For most people thinking of powering their homes with solar power, one of the first questions to ask is “Is solar worth it?”
And to these folks, we’d answer, “What, is making this awesome, environmentally conscious choice (you can learn more about those here) alone not worth it?” 😉
But all jokes aside, if you’re investing in most cases, at least $10,000 (and often much more) to install solar panels, then you’ll probably want to know if that investment will pay off.
If you’re worried about the viability of going solar, you’ll be glad to know that as solar energy becomes more popular and widely accepted around the world, prices are going down. (Learn more about the latest solar energy-related stats.)
In fact, in areas that are more advanced in terms of policy and finances, the International Energy Agency (IEA) reports that solar energy can now generate electricity at or below $20 per megawatt hour (MWh).
Take a look at the massive growth that solar has seen in the last few years:
What this growth means for us is that a lot of hard work is being done, in terms of laying infrastructure and putting policies in place to reduce costs of everything from manufacturing solar panels to installation and more.
And not only are costs going down (and expected to continue going down), but solar panels’ effectiveness has also improved thanks to advances in technology. So if you’re interested in solar, there’s no time like the present.
In this post, we’ll look at nine important questions to answer if you’re seriously considering switching to solar energy:
- How much are you paying right now for electricity?
- How many years do you plan to spend in this home?
- How much does a solar panel system cost?
- How much do solar panels cost to maintain?
- Okay, but what else do you need to do to maintain a solar panel system?
- Are there any tax credits or grants for installing solar?
- So… are solar panels really worth it then if you don’t live somewhere sunny?
- Are you planning to go completely off-grid?
- Are you willing to do a little bit of legwork to use your solar energy more efficiently?
9 questions to ask in order to figure out if solar is worth it
As you start exploring your solar options, there are some key questions you can ask to help determine whether solar makes sense, including:
This is the most important question to ask if you’re considering whether switching to solar is worth it.
In some countries or states, electricity is really cheap! There’s a whole slew of factors that can influence how expensive electricity is where you live, from big macro factors like the economy to existing investments and how much your utilities want to charge (or overcharge) you.
Here’s a quick comparison of how much a few countries are paying for electricity as of March 2020:
|Country||Cost per kWh in USD|
First thing you should do is pull out your electricity bill and look at your charges.
|🌞 Pro-tip: What is a kilowatt-hour? You’ve seen kWh on your electricity bill before, most likely, and it’s basically just a common billing unit that measures energy delivered to you. It’s key to figuring out if solar is worth it to you. |
(And it also comes in handy if you’re deciding how many solar panels you need because you need to know how much energy you’re consuming right now!)
If you’re already not paying a lot for electricity, you’re probably not going to save too much by installing solar panels. Either way, we’d still suggest using a calculator to some quick math just to make sure.
In the United States, it ranges widely even between states. Here’s a quick comparison of the numbers from September 2020:
|State||Average cost per kWh in USD|
Once you’re figured out roughly how much you’re currently paying for electricity, let’s look at ways to estimate how much you could save. A quick Google search will pull up some great calculators online to help you estimate—and these are great, but speaking of calculators…
You’ll find that the way most of these energy savings calculators will spit out your savings over anywhere from a 10-to-20+ year span.
Which means that if you are thinking of installing a solar system, remember that it’s not a quick-win deal. It’s an investment, and investments take time to pay you back. Solar is definitely one of these.
In most cases, it’ll take you at least a few years to break even with the cost you put into installing the solar panels, and more years after that to net positive.
And don’t forget to check with your home insurance company to make sure they cover solar panels!
As you’ve probably guessed, the biggest chunk of your money is going to go toward buying the solar panels and installing them.
This is why step 1 is important: you need to know how much electricity usage your solar panel system has to support before you can calculate how many panels you need.
Another important note to remember is that a 5 kW solar panel system is not going to produce the same amount of electricity everywhere! For example, if you live in Las Vegas and enjoy really strong sunshine all year round, your 5 kW solar panel system will most likely produce more electricity than someone who lives in, say, Seattle.
(Actually that’s not exactly a fair comparison because Seattle also has pretty low electricity rates. So you’re not losing much there by not going solar.)
According to the Center for Sustainable Energy, the average residential solar panel system costs about $3–5 per watt. That means a typical 5 kW, or 5000-watt, residential system will cost you $15,000–$25,000 (before counting tax credits or incentives).
Now, let’s look at installation costs. According to the National Renewable Energy Laboratory’s 2017 report, surprise surprise—it’s cheaper to get solar panels installed by smaller companies.
Their researchers matched quotes from large installers (meaning installers who did more than 1,000 systems in any year 2013 to 2015) against “non-large” installer quotes given to the same customers.
They found that on average, the large installer quotes were about 33 cents per watt (about 10%) higher than the non-large installer quotes:
Even after controlling for what they called “systematic differences” between large and non-large installer quotes, the difference was still about 21 cents per watt.
In any case, installer quotes can vary pretty widely, so our best tip is to do your homework and compare not only the quotes, but also the reviews to make sure you’re going with someone who’s not only local, but also reliable.
|🌞 Pro-tip: If you generate more electricity than your household needs and you’re still hooked up to the grid, you might be able to sell that electricity back into the system—and break even on your solar investment sooner.|
If, like us, you’re not into high-maintenance installations, then you’ll be glad to know that solar panels are pretty low-maintenance!
They’re generally hardy and durable, and most solar panels come with a 15 to 25 year warranty. Read the fine print here, because these warranties are typically “performance” warranties, meaning the parts may still age—but the warranty guarantees that they’ll still perform well for the duration of that period, for example, at an 80% level.
Some folks even find that the roof will need work or repairs before the solar panels do. And speaking of the roof, if you know that your roof is quite old or might need to get work done on it soon, it’s best to do that before you install solar panels.
Otherwise you’d have to pay to remove the panels, store them, and put them back after.
|🌞 Pro-tip: Don’t forget your inverter. Most people think only of their solar panels but forget that the inverter is another key piece of the system. Inverters, unlike solar panels, usually have shorter warranties (anywhere from five to 10 years), so make sure to factor that possible replacement into your budget. A good inverter can easily run you a couple grand, from $2,000 to $7,000 including all the installation fees.|
Like anything though, solar panels do age. And after a decade or two or three, you might find that they’re not quite as effective. All the same, they typically last around 30 years, which is not bad at all.
If you live in a place that has a long winter or gets a lot of snow, you’ll need to make sure that you clear that white stuff off! And be careful not to scratch the panels!
|🌞 Pro-tip: When you get your solar panels installed, try to get them angled at about 35 degrees. This way, any debris, snow—and yes, even dust—that might block them from absorbing maximum sunlight will either blow off or clear themselves off without you having to do too much.|
If you’re fortunate enough to have quite a bit of land, why not install your solar panels on the ground? You can still angle them so that most debris falls off by itself—and you get the added bonus of not having to climb onto the roof just in case you do need to manually remove snow or make any repairs.
Depending on where you live, you might be able to get tax credits that’ll reduce the hit on your wallet.
When you’re looking at these, note the differences! Not everything is going to give you a cheque or reimbursement.
For example, grants and rebates will give you cash back (usually in the form of a cheque), but a tax credit is literally that: a credit for you to help reduce the amount of taxes you pay. Credits usually roll over into the next year if you’ve accumulated enough, but these don’t work the same way as grants, rebates, and other types of reimbursements, so make sure you know the difference.
|🌞 Pro-tip: There’s a residential federal tax credit that lets you claim up to 26% of your installation costs. Sounds nice. However! This program expires December 31, 2021—and the 26% drops to 22% in 2021. Plus, your solar system has to be all set up by Dec. 31, 2020. More info here from the Database of State Incentives for Renewables & Efficiency (operated by the N.C. Clean Energy Technology Center at N.C. State University).|
Personally, I wouldn’t borrow money just to install solar panels unless the savings are significant. Not worth the time and work getting everything set up. But that’s just me.
For sure! Just because you don’t live somewhere that’s sunny all four seasons doesn’t mean that solar isn’t worth it.
If you’re paying a lot for electricity right now, then solar could be well worth it even if you don’t get a “lot” of sun. Plus, you might get different tax incentives and other perks depending on which city or state you’re in. More sun is better in most cases, but it’s by no means the be all and end all.
All the same, calculate how many hours of sun your area gets on a monthly and yearly basis. That’ll help you get a better sense of how much electricity you’ll realistically generate with solar panels.
Here are a few other things to consider when thinking about your access to sunlight:
- Will your panels be under shade or tall trees?
- Are there tall buildings nearby that could block access to the sun?
- Are you in a hilly or mountainous area that might affect how much sun you get?
Some folks want to go 100% off the grid and rely only on themselves for electricity. In these cases, you’ll probably need a battery to back up your system.
If there’s bad weather, you might not always get enough sun. And even if you’re not going 100% off the grid, if you live somewhere where the power grid isn’t the most reliable, then having a battery backup is a good idea.
We’ll get more into the actual ins and outs of this in a future blog post, but for now, just consider that you might need a battery or generator as a backup just in case your solar panels need a little extra juice. Add that to your costs as you’re figuring out if solar is worth it.
Depending on where you live and what your solar setup is like (e.g. whether you have a generator backup), you might have to set your appliances to run during certain times of day so that you’re maximizing the use of that sunlight.
This is quite common for folks living in tiny homes, but just something to think about depending on how much electricity your solar panels can generate.
So, will solar be worth it for you?
Let’s quickly review a few important considerations as you’re debating whether to go solar.
To make solar truly worth it for you and your family, you should be:
- Paying more than average for your electricity right now (although if you’re doing it for environmental reasons or other reasons not related to price, this is a moot point)
- Reasonably confident that your area gets enough sunlight every year to actually generate enough electricity to cover a significant portion of your usage
- Planning to stay in your current home for a while (10+ years) so that you can break even and then actually come out with a net positive
- Willing to shop around to get a range of quotes from not only companies that sell solar panels and inverters, but also installation companies
- Willing (and able) to clear debris off the panels from time to time (it’s not a huge deal and you can always hire someone to do it in a pinch, but it’s worth considering)
- Able to front the costs or cover a portion of it with grants or reimbursements that might be available in your area
And that’s it! If you’ve checked these boxes and decided that solar is worth it, the next step is to look at your solar panel options, which we’ll tackle in a future post.