There’s little doubt that solar energy is a planet-friendly alternative to energy derived from fossil fuels. But in light of the relatively high upfront cost to install residential photovoltaic systems, it’s reasonable to wonder whether these systems are a smart choice from a financial perspective. Here are five reasons why going solar makes sense for your bank account.
1. Solar energy can increase the market value of your home
Solar energy systems may carry a substantial initial payment, but the market typically views solar installation as an upgrade. With solar energy gaining in popularity, homes with an existing solar energy system are attractive to many potential homebuyers.
Opting to go solar will distinguish your home from similar homes in your area, attracting sustainability-minded buyers as well as those who understand the advantages of buying a property with an already functioning solar array. A Zillow study, in fact, shows that homes with solar energy have the upper hand in the marketplace, selling at an average of 4.1 percent higher than homes that rely only on the grid for energy.
2. Solar energy yields long-term savings
The main difference between solar energy and energy derived from fossil fuels is that solar energy is essentially free after the initial setup, apart from routine maintenance and repairs. With solar panels that have a lifespan of 25 to 30 years, the money you put into your solar energy system will likely come back to you several times over (depending, of course, how long you plan to stay in your home).
Many locations also allow solar energy customers to make money back on excess solar energy through a billing mechanism called net metering. When a household does not use all of the energy accrued during the day, the energy—usually around 20 to 40 percent of the solar customer’s yield—is fed back into the grid for other customers to use and the household gains energy credit. This not only benefits the solar customer; it puts more solar energy into use and helps energy utilities better weather times of peak usage.
3. Solar energy adoption can be subsidized with rebates
A federal solar tax credit is currently available for taxpayers who have fully installed solar energy systems. Currently, homeowners who installed solar between 2020 and 2022 receive a 26 percent credit, and those who install by the end of 2023 receive a 22 percent credit. The federal solar tax credit is set to expire at the end of 2023 unless it is renewed. With the current administration’s goal to create 100% clean energy in every household by 2035, however, it’s possible that additional incentives for going solar may be introduced in the future.
You may also be eligible for state rebates and grants that fund clean energy adoption. Enter your zip code on the Database of State Incentives for Renewables & Efficiency website to see what assistance is available where you live. This Forbes Advisor article demonstrates how, with the help of rebates and post-installation energy savings, a household could stand to save up to $20,000 over 25 years.
If you don’t have the budget to pay for a solar energy system outright, you can also lease solar panels. However, be aware that renting solar will place a lien on your property that would have to be assumed by the next buyer. Solar energy loans are another option for managing the cost of solar energy adoption without taking on a lien.
4. Choosing solar makes you a conscious consumer
Taking one step toward creating a sustainable lifestyle often leads to taking another. When you make a choice to reduce carbon emissions with solar energy in your home, you see firsthand that a responsible choice for the Earth can also be a responsible choice for your wallet.
You may find that you’re more inclined to adopt new habits such as walking or biking instead of driving, using a reusable water bottle instead of buying plastic water bottles, or choosing to purchase second-hand items rather than always buying new ones. You will likely become more aware of the sustainable options all around you that will both cost you less and have less impact on the Earth. The ripple effect of going solar—or making any other significant commitment to sustainability—can be powerful!
5. Solar energy is an investment in the Earth’s future
Above all, committing to using solar energy for some or all of your household’s energy needs is an investment in the Earth. By making such changes, you show concern for your present environment as well as that of future generations. Such perspective brings meaning to your daily routine and inspires you to engage in other sustainable habits. The dividends you’ll reap from the experience of going solar will likely be as worthwhile as the long-term savings you gain from your system.