Are you learning about solar energy or do you already have solar technologies? It pays to know the benefits of solar panels, and your solar panel ROI is a big one. Your solar ROI is your financial return at the end of each year you own a solar installation. To be clear, with renewable energy systems, you can see a 10 to 30 percent annual return on your solar investment. Moreover, your solar ROI helps you pay off your solar panel cost after only 5 years. And you still have 25+ years to enjoy free electricity from your residential solar panel. Want to know how you’ll benefit? In this article, we’ll explore how to calculate your solar ROI by looking at multiple factors.
Thanks to EnergySage, there’s a simple equation to calculate your annual returns. All you have to do is divide the financial benefits you receive each year by your initial investment. Your financial benefits are comprised of a few factors, which we’ve listed below using information EnergySage brings to light. See how you fit the bill.
Click here for a solar payback calculator to receive details on your solar panel ROI, including your lifetime savings.
How does area affect my solar panel ROI?
Electricity rates, financial benefits, and Solar Renewable Energy Certificates (SRECs) are area related incentives that boost your solar ROI. Profit off your area!
- Electricity rates
In short, if electricity rates are high in your area, you’ll be saving a lot more with solar. Trends already show that electricity bills are rising every year. If rates aren’t already high in your area, give it a year. You’ll profit off how much you would’ve spent on high electric bills. Click here to learn more about how to benefit from high electricity rates and lower your electricity bills
- Financial benefits
The federal government offers benefits for owners of a solar power system. These benefits are local and state tax programs and rebates that push for solar power. If you’re a business or other organization, depreciation tax benefits and accelerated depreciation can help you in particular.
SRECS are certificates given to homeowners for every 1000 kilowatt hours (kWhs) their solar power system produces. The awesome part is, SRECS can be sold to utilities for up to $300! However, your profit depends upon the market of the state or utility in your area. Worry not. Chances are your state follows renewable portfolio standards (RPS). This means you’re likely to have markets with utilities or a state trying to meet its quota.
How does my system affect my solar panel ROI?
Solar technologies, housing conditions, and property value reflect your system’s potential to boost your solar ROI.
- Solar technologies
Producing energy at a high efficiency reduces your monthly bill. Remember: when panels are working well, you’re bound to produce profitable electricity. Therefore, the best way to ensure you have an efficient solar system is to invest top tier solar panels.
- House conditions
Additionally, properties like good sun exposure, roof angles, maintained panels, and optimal panel placement affect your solar system’s efficiency. High efficiency means more money back into your pocket, and we will work to make sure your system is optimized.
- Property value
When you own a solar installation system, the value on your property increases. But, by how much? According to Cost of Solar, added value is worth the investment. They state, “a small 3.1-kilowatt (kW) system can add an average of $18,324 to the value of a medium-sized home. The property value advantages of solar energy only increase as you scale up. Installing 5kW of solar panels adds an average of $29,555 to the retail value of a medium-sized home.” Interestingly enough, for the average home, there’s a much higher return. The data below outlines the results of extensive research done on how solar houses do well in the market.
How do lowered costs affect my solar panel ROI?
Finding a good price and benefitting from rebates and tax incentives will offset the solar panel installation cost. Your investment doesn’t have to be costly. To compare options and support your solar ROI, click here.
- Business benefits
Lowering high energy costs can increase the profits of your business. Take note of the “goodwill” your renewable power source generates. In other words, your revenues might be accredited to your solar electricity output. At renewable energy hub, they agree that solar reduces energy bills and provides guaranteed income over the next 20 years. They also add, “installing solar panels for your business also increase your green credentials. Many people are in favor of the government and business taking on new eco-friendly technologies and often look to support them.” Solar is a form of energy that can, without a doubt, help your business and your solar ROI flourish.