Save Green By Going Green: How to Save Money with Solar Power

save money with solar

If you have been considering powering your home with solar panels or seek out other ways of harnessing the sun’s abundant energy, you have plenty of company. In the past decade, hundreds of thousands of American homes feature solar panels on their roofs as a growing number of people are opting to power their homes with solar.

But is solar power for you? Can it help you save money?

A recent study carried out by researchers at the NC Clean Energy Technology Centre, of NC State University, ranked the 50 largest US cities by overall best solar investment.

The study found that consumers who used a 5kW solar system saved an impressive $44 to $187 every month for the first year the owned the system. This is before a lease, loan or PPA

Of course, the savings will vary since every location have different hours of sunlight. The best way to find out how much you can save and also the cost of installation is by getting a professional installer to give you a quote.

How do you get electricity from solar?

There are two main ways by which the energy of the sun can be converted to electrical energy for human consumption. The first and most common one is the use of photovoltaic cells commonly referred to as PV. This is what you usually see on rooftops or in fields. When the sun’s rays fall on the PV panels, the PV cells in the panels absorb the sun’s rays and generates an electric field across the semiconductor layers that make up the cell which makes electricity to flow.

The second technology for converting sun rays into useable electrical power is concentrating solar power, or CSP. This technology is seen in large power plants and is not suitable for domestic use.

It features mirrors which focus the sun’s heat energy onto receivers. The receivers contain high-temperature fluids which in turn transmit the heat energy to electrical power by driving turbines.

The attraction for solar energy lies in the fact that solar energy systems are powered by the sun which is entirely free. It’s a renewable source of energy.

Solar power systems can still provide electricity even on cloudy days. Again, your house does not need to have sunlight all day to benefit from solar. Also, the system stores power in special batteries during the day and your appliances will continue running normally even when the sun goes down.

Several factors affect the suitability of installing solar panels on the roof of your home. For instance, nearby trees can cover your roof from the sun’s rays. In that situation, roof panels are not ideal. You should also consider the size, slope, and shape of your roof.

Solar panels are usually at their best when mounted on south-facing roofs with a gradient of 15 to 40 degrees.

Also, bear in mind the age of your roof and how long it will be before they are due for replacement.

If your roof is not suitable to carry solar panels, or the home isn’t yours, you can still benefit from solar power. There are community solar arrangements that allow people to benefit for a shared solar array installed on or offsite. Of course, the beneficiaries share the cost of purchase and installation.

save money with solar

Before you decide on investing in solar, here are some things you ought to consider.

How you can save money with solar power

You can save money with solar power depending on the amount of electricity you consume; the size of your solar energy system; if you opted for outright purchase or lease of the solar system; how much electricity your system can generate with the direction it faces and the amount of sunlight that hits it.

The more sunlight you have, the more energy is produced and the more money you will save with solar.

Some states such as California and Arizona have more sunlight hours on average per day. You can calculate the potential efficiency of solar panels in your area with this handy Solar-Estimate Calculator.

Your saving is also dependant on the electricity rates charged by your utility company and how much (if at all) they are willing to pay you for the energy you send back to the grid. You can check your current local utility rates here.

The cost of going solar has been dropping every year since 2009. Not only that the cost of the panels are dropping, but the installation costs t are also on a decline.

The sun is the only safe nuclear reactor, situated as it is some ninety-three million miles away. – Stephanie Mills

So should you go all out and power your home with Solar?

According to the Center for Sustainable Energy, an average residential system with a power rating of 5kW can cost between $3 and $5 per watt to install. That translates to $15,000 to $25,000 and is by no means cheap.

However, over the long term, the solar power system’s savings can cover the initial installment costs. This is because they do not require much maintenance and are made to last for about 20 years without loss of efficiency.

Then there are the federal government incentives to encourage homeowners to embrace solar. Such as this residential federal tax credit which allows taxpayers to claim 30 percent of installation costs if the systems are in place before Dec. 31, 2019. This credit reduces to 26 percent in 2020 and 22 percent in 2021, finally expiring on Dec 31, 2021.

It even gets better; you can get more credits depending on your location. If you live in a state with high solar ranking, you may be eligible for more incentives like property tax exemption, cash back, waived fees and expedited permits. You can check out available incentives for all the states here.

You should bear in mind that these incentives are just for a limited time. As solar becomes cheaper, federal and states government, and utility companies will reduce the number of incentives they give out. Therefore, it might benefit you more if you invest in solar sooner rather than later.

Another factor that might affect the cost-effectiveness of solar is government trade policies. For instance, the presidency imposed a 4-year tariff on solar panel imports which starts at 30 percent and will reduce by 5 percent every year through 2021. Although this tariff could raise installation cost by as much as 100 percent, the actual effect on consumers is not so easy to predict.

With time, the cost of imported panels may still drop further leading to a reduction in the payable tariff.

If your home is in an area with high energy rates and a suitable solar rating, and you can afford the initial investment, installing solar panels on the roof of your home can save you a reasonable amount of money.

Especially with all the tax breaks and incentives.

Another reason to lean towards solar power is that not only is it great for your wallet, it’s also good for the environment. It’s one of the cleanest forms of energy there available and has none of the harmful emissions typical with more traditional forms of energy such as gas.

If you have decided to purchase solar panels, shop around for the best deals. Also, look out for any available incentives and tax breaks. Know that you can also lease solar panels if the initial cost of ownership is beyond your budget. However, if you don’t own the solar system, it won’t increase the value of your home, and you won’t be eligible for any incentives.

Founder, writer, thinker and digital marketing addict. He is passionate about self-development, personal finance, and the stock market. He believes that financial knowledge combined with self-discipline is the key to achieving financial freedom. An avid golfer and a 15 handicapper.

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