Saving on Solar Energy Costs in the Next Few Years

Saving on Solar Energy Costs in the Next Few Years

About Solar Power Technology

Solar energy is generated through the use of solar panels which get exposed to the sunshine from the sun. These panels have the ability to capture the sun’s energy and transfer it to a controller, battery, and then an inverter. This is the process of how solar energy gets converted into electricity that can be used to run household appliances and electrical equipment.

However, the problem with solar power technology is that it stores very little energy. Plus, the solar technology you have to purchase to generate the energy is expensive. To set up all of this solar equipment in a standard household, it would cost the owner between $18,000 and $25,000. This may seem like a lot but the upside is that it eliminates the monthly electrical bill that you’d normally be paying. Once you have a solar panel hookup, you’ll be getting all of your electricity from the sun for free.

The average American household uses 1 kW of electricity per hour. The average month has 730 hours in it and the average hourly price per kW is $0.10. This means the average American pays $73 per month for their standard use of electricity. But if you have major electronic devices or appliances such as computers, hot tubs, and big screen televisions then your electrical costs will be much more. Some Americans pay as much as $200 per month for electricity. So let’s say you want to eliminate this cost by converting your house to solar energy. If you were to spend $20,000 on a solar panel hookup, you would end up saving money on electricity after about 10 years. The longer you stay in your home after that, the more money you’ll be saving.

Solar Investment Tax Credit

The federal government is currently playing a big role in helping solar manufacturing companies drive down the prices of their solar equipment. One big way the government is doing this is by giving tax breaks to both businesses and individuals who purchase solar equipment for their property. The Solar Investment Tax Credit has just been extended by the federal government for residences and commercial properties that use solar power technology. This gives taxpaying businesses and individuals a 30% tax credit to help them lower their income tax bill. Not only that, but many local and state governments offer their own tax incentives and rebates for individuals and companies within their jurisdiction who purchase a solar system.

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According to a report from the Solar Energy Industries Association, the Solar Investment Tax Credit has caused a 1600% increase in the number of solar energy system installations throughout the United States. As more people invest in solar technology, it will cause the marketplace to expand. Anytime there is an expanding marketplace it means more competition, more technological innovation and lower prices for consumers. So don’t be surprised if you see new solar companies being established over the next few years in order to compete in this growing market.

Solar Loans

The only complaint that consumers have about solar energy systems is the cost. After all, who can afford to shell out thousands of dollars on a new solar energy system for their home? Even the tax credits won’t be able to make up for this price. But don’t worry, because solar companies are now starting to offer payment plans to their customers. Many of these “solar loans” require no downpayment and have very low interest rates. On top of that, you can still get a 30% federal tax credit applied toward the amount of money you paid toward your solar loan for that year. Therefore, you may be paying interest but you’ll also be getting credit back from the government just for making the purchase. So it kind of evens itself out.

“Do-It-Yourself” Solar Packages

Installation of a Solar Panel on a Rooftop

Some solar companies are selling “do-it-yourself” solar packages which give property owners the opportunity to perform the solar panel installation themselves. That way they cut out the labor costs that are always added on to the total price of the solar energy system. Since the average solar panel is about $200, you could purchase four solar panels for $800 and generate 1kW of electricity with them. If you want to generate 5kW then it would cost you $4,000. However, you have to be confident that you can perform the installation yourself. If you are not a handy person with construction then you’ll need to have a professional install them for you. This will end up tripling the price of the solar energy system but at least you’ll know it was installed properly.

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Conclusion

Overall, the amount of money you’ll save by using a solar energy system for your property will depend on your location. Remember that energy costs fluctuate all over the country. For example, Floridians spend a lot less money on electricity than people living in Boston. So if a Floridian were going to convert to solar energy, their annual savings on energy costs wouldn’t be as significant as someone in Boston who converts to solar. But regardless of where you live, you’ll always find ways to save money with solar energy systems. Just look out for the tax credits, solar payment plans, and the “do-it-yourself” deals. These are surely going to drive down prices on solar equipment over the next several years. comment