What You Should Know About Adapting Your Home for Solar Energy
Unless you are vigilant about turning off lights and appliances when not in use, you’re likely wasting a lot of electricity on a daily basis in the home. The average American pays as much as $1,200 a year for electricity. Depending on where you live and the size of your home, however, those costs can easily be hundreds or thousands of dollars more.
Although the energy infrastructure of the world currently runs on fossil fuels, a complete turnover to solar energy power is due to occur with the next 50 years or century. There is only about 50 years’ worth of reachable oil left on Earth. There is only about a century to about 150 years’ worth of coal left. Any technology developed to reach any unreachable reserves will probably cost more than the recovered reserves.
What does that mean to you and me, the average homeowner? Basically, that the time to get ahead of the energy infrastructure changeover is sooner than later. There are significant initial costs involved in a solar energy home conversion, but it is something you should consider. There are federal tax credits that help offset costs. The cost savings will accrue over decades, but it will be worth it if you take some measures to save energy now.
Cost Analysis
I am making this consideration right now myself, so I know it’s no easy task. Converting your home energy system to solar energy can cost anywhere from $11,000 to $50,000. It can cost significantly more money depending on where you live, the size of your home, and how much energy you use.
Also, if you were to consider such a conversion, it’s important to consult with experienced solar energy contractors. Unless you have the licenses, certifications, and skills required for such work, it’s better to leave it to professionals. Analyze the costs and consider if this would be the right move for you to make.
Long-Term Savings
You also must keep in mind that a full solar energy conversion for your home won’t pay for itself, or yield significant savings against traditional electrical costs, for years. Or decades. It is possible to break even against installation costs in a few years to a decade. You could save anywhere from $12,000 to $50,000 against traditional electricity costs over two decades. That would depend entirely upon where you live.
Tax Credits
You can significantly offset your initial conversion costs with the federal government subsidized Solar Investment Tax Credit. The American government wants you to convert to solar energy. Also, the IRS will refund, rebate, and monetarily incentivize your endeavors to do so. You can receive about 30% in ITC benefits against initial startup costs. There are also many state, city, and local solar-centric tax credits you may qualify for. It’s basically free money.
The ITC incentivization initiative won’t last forever. In 2019, the ITC will be available at 30% for the last time, barring any extension from the government, which looks unlikely. The ITC lowers to about 26% in 2020. It then lowers to 22% by 2021. By 2022, the ITC for residential redemption will no longer exist. Businesses and corporations will still be able to take advantage of ITCs however.
Assess Benefit Potential
This process is not half as easy as I may have unintentionally made it appear. I am still considering this process myself. Assess your own benefit potential with solar energy. It will cost a lot, but you will save in the long-term. The world will changeover to solar within our lifetimes, so why not get ahead of the curve?
Have you considered converting your home to solar energy? Share your thoughts in the comments below.
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Allen Francis was an academic advisor, librarian, and college adjunct for many years with no money, no financial literacy, and no responsibility when he had money. To him, the phrase “personal finance,” contains the power that anyone has to grow their own wealth. Allen is an advocate of best personal financial practices including focusing on your needs instead of your wants, asking for help when you need it, saving and investing in your own small business.
Unfortunately for all of the federal incentives there is often a hostile atmosphere on the part of state and local governments in close collaboration with large-scale utilities that refuse to allow individual contribution in solar adoption except on *their* terms. It behooves the individual investor to understand local and state amendments as they may could prolong ROI by prohibiting net-positive feedback and billing and, in some cases, punish adoption (increased minimum billing, surcharges, etc).
Typically in business, it’s only worth making a long term capital investment if the break even term is relatively short. In residential applications, how many people still reside at one location long enough in order to see a return on that investment? Industries and government can easily change the laws during the period of break even to either lengthen the break even time or render it infinite. Solar conversions are not financially beneficial to consumers. If you want to switch to solar, do so because you value it, but not because you think everyone should. Even in your analysis which is different from the sales pitches I hear in Vegas you admit that it might not benefit everyone. It might actually not benefit anyone with costs that high and an event horizon that distal in space and time. Finally, tax credits are transfers from other people who pay tax meaning essentially that you’re asking other people to pay for your solar system. In this Thanksgiving season, have you ever stopped to thank the people who pay taxes so that you can benefit from largess?