an average amount of sun exposure your home receives on a regular basis.

2. Roof

The size and shape of your roof will come into play for solar energy production. In general, roofs ideal for solar panels have a pitch of 15 – 40 degrees facing south.

Typically, roofs with an especially steep slope will add extra installation costs. Roofs that aren’t ideal for a regular solar panel installation may need to opt for more efficient panels, which are also more expensive.

In addition to the roof’s structure, the foliage and other buildings around your home can have a big impact on sunlight exposure. For example, homes with roofs that are shaded out by trees most of the day won’t get as much out of their solar panels as a home sitting in an open field without any trees blocking their light.

3. Length Of Time Owning A Home

Adding solar panels to your home is one way to increase the value of a home. After all, prospective buyers will likely be interested in the energy-saving opportunity presented by a solar panel system.

Although solar panels will likely add to your home’s value, consider how long you plan to stay in the home. In a perfect world, you’d be able to stay in the home until you’ve recouped the upfront costs of your solar panels with energy bill savings. If you aren’t planning to stick around until the breakeven point, that might sway your solar decision.

4. Financial Situation

For households using a lot of energy, opting for solar panels can help you cut down on monthly costs. In an ideal situation, you might even see your electric bill slashed down to nothing. At the very least, the ability to produce solar energy can help your household avoid the pinch of rising energy costs.

If you can afford the upfront costs of solar, then locking in these long-term energy savings might be a smart financial move.

5. Eligibility For Incentives

Many homeowners can tap into government incentives to lower the cost of installing a solar panel system.

On the federal level, homeowners that install solar panels between 2022 and 2032 might be able to tap into a 30% tax credit. The tax credit will ultimately lower the total installation costs.

Additionally, many states and local governments are offering rebates and tax breaks of their own. Scope out all of the potential incentives for your area to determine how much you might save on the upfront sticker price of a solar panel system.

Are Solar Panels Cost-Effective?

In 2021, the average U.S. household consumed 886 kilowatt hours (kWh) of electricity per month. In contrast, a regular residential solar panel system can produce between 720 kWh to 900 kWh per month. With that, it’s possible that you’ll slash your electric bill altogether.

But even if you don’t completely eliminate your electric bill, you’ll reduce your reliance on the utility company. With rising energy prices, this ability to produce electricity may help you avoid the worst of rising costs.

On average, the average solar panel installation costs are $12,000. But households can enjoy lower costs if they tap into the federal tax credits available. According to EnergySage, the average homeowner will recoup these costs in just under 9 years. But the breakeven point can range from 6 to 10 years.

Since most solar panels last 20 – 30 years, you’ll find energy savings for many years after the breakeven point.

Pros And Cons Of House Solar Panels

Every choice has advantages and disadvantages. Here’s what to know about residential solar panels.

Pros

Cons

Increase your home value

Upfront costs to cover

Save money each month

You’ll have to cover some maintenance costs along the way

Reduce your reliance on utility companies to avoid fluctuating energy costs

Another thing to worry about during bad weather events

Enjoy renewable energy

Financing issues

Pros

Here’s a closer look at the advantages of solar energy:

  • Increase your home’s value: Solar panels are a new technology that can provide energy savings that potential homeowners want to see.
  • Save money each month: A sky-high utility bill can be a drain on any budget. With the right solar panel system in place, you can offset the bulk of your energy costs.
  • Reduce your reliance on utility companies: Energy costs have been on the rise. When you install solar panels, you can reduce your vulnerability to the swings in energy prices.
  • Enjoy renewable energy: In addition to saving on energy bills, you can enjoy the feeling of making green choices.

Cons

Of course, there are also disadvantages to consider:

  • Upfront costs to cover: Installing solar panels isn’t free. Even with tax credits, you should expect to pay several thousand dollars for the system. Many solar companies will allow you to break up the system costs into a repayment plan.
  • You’ll have to cover some maintenance costs along the way: Like all appliances, things can go wrong with your solar panels. If something breaks, you’ll likely need to call in help from an expensive professional.
  • Another thing to worry about during bad weather events: When a major weather event hits your house, solar panels can get damaged. If your panels are damaged during a storm, you might need to rely on a utility company until you can resolve the issue.
  • Financing issues: Some solar energy companies are pushing solar leases or power purchase agreements (PPAs), which means that you won’t actually own the panels. Be sure to work with a solar company that has a positive reputation.

Solar Panel FAQs

How long does it take for solar panels to pay for themselves?

Typically, the average household will see the solar panels pay for themselves within 6 – 10 years. But the exact length of time varies based on your upfront costs and household energy usage.

Does going solar actually save money?

Going solar can actually save homeowners money. Since solar panels can general their own power, you could slash your electricity bill. But the potential savings will vary based on the home’s location and the household’s energy usage.

Does solar increase home value?

According to the Office of Energy Efficiency & Renewable Energy, homes with solar panels installed often fetch a higher price than those without a green energy source. But the increased value varies based on your state and how much electricity your panels generate each month.

Do you need a permit for solar panels?

In most locations, you’ll need to file for a permit before installing solar panels. Typically, you’ll need to work with both your local government and the utility company to finalize a solar panel installation.

Can I install my own solar panels?

Yes, it is possible to install your own solar panels. But the task requires a significant investment of time and energy. In addition to spending a lot of time on your roof, you will need to read up on the system to make sure you install it correctly.

The Bottom Line: Are House Solar Panels Worth It?

For residential homeowners, solar panels might be worth the cost. But it depends on their location, financial situation and energy usage. Take the time to run the numbers for your unique household to determine whether solar panels are the right fit for your house.

If you are ready to go green, then apply for solar financing with Rocket Solar today.

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Sarah Sharkey

Sarah Sharkey is a personal finance writer who enjoys diving into the details to help readers make savvy financial decisions. She’s covered mortgages, money management, insurance, budgeting, and more. She lives in Florida with her husband and dog. When she's not writing, she's outside exploring the coast. You can connect with her on LinkedIn.