How Solar Panels Can Improve Your Home: Adding Value, Saving Money, and Reducing Carbon Footprint
Solar energy systems might be useful in the homes of both idealists and realists. But what exactly does it entail?
Installing solar panels could help homeowners save money on their monthly energy bills. Using the sun's rays to power your home saves you tons of money every month on your electricity bill.
Photo by Bill Mead
How does it work?
The photovoltaic cells in a solar panel capture the energy from the sun's rays as they hit it. In response to an electrical field inside the cell, this energy creates moving electrical charges, which cause electricity to flow.
Solar panels can be put on walls, floors, or rooftops. Solar tile systems are usually twice as expensive as panel systems. After the solar panels are set up, an inverter will convert the DC electricity from the panels into AC, which is what most home appliances use.
Understanding Commercial Solar Installation
Compared to residential systems, which are usually between 5 and 10 kilowatts, commercial solar installations are much bigger and have more than ten times the environmental and economic impact of a similar residential system.
Do Solar Panels Increase the Value of a Home?
Although solar panels have a high initial investment cost, they can save you money in the long run. Solar panels can increase the value of a home and make it more appealing to buyers because they are good for the environment (they save money on energy bills and have less of an effect on the environment).
The value of your home, the factors that go into determining its final selling price, and the impact on your property taxes will all be discussed in further detail as we go through this guide. Moreover, we will discuss the solar tax credits and incentives that might help you save even more money.
Why Would Installing Solar Panels Raise the Value of My Home?
A commercial solar installation can raise its value just like a new roof or updated plumbing. The Lawrence Berkeley National Laboratory (Berkeley Lab), which is part of the U.S. Department of Energy, did the most research on solar homes between 2002 and 2013 in eight states. It found that in six of those states, the average premium for a home equipped with solar panels was $15,000.
Researchers have found that lowering your electric bill and increasing the value of your home go hand in hand. The Appraisal Institute is the largest group of real estate appraisers in the United States. Its quarterly academic magazine, The Appraisal Journal, recently featured information from research done by the National Renewable Energy Laboratory (NREL).
In 2008, researchers found that for every dollar spent on utilities that were cut, a home's value increased by $20. A solar energy system that can reduce annual energy costs by $500 can increase the value of a home by as much as $10,000.
Real estate brokers and homeowners alike can benefit from this because it allows them to set a higher asking price for the property. Both the buyer and the seller can benefit from a property that is more energy efficient.
What Aspects of a Solar-Powered House Affect Its Market Value?
Yet, not all homeowners see an increase in home value after installing solar panels. The location, cost of electricity in the area, cost of installing solar panels, and effectiveness of those installations can all have an impact on a home's market value. Take a closer look at the factors that might either raise or lower the value of your home.
Location
A home with pre-installed solar panels has a different resale value in different regions. It is not possible to make a financially sound solar investment in every state due to a lack of clear regulations, qualified solar installers, or community backing.
On the other hand, there are places where using solar energy is not only possible but also encouraged. Based on how much solar energy each state can produce, the SEIA has named the following states as leading solar markets:
California
Texas
Florida
Cary, North Carolina
Arizona
Nevada
Georgia
A New Jersey
Virginia
Massachusetts
More solar incentives and tax credits could be made available to lower the upfront cost of installing solar panels. Installing solar panels could cost less upfront if there were more solar incentives and tax credits.
Cost of Power in a Home
Solar panels can make you less dependent on the power grid and utility companies. Solar panels can be put on the roof of a house and used to make electricity, which can lower a person's monthly energy bill.
With a solar battery, a home's solar panels can store any extra energy they make during the day. This energy can keep your house running through the night or during a blackout. To further reduce costs, the power can be utilized during peak electricity hours.
States with relatively high electricity prices, like California, Colorado, Florida, New Jersey, and New York, can get the most money-saving benefits from these steps. For this reason, homeowners in locations like San Francisco and Orlando, Florida, could get a greater selling price for their solar-powered homes than their Chicago counterparts.
Longevity of the Solar System
The age of the solar system is a further consideration. A solar system usually lasts between 25 and 35 years, but it could last up to 40 years in the best case. So, solar panels on homes that are less than 10 years old will keep making electricity for their owners for a lot longer than those on homes that are 10 years or older.
An inefficient system could completely negate any anticipated savings on energy costs. You could end up spending more money on upgrades, replacement parts, or an entirely new system if you don't have adequate coverage for equipment maintenance or performance guarantees. It is possible that the warranty period for these older devices is ending soon.
If you're looking to buy a house that already has solar panels installed, make sure to ask about the system's age and maintenance history. Before you put your home on the market with a solar energy system, you need to make sure that the panels and the whole system work well.
Possession of Solar Panels
To what extent a solar-powered home can be sold depends on who owns the system's solar panels. If a homeowner has put money into solar panels and owns them outright, they may decide to sell their home with the panels still on it. This is the least complicated way to transfer ownership, and it will net the seller the most money.
When trying to buy a home with a leased system, however, things can get trickier. Buyers have to figure out how to take legal ownership of the system from the vendor, who is not the owner. Solar leases are transferable either through a buyout or a transfer of the lease.
Sellers can get out of their solar contract early by agreeing to a lease buyout, in which case the new lessee will take over the remaining term of the lease in their name. But the seller is responsible for making any lease payments that are still due, which, depending on how long the lease is and how old it is, could be a big sum.
The alternative is to sell the lease to a company that will really use it. When dealing with a solar lease, this is your best bet. With a lease transfer, the seller doesn't have to put as much money into the sale of the property. But the new buyer must pass a credit check and other leasing requirements in order to close on the deal.
When Installing Solar Panels, How Will my Property Value be Affected?
Photo by Pixabay
When the value of your home rises after installing solar panels, so will your property taxes. Still, some places have laws that protect homeowners who install solar panels from having to pay fines. In states that don't tax solar property, the homeowner can deduct the increase in value from their taxable income.
There are a total of 36 states that provide some sort of tax relief for homeowners who install solar panels, and another 25 that do the same for homeowners who buy solar panels. It's important to know that the number of people who don't have to pay taxes in each state varies a lot. Some states may let you off for life, while others may only let you off for a certain amount of time. If you want to make the most of your increasing property value, you need to familiarize yourself with the policy in your state.
How Can a Household Cut Costs on a Solar Energy System?
Homeowners must make a substantial initial investment to install a solar energy system. The Solar Energy Industries Association (SEIA) says that the average cost of a 6 kW solar system is $18,600. This sum includes the solar panels, the cost to have them installed, and any other components like solar batteries or electric vehicle (EV) chargers. It all depends on the solar panels you choose, the size of your system, the extras you want, and the cost of similar installations in your area. Homeowners, however, can cut back on solar energy expenses by taking advantage of solar incentives, rebates, and tax credits.
Financing Solar Energy Via Substantial Tax Breaks and Reductions
Owning a photovoltaic (PV) system allows you to claim the federal and state tax credits that are set aside for such installations. A 30% federal tax credit is available for solar energy systems. Until the year 2032 comes to a close, it will stay at 30%. In 2033, the credit dropped to 26%, and in 2034, it dropped to 22%.
The value of tax breaks that each state gives can vary depending on its own laws. You might be able to get even more discounts and rebates if you talk to your utility company or local government. If you want up-to-date information about solar subsidies in your area, you may look it up in the DSIRE database.
This rebate is only available to clients who are new to solar energy. The original owners of these credits can only use them once. These rebates are not available for homes that already have an installed system.
The Concept of Net Metering
Net metering programs are also helpful because they let people get credit for the extra energy their solar panels produce by selling it to the utility company. These credits may be cumulative and paid out to the consumer at the end of the year, depending on the program. When clients need to draw power from the power grid due to low sunlight or a blackout, the credits can be used then as well. The amounts and duration of these schemes are not uniform across states or utility providers.
Advantages of Solar Energy
The sun's rays are the source of solar energy, which can be turned into either heat or electricity. Advances in technology have allowed us to harness even more of the sun's energy, which is always there for us to consume at no cost.
1. Eco-friendly
The installation of solar panels can reduce a family's annual carbon emissions. Solar panels are good for the environment because they don't make any pollution when they turn sunlight into energy.
You'll use less fossil fuel to run your home's utilities thanks to your system. For every kilowatt you add, your home's annual carbon footprint will go down by about 3,000 pounds. Even though households using solar electricity produce less trash, this has little effect on global warming.
People use more energy when it's warmer, which contributes largely to the annual carbon footprint of the typical American home. Residential energy use goes down in the spring and fall, while it goes slightly up in the winter and a lot in the summer.
Solar power output is the same every hour of the year, but because summer days are longer, more energy is made every day. Because of this, the solar grid that powers your home will work best when utility companies are getting the most calls for power. As peak demand is reduced, a community's carbon footprint is reduced.
2. Solar Energy is Everywhere
In reality, the annual demand for power in the United States may be met by just one hour of summer sun. Much of the United States has good to excellent solar resources. Even in places like the Pacific Northwest and Alaska, where there isn't much sun, installing solar panels can save money and help the environment.
3. Eliminating Extra Expenses
It's not a coincidence that reducing your energy consumption also lowers your power cost. With solar panels, you may generate a renewable energy source. That can power your home and even heat your pool, resulting in significant cost savings.
Switching to solar energy can save you money and lower your monthly electricity costs. Before you can determine the financial impact of installing solar panels, you'll need to know how much you currently spend on electricity each year. In the United States, one typical family uses 11,000 kilowatt hours of electricity each year (kWh). Multiply that by the average cost of electricity in the United States ($0.1301), and you get the answer. Your annual electricity bill would be calculated.
The specific cost savings from solar depend on the following variables:
Uninterrupted exposure to sunlight
Dimensions and slope of roof
Cost of power in your area
Electricity consumption
The dimensions of a solar power plant
4. Property Values Have Risen
You might expect a return on your investment in a solar energy system in the form of a higher sale price for your home. Solar panels are seen as improvements, just like a remodeled kitchen or a finished basement.
That’s why solar-powered homes can sell for more than similar homes without PV, but the exact amount depends on things like the price of electricity in the area and the size of the system.
Conclusion
Investment in commercial solar installation is expected to increase a home's value due to the long-term energy savings, tax rebates and incentives, and net metering programs that homeowners enjoy. If you want to increase the value of your home when you sell it, upgrading your solar panel system could be a good idea.
The cost-benefit analysis of installing solar panels, though, depends on things like where you live, the condition of your current system, and the rules in your area. Yet if homeowners pay attention to these, they will get a better return on their investment.
the upfront
Author: Daniel Martin
