Will Solar Power Save Me Money?

Turning to solar power comes with a lot of benefits. It's clean, renewable, and goes a long way towards preserving the health of our environment. On a more personal level, though, solar power has one very attractive benefit to your everyday homeowner - it will save you money.

How Much Can I Save with Solar Power?

There are a lot of factors to be taken into account to determine how much you'll save by switching to solar. After all, between individual house energy needs and varying utility costs in different states, the amount can fluctuate greatly. For example, the average cost of electricity in Louisiana is 7.51 cents/kWh but, in Hawaii, it's 27.55. Obviously, those who turn to solar power in Hawaii stand to save more than those in Louisiana.

On average, however, households that switch to solar in the U.S. tend to save approximately $1,500 a year. Over a span of 25 years, this works out to a substantial $37,5000 in savings from solar power. And that's just the average. Some households have the potential to save as much as $90,000 over that same time frame.

That is, after you paid the upfront cost of installing the system.

How Much do Solar Panels Cost to Install?

The cost of installing a solar panel system can vary quite a bit. This is because different types of homes require a different amount of panels to collect enough energy. The larger your house, the larger amount of energy you require, which means more panels and a higher price tag for the system. On average, though, a solar system usually costs in the neighborhood of $13,000 to $14,000 to install. That number on its own can give a lot of people sticker shock, but you need to factor in savings, return on investment, and, of course, the federal solar tax credit.

Currently, there's a federal tax credit available for anyone who installs a residential solar photovoltaic system in the U.S. Until the end of 2022, this tax credit is worth 26% of your system's total cost. In 2023, though, the tax credit drops to 22%. So if you're already considering adding a solar power system to your home, better to take care of it sooner rather than later.