Is solar energy really worth it?

SOLAR ENERGY OVERVIEW

Over the last decade, the solar market in the United States has grown at an average rate of 50% each year. There are more than 2 million individual solar installations in the U.S., ranging from small home rooftop systems to large utility-scale systems that add hundreds of megawatts of clean electricity to the power grid.
As reusable energy generated from the sun, solar energy is popular not only because of its characteristic of being clean and helping to save money but also the ease and variety of ways of utilization. Aside from using photovoltaic to generate electricity, solar energy is commonly used in thermal applications to heat indoor spaces or fluids, for heating buildings or water.

HISTORY

Tracing back to the history of solar energy, the solar industry has experienced rapid growth in recent years. In 2009, less than 20 GW of solar capacity was installed worldwide, while in 2020, that number has skyrocketed above 480 GW—over 24 times larger in just over a decade. Rapid technological advancements have made this possible. In the same time frame, the cost of a fully installed system dropped from $7.14/watt in average in 2010 down to around $2.50/watt in 2020. That means you can go solar today for about one-third of what it would have cost ten years ago. (The exact price always depends on the area you live, the sunlight you get there, the system size you would need and so on – we will be happy to find out for you!)

TODAY’S USE

Recently, solar energy has become more and more efficient, adding up to a considerable portion of its value, and this is a predictably continuous trend. Scientists have reported the development of multi-junction solar cells with an efficiency of more than 40%, a new world record for solar photovoltaic cells. They also predict that concentrator solar cells could achieve efficiencies of more than 45% or even 50% in the future, with theoretical efficiencies being about 58% in cells with more than three junctions. But an own system is also an investment. Is it worth it?

Benefits of Solar Energy

At the same time, using solar energy will also have a positive impact on the value of your home. According to a study, on average, solar panels raise a home’s value by 4.1% across the U.S.— that’s a boost of over $9,000 on a $226,300 home, according to the study. This analysis compared homes “with and without solar-energy systems that were listed for sale and sold from March 1, 2018, to February 28, 2019.” The study controlled for the home’s attributes, like bedrooms, bathrooms, square footage, age, and location, to determine an area’s solar panel boost. Does that make solar energy worth it? Maybe, but there is also more to come:

Factors Affecting Solar Energy Use

On the financial side, going solar can reduce your electricity costs significantly or eliminate your bill. The savings with solar depend on several different factors:

1. What’s the cost of energy in your living area?

What U.S. citizens on average pay for energy varies greatly from state to state. The average kWh costs 8.8 in Oklahoma. In Hawaii, on the other hand, it costs 32.8. More than three times the amount! In between are New York with 17.27 and California with 18.34.

Residential Electricity Rates by State (a selection)

• Oklahoma: 8.8
• Florida: 11.99
• Delaware: 12.25
• Maryland: 13.07
• New York: 17.27
• California: 18.34
• Hawaii: 32.8

We are getting closer to a positive answer to our main question: Is solar energy really worth it?

2. Are there any solar financial incentives offered in your state?

Homeowners who buy their solar panels — instead of leasing them — can claim a federal Investment Tax Credit (ITC) worth 26% of their purchase cost come tax season, a $6,000 return on a $20,000 home solar system. At the same time, different states have offered various financial incentives to encourage residents to install solar panels.

Some examples of solar tax credits & incentives

• Solar Energy System Equipment Credit in New York: 25% of qualified solar energy system equipment expenditures (limited to $5,000)
• New York State Solar Incentives: rebate rates of $300-$350 per kW of the total syszem size
• New York City Property Tax Abatement: after rebate – the value of saving is 20% of the total system cost
• Local utility solar rebates in California: up to $1.25 per watt
• Property Tax Abatement for Renewable Energy Property in Florida: a 100% property tax exemption for residential or 80 % for non-residential renewable energy property
• Solar and CHP Sales Tax Exemption: no sales tax on a solar energy system = 6% saving

Those are multiple reasons (on top of the positive environmental impact ) that make solar really worth it.

3. How much would you otherwise pay to your utility?

Price of electricity continues to rise, your savings will continue to grow each year. Electricity rates in California have increased by about 2% within a year. However, increases of over 20% can also be made. This means that if you buy a solar system for your home, all solar power generated by your system will be “free.”

Solar power cannot only reduce one of your most significant monthly expenses but stabilize your budget. Because electricity prices are unpredictable, it’s hard to manage your budget. By installing solar panel systems, you can also fix your electricity costs and make them more predictable. This is particularly beneficial for anyone with a fixed income, as well as for businesses that can benefit from more stable cash flows. As you make your electricity costs more predictable by using solar power, you also improve your ability to forecast and manage costs.

Therefore, where does solar energy make sense?

Sure, it makes sense in California and Florida with a huge amount of solar energy resources due to the geographical advantage. Taking California for example, by 2019, California has installed 26,232.25 MW, which is enough to power almost 7,000,000 homes. As for the northern parts like New York and Philadelphia, it still makes sense even though the winter is much longer and colder than the southern parts. This is because solar systems can produce energy even on cold days. As for the days with less sunshine, they are limited to a few months. In these few months, there is usually no continuous snow. At the same time, the low temperature doesn’t affect the productivity of solar panels. Not at all, it’s an advantage.

So – YES! Solar energy is really worth it.

Ready to go solar or any more questions?