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Solar Panels: Are They Worth It?

Brian Robson

Brian Robson

Insurance and Finance Ronin

8 min. read

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Only if you’re willing to stick with them for 13 years

Going solar is expensive –let’s get that right out of the way. The cost of an average-sized residential installation can easily put you $17,000 in the hole and, believe it or not, that’s down from where it was at $40,000 back in 2010. Suddenly, the average monthly electricity bill of $111.67 doesn’t seem so bad, does it?

However, there’s a huge difference between solar energy and the more conventional forms you use to power your home. With solar, you’re only paying for the installation and any of the times the energy company nickels-and-dimes you when the system doesn’t quite account for 100% of all your energy use.

With conventional energy, on the other hand, you’re left paying every month for the foreseeable future. And just because $111.67 (over $1,340 annually) doesn’t seem so bad now, doesn’t mean you’re locked in at that rate. In fact, energy costs have risen 15% over the last 10 years and show no sign of lowering.

So, are solar panels worth it? It depends on whether you have the funds (and the time) to see your investment pay off in the long run. It also depends on your home.

Is your home suited for solar panels?

Not all roofs are created equal and some just can’t handle the combined weight of 28 – 34 solar panels in a typical solar system. Then, of course, there’s the question of just how much sun your roof gets and whether it’s situated in a state that will make the most of any tax exemptions or perks.

Will your state make it worth your while?

Ignoring the fact that some places are just sunnier than others, there’s also the possible tax incentives to consider. For example, let’s look at Massachusetts: Not only does the Bay State offer solar panel programs that can pay back the homeowner, these programs are subject to sales and property tax exemptions. Whether it’s a sales tax that cuts a couple hundred out of the upfront installation cost or a property tax exemption for improving the value of your home, you want to make sure your state will make going solar worth your while.

Can your roof support solar panels?

The best way to determine if your roof can handle the weight of a solar system is to contact a roofing company for an inspection. Most panels weigh somewhere around 40 pounds. And remember, we found that a typical system involved 28 – 34 panels. For the sake of this example, let’s assume you need 34 panels bringing the combined weight of your system to a yikes-inducing 1,360 pounds.

The good news, however, is that an installer can give you the weight per square foot of any system you’re looking at. If the installation falls in line with what your roof can handle, you’re good to go. If not, you’ll have to look at the combined cost of reinforcing (or replacing) the existing roof in addition to the installation cost for the solar system.

What if you don’t own your home?

If you are renting property, we won’t tell you that it’s impossible to go solar, but it’s a lot more difficult. For one, you don’t own the property and, as you’ve likely gathered by this point, installing solar panels isn’t like asking your landlord if it’s okay to plant a tree. This is a major investment that will alter the property in ways that can make even the most flexible landlord put their foot down.

The best way to even broach the topic, we found, is to show your landlord how a solar system will bring value to the property. There are other ways you can go about pitching solar to your landlord, and if that doesn’t work, you could try community solar, a method that involves multiple households sharing and drawing energy from a single solar power plant.

How shady is your property?

We’re not talking criminal activity – if you’re living in the middle of the woods or your home is partially-shaded by nearby tree boughs, this could impact how much sun your solar system soaks up. In some cases, it might just be a matter of cutting down one or two trees near the home, but if your cabin is situated under a thick canopy of pine trees, you might not be getting enough sun to warrant the cost of solar panels.

A long-term investment

The average solar panel can last about 25-30 years and, even then, that doesn’t mean it will simply cease producing energy at that time. However, around that mark you will notice a decline in efficiency. So we know when the panels start to show their age, but when do they start paying off?

Let’s look at the average installation cost of $17,000. Now, if we take the average annual electricity cost of $1,340 and divide it into the installation cost, you’re looking at 12.7 years. We’ll round up to 13 years. That’s more than half the average lifespan of a solar panel, but there’s still enough juice left in those panels to benefit from them long after that point. The real question is whether you’ll be living in that same house for that long.

If you think you might move in the next 5 or 10 years, all you’ve really done is raise the property value of your home. You’re still stuck with the staggering installation cost and no time to really enjoy how it feels not to pay the power company every month.

What if it’s just too expensive?

Most people aren’t lugging around an extra $17,000 to just throw at a solar panel system. We get that and, frankly, most solar providers understand this as well. There are ways you can pay that can help offset the initial blow of the installation cost.

Leasing

When you lease your solar panels or do a “solar lease,” you are not financially responsible for the installation, maintenance, monitoring, and repair. Sounds pretty good, since you can do this with little to no money down. However, you’re still paying the solar provider a predetermined monthly amount and, furthermore, you don’t get that 30% federal tax credit.

Power Purchase Agreement (PPA)

A PPA is very similar to a solar lease, the major difference being that the monthly fee you pay is determined by how much power the solar system is producing. This rate can also rise over time. And, unlike with a solar lease, there usually is a low upfront cost of $1,000 or more.

Home Equity Loan

The downside to taking out a home equity loan for a solar system is that you’re essentially putting your home up as collateral. This can be a risky move if you aren’t in a position to consistently handle these payments. On the plus side, it is possible to work out financing options with payments lower than the electricity savings.

Offsite Shared Solar

According to the National Renewable Energy Laboratory (NREL), only 22 to 27% of residential rooftops are fit for solar panels and, as we’ve mentioned earlier, solar panels can weigh a lot. In cases like this, shared solar is the best bet and the electricity generated usually costs less than what you would ordinarily pay in utilities.

What if you don’t want those big, ugly solar panels?

For the record, we don’t actually think solar panels are “ugly” but they are certainly big and the truth is that some people would like to go solar without necessarily going big. While solar panels have only gotten sleeker over the years, there are smaller scale and more aesthetically-pleasing alternatives.

Consider a DIY solar kit

A DIY solar kit is just like it sounds—it’s a smaller solar panel (or a series of panels) you install yourself. In most cases, these kits provide customers with a small-scale solar system that often comes in at less than a tenth of the installation cost for a typical system. These cheaper systems are most ideal for off-grid projects and smaller homes like boats and RVs. However, installing these panels can be complicated and it’s often cheaper (and uses less time) to work with a certified installer.

Solar shingles

Solar shingles can work just like larger, blockier solar panels in reducing your CO2 footprint and reducing your energy costs. Aesthetically, they can integrate with your roofing rather than clash with it visually. The problem, however, is that solar roofing materials can cost 10 times more than conventional roofing materials.

Solar panels FAQ

What is the best solar panel?

In our research, we found a lot of different solar brands so we focused on finding the best solar companies. After evaluating 13 different companies and looking at customer service reports and quality of the panels offered, we found the following to be ideal sources for the best solar panels:

How many solar panels are needed to power a house?

A typical system can include 28 – 34 of the most efficient solar panels all working in concert to offset your energy needs. However, that number is not uniform across all homes and you might find that you require far more (or fewer) panels in order to meet your unique power demands. A certified installer can help you determine what that number might be.

What goes into the cost of solar panels?

When breaking down the cost of solar panels, it’s important to remember that the labor accounts for just a small portion. There’s the sales tax on the equipment, cost for the inverter (which helps translate the sun’s energy into usable electricity), sales and marketing, permits, inspections, and so much more.

Worth the investment if you can stick it out for the duration

As we mentioned, given the average energy bill and the average installation cost of a solar system, it can take 13 years for a solar array to start paying for itself. However, when you do reach the “break-even” point, you’ll find that not having to deal with the energy company’s fluctuating rates more than makes up for it. All of your electrical needs will be facilitated by the ever-burning (at least for the lifespan of anyone currently reading this review) sun that isn’t going anywhere anytime soon. On top of that, there’s just no denying the positive impact going solar can have on the environment.

Today, there’s enough solar photovoltaic (PV) capacity in the U.S. to power more than 11.3 million homes. This amount of solar generation has offset more than 76 million metric tons of CO2 emissions each year. That’s roughly the same as taking 16.2 million smog-belching vehicles off the road and planting almost 2 billion air-freshening trees! If you have the capacity to convert to solar, it seems to be a good investment towards a brighter future.

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