Solar Energy Pros and Cons in 2024 – MarketWatch
Solar panels have a high upfront cost, but their maintenance needs are minimal and their lifespan can exceed 40 years. The following are five major benefits of solar energy systems.
1) Solar Panels Can Save $1,000 to $2,000 in Annual Energy Bills
The exact savings of a solar energy system depend on many factors: local sunshine, electricity prices and the number of PV modules used. However, most U.S. homeowners can expect to save between $1,000 and $2,000 annually. If you live in a state with expensive electricity and you install a large solar system, savings of up to $3,000 per year are possible.
Depending on where your home is located, solar panels may also earn Renewable Energy Certificates (REC).
- RECs can be sold to utility companies and other organizations subject to clean energy targets, and they represent extra income beyond your power bill savings.
- Generally, you accumulate one REC for every 1,000 kilowatt-hours (kWh) generated, and prices vary depending on the state.
2) Solar Energy Systems Are Eligible for Many Financial Incentives
Solar PV systems qualify for tax benefits and cash rebates. These incentives vary by state, but there is a nationwide investment tax credit for renewable energy systems. If you complete a solar panel installation, 30% of your project cost can be deducted on your next IRS filing.
The federal tax credit is the only solar incentive that is available everywhere in the U.S. Depending on your location, you may also qualify for the following:
- Sales tax exemption for solar energy equipment
- Property tax exemption for homes with solar panels
- Local solar tax credits
- Cash rebates for solar installations
If your state or city government offers tax incentives, they can be claimed in addition to the federal tax credit. Cash rebate programs are available from both government agencies and electric utility programs, and they may cover other technologies beyond solar panels.
3) Solar Panels Increase the Market Value of Your Home
Since a solar power system is a home improvement, the value of your property increases. As a rule of thumb, the typical increase in home value is equivalent to the estimated solar savings over a 20-year period. For example, if your solar energy system is expected to save $1,500 per year, your home value can increase by around $30,000.
Many states have a property tax exemption for solar panel systems, which means you are not taxed for the increase in home value. If you own a $400,000 home and solar panels increase its value to $430,000, your taxes are still calculated based on a $400,000 property value.
4) Renewable Energy Systems Lower Your Carbon Footprint
When you generate your own kilowatt-hours with solar panels, grid electricity usage is reduced. Renewable energy sources have been growing fast in recent years, but fossil fuels still dominate electrical grids in the U.S.
The U.S. Energy Information Administration (EIA) estimated the emissions released by fossil fuels when generating electricity:
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