Why go solar in 2021: all benefits explained
There are currently over 2 million homes that have solar panels installed in the U.S., and as the Biden Administration aims to make the power sector carbon-free by 2035, that number is expected to rise – quickly.
In this article, I will discuss 8 reasons why people are going solar in 2021.
1: The federal solar tax credit reduces the cost of solar
The federal solar tax credit covers 26% of your solar energy system¡¯s cost. Unfortunately, it is slated to reduce to 22% in 2023 before expiring altogether in 2024 for residential homes.
A flood of users in the first quarter of 2021 have utilized our site to contact solar companies to ensure they get their system installed while they can still claim the tax credit at the 26% rate.
SolarReviews ran a survey on over 400,000 U.S. homeowners who received a solar quote on Solar Reviews. The data showed that the solar tax credit was the single-most important financial incentive when going solar.
The below table shows average system sizes and their costs before and after the federal solar tax credit is applied. As of July 2021, the average cost of solar is between $2.75 and $3.25 per watt, depending on the size of the system.
2: Solar reduces your energy bills
The solar power your panels generate from the sun can reduce your electricity costs or even eliminate your electricity bills altogether.
With grid power getting more expensive, having a solar energy system allows you to generate your own power, and as such, provides a sort of insurance policy against the effects of future electric rate increases.
Avoiding the rising electricity prices during your system¡¯s 25-year lifespan is very appealing, especially with monthly savings increasing over the years as power gets more expensive.
3: Battery storage keeps the lights on in a power outage
Battery storage allows you to store the solar power that your solar panels generate. You’ll also be able to keep your appliances running, like your refrigerator, in the event of a power outage – which will prevent your food from spoiling – saving you an extra trip to the grocery store, as well as wasted money!
You can also claim the 26% solar tax credit on a solar energy storage battery. Solar batteries and home energy storage solutions have become significantly cheaper in the last few years, thanks to improved technology.
4: Solar increases the value of your home
In 2019, Zillow released a study showing that homes with photovoltaic solar panels installed sold for 4.1% more than similar homes without solar panels on them.
Based on current median-valued homes, this suggests that going solar adds an extra $9,274 to the property value of an average home. This value is a large proportion of the total cost of a system after claiming the solar tax credit.
So even if you were contemplating moving within the next few years, solar would still be a worthwhile purchase. Not to mention, you’ll save money on energy costs before the move, too.
5: Solar is a smart investment
Homeowners typically generate a return on investment of between 10-20% on their residential solar energy system. This is a payback period of only 5-10 years on a system that will last 25-30 years.
If you were to invest in the stock market, getting that type of return on your investment would be considered out of this world. Stocks and shares go up and down; the return on investment from a solar system also could be said to have a much lower risk profile.
It is certain that you will continue to use electricity, and so the investment income from solar (in the form of electric bill savings) is very secure and reliable. We think this point is often overlooked by people considering the investment case for a home solar system.
6: Solar is good for the environment
Solar power doesn’t pollute the air or produce greenhouse gases. It replaces other non-renewable power sources like oil, gas, and coal, and using a renewable energy source stops the need to use fossil fuels to generate our electricity.
The Biden Administration aims to stop the use of fossil fuels by 2035; we will have to reduce our carbon footprint to achieve this and solar panels are the best way to do it.
7: The price of solar panels has dropped significantly
The price of a 6 kW system today is around $11,988 to $14,652, after applying the 26% solar tax credit – that¡¯s an almost 80% decrease from what it was 10 years ago!
This means a solar panel system is now much more affordable for most American homeowners, especially as zero-down solar loans and other flexible financing options are now easily available.