Estimated reading time: 8 minutes
Your parents just got solar panels installed. So did your neighbors. And one of your co-workers. It may be hard to tell if purchasing solar panels is worth it—are they just today’s fad, or something you will regret not having tomorrow?
Naturally, as solar energy options become more and more common and accessible, you may find yourself wondering if solar is worth your time and the financial investment.
It is impossible to take on the solar question without considering finances. You’ve heard people rave about how much they are saving on their electricity bills, but you can’t help but wonder if solar energy users are really coming out on top.
Choosing an energy source is a serious decision that warrants thorough research and company comparison, so in addition to outlining the personal, financial, and environmental benefits of solar energy, this article will also address some common concerns and questions that may be keeping you from starting a solar project.
As you consider solar energy’s federal tax incentives, green benefits, impressively high ROI, and solid warranties, you'll understand why so many people are deciding that solar is right for them right now.
Federal Incentives
The Solar Investment Tax Credit (ITC) has played a huge role in motivating consumers to switch to solar. With the ITC, the US federal government is offering a 30% tax credit on residential and commercial properties that install solar systems.
With a 30% tax credit, your federal income taxes will be reduced by 30% of what you pay for your system. Dollar for dollar, that 30% can come back to you.
Since being enacted in 2006, the ITC has made solar a financially plausible option and helped the solar industry grow by more than 10,000%. This rapid growth has also contributed to the market’s increasing affordability and technological advancements.
To put the ITC’s value into perspective, the average Project Solar customer saves $6,000 with the credit.
With the recent passage of the Inflation Reduction Act in 2022, this credit was extended for 10 years (it was originally set to expire after 2023). After 2032, It will decrease to 26%, and after 2033, it will drop to 22%. Unless it is renewed or extended again, those with residential property solar projects will not be offered any credit starting in 2035.
Green Benefits
Whether you have personally experienced poor air quality in a city, seen images of polluted water sources, or watched one of the many films about a futuristic, dystopian Earth, you know you don’t have to look far to find reasons to feel some concern for our planet's environmental well-being.
This concern naturally influences consumers’ decisions. Clean and sustainable life choices can benefit individuals, communities, and the planet as a whole. Since solar energy is renewable, it is an appealing substitute for more environmentally harmful energy sources.
While the burning of fossil fuels increases greenhouse gas emissions such as carbon dioxide (CO2), producing electricity through solar power helps reduce harmful emissions.
Since climate change and air pollution are intimidating issues, consumers may feel powerless in their ability to make a difference. However, the effect of transitioning one home to solar power from fossil fuels is equivalent to planting around 150 trees every year.
This demonstrates that the energy choices of single people make significant differences. Along with shrinking your carbon footprint, switching to solar can also improve air quality.
Cutting down on emissions helps improve respiratory and cardio health on a global and local level. The National Renewable Energy Laboratory (NREL) has found that lower fossil fuel emissions result in fewer cases of bronchitis and lost workdays related to health issues.
By investing in solar power, you are investing in the planet and your personal environment. Solar energy is a significant step forward to creating a more sustainable life. While there may be environmental issues that you can’t directly control, choosing solar is worth it because it’s a way you can make a difference today.
Return on Investment
Switching to solar energy is often referred to as an investment. After gathering quotes and comparing prices, you are probably curious as to how and when the return comes. Many people aren’t willing or able to wait 20 years to see a financial return.
The great news is that solar is literally one of the most profitable investments you can make right now. To put this into perspective, the S&P 500 stock market index, one of the most reliable investment opportunities, has a 9.8% ROI and average home appreciation is 3.2%, but some solar companies, such as Project Solar, can offer 18% ROI.
You can calculate ROI for yourself with a simple equation:
[energy cost savings for the year/cost of going solar]
Let’s say that you decide to install a solar system. First, we’ll look at the stats of your system:
System size: 9.9 kW
System production/year: 15,899 kWh
Total cost: $12,471
Then, we can find the energy cost saving by multiplying system production by your local utility rate.
Local utility rate: $0.13/kWh
15,899*0.13=$2,066.87
With $2,066.87 saved a year on a $12,471 investment, you’ll have a 17% ROI!
After getting 17% of your investment back within the first year, you’ll be well on your way to covering the original cost of the panels, and you can expect to continue to profit from your decision to go solar.
Warranties
Since we are talking about solar as an investment, you may wonder what risks are involved. Those who like to play it safe can rest easy knowing that the best solar manufacturers typically offer a 25-year production warranty for their panels and a 25-year warranty on microinverters.
Panel Warranties
The solar energy market may feel foreign as you learn more about panel technology and various options. You want to feel confident in the choices you make, and a robust 25-year warranty can build your confidence that if your panels are not properly producing, you will be properly compensated.
Some solar companies, such as Project Solar, guarantee that your panels will have a certain production level by year 25, and quality panels usually can even outperform that minimum. Project Solar's panels will produce at least 84% after 25 years.
In the case that a panel needs replacement within the 25-year warranty, it can be switched out free of charge. At Project Solar, we require our installers to offer 10-year warranties, so if the replacement takes place within those first 10 years, the installation fixes can also be completed for no cost.
Although quality panel manufacturers typically offer a 25-year warranty, panels often surpass that mark and continue to function.
Inverter Warranties
A solar system's inverter (the part that converts the sun’s energy into usable energy, tracks the panels’ stats, and is paired with the brains of the system) also has its own warranty.
The two most common types of inverters offered by companies are string inverters and microinverters. The type of inverter you choose for your system will impact the warranty that you receive.
If you’ve heard complaints of malfunctioning or low-performing systems, it is likely that a string inverter was at the root of those issues. Solar systems typically used string inverters in the past and have a lower upfront price.
A string inverter hooks up all panels to a single point of control, so like a string of Christmas lights, if there is a single problem with one of the system’s parts, it will affect the performance of the whole system.
These finicky inverters typically only come with 10–12 year warranties which can leave buyers out of luck and frustrated less than halfway through their panels’ warranty.
Microinverters, on the other hand, are generally preferred when considering performance and warranty. Although they come at a higher price, many solar users find microinverters worth their price since it saves them from dealing with a low-performing system or purchasing replacements down the road.
Unlike string inverters, microinverter systems have an inverter on each panel, so if one panel is shaded or malfunctioning, the rest of the system can effectively operate regardless.
Top microinverter manufacturers, such as Enphase, offer clients full refunds or replacements on their inverters for 25 years. With a solid warranty that matches the panels’, microinverters can relieve anxiety and ultimately enhance the performance of the entire solar system.
Concerns and Counterarguments
Now, we'll clear up some common misconceptions, so that you can feel confident and informed while deciding if solar is the right choice for you. This is a limited list, so check out our FAQ page if you have a concern that is not listed.
1. “Solar energy must be super expensive.”
The market is incredibly competitive, and many options are available. The cost of photovoltaic electricity has actually fallen by 82% since 2010, and solar energy is not as expensive as you may think after considering tax incentives and ROI. Project Solar also offers a DIY installation option that saves on total cost.
When priced properly, solar will save you money. The high prices that you've heard of are a result of unethical sales tactics. Door knockers are incentivized to charge prospective customers as much as possible to rack up commissions.
Companies like Project Solar prioritize flat pricing and do not incentivize employees with commissions. This lowers the overall price and increases ROI.
2. “Isn’t solar energy unreliable? What will I do when it’s not sunny?”
Solar produces the majority of its energy during peak sun hours, which is about 4–6 hours a day. During peak sun hours, most people have lower energy demands, so solar batteries can help conserve the energy collected so that you can use it after the sun has gone down.
Batteries can spread out your energy production and also help your home function independently from your local energy grid, but batteries' high prices have often repelled potential buyers in the past. Prices have gone down slightly in recent years, but batteries are not always necessary.
Batteries may not be right for your system, especially if you live in areas with beneficial net metering rates. Net metering is another possibility that can help account for the excess energy produced during peak sun hours.
Net metering is the process of your your utility company crediting you for your unused solar power that is pushed into the grid. Credits can vary from state to state, however, and this should be considered when planning your system’s design.
Microinverters are another factor that increases solar reliability, since they allow your system to work effectively even if a couple panels are shaded.
If it’s a cloudy day, your panels can still produce electricity; however, they will not produce when covered by snow. Panels are typically installed at a slant so the snow will slide off once the weather clears up.
3.“I’m worried that solar panels will look bad and distract from the architecture of my home.”
Although some may imagine solar panels as bulky or ugly, as the solar market has grown, panel manufacturers have been able to produce aesthetically appealing designs that complement the original architecture of a home or building.
Project Solar offers black-on-black designs that are subtle and sleek to allow you to find a design that suits your needs.
So . . . Is Solar Worth It?
While taking on a solar project may seem intimidating, financial and environmental benefits make solar an accessible and profitable energy option that is worth investing in.
Your parents, neighbors, and co-worker were onto something when they chose solar energy. Solar is not only worth it—it’s probably one of the best decisions you can make right now.
