Why install solar panels? Is it really as worthwhile as people claim, and is there a genuine return on investment involved? Naturally, your geographic area is important. This is not only related to the average amount of sunlight you get, but also to the inclination of your geographical position to the sun.
You can get that information using a free solar suitability app available online, but most of these are useless and simply check the strength of the sun at one moment in time. You are best to get professional advice, but the southern states and the south west are all good. Here we will explain how solar panels can work to save you money, and answer the question that many people ask: "Why install solar panels?"
Understanding Solar Panel Costs
Installing solar panels might be the environmentally correct thing to do, but there are also cost benefits and money to be saved. You will also increase the equity in your home with solar panels. There are ways to calculate your ROI, but it takes time. You will find pages of results on Google explaining how to do it, and we shan't repeat it all here.
What we will do is state what is known, what the calculations say and what people that have actually installed them are saying about their own savings. However, here is how it's done:
1. Calculate the cost of your solar panels. This is the cost+installation+taxes minus any grants and tax credits you get for doing it. The federal government is allowing a 30% tax credit for the cost of the solar panel equipment, so include that in your 2014 tax return using form 5695 for the year of your claim. Your equipment installer should be able to look after this for you.
2. Your supplier should be able to give you information on the energy you will generate from your installation.
3. Use your electric bill to calculate your true cost per kilowatt Hour (kWh) - divide the bill total by the stated hours of usage.
4. Calculate the annual kW generation of your solar panels and also how much of that can be resold to the electricity companies. These two figures should give you your annual cash benefit using the kWh cost from above.
5. Divide the initial investment by the annual benefit for a payback period.
Some claim the ROI to be large, certainly in double figures. However, this would certainly depend upon your geographical position. You should contact an installer to discuss potential savings at your location.
Why Install Solar Panels?
There are no doubts at all that installing solar panels enables you to reduce your electricity costs. Why install solar panels if they don't! As the cost of electricity rises, your savings will also increase, and so will your equity. However, never make up your mind until discussing the situation with an expert or even a local installation company. Don't forget these government tax credits and potential state grants.