Use Solar Power To Improve Your Home’s Energy Efficiency
By This Old House Reviews Team
Energy prices are expected to stay high through 2023, causing expensive utility bills for many Americans. Solar incentives have become an increasingly more attractive option, especially after the passage of the Inflation Reduction Act of 2022. Both factors are causing more homeowners to consider installing solar panels. In fact, a 2022 study from EcoWatch reveals that 1 in 4 homeowners has plans to go solar by 2027.
The growing popularity of solar panels can also be attributed to their environmental benefits. A home with solar energy is far more sustainable than one largely reliant on electricity. And as the climate crisis continues to escalate, having a home powered by solar means you’re doing your part to mitigate the problem. You can use solar power in your home in several ways to save money and help save the planet.
6 Solar Power Uses in Your Home
Solar power became a viable option for Americans’ homes in the 1970s, and the number of residential solar installations has continued to climb in the last decade. Here are the most common ways homeowners use solar power:
Power Appliances and Electronics
The most obvious reason to go solar is to support your current electricity needs. Solar panels can provide electricity to power appliances such as your dishwasher, electric stove, refrigerator, washer, and dryer. They can also provide heating and cooling services, further reducing your energy bills in the summer and winter.
Homeowners have plenty of options when choosing solar panels. Several companies sell and install solar power systems. Each provider’s panels vary in energy-efficiency ratings and warranty lengths (which generally range from 10 to 30 years).
Heat Your Water
Using energy from solar panels for your water heater is an underrated benefit. Heating water is the second-most expensive use of energy. You can reduce your utility bills by using a solar water heater, especially if you have a larger family that often runs the dishwasher and washing machine.
Charge Your Car
If you have an electric vehicle (EV), you can install a solar-powered charging station at home. It’ll help you save more on transportation costs because you won’t be paying electricity to fuel your vehicle.
Having a solar EV charging station at home also ensures that you’ll still be able to charge your car if you lose power, which can give peace of mind to homeowners living in storm-prone areas.
Power a Second Home
Most homeowners install solar panels on their primary residence, but some will also install them on a vacation or rental house. If you have a cabin or lake house that often loses power, having solar panels and a backup energy storage system could benefit you.
You may still be eligible for tax credits and subsidies if you install solar panels on a secondary residence. However, it depends on where you live and if you’ve already taken a tax subsidy for that year. You likely won’t be able to use multiple tax subsidies for separate properties in the same tax year.
Provide Backup Power
Some people use traditional energy as their primary energy source and solar as a backup. Having both can reassure you that you’ll always have access to electricity.
However, some homeowners instead use a solar-powered generator that will kick on when they lose power. Having a backup during storms or other events that lead to disruptions in your electrical utilities can protect your home from power outages.
Heat Pool or Hot Tub
If you have a pool or hot tub, you know they come with considerable energy costs. You can use either traditional electric solar panels or a solar thermal water heating system to save money on pool and hot-tub operation.
However, a solar thermal water heating system may be the better option. Instead of converting sunlight into energy, solar thermal systems use sunlight to heat water directly and can be up to 70% more efficient than traditional panels, according to GreenMatch. We recommend asking your solar installer which option would be best for your household.
Considerations When Adding Solar-Powered Devices in Your Home
Although solar power holds promise, many factors can affect how successful solar panel installation will be for your home. Here are some things to consider before installing solar panels.
Check Your Roof
Solar panels are usually installed on the roof. If your roof is in poor shape, you may need to replace it before installing heavy solar panels.
Even a structurally sound roof may not be ideal for solar panel installation. If your roof isn’t big enough, receives too much shade, or isn’t facing an optimal direction for sun exposure, you may not be a good candidate for solar panels.
Fortunately, most solar companies perform free consultations to assess your roof and explain how beneficial solar would be for you.
Make Sure You Qualify for the Tax Benefits
The U.S. government recently expanded the federal solar tax credits, but there are still restrictions on who can claim them. Check whether you’re eligible for the tax credits. Plus, you should understand how they work and how much you’ll actually save with these incentives. We recommend speaking with a professional tax accountant if you’re not sure how the incentives would apply to you.
Understand that the federal tax credit is just that—a credit. It’s used as a deduction from the taxes you owe. If you owe less than the credit is worth, the deduction will roll over for up to five years. But it may be less than expected for your system size.
The tax credit percentage is currently 30% for those who install solar panels between now and 2032. In 2033, the credit will drop to 26% and decrease further from there.
You may also be eligible for state and local solar tax credits and rebates. Your solar installer should relay all the incentives available to you, but you can also search the Database of State Incentives for Renewables and Efficiency (DSIRE) for more information.
Calculate the Cost
Even though solar panels come with many federal and state incentives, a hefty out-of-pocket cost must be considered. If you can’t afford to pay for the installation in cash, you must choose a solar panel financing option.
Many solar companies offer financing, or you can go through a third-party lender. Before you commit to anything, get prequalified to see what kind of interest rate you may receive. Do the math to see how much total interest you’ll pay and compare that to your cost savings. You can also look at Power Purchase Agreements and solar panel leases.
Consider the ROI
Before getting solar panels in your home, calculate the return on investment (ROI). In this case, ROI refers to how long it will take for the initial cost of solar panel installation to pay for itself in terms of lower utility bills.
The ROI also depends on what kind of federal and state tax credits you are eligible for after installing solar panels. State tax credits vary—some states offer more generous tax subsidies than others.
Solar panels could increase your home’s value and make selling easier. Data from the National Renewable Energy Laboratory indicates that a home’s value rose $20 for every $1 saved in energy costs.
However, this may also depend on where you live and what type of solar panels you have. If you plan on selling your house soon, talk to a real estate agent and ask whether installing solar panels will help sell your home faster or attract a higher offer.
Determine Your Potential Savings
How much you can save by installing solar panels depends on where you live, the type of solar panels you install, the cost of your solar panels, and more. Generally, states with higher electricity costs may provide a higher savings opportunity for solar homeowners.
For example, Hawaii has the highest energy cost per kilowatt-hour, so the average homeowner could receive $5,868 in subsidies. However, in Kentucky, you would only save about $3,930.
With so many ways to use solar panels, it’s hard not to see their benefits. Plus, they’re sustainable, can save money, and will likely become more popular over time. However, that doesn’t mean they’re the best option for every home.
Installing solar panels in your home is a major decision and should not be taken lightly. Weigh the pros and cons of your specific situation carefully. If you decide to buy solar panels, research different solar companies thoroughly before selecting a provider.
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