6 Reasons Solar is Worth It In 2022
Solar costs are down and the technology is sound. With federal tax incentives available and electric rates rising and volatile, solar energy is worth it in 2022 for qualified homeowners seeking ways to lower costs.
Solar offers greater freedom and control. You can take ownership over your energy generation and save money on utilities. The average cost of installing solar ranges from $3 to $5 per watt, so there is a capital expense to it. Fortunately, there are many flexible finance options available to qualifying homeowners so that you can benefit from solar without the upfront cost.
There are a number of factors that could deter someone from going solar, the primary reasons being:
your house gets very little sunlight exposure
you already have minimal electricity costs
you don’t qualify for appealing loan options
If you are interested in lowering your electric costs and feel you’re in a position to take advantage of finance options, then here are six reasons why solar power is worth it in 2022.
Save on electricity
Unlike the utility, the sun does not charge a thing to use its power (if it did, all plants would have to be millionaires). So when you get solar for your home, you will be able to generate electricity from the sun instead of pulling it from the grid, resulting in savings on your electric bill.
While solar does offer greater energy freedom and control, the vast majority of residential solar households will remain tied to the grid. With that said, it’s important to understand available rate plans and agreements so that you can be sure to get the best solar compensation plan to optimize savings and take advantage of days when your solar system overproduces.Lock in electric rates
Rising electric costs or volatile rates are motivating factors for many to go solar. With solar, you should have a firm understanding of how much energy your system is capable of producing a month, and therefore how much of your energy consumption can be offset — ideally all of it. That understanding allows for predictable monthly energy costs.
Rate plans differ from provider to provider, so picking the one with the most favorable rates for solar customers is important. While rate plans do change, many providers allow customers to stay locked into their agreed upon rates even when adjustments are made.Earn tax credits
The solar investment tax credit (ITC), commonly referred to as the solar federal tax credit, remains at 26% for a final year. It is scheduled to drop down to 22% in 2023 and to phase out completely for residential solar come 2024.
The ITC is a dollar-for-dollar credit that can be applied directly against your tax liability.
At 26%, that means if your solar system costs $15,000 then you would receive a $3,900 tax credit.
The ITC has and continues to be a great tool to drive down costs for solar customers. For those interested, battery storage also qualifies for the ITC, making it more affordable to add resiliency to your setup with a battery+storage energy system. If you’ve been on the fence for a while, keep in mind that the ITC is slated to step-down and terminate all together in 2024, making 2022 primetime to bite the bullet and embrace solar.Increase property value
A solar system lowers your home’s utility costs and provides reliable energy. This makes your home more valuable. This added value often translates to a higher selling price, although there is not a set appraisal strategy for homes with solar. So the amount of value added will be situational, depending on neighborhood trends, the condition and age of the system, and the projected utility savings.
Studies have also shown that homes with solar sell faster than those without, and while a solar system adds value to your home, it does not impact your property taxes.Take advantage of flexible finance options
Solar technology is reliable and robust, making it a sound investment. That means there are finance options available to reduce the headache of a hefty upfront cost. Loan options can heavily reduce or eliminate any upfront capital commitment and allow you to pay off your solar system at a fixed rate over a 10-20 year period. Although interest will be calculated into the overall price, the loan option has the potential to make your solar system cash flow positive from day one (your loan payment + remaining electric bill < your electric bill before solar).
In addition to the loan option, there is also opportunity to lease solar. This allows you to essentially rent out your roof space so that someone can put a system on your house, and you pay the solar system owner for power at a rate cheaper than the utility provides. The lease option does not allow you to take advantage of the solar tax credit or other financial benefits, but you can experience cost savings on your electric bill without owning a solar system yourself.Electrify your life
Solar energy rests in the larger movement of electrification — switching from a power source to one that’s powered by electricity. Moving away from utility-based power generated from natural gas to a residential solar system demonstrates electrification.
And the movement doesn’t stop there…
The automative industry is going electric and it’s proving better for the environment and your indoor air quality to adopt electrification for major home appliances like your stove, oven, and water heater. Solar makes that transition to electrification satisfying — you can heat your water, charge your car, and operate your house all from the power generated on your roof.
Electrifying your home will increase your demand for electricity, so it’s important to consider that increased demand when sizing your ideal solar system.