Now that the costs of manufacturing solar panels and installing them have come down significantly, they’re at the point where they are affordable for many homeowners. But how much money do they help you save, and when do these savings start to actually outweigh the costs of installation?
There’s no precise calculations, and it depends largely on how much you pay to have the installation performed. However, here are some ideas that could help demystify the issue:
- For Texas residents, you can save about $20,960 on average, over the course of 20 years. The number was computed based on 2011 research, and solar power’s cost has dropped much since then, so the real figure could be higher. You can view data for Texas and every other state in the nation in an infographic at CostofSolar.com
- Don’t forget about federal and state tax incentives. There is a residential tax credit of 30% that will remain in effect until December 31 of 2016. For credits available to Texas residents, visit this website.
- How much does installation cost? Do know that whatever you do, installation is going to be expensive. Contractors will give you different numbers, but the average cost is around $5 per watt, or nearly $15,000 for the typical 3-kilowatt system.
- Remember electricity costs are generally rising. To account for your total savings, you have to also factor in the cost of electricity. The Edison Electricity Institute conducted a study which found they rose 2.5% per year from 2000 – 2006, while inflation grew at a rate of 1.99% per year over the same time.
- Know how much electricity solar produces. Of course this info disagrees with point number one, but it’s here just for your information. The typical 3-kilowatt system creates 450 kilowatt-hours of electricity per month. In a state with an average amount of sunshine, that equates to about half of the monthly electrical usage. If that bill is an average amount of around $100, it would save you about $50 per month. Figuring a new cost of $50 per month, that’s $600 saved per year.
Give that Info, What Should You Do?
If you’re saving $600 per year, you won’t break even on the cost of your solar panels (assuming a $15,000 cost) until you’ve owned them for…25 years! But, with that 30% discount in place, that takes the installation cost down to $10,500. That lowers the payback time down to 17.5 years.
The bottom line: the 30% federal tax incentive is in place until December 31st of 2016, and installation costs will come down. Get your solar panels installed before then, if they fit in your budget, and make sure you pay special attention to see if the federal government extends that deadline.
For may ways to save money, switch to Payless Power for pre-paid electricity! Offering low-cost energy plans to suit both residential and business needs, Payless Power is a company committed to providing people with some of the best electricity rates in Texas, but also with helpful customer service. Visit the website to learn more about how to save electricity at home, or connect with the online community on Facebook, Twitter, YouTube, and Pinterest.