The new year is around the corner and you may begin asking yourself, are solar panels worth it in 2022?
This is somewhat of a complex question and we aim to break it down in bite sized pieces for your understanding.
If you are at the point where you are finally ready to purchase a solar system for your home but just need that extra bit of reassurance, then this article is for you.
1. Is Solar a Good Investment in 2022?
That is the question isn't it. We all know that solar systems cost quite a bit of money, especially in the United States.
In fact, on average a grid tied solar system will cost you roughly around $11,389 and $13,919 (this takes into consideration tax incentives by the way).
keep in mind that the total cost of your solar system will largely depend on your electricity consumption, your homes location and how much energy consumption you would like to offset.
Of course, brand of solar equipment matters too.
Another way to predict your costs is to use the cost per watt method.
Most solar systems cost between $2.57 and $3.14 per watt, with a national average price of $2.85 per watt.
Therefore, if you aim to install a 15,000 watt solar system, you can expect it to cost around $14,250. When it comes to the question of "are solar panels worth it", this is one factor you should consider.
How Much Solar Costs Have Dropped
In fact, pay attention to the first bar graph, on the top left. Look at how much solar has dropped over the years, it went from $7,53 per watt in 2010 to $2,71 per watt in 2020.
That is a massive drop in price.
I mean, if you were to buy a 5kW solar system in 2010 you would of paid $37,650, whereas in 2020, you would of paid $13,550. That's a $24,100 difference in cost!
Let's do some calculations to see if it would of been worth it to buy a solar system in 2010 or if you should of waited for the price to drop before buying one.
The average electric consumption per household sits at around 893 kWh each month. Therefore, in 2010 you would of paid around $87,51 per month for electricity or $1050 per year.
However, remember the cost of electricity generally increases each year. The average cost of electricity between 2010 and 2020 is $0,1027.
Therefore the total amount you would of spent on electricity between 2010 and 2020 would of been $11,000.
This means you would essentially still be paying off that original solar system today. In fact it would take you exactly 34 years to pay that 2010 solar system off, assuming you spent about $1100 a year on electricity.
Also remember that solar systems generally on last 25 to 30 years, so a 34 year pay off period is definitely stretching it.
Were solar systems worth it in 2010?
What if you got that same solar system in 2020?
We have already established that that same 5kW solar system would of cost you $13,550 in 2020.
This means your total pay back period (taking into consideration average electricity costs) would take you 12 years to pay back as apposed to 34.
This means that after 12 years, you will be generating free electricity and saving around $1100 each year.
Now, that brings us along to our next point.
2. Understanding Tax Incentives Available To You
Are solar panels worth it in Texas? In fact, both state and federal governments have established various incentive programs to encourage homeowners to buy solar panel systems.
There is currently a 26% federal solar tax credit, called an Investment Tax Credit (ITC), available for all homeowners who install residential solar panels between 2020 and 2022.
That means 2022 is pretty much your last chance to take advantage of the 26% tax incentive.
This incentive is scheduled to reduce to 22% in 2023 and may not be extended thereafter.
This means, that that same 5kW solar system would in fact cost you $10,027 in 2022. And in 2023 it would cost you $10,569.
Although solar costs are believed to continue dropping into the future, not taking advantage of a 26% tax relief seems like a massive loss. Especially considering solar system prices are unlikely to drop by 26% themselves within the next few years.
So the anwer to are solar panels worth it in Texas is that, you would save the most money now, by investing in a solar system in 2022 and taking advantage of the 26% tax relief.
3. Final Thoughts
Is solar panels worth it? In our opinion it makes the most sense to invest in a solar system in 2022 or by 2023 latest. Unless you are willing to wait another 5 years or so for costs to drop even further without the tax relief.
All in all, investing in a solar system will not only save you thousands of dollars over the years, it will also reduce your homes Co2 footprint.
Doing something good for the environment makes you awesome.
1. Are solar panels bad for your roof?
Solar panels don't damage your roof when installed properly.
For most homeowners, installing solar panels will not result in roof damage as long as your solar installer is a licensed, qualified professional and your roof is in good condition.
2. How long does a solar panel last?
about 25 to 30 years.
But the solar panels generating that power don't last forever. The industry standard life span is about 25 to 30 years, and that means that some panels installed at the early end of the current boom aren't long from being retired.
3. How long does it take for solar panels to pay for themselves?
between 6-10 years.
There are several factors that affect the combined costs and combined benefits of going solar. The average time it takes solar panels to pay for themselves is between 6-10 years for most homeowners.