Homeowners can expect three main benefits from installing solar power: lower utility bills, higher home value and a greater control over their future.
Benefit #1: Lower Utility Bills
The best benefit of solar power is that it can dramatically lower your electric bill from day 1! In fact, a properly sized solar photovoltaic system may be able to offset around 70% of your electric usage. So, if you spent $200 last month, you might save 70% or $140 each month. That’s a savings of $1,680 per year. Don’t forget that electricity costs have historically gone up around 2-3% each year. That can add up to well over $35,000 over the course of a 20 year period! The payback period for a residential solar installation depends on your electric bill, your location, your current utility rates and other factors. However, many new systems can pay themselves back in 5-10 years with the help of state and federal financial incentives, such a solar rebates. Also, current solar financing and solar lease programs in many areas allow homeowners to benefit from immediate reductions in monthly energy bills without paying a large sum of money upfront. Some programs can cost homeowners as little as $1000 or even $0 down payment in certain areas.
In addition, New Jersey has adopted a net metering policy. Basically, net metering is where you only pay for the net amount of electricity that you use. With net metering, homeowners with solar installed are able to “bank” the excess electricity their solar system generates or literally send the energy back to the grid. Homeowners can then receive credit up to 100% of their electric use bill at the full retail electricity price that they can use later. What’s even better, a typical solar system produces the most electricity during the middle of the day when the utility rates are at their highest. With the right sized solar system, you can sell excess electricity at high peak rates in the afternoon and buy electricity back at lower off-peak rates at night.
Benefit #2: Higher Home Value
Much like when you renovate your kitchen, solar power is considered an improvement to your home. As a result, solar energy can increase your home’s value and make it more attractive should you decide to sell it in the future. In fact, installing a solar system can actually increase the value of your home more than the cost of the system itself, particularly where state and federal incentives are available. This is because electricity bills factor into the affordability of a house and a buyer can afford to pay more for a home that has lower utility bills. A 1999 study partially funded by the U.S. Department of Housing and Urban Development found that home values increase by $20 for every $1 reduction in annual electricity bills. This means, the annual savings of $1,680 mentioned above would result in a home that is worth $33,600 more!
As if these reasons weren’t enough, research by the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy has shown that a home with solar panels installed can sell twice as fast as a home without solar panels installed. As a wise consumer you’re probably curious about what these improvements could do to your property taxes. Fortunately, most states offer property tax incentives that exclude the added value from the solar system in the property tax calculation.
Benefit #3: Greater Control Over Your Future
Solar energy provides peace of mind that you are building a more financially secure future for yourself by providing independence from utility company electricity rates and control over your home expenses. In fact, electricity is increasing on average about 6.7% a year, with a 30% jump in the last three years alone. Using solar to generate electricity and/or hot water for your home effectively locks in a low utility rate now for the lifetime of your system – which can be 30+ years! Together with home energy efficiency improvements, the energy from solar power systems can be used to make your home more comfortable and luxurious. And by reducing your home’s energy demands from local utility company power generation, you are doing your part to protect the environment and improve the health of your local community.