is solar worth it

Are solar panels worth it?

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Every solar company has a variation of the same sales pitch, “did you know going solar can save thousands of dollars?” They make it sound so easy, but the truth is, whether solar is a smart long-term investment for you depends on a few major factors. So before you buy into the hype, we recommend you use this simple guide to cut through the sales jargon and determine if solar panels are actually worth the money.

Find out what solar panels cost in your area in 2021

How to know if solar is really worth it: top takeaways

  • Factors like electricity rates, solar panel system cost, and financing method all play into how worth it solar will be for you
  • Most property owners can break even on their solar investment in 7 to 8 years
  • Start comparing solar quotes on the EnergySage Marketplace to see how much you can save

How to determine if solar is worth it

As you start exploring your solar options, there are a few questions you can ask to help determine whether solar makes sense, including:

1. How much do you pay for electricity?

Your current electricity bill is the largest factor in determining how much you’ll save by installing solar. You pay your utility company for every kilowatt-hour (kWh) of electricity you use, and your rate varies significantly depending on where you live. In some parts of the country, you can pay as little as 8 cents per kWh; in others, you’ll pay 20 cents or more.

When you go solar, you effectively install a mini power plant on your roof to replace the power plant where your utility gets its electricity. That means homeowners with high electricity rates from their utility are the ones who save the most when they switch to home solar power.

If you’re just getting started and aren’t sure how much solar can save you, start out by using an online Solar Calculator. EnergySage’s calculator incorporates local electricity rate data to give you a customized estimate of what you can expect to save, and just how quickly your investment will pay off.

is solar worth it? calculator result

2. How much does the solar panel system cost?

Installation prices will vary significantly depending on the solar company you choose and the equipment you install. While cheap solar panels might feel like the easiest way to save some cash, your total 20-year savings will often be higher if you invest in high-quality equipment. It’s worth taking some time to review all of your equipment options and find the right combination of price and quality for your home. You can use an online solar marketplace like EnergySage to easily compare all of your offers in one place, the same way you’d shop for a flight online.

Don’t forget to research the solar incentives and rebates available where you live: they can reduce your net cost by 50 percent or even more. The federal government offers a 26 percent solar tax credit, and many states and municipalities have additional financial incentives for their residents. Some utilities even offer cash rebates to their customers to encourage them to go solar.

3. How are you financing your solar panel system?

Whether you choose to buy or lease your solar panels will have a major impact on your system’s long-term value. If you have enough to make a purchase in cash, you’ll save more than with any other option – but even with a $0-down solar loan, your savings could still be in the tens of thousands. While solar leases and power purchase agreements (PPAs) require no money down and promise a maintenance-free option, they come with a trade-off: your total savings will typically be just 10 to 30 percent of your utility electricity bill.

How does this play out in the real world? This screenshot from the EnergySage Solar Calculator for an example property in Massachusetts shows the difference in long-term savings between a cash purchase, solar loan, and a solar lease.

is solar worth it? financing chart

Are solar panels worth it if you’re not in the sunny Southwest?

While solar loves sunlight, you might be surprised to learn that you don’t have to live in the sunny Southwest to achieve lots of solar savings. In fact, some of the states with the most installed solar in the country (including New York, New Jersey, and Massachusetts) are in the Northeastern U.S. – more famous for their cold snowy winters than sunny summer days. Why is this? These states often have higher electricity costs and better local incentives than elsewhere in the country.

Three Tips for Solar Shoppers

1. Homeowners who get multiple quotes save 10% or more

As with any big ticket purchase, shopping for a solar panel installation takes a lot of research and consideration, including a thorough review of the companies in your area. A recent report by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) recommended that consumers compare as many solar options as possible to avoid paying inflated prices offered by the large installers in the solar industry.

To find the smaller contractors that typically offer lower prices, you’ll need to use an installer network like EnergySage. You can receive free quotes from vetted installers local to you when you register your property on our Solar Marketplace – homeowners who get 3 or more quotes can expect to save $5,000 to $10,000 on their solar panel installation.

2. The biggest installers typically don’t offer the best price

The bigger isn’t always better mantra is one of the main reasons we strongly encourage homeowners to consider all of their solar options, not just the brands large enough to pay for the most advertising. A recent report by the U.S. government found that large installers are $2,000 to $5,000 more expensive than small solar companies. If you have offers from some of the big installers in solar, make sure you compare those bids with quotes from local installers to ensure you don’t overpay for solar.

3. Comparing all your equipment options is just as important

National-scale installers don’t just offer higher prices – they also tend to have fewer solar equipment options, which can have a significant impact on your system’s electricity production. By collecting a diverse array of solar bids, you can compare costs and savings based on the different equipment packages available to you.

There are multiple variables to consider when seeking out the best solar panels on the market. While certain panels will have higher efficiency ratings than others, investing in top-of-the-line solar equipment doesn’t always result in higher savings. The only way to find the “sweet spot” for your property is to evaluate quotes with varying equipment and financing offers.

For any homeowner in the early stage of shopping for solar that would just like a ballpark estimate for an installation, try our Solar Calculator that offers upfront cost and long-term savings estimates based on your location and roof type. For those looking to get quotes from local contractors today, check out our quote comparison platform.


This post originally appeared on Mother Earth News.

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75 thoughts on “Are solar panels worth it?

  1. AvatarTeddy

    Right now, my energy usage is low. About 600 kWh a month. Let’s say I invite all the electric car owners in my neighborhood to plug in and charge at my house. Now I am using 2000 kWh monthly.
    According to a solar company, I can throw a 24,000 kWh system on my roof since my electric bills prove such.
    Then I tell all those car owners to beat it and our usage goes back down to 600 kWh. Will I be penalized for producing too much energy? I am now banking an extra 1400 kWh monthly.
    Anyone have experience with this?

    Reply
  2. AvatarChris Pederson

    You surprised me when you explained that you don’t need to live in a sunny place to get a lot of solar savings. A ton of people are overlooking this I imagine and assume that only people on the coasts save money with solar. I hope to be able to save money on my energy bill each month and I live in a place with a lot of rain so I’m hoping it works out.

    Reply
  3. AvatarYOUSEF S ZUMUT

    My roof consists of several segments and the largest can take 4 panels. I need a total of about 22 panels. Those will be all over the different segments facing the sun at different angles and inclinations. Do you see a good power/panels efficiency coming out of this config, or, just forget about solar?

    Reply
    1. AvatarSteve

      The company I used had two programs that worked from Google Earth. One showed overall annual generation factoring in panel placement. We are lucky and have a large, un-interrupted south facing roof segment that has 24 panels at max efficiency. We could have added 3 more panels on our west facing roof but those panels would be 30% less efficient and not worth it. All this came from their planning tools (FYI, they guarantee the system will generate the power quoted). I’d get a quote and see if it makes sense. A friend in Denver area got a quote that was more expensive than my system and generated 40% of the power. Same issue you have with multiple roof segments plus he has. some tall trees that shadow parts of roof during the day.

      Reply
  4. AvatarJohn

    With the price per KW from the power company it is not worth it. The average KW in FL is .084 cents the average cost to produce a KW with solar in Florida $2.50. Don’t be fooled! Do the numbers with your electric bill. I bought a house that already had panels so no out of pocket for me. I am still taking the off the panels when we redo our roof not worth putting holes in a $14,000 roof. On a perfect day sun shinning my 5KW system will produce 20 KW x 30 days = 600KW my power company charges .09 cents a KW so 600 x .09= $54 a month on a perfect day for 30 days. I wanted to believe in solar and still do but its just not there yet. PLEASE do yourself a huge favor and run the real time numbers off your power bill before you invest a bunch of money and possibly put holes in your roof.

    Reply
    1. AvatarLance

      Solar panels are expensive, no doubt. BUT I’m getting more than enough out of my panels to over 100% offset the grid.

      I do have a solar loan to pay at 1.49% interest for them, but the bottom line is my payment on my solar loan is LOWER than my payment to my power company was. That’s a win in my book no matter how you spell it.
      Then factor in that my power company increases its rates every year and Solar (at least for me in my area) is a bargain.

      Reply
    2. AvatarJohn

      Thank you. Solar sounds so sexy but in FL with the cheap power and hurricane threats, I think the solar roof tiles may be the only viable option when they become standardized.

      Reply
    3. AvatarSteve

      Agree. And make sure you get full value net metering (credit for producing more power than you use). My system generates over 90% of our power annually (even with clouds and snow in Chicago). With Illinois and Federal incentives the payback is 6-7 years to break even. But after that I have no electricity cost and if I sell, I’ll find a buyer who understands that those cost saving result in a “free” mortgage payment.

      Reply
    4. AvatarDara B

      Your calculations are incorrect and you’re conflating kW (the size of a PV system – a kilowatt is an instant measure of power and the size of the system is the number of panels multiplied by the wattage of each panel – so a 5kW system might have 20 x 250 watt panels ) and kwhs (power over time – this is what your utility bill measures and charges you for each month – the number of kwhs you used). There’s a standard formula to calculate how many kwhs your 5kW system will generate in your geographical location in a average year. You can use the industry standard PVWatts calculator (pvwatts.nrel.gov/) to put in your address, the size of your array (in kW), the azimuth of your panels (what direction they face in), the slope of your panels, the shading factor on your panels (how much shade they get throughout the year), the efficiency of your equipment, and a few other details (if you want to get down to nitty gritty) and calculate how many kwhs will come out of your 5kW system on average each year. For example, I just entered Miami (no specific address), 5kW system, facing due south, at a 20 degree slope, with minimal shading (I used 3 percent), and left everything else as the default values – it calculates your system would generate 7761 kwhs/year. This means that using your information above, your 5kW system saves you about $700 each year on your electric bills. I’m actually reading that average price/kwh in Florida is 11.5 cents so that 7761 kwhs/yr will actually save the average Floridian close to $900/year. I don’t know about state solar incentives for solar but the system will be eligible for the federal tax credit of 26% of the cost of the system. And the system should continue producing for 30 – 40 years (with manufacturers warranties on the major components of 25 years standard in the industry now).

      Reply
  5. AvatarBOBBY MONTALVO

    I have spoken to and had an inspector from FREEDOM FOREVER Company. How are they rated in Texas? I live in Pearland Texas, near Houston.

    Reply
    1. AvatarSharon Pole

      i had freedom install my solar panels in California and I was impressed with the operation, I had 5 other solar companies come out and they tried acting like they were engineering another wing on my house, I highly suggest them

      Reply
  6. AvatarAustin Anderson

    Solar energy is experiencing massive growth in Boise. In large part, the growth is thanks to Boise solar incentives. These are being given by the government, state and utility companies to people or businesses that choose to go solar. We have some of the least expensive energy rates in the country. That may also be why we consume a bit more energy than the national average. So even with our low electric rates we still see higher than average electric bills across Idaho. With solar Idahoan are able to lower their monthly expenses while working towards true ownership of their solar system. There are 4 main financial incentive programs in Idaho for clean energy consumption and we want to talk about all of them!

    Reply
  7. AvatarDarryl Morgan

    My neighbor got into Solar Panels and says she is regretting it. It is too costly for her and she has even considered refinancing her house just to be able to afford it and even called in a Lawyer to get out. Are Solar Panels that costly for everyone or was it just the specific company she went into?

    Reply
    1. AvatarTroy Skerrow

      It’s a company thing, the company I am familiar with offer both purchase and lease with 0 to little down and you lock in a monthly rate for 20 years. Look up sunrun if you have any questions or want information reach out.

      Reply

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