After talking with friends and work associates about using solar energy instead of the traditional means, I often wonder if I would actually save money if I went solar. Some feel that the cost for solar is not worth it yet. Some feel the cost for solar is worth it now.
But, I am seeing more and more homes with solar panels. Being a Californian, I am thinking, perhaps these homeowners know more about solar energy than my friends or I do.
So I crunched a few numbers and found out that I would save money based on my electric and gas bill if I went solar. With the economics of our country, this day and age saving money anywhere and anyhow is what we are all trying to do. Sure, there are upfront costs that my husband and I have to pay out, but in the long run we will save, which will take about five years. Another added value is that it’s an investment for raising the resale value of our home.
And, it sets an example for the rest of our neighbors while teaching our children the importance of using alternative-energy.
{ 5 comments… read them below or add one }
we are specialized producer of solar cell and panel. I am so happy to see people now realize how good to run solar panel on their roof. And the government support it much more than before. It is not only to save money, it is also to save our nature.
My company, Ulica, honored to offer solar panel to let people use solar energy.
If you are interested, please contact me: janchu@126.com
First off, I do not believe in Global Warming but I do believe in saving money and natural resources.
I too did question the costs and figures with installing solar. Here are my real world numbers that show I will make my money back in 3 years with my PV system.
I installed a $33,600 3.68kWh PV system.
I received a $10,000 Federal Tax Credit (Courtesy of the 1st Bush Stimulus Package Oct 2008)
I received a $9,200 Maryland State Grant (Taxed by the Federal Government at 28% – $6,624)
I receive a $38.18 Maryland State Tax Credit (3 year total ~$114)
I save $655 in electricity per year (3 year total $1,965)
I earn $2,700 in SRECS (3 year total after tax)
Total return after three years – $21,403
In addition, there is a formula to compute the value added to your home. Obviously, a $33,000 system does not add 33K to the value of your home. Most home improvement projects like a remodeled kitchen or bathroom return 80% – 85%. As per a 1990’s survey of home prices with solar and without solar – they determined that for every one dollar saved in electricity it adds $20 to the value of your home. Therefore, saving $655 per year in electricity x $20 adds $13,100 to the value of your home.
Added value to my home – $13,100
Therefore, after three years – I will have saved $21,403 and gained $13,100 in home value = $34,503
If you do not calculate the increase in home value the breakeven point is 13 years. Please keep in mind that Federal and States offers are constantly changing grants and tax breaks. (For example – Maryland halved their Grant in 2009.)
In my case getting solar was a no brainer. My ROI is 7-8% per year – better than Bank CD’s or the volatile stock market. I would suggest that each person research their state grants to see if solar is worth it. You may just be surprised.
Also be sure to check with your state and municipality as some offer incentives to home owners to encourage them to remodel their home to make it energy efficient.
Saving the environment and saving money makes sense. If you gone green or consider going green, then you should also consider proper cleaning care for your solar panels to help you maximize your energy output!
Great writeup Michael. Not a lot of people remember to include the increased appraisal value of the home. It’s also important to note that the increased appraisal value is tax free, unlike interior improvements to the home like room additions.
Thanks for following.