Estimated Monthly Savings: $150
More consumers are realizing the value of adding solar panels to their homes. At the end of 2017’s first quarter, there were close to 1.4 million solar panels installed throughout the U.S., according to data collected by the Solar Energy Industries Association. SEIA expects this number to reach 2 million by 2018.
Homeowners who install solar panels on their homes save money in multiple ways.
Federal Income Tax Credit for Energy Efficiency
First, there’s the Federal Income Tax Credit for Energy Efficiency, an incentive program created by the government in the early 2000s to encourage smart energy decisions among consumers. Last year was the final year for many of these tax credits and rebates to be claimed at their initial rate of 30 percent the cost of the upgrade. The only exception was solar systems.
Homeowners can continue to receive 30 percent of the amount they paid for solar panel installations they invest in until Dec. 31, 2019, according to Energy Star.
On average, Americans spend $16,800 on solar panels, EnergySage reported. While this is a hefty price, the credit they get back will be quite large as well. At this price, the tax credit would be $5,040.
Monthly energy savings
Aside from the several-thousand-dollar tax credit, Americans can save money on their monthly energy bills by installing solar panels as well. The amount by which a homeowner can cut their bills depends on a number of factors, most notably geographic location.
Sunny Los Angeles has one of the highest savings rates, with the typical homeowner avoiding $89,706 in energy fees over two decades. This amounts to about $4,485.30 per year, and just shy of $375 per month.
Clear across the country in Washington D.C., homeowners enjoy some savings, though not as large as those in LA. In the District, the typical homeowner may avoid $35,666 in energy costs over 20 years. Some simple division tells us that this amounts to about $1,783.30 per year or $148.60 per month.
Don’t let the soon-declining tax credit pass you by. Installing solar panels can save you money every month – and getting started soon can give you a nice tax break.