Learn About Solar
Pros and Cons of Going Solar in 2024
Solar panels present homeowners with an exclusive chance to take ownership of the electricity fuelling their residence rather than continuously leasing it from a utility provider.
Nevertheless, akin to purchasing a property, investing in solar entails a comprehensive evaluation of various aspects over the long haul.
Therefore, we've assembled a comprehensive breakdown of the advantages and disadvantages of solar energy to assist you in determining whether 2024 marks the opportune moment for you to embrace this sustainable endeavor.
The Advantages of Going Solar in 2024
Anticipated Drop: Solar Costs Set to Plummet in 2024
Considering transitioning to solar in 2024 holds promise due to anticipated drops in solar costs following a period of consecutive increases. The pricing of rooftop solar systems is conventionally gauged by price per watt (PPW).
Residential solar experienced a significant decline over several decades, reaching a low of $2.92 per watt in 2019, as reported by the SEIA. Nonetheless, disruptions in supply chains resulting from the pandemic led to a surge in solar prices from 2020 to 2023, contrary to the preceding trend.
The latest data from the SEIA reveals the average PPW of solar stands at ($3.42). Nevertheless, optimism exists for a downward trend in solar prices throughout 2024 and beyond, driven by several factors:
Firstly, the disentanglement of supply chains and a general global inflationary slowdown are anticipated to exert downward pressure on prices. Secondly, substantial investments in American solar and battery manufacturing facilities are poised to enhance domestic production capacities, potentially driving costs lower. Thirdly, as solar installations continue to surpass expectations, economies of scale are anticipated to further drive down costs. Lastly, the integration of software and automated processes in local permitting procedures is expected to streamline the regulatory process, potentially reducing overheads. A significant proportion of solar panel production is concentrated in China, with module prices having already experienced a notable decline of 42% by late 2023, owing to the emergence of new manufacturing facilities.
A Shield Against Rising Energy Costs
Energy inflation became a kitchen-table issue in 2022 with the national average price of utility electricity rising nearly 16% from September 2021-2022. Utility rates continued to climb in 2023 and are expected to keep climbing for the foreseeable future as the outdated central grid tries to keep up with fast-increasing electricity demand.
By opting for solar panels, homeowners gain the advantage of establishing a stable and affordable rate for their home's electricity consumption. Take rooftop solar electricity, for instance, where the average cost per kilowatt-hour (kWh) hovers around 8 cents — a stark comparison to the US's typical utility rate of 17 cents per kWh.
Essentially, embracing solar power empowers individuals with the authority to manage and dictate their electricity expenses, a level of autonomy unattainable through conventional utility services.
The Superiority of Solar over Fossil Fuels
Renewable energy stands as a beacon of sustainability, boasting a significantly lower carbon footprint compared to its fossil fuel predecessor. When considering the entirety of its lifecycle, from manufacturing to operation and eventual decommissioning, rooftop solar emerges as a shining example of environmental stewardship. It outshines natural gas by a factor of 12 and coal by an impressive 20, making it a clear frontrunner in the race towards a greener energy future.
Rooftop solar offers more than just a solution to carbon emissions; it presents a multitude of environmental advantages. Unlike traditional energy sources, rooftop solar demands no additional land usage. Moreover, large-scale solar installations can integrate with agricultural spaces, known as agrivoltaics, fostering enhanced crop and livestock yields. Additionally, solar panels positioned over bodies of water, known as floatovoltaics, mitigate water loss due to evaporation. This intersection of sustainability and innovation underscores the transformative potential of solar technology.
Solar Modules and Warranties Evolving for Longevity
As solar panel lifespans extend, so do the durations of manufacturer and installation warranties. Leading solar manufacturers such as REC, SunPower, and Panasonic now provide warranties ensuring a specific output level over 25 years, with some even offering 30-year warranties.
A standard rooftop solar setup typically pays for itself within 7-10 years, granting solar owners 15-18 years of electricity generation at no additional cost while the panels remain under warranty.
It's important to note that solar panels don't vanish once their warranty expires; rather, their production capacity gradually diminishes over time.
Considering the rapid advancements in solar technology, it wouldn't be unexpected to witness further expansions in warranty periods.
Federal Solar Tax Credit Holds at 30% Until 2032
Enacted under the Inflation Reduction Act of 2022, the Federal Solar Tax Credit now stands at a substantial 30% from 2022 through 2032. This adjustment presents a significant boon for homeowners contemplating the switch to solar energy, particularly in the year 2023.
The Federal Solar Tax Credit, also known as the Investment Tax Credit, represents the primary motivator for adopting solar technology among homeowners. While various state and local governments may extend their own incentives, the Federal Solar Tax Credit remains universally accessible to homeowners who have both ownership of their solar systems and a taxable income.
This tax incentive empowers owners to claim 30% of their total solar system expenses until the year 2032. To explore the process of claiming the Federal Solar Tax Credit, detailed guidance is available for reference.
How Solar Power Boosts Your Home's Value
There exists a wealth of data indicating that solar home improvements indeed provide substantial returns on investment.
As per Zillow, residences equipped with solar panels fetch a premium of 4.1% compared to those without solar. This translates to an extra $18,052 based on the national median home sales price of $440,300 in the second quarter of 2022.
Moreover, Zillow's research reveals that 80% of prospective homebuyers consider energy-efficient attributes essential.
Yet, Zillow isn't the sole source underscoring the advantages of solar installations on property value.
A joint study in 2015 by the Department of Energy’s Lawrence Berkeley Laboratory and Sandia National Laboratories uncovered that Californian home purchasers are willing to shell out up to $4 per watt for installed PV systems, while the nationwide average hovers around $3 per watt. This equates to approximately $15,000 in added value for a home with a solar system.
Drawbacks of Opting for Solar Energy in 2024
Net Metering Rollbacks
Net Energy Metering (NEM) has been a cornerstone of incentivizing solar module owners by crediting them for excess generation fed back to the grid. However, some utilities are now rolling back NEM due to various factors such as market maturation and the financial strain it places on utility companies. It's important to note that solar incentives, including net metering, may not become more favorable over time. Therefore, taking advantage of available incentives now is crucial.
Solar Scams
The solar industry has been plagued by scams for some time, posing risks to both consumers and legitimate solar companies. However, it's essential not to dismiss solar energy altogether due to these issues. Opting for reputable installers ensures access to clean and affordable electricity for millions of homeowners across the United States.
Batteries Remain Costly
While batteries aren't essential for solar systems, they can enhance their value by allowing homeowners to utilize stored solar energy during peak grid times, reducing reliance on utility electricity and associated costs. Despite decreasing battery prices, the overall expense remains high for some but the technology and software built into batteries combats NEM 3.0 very well. Homeowners considering solar in 2024 can benefit from the Residential Clean Energy Credit, applicable to battery storage systems larger than 3 kWh. This credit, currently at 30% until 2032, is made possible by the Inflation Reduction Act.
High Initial Investment
Even with local and federal incentives, the upfront cost of going solar can be prohibitive for homeowners paying in cash. Fortunately, zero-down solar loan options are available, spreading the cost over time while delivering immediate savings.
Solar as a Long-term Investment
Solar should be viewed as a secure, long-term investment, offering immediate electricity cost savings and protection against future utility rate hikes.
Solar Panels and Mobility
It's important to recognize that solar panels are a permanent fixture and won't relocate with homeowners. Therefore, if you're planning to move in the near future, purchasing a solar system may not be financially viable. However, solar panels enhance home value and expedite sales, potentially offsetting the initial investment even if you decide to move.
Evaluating the Benefits and Drawbacks in 2024
In 2024, the landscape of solar energy presents a dynamic interplay of advantages and challenges. On the positive side, there's a notable trend of decreasing residential solar prices and financing expenses, making solar energy more accessible to homeowners. Additionally, streamlined permitting processes and reduced associated costs contribute to the attractiveness of solar installations. However, there are also emerging concerns, such as the upward trajectory of utility rates, potentially driving greater interest in alternative energy sources like solar. Moreover, the decline in solar incentives, particularly in net metering programs, poses a significant drawback, warranting careful consideration in the evaluation of solar investments.