Will Solar Save You Money?
Expensive.
That's a common way to describe solar.
The reality is, if you can afford car payments, you can likely afford solar. Unlike a car though, solar is considered an investment. Solar can:
👉Save money on power bills
👉Increase home values
👉Qualify you for a 30% tax credit
Let's break it down.
Solar Saves You Money on Your Power Bills
When you go solar, you get to own your power instead of renting it. Similar to buying a house, you'll have payments, but for many, it's a much better deal than renting a house.
The same goes for power. You can rent your power from the utility company. They'll have control over the prices, and will inevitably raise them on you. If there's a power outage, there's not much you can do about it.
When you go solar, you get control of your power. You get a flat price, just like a mortgage. There are three factors that make solar a better option than renting your power from the utility company
- Financing breaks up the cost of solar over time
- Net metering allows you to eliminate your bill year-round (even through winter)
- A flat payment means you're not stuck with utility company rate hikes
Understanding Solar Financing
Solar isn't free, but it can be more affordable through solar financing. There are three main methods of buying solar. Cash, leasing & financing.
When you buy a solar system cash, you have to pay for the whole thing up front. You'll save on the cost of interest over time, but you have to be able to pay a larger lump sum.
When you lease solar, that means you don't own it. The company that leases you solar will come to install panels. They will also maintain them.
However, they are in control of the price you get charged. We don't offer a leasing option. We prefer to have customers own their power rather than rent it from us or the utility company.
Financing is the most popular option with our customers. With financing you're able to lock in a flat price with a term of your choosing. You get to own your power and only pay a flat rate until it's paid off. Once it's paid off, you won't have a power bill or a solar payment.
The nice thing is that panels can last 35-40 years. If you pay your system off in 10 years, you'll have 25-30 years of no power bill, and no solar payment.
This all depends on the financing options you choose, and the size of your system. It's something we go through in detail with every homeowner that requests a free quote from us.
Here's a tool we made to calculate the lifetime savings of solar.
Net Metering Means No Power Bill
Net metering is a process that allows a homeowner to overproduce power, and store credits for power with the utility company to be used when they need them, like night time, or winter. Net metering is the reason you can get rid of your power bill.
For it to work, you have to update your power meter. Before you get solar, your power meter only tracks what power you used, and how much you’ll owe the utility company.
When you go solar, you get a new power meter that tracks how much you draw from the grid, but also how much excess you produce and send back to the grid.
This tracked amount becomes your net metering credit. Those credits are then redeemable to cover your utility bill during winter time, at night, and at other times.
A properly built system will leave you without a power bill. In essence, you’re able to swap your electrical bill, for a solar payment. The solar payment will be around the same price or less, and because of net metering, you’ll be covered year round.
Some things to note, when you produce extra power and send it to the grid, you're not getting money back. You're getting credits that can be redeemed for free power from the utility company.
Different utility companies also give credits at different rates. Not all companies provide you with the same amount you gave them. This depends on the utility company. It’s something we go through with every customer when we’re building out their free quotes.
Solar Avoids Rising Energy Costs
Every year the cost of electricity rises. Depending upon your location and the given year, cost increases may range anywhere from two percent to eight percent per year.
No one likes the increased prices of any commodity, but electricity isn’t a commodity, it’s a necessity. With a solar energy system, you can protect yourself from rising prices.
When you finance your solar system, whatever price you negotiated is locked in. No one else has the power to raise it on you. This is where financing is a lot like buying your home instead of renting it.
Solar Can Improve Home Values
According to research done by Zillow, having a solar energy system can boost a home’s value by 4.1%. A home that would normally sell for $300,000 would be valued at $312,300. That’s a $12,300 increase in value for something that’s already saving you money!
The Zillow study notes that the change in home value depends on areas of the country you're in, but 4.1% is a national average.
Another study done by the Lawrence Berkeley National Laboratory found that a home’s resale value can increase by $5,911 for every kW of solar capacity installed on the home.
For reference, in 2022 our average system size was 8.5 kW, reference 80% of our installations fall between 6 & 12 kWs in size.
The increase in home value varies by region, and by the age of a system. The figures we shared represent national averages, and we encourage looking deeper into the sources we listed to get a clearer picture.
Solar Can Help You Qualify for a 30% Tax Credit
Mitch, one of our employees went solar and was able to claim a tax credit on the cost of his solar system for 3 years. He spent three years not paying any taxes!
If you spent $20,000 on your solar energy system you’d get a 30% credit. That’s $6,000 in a tax credit. If you only have $1,000 of tax liability.
We wrote a whole tax credit article with everything you need to know. Here’s a quick recap.
The Federal Solar Tax Credit is a 30% tax credit for solar systems installed between 2017-2032. During 2032 they will drop to 26%. Systems installed in 2033 will receive a 22% tax credit. Unless Congress renews it, this tax credit will expire entirely for home solar energy systems installed in 2034.
You could be eligible if you meet the following criteria:
- If the Solar Panels have been installed before December 31, 2034.
- The solar PV system must be located on your home or business.
- You or your business must own the solar PV system, or you must have purchased an interest in an off-site community solar project. The electricity generated by the project must be credited against, and not exceed, the home’s electricity consumption.
- The solar PV system must be new or have never been used before. The credit only applies to the original installation.
Related post: Understanding the Solar Investment Tax Credit | Solar System Example
Bonus: Smart Energy Insights from Solar Help You Save Money
The more you know about your energy usage, the more you can make smart decisions and cut wasted energy usage.
When you’re fully reliant on the utility company, you get a power bill every month. They pretend to give insights but really, they just tack on random fees, connection fees, transmission fees, and then there’s the cost of your power.
There’s no insight into how your home is consuming power, and where you can cut the waste.
With a full smart solar system, you can see and program every circuit in your home. Kenny, one of our Big Dog Solar employees, got a full smart solar system installed in his home and he found that his hot tub was taking up 40% of his power bill. He said, “If my kids leave the porch lights on I can turn them off without having to walk all the way downstairs.”
This is possible because of smart inverters, batteries and especially a smart breaker box.
What is a full smart solar system? Most solar systems allow you to remotely monitor power you produce. A full smart solar system allows you to monitor the power your panels produce as well as the power your home consumes on a circuit by circuit level. You can also control it from your phone.
With a full smart solar system, you can see what’s drawing power that you might not even be using. That’s just the tip of the iceberg for the benefits of a fully smart solar system.
You can watch a full video on how this breaker box company is making solar a lot smarter.
When is Solar not Worth it?
We get it, we're making it sound like it's all sunshine and roses with solar. But, it's not always the right choice for everyone. We get that. Our goal isn't to get every single person to go solar, but rather to help people make an informed decision about solar.
Here are some reasons solar might not be a good fit for your home:
- Your roof or yard is in shade through most of the day
- Your power bill is less than $50/month
- Your home is on a temporary foundation, (like a manufactured home on a trailer)
- Your credit score is below 650 (financing will be less favorable)
- Your utility company has a really bad net metering policy
If you have questions about any of these, we actually go through each one of these with customers before we give our free quotes. Just call us at any number you see on our site. Or if you have questions feel free to email us.
Summing Up Some Simple Ways Solar Can Save Someone Some Serious Cash
Please excuse us for our silly headline, but solar power is an excellent investment for your finances. By installing solar panels, you can reduce or even eliminate your monthly electricity bills, generate your own electricity, and depend less on utility companies.
You may be eligible for federal and state tax incentives and rebates, further reducing the overall cost of installation. Investing in solar panels can increase the value and attractiveness of your home, and make it a smart investment.
Going solar can save money on your energy bills, increase the value of your property, and help protect the environment by reducing your carbon footprint.
