Benefits of Clean Solar Power For The Home
In recent years, Solar energy has been one of the most dependable, affordable, and beneficial source of alternative energy. The ‘green’ environmental benefits are the ones you’re more aware of, but there are other well-known financial rewards to replacing traditional coal- powered electricity with solar electricity as well. Solar power/energy is an investment where you’ve to buy or lease solar equipment and install it on your home or business property. But after the initial investment, it’s just a lifetime of savings with lowered energy bills and increased real estate value.
Calculating (or Assessing) Your Savings
OK, it’s true that solar panel systems are an affordable source of electricity. But the real question is can solar panels put back money in your pockets and when or how soon it starts to save you money. The total savings projected by the addition of a solar panel system is tremendous. With rising utility rates from traditional sources and the federal and state tax incentives, it’s easy to see how quick the money saved accumulates.
- Instant Savings: These days with new technology cropping up faster than ever, the question is not if solar saves, but how much. Due to solar panels producing utility-free electricity combined with government incentives, you’ll see your bills plummeting down and savings rise up. Whether you have bought the solar system for cash or loan, the electricity bill will definitely be less than a traditional utility bill. In fact, you may end up saving money instead of spending money on buying energy. Some U.S. states generate solar renewable income if your solar energy output surpasses consumption.
- Build-Up Savings: Every month you’ll enjoy small energy bill savings, which will quickly add up over a period of time. Depending whether it is cash or loan purchase, those savings will be seen immediately or add up to something big over time.
Everyone will experience contrasting savings, due to the difference in location, sun exposure, and other factors which affect the solar energy generated. While some may get 30% savings, there may be lucky ones who get 100%.
- Yearly Savings: When you invest in a solar system, your investment will promise a return every month. Imagine this; for every month your draw energy from solar panels, you don’t need to pay to the utility company. Not only do you accumulate energy, but if you live in favored U.S. states like Massachusetts and Connecticut with renewable energy credits, you’ll be credited for your solar energy production. The first year of solar will be negative due to the investment from your side, but from the next year onwards, its savings and only savings. On the other hand, the utility only loses money, never accumulating any saving.
- Tax Credits: A tax credit is deducted from the amount of tax that you owe. If you install a solar electricsystem, you qualify for solar tax incentives at state and federal level. Nearly 30% of the cost of your solarsystem and installation can be subtracted from your federal tax bill. These solar tax breaks depend on the stateyou live in and the size of your system.
Reducing or Eliminating Your Electric Bill
- Dictate Your Electric Costs: Besides helping the environment, one of the biggest reasons to go solar is reducing or eliminating your electric bill significantly. How much you’ll save depends on how much energy your solar powersystem generates and how much of you consume. Solar installed homes will still draw power from the utility grid but at a lower-priced rate tier. However, the biggest decider of savings is dependent on the rates you would have paid if your electricity came from the utility.
- Security from Rising Electricity Costs: Electricity costs make a large part of your overall budget. Production of electricity is reliant on fossil fuels such as oil, coal and natural gas, which are susceptible to unstable and unpredictable foreign markets. When you switch to solar, you’re hedging yourselves against steadily rising electric rates. You can ensure, fixed & predictable electricity rates for years to come. As utility rates continue to rise, so do your savings.
- Offset against Electricity Costs: When your solar system generates more electricity than your home can use, your excess power is routed back to the utility grid. Most electric companies pay or credit you for this electricity.
Solar power system produces maximum power during the middle of the day (peak hours) when utility rates are at their maximum. You can sell excess energy during the peak hour rates in the afternoon and buy electricity at lower off-peak rates at night. This way, you sell high but buy low. In America, this system known as “Net Metering” and it allows net electricity costs to be reduced to zero. Some of the U.S. states pay you for any excess electricity, in what is known as “Feed-In Tariff system”.
Estimating Energy Cost Savings for Net-Metered PV System (Credit: U.S. Department of Energy)
Using the equation below, you can estimate the annual electricity production and electric bill savings for a grid-connected home solar electric system with a net metering arrangement.
Determine the PV system's size in kilowatts (kW). A typical range is from 1 to 5 kW. This value is the "kW of PV" input for the equation below.
Based on your geographic location, select the energy production factor from the map below for the "kWh/kW-year" input for the following equation. Electricity production from the PV system = (kW of PV) × (kWh/kW-year) = kWh/year
You can calculate your annual electric bill savings using the following equation. Note that the residential rate should be in dollars per kWh; for example, a rate of 10 cents per kWh is input as $0.10/kWh.
Electric bill savings = (kWh/year) × (Residential Rate) = $/year
(To determine your monthly electric bill savings, divide the final number above by 12.)
Improved Property Value
When you install a solar power system to power your house, the value of your property will increase drastically. It is a bonus if the operating expense of managing your property gets decreased. So, by the time your house is put up for sale, its price will be higher, since what you spent on your system is added to the house's purchase price. This could bring down your capital gains taxes if you sell for a big profit. Putting it differently, if you install a solar power system,you will be able to save thousands of dollars on your electric bills while you live in the house, and get every penny youspent on the system back when you sell.
Reduced Overhead Expenses
When you invest in solar panels on the roof of your house or business property, it will drastically decrease the overhead expenses in a significant manner. If the kit is mounted properly, solar panels have long lifespan. It will saveyou from the nuisance and costs of frequent maintenance. Most solar panels have a 20 - 30 years lifespan and this can increase to 40 years if solar panels are properly maintained.