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Using electricity to turn on the lights, run the AC and dry your clothes is getting more costly. Last year, U.S. retail electricity prices rose at their fastest rate since 2008 and hit a record 13.72 cents per kilowatt-hour (kWh), according to the U.S. Energy Information Administration. The EIA expects electricity prices to jump nearly 4 percent this year, so the hit to your wallet is likely to continue.
At the same time, the cost to generate electricity with solar panels that convert sunlight to energy has been falling for a decade. Ten years ago, an average 6 kWh residential solar system could cost $50,000 or more. But now a typical home installation will run between $16,200 to $21,400 — a drop of more than 60 percent, according to Sunrun, a maker of residential solar panels.
To boost their affordability, the federal government is still offering a generous tax credit to homeowners who install solar systems, but the incentive program is set to be phased out in 2024. Add in the fact that homes with solar energy systems sell for 4.1 percent more, according to online real estate marketplace Zillow, and the fact that renewable energy is more environmentally friendly, and the case for solar gets a little sunnier.
“The biggest reasons for powering your home with solar is reducing or even eliminating your electricity bills and doing right by the environment by lowering your carbon footprint,” says Nick Liberati, communications manager at EnergySage, a renewable energy marketplace that helps people comparison shop solar projects.
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In fact, a recent SaveOnEnergy and CNET survey found that the top motivations for switching to solar were to “save money on electric bill” (82 percent) and “environmental reasons” (65 percent).
So should you bite the bullet, pay the up-front costs and go solar? It depends on a number of factors. Here, we’ll break down what you need to know to make an informed decision.