Advantages of solar energy in 2020 — this is why solar is booming!
Written by Jagpreet Sandhu
Updated April 02, 2020
4 minutes read
According to the Solar Energy Industries Association’s Solar Market Insight Report, solar has been one of the top two renewable energy sources in the US for the past 6 years. Last year, the residential market for solar energy systems grew by 7%, with over 0.3 million new residential solar power systems installed by American homeowners. The total capacity of solar system installations is estimated to double in the next 5 years,.
This rapid growth in the size of the solar market is not merely driven by the increased awareness of environmental pollution. Rather, it’s fuelled by the advantages experienced by the US residents from using solar power. These include attractive solar power tax rebates and incentives offered by the government, easily available solar power financing options, and high solar energy savings associated with the residential solar energy systems.
Let’s explore some of the key benefits of solar energy in 2020 in detail.
What are the many advantages of solar in 2020?
Conventional energy production and distribution methods are facing inescapable pressures from strict energy regulations, grid transmission upgrade and maintenance requirements, increased carbon taxes, and rising fossil fuel costs. On the other hand, solar energy is becoming a sought-after alternative to fossil fuels, because of its low environmental impact and natural potential to produce it.
Here are some of the pros of installing solar panels in 2020:
Solar power is a cost-effective and environmentally-friendly source of energy
Solar energy is without question safer and cleaner than energy produced by fossil fuels. All energy you produce with solar panels will have a major positive impact on both your finances and the environment.
Solar panels for an average home currently costs just $3.18/ watt. With current prices, a typical home solar power system saves its users more than $20,000 over a period of 20 years (2019 US Solar Market Outlook). Meanwhile, our data shows that in solar-friendly states like California you can save $100,000 or more over the 25-year life of your solar panels.
If we zoom out and look at the bigger picture, we see these huge savings replication at the national level. Expert estimates published in the Drawdown report state that with a solar implementation cost of $1.45 per watt at the utility level, savings of $81 billion will be realized. This can further help prevent 36.9 Gigatons of harmful CO2 emissions, and can save up to $5 trillion of operational costs by 2050.
Moreover, the solar energy equipment offer a long life expectancy, with zero to low maintenance. Modern solar equipment is efficiently designed. It means that repairing a fault or replacing one component doesn’t require a complete change-out of the solar power system.
You can receive credits for surplus electricity
Net metering, as explained by the SEIA, is an efficient billing mechanism appreciated for enabling homeowners to save money from surplus power generated by their home energy systems.
For example, if electricity produced by your home energy system is more than what you consume, you can export the excess to the grid. It will save you money on your monthly electric bills and compensate for days with low solar production, such as on cloudy days.
Explore more in this article on how net metering works.
You can claim the solar investment tax credit
The solar Investment Tax Credit (ITC) initiative by the US government has played a vital role in the development of the solar industry. The solar industry witnessed an astounding 50% growth over the past decade, thanks in large part to the solar ITC policy making solar energy more affordable for everyone. This federal government policy lets you claim 26% of the costs spent on solar panel installations.
The credit even applies to consultation costs of solar panel professionals to discuss the advantages and disadvantages of solar energy, and other related aspects of the solar power system.
The way it works is simple: if the initial cost of your home solar panel installation is $10,000, you get a tax credit of $2,600 (26% of $10,000).
For more information on the top solar incentive programs in the US, check this blog.
Easy financing options are available
There is a good chance that you don’t have the required funds to purchase your solar panel system upfront. The good news is there are several solar financing options available in the market today to help you go solar right away. These include:
- Power purchase agreement
- Home equity loan
- Solar lease
- Energy efficient mortgage (EEM)
- Shared solar
- Property assessed clean energy (PACE) program
- Peer-to-peer lending
- Group purchase
Here’s the expert guide on how to find the best solar loan for your home.
Solar tax exemptions are available in many states
Solar tax exemptions are provided by state and local governments to homes and businesses installing solar energy panels. Solar tax exemptions are offered in the form of property tax exemptions as well as sales tax exemptions.
The tax exemption on property allows homeowners to exclude the additional property value (property value incremented after solar power installation), while making their property valuation for tax purposes. Currently, 6 US states offer solar energy property tax exemptions to their residents.
The government also provides US residents an exemption from the sales tax they are supposed to pay on the purchase of solar power systems. At present, there are 25 states that offer sales tax exemptions on solar energy system installations.
The benefits of going solar are numerous. These include lower electricity bills, reduced emissions from harmful greenhouse gases, tax exemptions, government incentives, good public health, and a cleaner environment.
Experience the varied advantages of solar! Calculate the cost of solar panels for your home now with our solar estimate calculator.