The Pros and Cons of Solar Energy in 2023
It’s been nearly 40 years since they were first installed on the White House. Despite their long track record, installing solar panels is still a big investment and it’s only natural to consider the pros and cons of solar before diving in.
We’ve compiled a list of pros and cons of solar to help you decide if this is the right year for you to jump on board.
Pros of Going Solar in 2023
The cost of solar has plummeted in recent decades
When considering solar pros and cons, many homeowners recognize that cost of solar is cheaper than it’s ever been. Just how much cheaper, though? A 2018 study found that costs of solar modules have dropped a whopping 99% over the past four decades.
Given that there is no marginal cost of generation, as solar panels don’t require any input other then sunlight, the price of the solar modules and installation is the only cost most homeowners have to consider.
In 2023, with energy costs rising and time of use rates (TOU) getting more extreme, you can save even more by going solar.
Image via National Renewable Energy Lab (NREL)
Solar is a hedge against energy inflation
Energy inflation became a kitchen-table issue in 2022 with the national average price of utility electricity rising nearly 16% from September 2021-2022.
While utility rates climb over time, going solar freezes your electricity rate at around 7 cents per kWh over the 25 year life of the system.
In other words, going solar gives you control and independence over your electricity rate — something you will never have with a utility.
Solar energy is much cleaner than fossil fuels
Solar energy is not only renewable, it produces far less greenhouse gas emissions per kilowatt-hour of electricity than fossil fuels.
In terms of lifecycle emissions — including manufacturing, to operation, to end-of-life processes — rooftop solar is around 12 times cleaner than natural gas and 20 times cleaner than coal.
Rooftop solar is not only a means of drastically reducing carbon emissions, it has other environmental benefits as well.
For example, rooftop solar requires zero extra land and large-scale solar can be combined with agriculture (agrivoltaics) to increase crop and livestock production, and placed over bodies of water (floatovoltaics) to decrease water loss from evaporation.
Solar modules and warranties are lasting longer
As the lifespan of solar panels increase, so are the length of manufacturer and installation warranties. Most major solar manufacturers including REC, SunPower, and Panasonic offer warranties that guarantee a certain level of output over 25 years, and some companies are beginning to offer 30 year warranties.
A typical rooftop solar system pays for itself in 10-15 years, leaving solar owners with 10-15 years of free energy production while the panels are still under warranty.
And remember, solar panels don’t disappear when they reach the end of their warranty, their production capacity just slowly degrades over time.
Given solar technology is advancing by leaps and bounds, it wouldn’t be surprising to see warranties continue to increase.
The Federal Solar Tax Credit is 30% until 2032
With the Inflation Reduction Act of 2022 passed into law, the solar tax credit is now at 30% from 2022-2032.
For many homeowners looking to get the biggest bang for their buck, this may be the most compelling reason to go solar in 2023. The Federal Solar Tax Credit, or the Investment Tax Credit, is the single largest incentive for going solar.
While many state and local governments offer their own incentives, the Federal Solar Tax Credit is eligible for any homeowner that owns their system and has income tax liability.
The tax incentive currently allows owners to claim 30% of their gross solar system cost until 2032. You can learn more about how to claim the federal solar tax credit here.
Solar Increases Your Home Value
There is a whole slew of data showing that solar home improvements truly offer bang for their buck.
According to Zillow, homes with solar panels sell for 4.1% more than homes without. That’s an additional $18,052 on the national median home sales price of $440,300 in the second quarter of 2022.
Zillow also found that energy-efficient features are important to 80% of homebuyers.
And Zillow’s not the only organization reporting the benefits of solar on home value.
A 2015 study by the Department of Energy’s Lawrence Berkeley Laboratory and Sandia National Laboratories found Californian home buyers will pay up to $4 per watt of installed PV, while homebuyers across the country will pay around $3 per watt. This comes out to about an additional $15,000 for a home’s solar system.
Related reading: 5 Advantages of Solar Energy
Cons of Going Solar in 2023
Net Metering Rollbacks
Under Net Energy Metering (NEM), utilities credit solar module owners for excess generation that is distributed back to the grid. While many utilities still rely on NEM, some have begun rolling it back for a variety of reasons, including market maturation and the cost utility’s bore under the system.
However, many homemakers, solar industry officials, and policymakers are fighting the rollback. For example, Connecticut passed a 2018 bill attempting to roll back NEM. However, four recent pieces of legislation are attempting “at least slow down, if not repeal” the bill’s objectives.
For states that have rolled back NEM, other programs are emerging with similar payback methods. For example, some utilities are adopting a Solar Renewable Energy Credit (SREC) system. Under this system, homeowners sell SRECs at prices set by the market to their utility. As demand for renewable energy grows, the price of SRECs in many utility areas may rise.
Learn more about the new version of net metering, NEM 3.0, coming to California.
Solar scams have long plagued the industry, harming both consumers and reputable solar companies.
But that is no reason to throw the baby out with the bathwater. Going solar through a vetted and reputable installer is a means to clean, cheap electricity for millions of American homeowners.
Batteries Are Still Expensive
Batteries are not required for solar systems, but they can help maximize a system’s value. Homeowners can rely on stored solar generation at peak grid times, thereby avoiding higher utility electricity costs. While battery costs continue to decrease, however, the overall cost is still considerable.
Homeowners looking to go solar in 2023 can take advantage of the Residential Clean Energy Credit, which allows applies to batterie storage up larger than 3 kWh. This credit is currently at 30% until 2032 thanks to the Inflation Reduction Act.
High Upfront Cost
Even with loca and federal incentives, going solar still has a relatively high upfront cost for homeowners paying cash.
Thankfully, there are zero-down solar loan options that spread the cost out over time and provide savings on day one.
In general, solar should be thought of as a secure, long term investment. Not only will it immediately reduce electricity costs, it also reduces shields homeowners from rate hikes.
Related reading: Best and Worst Moments for Solar Power in 2022
Solar Panels Don’t Move With You
Unfortunately, solar panels won’t pack up and move with you. They’re a long term investment, so if you’re planning on moving in the near future it may not make financial sense to purchase a system now.
As mentioned, solar panels do help homes sell more quickly and for more money. Even if you move, you’ll likely recoup the cost of your solar system — and perhaps even come out ahead — through the added value to your home.
Related: Is It Worth Going Solar in Your Golden Years? A Retired NASA Scientist Weighs In
The Pros and Cons of Solar in 2023
The pros and cons of solar energy are constantly changing as the industry evolves. If passed, the Inflation Reduction Act of 2022 – perhaps the largest climate bill in history – will add heavily to the pros column.
Not only will the solar tax credit be at 30% from 2022-2032, major investments in solar manufacturing will continue to drive down the cost of residential solar.
With that said, solar is a long-term investment. While the future is incredibly bright for residential solar, it’s best to get in early in order to enjoy the return on investment sooner.
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