Solar Pros & Cons
It’s been more than 60 years since solar panels were first invented and almost 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 many people are unsure if it’s worth installing solar panels in 2020. We’ve compiled a list of pros and cons to help you decide if this is the right year for you to go solar.
Pros of Going Solar
Solar is Cheaper Than Ever Before
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 recent paper found that costs of solar modules have dropped a whooping 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.
Many Module Warranties are Increasing
As the lifespan of solar panels increase, so do manufacturer and installation warranties. Many companies have recently increased their product and power output guarantees, including LG Solar.
The Federal Solar Tax Credit is Stepping Down in 2021
For many homeowners looking to get the biggest bang for their buck, this may be the most compelling reason to go solar in 2020. 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 26% of their gross solar system cost, but it’s stepping down to 22% in 2021. You can learn more about the Tax Credit and the step down in this article.
Solar Increases Your Home’s Value
There is a whole slew of data showing that solar home improvements truly offer bang for their buck. 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. Solar homes sell more quickly and for more money than non-solar houses. In 2010, the National Renewable Energy Laboratory found that California homes with solar systems sold for 17% more and 20% faster than similar, non-solar homes.
Cons of Going Solar in 2020
Net Metering Rollback
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.
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 2020 can take advantage of the Federal Solar Tax Credit, which allows applies to batteries installed with a solar system.
High Upfront Cost
While federal, state, and local incentives can bring down gross system cost, solar still has a relatively high upfront cost. However, solar should be thought of as a secure, long term investment. Not only will immediately reduce electricity costs, it also reduces homeowners’ dependence on their utilities. There are no more electricity rate raises with solar – the energy input is always free!
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.
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