Any investment you make in your home or business should generate some type of return. Thanks to the tax rebates and cost-savings associated with solar panels, it makes the system and installation service well-worth the price. In California, solar panels are a big deal, especially as energy costs soar. There are both state and federal tax incentives you can and should take advantage of.
In one study done by the Edison Institute, energy costs rose by 2.5 percent per year between 2000 and 2006. This was higher than inflation, which was rising at 1.99 percent each year, during the same period. The hike in energy rates has a lot to do with the increasing costs for various fuels, including natural gas and coal.
Since it’s expected that these rates will continue to rise, so shall electricity bills. The best way to counter this is to hire a solar company to install a system for your home, business or other property. It won’t take long for your panels to pay for themselves either.
Tax Credits From Solar Drive Down Cost
The U.S. government and various states introduced tax credits to help drive more citizens to go solar. This allowed solar panel service providers to get 30 percent back from new projects and those who install it on their homes also get a 30 percent tax break, which is expected to end Dec. 31, 2016.
Then the additional state tax breaks can also be combined to help increase your savings even more. The state tax credits are higher in areas where the solar rating is high. A solar rating is the average solar energy available per home, which is higher in states like New Mexico, California and Arizona. In these states, you can also get extra incentives, such as waived fees, expedited permits and cash back.
How Much Are Solar Panel Systems?
The cost of solar panels varies depending on where you buy it from and from what brand. You can expect to pay a bit more for American-made panels, but higher quality is guaranteed. Some solar panel services charge $5 per watt, which is around $15,000 for a 3kW system. Although the system will eventually pay for itself, you also get immediate monetary benefits, such as a reduced or eliminated electric bill.
On average, Americans use around 1kW of electricity hourly and 900 kW monthly. If you’re using an energy efficient refrigerator that uses 350 kWh per year (about $50 annually) and a LCD television that uses 700 kWh per year ($100 annually), your 3kW solar panel system will generate 450 kWh monthly, which will cut your monthly energy bill in half. So if your bill was $150 monthly, you can expect to pay $75 for as long as you have your system.
Here’s an example of how your solar system can save you money:
- The system costs $10,500 after tax rebates
- You save $600 annually on your energy bill
- It would take 17.5 years to get a return on your investment
Those who live in California can save the following monthly when using solar energy:
- Sacramento – $65
- San Francisco – $187
- Fresno – $107
- Oakland – $187
- Los Angeles – $101
- Long Beach – $131
- San Diego – $137
Is it Better to Lease Solar ?
You have the option of leasing the solar panels you have installed by a service provider, but is this a good idea? For one, you will forfeit your ability to get the 30 percent tax credit, since this is only available to those who purchase the system. If you’re looking to save as much money as possible, but don’t have the cash on hand to pay off a solar system, you can instead finance. At Equisolar, there are excellent financing plans that start as low as $0 down.