If you’re considering installing a solar PV system, one of your biggest worries may be whether solar is “worth it.” In other words, if you’re comparing cost savings over time to your energy bill, or reading up on environmental impact, you probably want some hard evidence that solar is the way to go.
Ultimately, the decision to solar power your home or business is up to you. By speaking to an installation service, you can get a good sense of exactly how much you can save over the lifetime of your solar panels (roughly 20 years or more). The Commonwealth of Massachusetts, especially, makes solar panel purchases easier on consumers through a number of tax credits and rebates, so researching which of these is right for you may help assuage some of your fears.
There are several factors that may help you determine right off the bat whether solar is worth it for your property. Some of these factors include:
- how much you’re spending on electricity already
- whether the electric company has time-of-use pricing or might in the future (as this can save a lot of money if you’ve been overpaying for power)
- the position and state of the roof (an unobstructed view of the southern sky will produce the best results for solar power, and the roof should be in good enough shape to support the solar panels, or else a ground-mounted system will be necessary)
Now for the numbers. Exactly how much will solar power save you?
While homeowners will have to account for a number of individual factors, the return on investment on solar is high for the majority of U.S. states. A study from Costofsolar.com revealed that all but six states saw some ROI for using solar power, and for 42 states, the savings were worth more than a five-year CD with a .75% return.
At least twelve states (including Massachusetts) and the District of Columbia saw an ROI of 10% or more when factoring in the cost of solar energy, conventional electricity rates, and the state and federal incentives to install solar panels. That’s higher than the ROI from the S&P 500 stock index in one-quarter of all states. In many states, net metering and other services for grid-connected solar-powered homes can actually earn homeowners money by crediting them for producing energy.
How soon do homeowners begin saving on their energy bills? According to Costofsolar.com, the savings are immediate. A large enough installation that relies solely on solar can drop that energy bill down to $0 — and that’s before any net metering credits. As utility prices climb higher, that savings can continue to grow through the years.
Individual savings will vary case by case when considering state, home size, energy consumption, and other factors, but it’s beneficial to look at how other homeowners have fared since going solar:
Kevin C. Tofel wrote about his experience going solar on Gigaom.com, and after installing solar panels on his southeastern Pennsylvania home, he and his wife found that they created almost twice as much energy as they used. Over the course of 12 months, Tofel’s home created 13.8 megawatt hours of electricity and used just 7.59; the excess amount was credited to Tofel by his utility company at the end of the year. Tofel’s system consisted of 41 panels of 230 watts each. Tax credits and rebates saved his family around $22,000 on the installation costs for a fairly high-end $50,000 system.
Some families may worry about how much sun they can get each month, especially in northern climates during the winter. But even a family in a suburb of snowy Buffalo, NY, saw their energy bills lower considerably, from about $95 a month to just a few dollars for taxes and surcharges — not including the excess energy output from the solar panels. Homeowner Terry Eagan said that ROI from her solar panels would outearn her 401K in the next 25 years, and after tax credits, the $27,300 system only cost the family around $8,482. And yes, the solar panels still worked just fine even with the gray upstate New York skies.
What about homes in Massachusetts?
Fortune.com writer David Whitford installed a 15-panel, 3.75 kilowatt solar PV system on his home just outside of Boston. His costs were considerably lower than Tofel’s, coming in at only $12,951 for upfront costs. That’s an amount Whitford could earn back within a five-year period on a system meant to replace about 80% of his family’s grid energy. By Whitford’s estimates, 25 years of solar use could save his family $25,000 in utility bills while cutting their carbon footprint by about 62 tons. His family could earn as much $10,000 in utility credits over the next decade with their current system in place.
Whitford wasn’t the only one to see savings in the state. Daily KOS user Lynne from Lowell, MA., took advantage of the generous tax rebates in Massachusetts to set up her home for solar power and saved approximately $9,500 on installation after around $17,000 in upfront costs. In addition to saving $669 on utilities in the first year, Lynne’s Solar Renewable Energy Certificates, or SRECs, could earn her an estimated $1,013 based on a market value of $210 per SREC. The impact of such a system over the course of 25 years is estimated to save 106,959 pounds of CO2 emissions, as well — a huge bonus for the environmentally minded.
The savings and rebates for your home will depend on a number of individual factors, so the experiences of one solar owner aren’t the same as those of others. Speaking with a solar PV installer can give you an idea of exactly what your home needs, how much it will cost for all products and installation services, and which credits and rebates you can take advantage of.