Solar panels are a great investment, but they’re not for everyone. If you want to know if solar panels are worth the cost in 2021, then read this blog post! In it, we will discuss how to calculate your electricity bill and how to figure out the return on investment of installing solar panels. We’ll also compare the time it takes until you can break even with what you save on your electric bill.
As a general rule, solar panels are worth it because over a 25 year period, the cost of solar will be less than half of what you have to pay a power utility for the same amount of electricity. The payoff for a basic solar net-metered system will be 5-8 years and 10-15 years for a full-up, battery-backed off-grid capable system.
High cost of a solar system
How much solar panels cost per square foot has declined dramatically since the 1980s when solar panels were seen as a luxury.
The cost of installing solar panels will vary depending on several factors including your location, roof size, and system efficiency rating.
Today’s typical homeowner can expect to spend about $2.50 per watt for installation costs, averaging around $15,000 for a standard home with a full solar setup, including solar panels and batteries.
a Grid-tied system will cost less, averaging out around $10 000, and for areas where there are not many blackouts, it can be the more attractive option.
Grid-tied solar system
a Grid-tied solar system is tied directly to the grid where the home is located. The price of a grid-tied system is lower because there is no need for the solar system to have batteries.
In a grid-tie system, the solar energy generated by your panels is sent directly into the public power grid, and you can receive credit for that electricity as well as from any excess generation following how much you use from the utility company’s supply.
Energy-intensive appliances like air conditioners, washing machines, and dishwashers can be powered for free using solar power. Excess energy is fed back into the grid on a bi-directional meter.
Calculate how much you pay for electricity
Utility companies charge per kilowatt-hour for every unit of electricity used. This can vary significantly according to the area where you live.
Some utility companies charge 15 cents per kilowatt-hour, others 25.
You can use an energy usage estimator online or on your utility website, which will take into account the number of hours in a month you stay at home and how many people live there; what appliances are used inside, such as TVs, computers, refrigerators, and dishwashers; outside lights, pool pumps, and irrigation systems; electric car charging stations.
Once you have the monthly cost you can multiply that by 12 to calculate your yearly utility cost.
Is worth it for you?
Solar panels are expensive. How quickly you can recoup your investment will vary depending on how much energy you consume and the size of your system.
If you have solar panels that produce 10 kiloWatts per day on average and multiply that by 30 days, that’s an approximate monthly cost savings of $42 if you are billed 14 cents per kWh.
If you do the math, that’s approximately $504 in savings by the end of year one. At first glance, it might not sound like a lot, but if your monthly electricity bill is around $200 and goes up over the years at an average rate of five percent, then this could be significant long-term savings.
If you have solar panels that produce an average of 20 kiloWatts per day on 30 days, your monthly savings would be $100 if billed at 14 cents per kWh. Over a year, this is $1200, and over ten years, it’ll result in total savings of about $12000.
Calculate how much your solar system will cost
The cost of solar panels in 2021 is approximately $2.50 per watt, excluding the federal and tax credits of 26%.
This means that a standard solar system of about 6 kiloWatts will cost approximately $15,000.
How to calculate the time it takes for your investment in solar panels to pay off :
Cost of installation : $15000.00
Minus 26% Tax credit: $3900.00
Total: $11 100.00
In our example, we saved approximately $504 per year on our utility bill with the solar installation.
It will take around 22 years for the system to pay itself off.
The average utility company rate increase over a 20-year period is about three times what it was over the last 20 years, so if you are anticipating that your electrical rates may go up soon, it’s best to install solar panels as soon as possible so you can start saving money immediately.
Why solar panels are not worth it?
Choosing to install solar panels can be an incredibly smart investment, but homeowners must also consider the solar’s high costs. Here are some factors that will affect your financial return: Installation cost, and lack of incentive if you’re not eligible for any federal incentives on installing solar systems such as the renewable energy tax credit or Solar Renewable Energy Credits
What are the 2 main disadvantages to solar energy?
- Initial cost. The initial purchase of a solar system is very expensive- over $20,000 for a typical home or condo. …
- Some solar energy can still be collected on cloudy and rainy days, but the efficiency of a solar system drops when it is not sunny.. …
- Solar Energy batteries Are Expensive
If you are considering installing solar panels, it is important to know that the installation cost has decreased by a significant amount in recent years.
In fact, if you purchase your own system and have no federal or state incentives like tax credits or rebates available to offset the upfront costs, then on average for every $1 spent of initial investment there will be an estimated return of $4 over 20 years (depending on location).
Another benefit of using residential solar power systems is that they can help reduce monthly utility bills as well increase home value due to their increased demand. You may want to speak with a professional about how these factors could apply specifically in your situation before making any decisions.
