Solar is one of the fastest growing forms of renewable energy worldwide, and it's quickly becoming one of the cheapest as well. Because of this, the price for adding solar panels to your home has significantly decreased since the technology went mainstream just a few years ago. With utility costs only rising, going solar is becoming an increasingly compelling investment every year.
Here in Arizona, our most abundant natural resource is sunshine. With large electricity usage from air conditioning being essential to surviving our hot summers, and lucrative federal and state tax incentives making solar dramatically more affordable, Arizonans have a unique opportunity to save big by cashing in a piece of our abundant sunlight with a rooftop solar system.
Understanding how to evaluate ROI (return on investment) is essential to fully understanding its impact on your monthly and yearly budgets. While the topic of solar ROI is complex with many benefits, we’ve taken the liberty to highlight just a few of the most compelling financial advantages of going solar.
1. Lower Electricity Bills
This one is typically the main reason for looking into solar in the first place, and is also pretty simple to figure out. Whatever energy your solar panels are producing is energy that you don’t have to purchase from your local electric utility. People are generally able to save so significantly on their electric bills that the average residential solar energy system usually pays for itself within 7-10 years, on average. With solar panels having warranties of 25 years and still efficiently producing energy for 40-50 years, that equates to decades of clean energy and significant savings hanging right over our heads!
2. Increasing Your Home’s Value
Although this financial benefit isn’t as noticeable immediately, like lower electric bills, it’s still worth mentioning and considering. Most solar energy systems add enough value to homes to cover most, if not all, of their initial investment. This can pay off big when you go to sell your home down the line--especially if your home is grandfathered into one of the older and often more lucrative solar plans. Also, with solar becoming more popular with younger buyers, it also gives you an edge against other homes that come without solar. Finally, adding solar is one of the few home improvement projects that both improves resale value value while instantly reducing monthly expenses from the moment it's switched on.
3. Tax Breaks and Rebates
There are a number of incentives that can dramatically offset a residential solar investment. The 30% federal solar investment tax credit (ITC) can offset nearly a third of the overall price. The ITC is scheduled to ramp down starting at the end of 2019, so it’s important take advantage of the higher incentives while they last. At the state level in Arizona, not only is there no sales tax charged on the purchase of a solar energy system, but you can also receive a state income tax credit of up to $1,000 for a solar purchase.
There are also limited-time rebates available for batteries, demand mangers, and approved “smart” thermostats. Right now, batteries have one of the most compelling rebates in Arizona. SRP is currently offering incentives up to $1,800 ($150 per DC-kWh) for customers who purchase and install qualifying battery storage systems. Batteries can be integrated into a new solar purchase, installed into existing systems, or installed without solar and charged entirely from the SRP grid. And if you don’t live in SRP territory, don’t worry. It was recently announced that the 30% federal ITC can also be applied to batteries, as long as they are filled with solar energy, regardless of utility!
If you’ve been thinking about making the switch to solar, now is a great time to make the switch! We invite you to contact one of our solar experts for a custom solar quote. If you aren't quite ready for a quote, you can download our complimentary whitepaper: Is Solar Right for You?