One of the most often asked questions by customers when they think about making a purchase is the same: How much is this going to cost?
You’re probably here because you’re curious about the long-term returns on solar. There are several solid sources of information that lend us to believe that the answer is yes, solar is a good investment. You don’t need to take our word for it though.
If you look up the average electric bill in the Mid Atlantic region you will find that it is roughly $120 per month. (Your bill may differ depending on factors like square footage of home, number of occupants, etc.). If you start to think longer term though you realize that even with the basic rate increases that in just a single decade you have paid nearly $19,000 to your electric company and you have nothing to show for it.
Solar will save you money. Solar is better for the environment. Is Solar a good investment?
Let’s look at the facts!
Let’s start with the incentives. A federal tax credit allows taxpayers to claim 26% of system and installation costs for systems installed before December 31, 2022. Additionally, many state and local regions offer rebates, waived fees, and property tax exemptions. (You can find more information about your specific region here).
After incentives we can now look at long-term returns. Zillow, one of the largest real estate websites in the world is now openly presenting a “Sun Number” which rates a home’s potential for solar on a scale of 1-100. This rating is based on 4 factors.
- Sun Exposure
- Regional Climate
- Electricity Rates
- Cost of Solar
Why does this matter? Well because according to Zillow, homes with solar panels sell for 4.1% higher than homes without solar, and The National Renewable Energy Laboratory reports that every $1 saved using solar energy increases home values by $20.
In Maryland, the average single family home value is nearly $370,000. A 4% increase would equal nearly $15,000 and remember that increased value is tax exempt.
So, we’re talking about tax breaks, rebates, higher home valuations, property tax exemptions, and lower monthly costs. All this and we still haven’t even touched the “break-even point”.
Your solar payback period is essentially the point in time where the money you save monthly with solar matches the amount of money you paid for the solar panel system. In the Mid Atlantic this payback period is 10-13 years or less. With solar equipment lifespans being 30+ years this means 15+ years of FREE electricity.
In case you were wondering, based on the average monthly rates this means $30,000 or more back into your pockets after you’ve paid for everything.
So, you go solar, and you get to write off up to 26% of the cost. Your home value increases by 4% or more. After 10-13 years you’ve broke even on the cost to buy the system and have it installed, and you could get free electricity every year after that.
That definitely sounds like a good investment!