How much can I save with home solar?
Factors that influence how much you can save with home solar
Your energy use and rate plan
Pennsylvania is what is known as a “deregulated” state when it comes to electricity. Deregulated states effectively separate electricity generation from transmission, allowing consumers to choose who to buy electricity from. You’ll still get a bill from your local utility and you’ll always pay them for the transmission portion of your electric bill, but you’re free to choose who generates your electricity. You can visit papowerswitch.com to learn more and compare different rate plans to make sure you’re getting a competitive rate.
Since home solar systems generate electricity which reduces the electricity you buy from the utility, how much you’ll save will depend on how much you otherwise would have paid your utility for that electricity. The more it costs you to buy your electricity from the utility, the more you’ll save by generating your own electricity from solar. And the more electricity you use and buy from your utility, the more opportunity you have to reduce that electricity with a home solar system.
Roof space and sunlight availability
Every home and property is unique in its space and access to sunlight. While solar panels can be installed in a number of places on your home or property, one of the best places to install them is on your roof. For solar panels to be effective your roof space should face south (best), east (good) or west (good) with little to no shade and few obstructions (vents, skylights, chimneys, etc). The more usable roof space you have, the more solar panels you’ll be able to install and the more you’ll be able to save.
Other options for installing solar panels include mounting them into the ground or as a shade covering on a pergola.
The bottom line is that the more sunlight the solar panels get, the more energy they’ll produce and the more you’ll save.
What incentives you're eligible for
The Inflation Reduction Act increased the federal tax credit for home solar and home batteries from 26% to 30% starting in 2022 and going through 2032. The federal tax credit is calculated based on the installed cost of your home solar or battery system and can include upgrades required to prepare your home for solar. For example, if you need a new main service panel, to upgrade your roof structure or even a new roof, some or all of those costs can be included in the amount you claim for your tax credit. A solar contractor can provide an estimate for your tax credit, but you’ll need to consult your tax professional to determine exactly what and how much you can claim.
It’s important to understand that this is a tax credit that will reduce how much tax you owe the federal government – it’s not a cash rebate. If you don’t owe enough taxes to fully utilize the tax credit, the balance may be carried over and applied to future years. A new provision in the Inflation Reduction Act provides the ability to transfer the tax credit to another person or entity in exchange for a cash payment. Details aren’t available yet, but the ability to transfer the tax credit may allow homeowners to receive an instant cash rebate instead of waiting to file their tax return.
In addition to the federal tax credit, Pennsylvania has a Solar Renewable Energy Certificate (SREC) program which requires utilities to procure a certain amount of their energy from renewable sources. When they’re satisfy the state requirements with their own renewable energy, they can purchase SRECs from homeowners. Your home solar system will generate one SREC for every 1,000 kilowatt-hours (kWh) or 1 megawatt-hour (MWh) of solar energy your system generates. SREC prices fluctuate with supply and demand, but have been $41 – $42 per SREC for most of 2022. An average home solar system generates 10-12 SRECs annually which results of income of $400-$500 per year in addition to your energy savings.
Home solar preferences, goals and budget
Last, but certainly not least, the most important factors in a good home solar system design (and the savings from it) are derived from your goals, preferences and budget. To get the right home solar system for you, it’s important that you:
- Have a budget
- Know where you either want or don’t want solar panels to be located
- Have a sense for what you’d like to accomplish with your home solar system. Is it to become more energy independent? Reduce your carbon footprint? Maximize your savings? These goals aren’t mutually exclusive and you don’t need to pick only one, but you should have at least a preliminary understanding of what’s motivating you to look into home solar.
You certainly don’t need to have all the answers right away, but if you’re able to provide more clarity and direction, your solar contractor will be able to customize your home solar system and ultimately deliver a better outcome.
How we maximize your solar savings
We’re always looking to maximize your savings, but in the end our goal is to get the right home solar system for you. Designing the right home solar system is just as much an art as it is a science. We take the time to understand your goals, preferences and budget and combine that information with aerial imagery and site data from your home and property to form the basis for a home solar design. From there we look for the most efficient places to install your solar panels while maintaining the aesthetic of your home’s roof planes and minimizing your cost. We typically look at two, three, four or even more designs until we find one that works best for you.
The bottom line is that your property, how you use energy and your goals, preferences and budget are all unique and a home solar system should be customized for you.
Contact our expert team today to get started on a quote, or to answer any additional questions that you may have.
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