With more and more consumers considering clean, alternative energy options all the time, the first questions many people ask is “do solar panels save money?” and perhaps more importantly, “how much money do you save with solar panels?”
Solar power is squeaky clean, environmentally friendly, and indefinitely renewable. However, while these features are appealing to everyone, those considering using solar energy still must analyze the cost to benefit ratio of having solar panels installed.
It is clear that solar energy is inexpensive, but do solar panels save money compared to the cost of traditional energy resources? The most obvious way that solar panels save money is that they use the sun’s rays, which are abundant, infinite, and free. Unlike fossil fuels, which require millions of years to form under the Earth’s surface, the sun’s rays and energy will never run out.
Furthermore, it is not possible to tax or regulate the use of the sun to create solar energy. This is a tremendous benefit for the consumer, since governments have no way of taxing solar energy in the way that traditional energy is taxed. Using solar energy in a residential or commercial setting alleviates many tax burdens, as fewer traditional energy sources are required, and therefore fewer taxes have to be paid for those services. From this standpoint, it is clear that solar panels save money when it comes to costs of energy.
When asking how much money does solar panels save, the long term benefits are clear. However, utilizing solar energy currently requires a significant initial investment. Well-sized, residential solar panel systems typically cost upwards of $10,000 to $20,000. The price tag on solar energy systems is enough to deter most consumers, however, there are ways to save money on the up front investment in solar energy.
There are many tax credits, tax deductions, and rebates available for those who invest in solar power. Solar panel systems and solar water heaters are currently eligible for a 30% federal tax credit, which can significantly reduce the costs of purchasing and installing solar panels. There are many other tax incentive and rebate programs for solar energy systems, which vary from state to state.
After comparing the cost effectiveness of harnessing the sun’s energy with the initial capital investment, how much money does solar energy save in the long run? The answer depends on a number of factors. Those who live in areas with abundant sunshine will realize a return on investment much sooner than those who live in persistently cloudy areas. Furthermore, certain states offer more tax incentives than others, which can also reduce both the up front and long term costs of utilizing solar energy.
For instance, California and Arizona are two of the nation’s leaders in promoting the use of alternative energy through the use of tax incentives and rebates. Combined with the fact that these areas have many days of sunshine each year, these regions are among the most cost effective in terms of investing in solar energy.
Do solar panels save money for those living in less sunny areas? While solar panels save money in almost every case, certain areas will require a longer period of time to realize a return on investment. Regions which do not experience many days of sun can save money from solar panels, but will have to rely on a greater percentage of traditional energy compared to those in sun-rich areas.
Perhaps the greatest feature of solar energy is that costs will continue to drop, but the benefits and savings will only increase. With increased technology and greater access to solar energy, many consumers will be able to afford the cost of solar systems in the near future.