For more than a few years, solar panels have been widely available as an energy alternative for homeowners. Thanks to tax breaks and rebate incentive programs offered by some states, they are slowly becoming more popular and more accessible to the everyday buyer.
There is still some uncertainty surrounding solar panels: are they a good investment or a pricey addition? What if I don’t plan on staying in my current home? Will I need to keep pouring money into upkeep costs?
We’d like to help you decide if the benefits of solar panels outweigh the upfront costs and investments.
The Benefits of Solar Panels
Higher Resale Value of Your Home
One of the major delays for homeowners is the feeling that once they install solar panels, staying in that home is the only way to reap the rewards of their investment. According to Zillow, however, homes with solar panels sell for an average of 4.1% more. On an average home sale (depending on where you live) that’s over $9,000 added to the sale price.
Operate Your Home Using Clean Energy
We all know the conservation benefits of solar power. Using the sun’s energy to power our homes emits fewer fossil fuel emissions.
Lower Your Utility Bills
The main reason many homeowners invest in solar panels is to lower or eliminate their electric bill. Whether or not you are able to get rid of your electric bill entirely depends on a few factors. The size of your system or number of solar panels makes a big difference, as well as the area of the country you live in. This isn’t as much to do with the weather, but the overall cost of electricity in your area. Solar panels will still do their jobs in cloudy, rainy, or even snowy climates.
Little to No Maintenance
People tend to believe that solar panels require expensive, ongoing maintenance, but this simply isn’t true. After they are installed, there is very little for the homeowner to do. It is a good idea to have your system cleaned and inspected, though typically this is done once a year and costs $150 to $300 on average.
Tax Breaks
Solar panel installation offers federal, state, and local tax breaks to homeowners. To start, Minnesotans don’t have to pay sales tax on solar panels (though this may differ from state to state). We also benefit from a program called net metering, which allows solar panel owners to bank energy collected during the day in the form of energy credits and use them during the night or on days when the sun is not shining as strong. This program is widely available, though again, doesn’t apply in every state.
At the federal level, the federal solar tax credit allows you to deduct a dollar-for-dollar amount against your federal income tax. When it began in 2016, it covered 30 percent of your solar panel system costs. Currently, the credit covers 26% of the cost, though it will drop to 22% next year, and 10% in 2022 and beyond. There is also a lottery-based program where lucky winners will have 60 percent of their costs covered. Finally, certain utility companies (Xcel Energy, for example) will have their own incentives based on your energy consumption and the averages in your community.
What are the Downsides of Solar Panels?
There’s really only one: cost. Solar panels are not cheap to install. On average, solar panel installation in Minnesota can cost $13,000 to $15,000 for a small, low wattage system and can reach $50,000 for a larger system. The exact price depends on the brand you chose, the size of your system, and the incentives available in your area.
You can get a good idea of the costs available to install a system on your home by using the virtual estimating tool here.
While solar panel systems are a pricey investment, the money they will save you over time and the pile of added benefits will outweigh the initial costs. If you’ve been considering a solar panel system, take advantage before the federal solar tax credit runs out in 2023!
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