Is it always a good time to go solar? Sure. Are there better times than others to make the switch? Absolutely.
The popularity of solar panels is on the rise for several reasons. The ability to save a significant amount of money on electricity bills, adding to a home's resale value, and reducing your carbon footprint are just a few of the many reasons why homeowners are making the switch to renewable energy.
If you are a homeowner who has been saving up to go solar (because owning a system outright offers a variety of perks), here are a few key points to consider when it comes to determining the right time to install solar panels.
Incentives, Rebates, and the ITC
Because it's likely that your solar panel process will come with upfront costs, it's important to get the most out of all available incentives and rebates. Many consumers are unaware of renewable portfolio standards, which is a regulation that requires that a certain percentage of energy come from renewable sources.
In an effort to meet their renewable portfolio standard, many states offer aggressive solar incentives and rebates, making the switch to renewable energy a cost-effective move for homeowners.
Every state's renewable portfolio standard is different, and there will likely be incentives until those standards are met. While it is impossible to know what the future holds, incentives will likely diminish considerably once those standards have been met.
Where solar is soaring and why
A more pressing offer is the solar Investment Tax Credit (ITC), which allows solar owners to deduct a certain percentage of the cost of installing their system from their federal taxes. Why is time of the essence with the ITC? Because the percentage that you can deduct was devised to decrease each year (although President Biden has extended it), and the ITC as a whole still has an expiration date.
As it currently stands, panel owners can deduct 26%. In 2023, that will drop to 22%, and unless there is another extension, the ITC will not be available to homeowners the following year.
With that in mind, it's better to install panels now so you can make full use of that credit.
Who doesn't want to start to recoup costs on a large purchase right away? Solar panels are one of the few things that allow you to do just that. Since air conditioning and heating account for a significant portion of an electricity bill, it makes sense to sync panel installation with a change in the season.
Installing panels in the spring helps you get a leg up when summer hits. You will be able to save a huge amount right away, as you can rely on your panels to power your air conditioner rather than having to pull from the grid. Fall is a great time to make the switch as well, as you will be able to cut costs associated with heating your home when winter arrives.
Getting set up before extreme temperatures hit also helps you bypass peak demand charges, which can quickly add up. To ensure that you are getting the most out of your panels right away, installing a system right before summer or winter is a smart move.
Rising Electricity Costs
Speaking of higher corresponding costs, it's also wise to take into account energy rate increases. The U.S. Energy Information Administration notes that residential electricity prices are 0.7% higher than what they were in 2019.
Unfortunately, there is no indication that prices will drop as the years go on. In fact, Statista estimates that the residential electricity price in the United States increases 2.8% each year.
That's quite an increase from one year to the next, and trends and statistics like these make the argument for solar energy that much stronger. Most homeowners are constantly looking for ways they can cut costs. Nearly eliminating an electricity bill is a great place to start!
Length of Stay
If you plan on staying in your home for, say, the next ten years, going solar is a smart move for several reasons. The solar payback period is relatively short, depending on how many panels you decide to include in your renewable energy system.
Plus, homes with solar panels sell for 4.1% more than their nonsolar counterparts according to data compiled by Zillow. That means you can take advantage of tax credits, recoup your costs, start saving right away on your electricity bill, and sell your home for more when the time comes. What other major purchase offers those kinds of perks?
Of course, if you are contemplating a move in the next year or two, you may want to consider leasing panels instead. You won't be able to make use of tax credits, but you will still be able to save on your electricity bill. While typically it is best to buy panels outright, there are some competitive leasing options available. Once you move, the sooner you can get panels installed onto your new home, the better!
Start Your Solar Journey Today
While it's always a good time to install solar panels, there are things to consider to ensure that you are getting the most out of your renewable energy system from the starts. If you are ready to cut your electricity bills, add to your home's value, make use of incentives, and protect the planet in a major way, use EnergyBillCruncher to connect with local solar installers today!