How to determine if you should install solar panels at home

Find out if solar is worth it for your home with a free cost-benefit analysis from Understand Solar.

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May 27, 2022 2:55 PM
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An installer is standing on a tile roof to lay a solar panel]

Solar energy technology has been around for a long time and has always been a great idea in theory. After all, sunlight is free, and converting it into electricity doesn’t contribute to our growing greenhouse emissions. And while solar wasn’t always financially feasible for the average homeowner, things has vastly changed.

The cost of installing solar panels has dropped about 70 percent over the past decade, thanks to tax credits, lower equipment costs, economies of scale and greater consumer demand for sustainability. Now, states like California even require solar energy systems on new houses, which might make the resource even more affordable for homeowners. But before you invest in new hardware, you should determine whether solar is for you, and a free personalized assessment from Understand Solar may help.

Is solar energy right for you?

First, you have to determine what local, state and federal government subsidies and tax incentives you’re eligible for. Then, you have to confirm how much sunlight your home gets, which will affect the amount of solar energy you can capture with a photovoltaic power system. This could vary depending on where you live and your house’s positioning and architecture.

The next step can be the most challenging: ascertaining the short- and long-term impact of your local electric company’s rates and policies. Are you charged a flat bill all the time, or is it higher during peak hours? Does your utility provider charge more or less based on your energy consumption? Does it allow net metering, which lets you use the extra electricity you generate and put it back into the grid? And what are the projected rates in your area over the next 10 to 20 years?

Questions like these can help you decide how much or little money a solar energy system can save you over traditional electricity. Unfortunately, finding these answers isn’t always easy, and the experts at Understand Solar can walk you through the process for free with no commitment required.

Understand Solar's free personalized assessments

Understand Solar is a third-party solar energy advocate. It doesn’t sell equipment, but it can provide assessments. One of its experts can contact you to answer any questions you may have. Understand Solar can set up in-home estimates from multiple highly-rated local installers when you're ready to move forward. If you discover solar panels aren’t right for you, Understand Solar can explain why.

The real value of solar panels

Many people believe switching to solar will eliminate their electricity bills. While it might offset the cost of financing your installation, it won’t necessarily put money in the bank. At least, not right away. Most homeowners stand to make money on solar energy systems over the long term.

“More than 80 percent of [home] buyers now say energy-efficient features are important in selecting their home,” Zillow Senior Economist Sarah Mikhitarian recently explained to CNBC. “This is part of the reason that there is a premium associated with it. The other piece is that there is a true value provided by solar panels—namely, future energy savings.”

So how much value is she talking about? Actual dollar amounts depend on where you live and how much sunlight your property gets. But in general, homes with solar energy systems sell faster and for higher prices than properties without. One recent study by Zillow found that solar adds about 4.1 percent to the average home's value. Another analysis discovered buyers are typically willing to pay $15,000 more for a property with solar power. And another calculated that you could gain about $5,911 in value for each kilowatt of solar installed.

When you factor in projected increases in electricity rates over the next 20 years and the value a solar energy system can add to your home, the long-term value might seem attractive. However, solar isn’t suitable for everybody, so you may want to consider getting a free estimate from Understand Solar today.

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