HOW MUCH MONEY DO SOLAR PANELS SAVE?
A frequently asked query we receive is, “What are the financial benefits of installing solar panels?” While it might appear simple, the advantages of solar energy extend beyond just reducing your electric bills. In this discussion, we’ll delve into three key areas where solar power provides savings:
- Reduction in electricity expenses
- Benefits from tax incentives
- Positive impact on the environment
How Much Money Can You Save on Electricity Bills With Solar Panels?
One of the primary motivations for individuals opting for solar energy is the potential for significant savings on their monthly electricity and utility bills. The amount you can save with solar power largely hinges on the efficiency and output of your solar system.
You will save more money with solar panels the more your system generates. The amount of power your solar panels save will depend largely on the size of solar panel system you have, the type of solar installation you have, and weather and shade conditions in your area – this all will impact how much power is generated, and therefore how much your solar panels save. The average home solar installation typically generates 350–850 kilowatt hours (kWh) per month. According to the U.S. Energy Information Administration, the typical house consumes 909 kWh of energy every month, thus having solar may reduce your electricity costs by up to 90%.
Watt Masters is committed to helping our clients maximize their savings by expertly designing and installing home solar systems the right way. We provide a variety of financing options for your solar panel needs. Our solar financing solutions, including $0 down options, make solar accessible to homeowners who might not have the upfront funds to invest in solar. With our financing plans, customers are only required to manage a small monthly payment for their system, plus a nominal fee of about $10 to maintain their solar panels connected to the grid for those occasional moments when additional energy is needed. However, by integrating a home solar battery backup with your system, you could potentially eliminate the need to use the grid altogether! This strategy is the key to maximizing your savings and protecting yourself against fluctuating and increasing utility costs.
Overall, it is our goal to assist our clients in saving thousands on their residential solar panel installations.
How to save money on solar panels in Phoenix, AZ
While investing in solar energy is significant, savvy shopping can help reduce the overall cost. By leveraging available incentives and rebates, and by comparing various quotes, you can effectively lower the expense of installing solar in Phoenix, AZ.
Take advantage of federal and local solar incentives
As long as your federal tax bill is high enough, you can take advantage of the federal tax credit in Phoenix, AZ. This incentive allows you to apply 30% of your solar installation and equipment costs toward your federal tax bill. If the amount exceeds your tax bill, you can roll over the remaining credit to the following year. Many states also offer great local incentives and rebates.
How much money Can You Save With Solar Tax Incentives?
You are entitled to government tax deductions if you install a solar panel system on your home or business. With the recent passing of the Inflation Reduction Act solar panels installed from 2022 to 2032 are eligible to deduct 30% of the cost from federal income taxes, as well as the cost of any required remodeling or retrofitting work connected with the solar installation. As a result, if you spend $10,000 on your system, you will be eligible for a $3,000 tax credit. Additionally, several local state jurisdictions let families who use solar panels be eligible for a state income tax deduction.
All Watt Masters Solar clients who pay federal taxes are eligible for the U.S. federal solar tax credit. Recognizing that navigating these tax deductions can be intricate, we offer our customers easy-to-follow, comprehensive guidance to simplify the process of claiming these financial benefits.
How Much Will the Environment Be Saved by Your Solar Panels?
When pondering the decision to switch to solar, the substantial environmental advantages offered by a solar panel system are an exciting aspect to consider.
Photovoltaic cells contribute positively to our environment, offering a power generation alternative that sidesteps the harmful impacts associated with traditional energy sources. A notable number of electric utilities still rely on coal, leading to carbon dioxide emissions. A standard home solar system helps offset this by preventing over 80 tons of coal burning, which would otherwise release 175 tons of carbon dioxide into the atmosphere. Each solar installation in Phoenix acts as a critical step in negating the effects akin to two gasoline cars each driven for 200,000 miles.
While nuclear energy and hydropower are other conventional power sources, they also require vast amounts of water. In stark contrast, solar panels, unlike expansive dams, do not use water, thereby avoiding environmental harm or radiation risks. This is particularly significant in regions where water conservation is crucial, marking an important contribution of solar companies in Phoenix.
The broader adoption of solar panels means less coal dependency by power plants, leading to purer air. The US Office of Energy Efficiency & Renewable Energy highlights that this reduction in pollution could save over 25,000 lives.
The energy and resource savings from solar equate to planting 4,000 trees. Thus, opting for solar panels not only saves on your utility bills and grants you ownership of your electricity, but also plays a part in a larger movement to reduce pollution and protect the environment. You become a change agent.
In addition to residential setups, commercial solar installation and EV Charging Station Contractors are pivotal in amplifying this impact. Moreover, services like Tesla Charger installation in Phoenix integrate seamlessly with home solar systems. As a solar energy contractor, the role in this environmental preservation is significant.
While saving the planet is a noble pursuit, understanding the specifics of what you’re conserving is essential. This includes exploring options like solar companies near me and evaluating the practicality of solar panels in different locales, such as Are Solar Panels Worth it in Arizona.
How Will Those Solar Savings Affect You in Real Life?
There are many ways to save money with solar energy, but most of them boil down to the same fundamental point: who owns your power?
Your energy is currently owned by the power company. And they get to pick whether the price goes up or how much you receive. You can choose a smaller system to offset part of your electricity usage, or become completely energy independent and gain full control over your electricity rates and power production by installing a larger solar system on your home along with solar backup batteries (some customers prefer to get systems that reduce their electricity need but not outright eliminate the need for the public power grid).
However, the way you install your solar system and which solar installer you use could significantly alter the amount of money you save now and in the future.
Part of what impacts your savings is how you purchase your system. At first glance, each option seems rather simple and self-explanatory, however some options are not very beneficial at all.
- Power Purchase Agreements (PPAs)
- Solar Leasing
- Solar Purchase
Depending on which one you choose, each of these buying possibilities has a significant difference and some can actually negatively influence your financial savings.
The most straightforward is a solar purchase: once you buy anything, you own it. But we’ll discuss how valuable this straightforward transaction becomes later.
Solar leasing is similar to leasing a vehicle in that you effectively can use everything, but you’re paying to rent rather than buy.
With a power purchase agreement, you may transfer the cost of your electricity to a solar developer. You pay them for electricity rather than the power provider, and they pay the bill and install the machinery.
You may lease either electricity or equipment using those latter two choices. These techniques are often sold at a cheap buy-in which can ease your transition into a contract. That said, with the right solar company, you may also be able to get $0 down solar financing which also enables you to easily get solar.
The downside of solar leasing and power purchase agreements however, is that you will forfeit the majority of your solar power savings.
Own Your Electricity
The full financial and energy benefits of solar panels can only be realized if you own your equipment and electricity outright. This ownership directly influences the extent of savings you can achieve with your solar setup.
However, this hurdle is eliminated when you make a purchase. The power generated is entirely yours, whether you opt for a gradual payment plan through solar financing or an upfront full payment. The amount you agree upon initially remains constant over the years of usage. Additional electricity costs only arise if your consumption exceeds your system’s capacity (which can be addressed with solutions).
In Phoenix, the typical period to reach a break-even point with a solar system is approximately 7 years. Post this period, you can look forward to many years of free electricity. Given these dynamics, opting for solar in Phoenix and its neighboring areas is an incredibly sound decision.
Take Advantage of Tax Breaks
Your tax deductions have a significant role in your savings as well. Most laws state that you lose all rights to your system if you don’t own it. Instead, your developer or electricity supplier gets to use it to cover their expenses. In this case, your solar provider receives the deductions for billing you instead of you getting the deductions for establishing a green, renewable energy system.
Avoid Price Increases
You’re playing a shell game with your electricity bill if you don’t own your solar. You pay a developer or make payments on your lease each month instead of making payments to the electricity provider. Additionally, the contract you sign may include price escalators or other provisions that takeover the money that you expected a solar system to save you.
In the previous 20 years, the cost of power has climbed by more than 60%, as we examine in our article Are Solar Panels Worth It in Arizona? It would be naive to believe that the world won’t rely on electricity again within the next 20 years, given how heavily it now does. Anyone using solar power on a lease basis or who hasn’t invested in it at all will be subject to the whims of the person who owns their electricity.
What are the Real Numbers, then?
Watt Masters is committed to giving you the most accurate representation of your potential savings. We don’t intend to misdirect you. In actuality, leasing deprives you of a large number of advantages.
From beginning to end, we can guide you through the procedure. Let’s summarize what we’ve discovered so far:
- PPAs let third parties build their designs onto your home and charge you for your electricity at their rates. If you are paying less for solar panels than you were for your electricity bill, you may still save some money. They are also the ones who gain from tax deductions.
- You may rent a company’s solar power system under a leasing agreement. Solar saves money IF a less expensive lease option is available. They also profit from the tax deductions.
- With Solar Financing, your money goes toward purchasing the solar system but also depending on your circumstances, it may be ALL you pay for in the coming years. Owning gives you control over your solar system. As soon as you pay it off, you effectively don’t have a utility payment and anything you own helps to create a greener world.
- Another major benefit to owning your solar panel system is the increase in home value and demand should you ever decide to sell your home.
Let's discuss what you would be looking at for solar panel installation if you were thinking about buying outright or by financing the system.
Watt Masters provides upfront no-obligation solar quotes so that you know exactly what to expect, what type of system would work best for your property, and how much it will cost.
We will come out to your home to evaluate your particular housing situation and design a solar panel system that optimizes your exposure to sunshine and lowers your electricity costs, however much you choose. We will discuss your current electricity usage, review past utility bills, and even discuss future electrical needs such as EV charging station installation. If you are interested in learning about the financing choices that are available to you, then we will also discuss be asked some basic questions about your financial condition so that we can get you the best possible financing options available to you. We will let you know if we don’t believe installing solar would be a smart option. We’re not here to add unnecessary expenses or complexity to your life. We do what is right, that’s why we have maintained such a trustworthy reputation after 20 years of installing solar in the greater Phoenix, AZ area.
If everything checks out well and it’s obvious that a solar panel system will save you enough money to justify your investment, then we can typically get started right away. Our expert solar team will design your system, assist you in obtaining the required local government permits, we will source all of the equipment and install everything for you. On average, from the time of signing to a completed installation, the procedure takes two to eight weeks.
After installation, it must pass another city inspection. If the installation is permitted by the city and utility inspectors, we turn on the switch, and you start generating power from the sun immediately.
We are committed to supporting you at every stage of your solar journey. If you encounter any hurdles or need clarity, we’re here to offer expert advice. After your solar system is up and running, your focus should be on minimizing the payments for your solar setup. Solar power not only lowers your current electricity bills but also shields you from escalating future energy costs. Depending on your location, you might even have the opportunity to sell surplus electricity back to the grid, and we’re here to assist you in navigating that process.
While it can be challenging to pinpoint the exact savings from solar panels due to various influencing factors, it’s undeniable that in Phoenix, the financial benefits are substantial and make solar a worthwhile investment.
Fortunately, Watt Masters Solar is here to make sure you’re maximizing your savings. With our free estimate, we can assist you in starting to save. With Watt Masters Solar, you can start saving right now on your monthly expenses, federal income taxes, and even the environment!
Frequently Asked Questions
After transitioning to solar power in Arizona, you’ll begin to notice savings on your monthly utility expenses. In Arizona, the average electricity bill comes to about $146.63 each month. Considering a standard 8 kW solar system and factoring in the 30% federal tax credit, the timeframe for recouping your investment in Arizona is estimated to be just shy of 10 years.
The average homeowner can save between $20,000 and $96,000 over a solar panel system’s lifetime, depending on the electricity costs in your area. Generally speaking, the higher your local electricity prices, the greater potential for your solar savings.
Yes. If you can, go solar to save money and power your home with green energy. Arizona is one of the sunniest states in the US, making it a prime place to try solar energy. Powering your home with solar energy can lead to thousands in savings on electricity bills.
The average cost of solar panels for a 2,000 square foot home is $36,000. To achieve this goal, you’ll need approximately 20 solar panels – which means that the total cost of installing solar panels on your home will be around $532 per panel.
One of the most popular options for obtaining free solar panels in Arizona is through a solar leasing program. In this type of program, a solar company installs panels on a homeowner’s property and then allows the homeowner to use the power generated by the panels for a fixed monthly fee.