Let’s face it: solar panels can be pricey. If you’ve been considering going solar, you might be asking yourself, “At what point do the benefits outweigh the cost for solar panels?” Well, research has shown that solar panels can actually save money in the long run, especially as electricity rates continue to rise in Colorado and the United States. At CRJ Contractors, our mission is to educate homeowners on every facet of solar panels, and we start by exploring the question, “Do solar panels ultimately pay for themselves?”
Many factors contribute to understanding the cost vs benefit of solar panels. In order to do this, we must consider three things: the cost of the panels, the incentives that will lower the initial price, and then, the future savings on electricity bills.
The cost of installing solar panels on a home or business depends on the type and size of the system. Different equipment makes for different pricing. Homeowners should also consider the cost of installation for the system, as the size and area also contributes to the price. Local solar energy companies like CRJ Contractors can provide an estimate for the upfront cost of the panels and installation. When we perform an energy audit for homes, we look at all these factors and more to determine if your home is a good candidate for solar, and what your savings would be. To get more information on solar proposals, contact us.
Before you decide, the upfront cost of the panels and installation is not a true number. Many states, including Colorado, offer incentives that reduce the total cost of installation. Tax breaks and rebates reduce the cost considerably, and the federal investment tax credit allows up to 30% to be deducted from taxes. Therefore, the initial price tag for solar panels might be misleading since these incentives pay for so much of the upfront cost. Many utility companies in the Colorado Springs area also offer incentives and rebates for solar panels. To learn if your home qualifies for these, contact CRJ Contractors.
Electricity Production and Use
The most important factor to consider is the difference between the cost of electricity and the cost of solar panels. We first need to look at how much energy is being produced at your home now, compared with how much is used. The cost of electricity has been on the rise for the past 10 years, going up a total of 24% overall in that time frame. Since electricity is constantly increasing, your utility bill will reflect that. With solar panels, you can offset your energy usage by 98%. This means that you can be almost 100% dependent on solar energy, nearly eliminating your electricity bill. Keeping this in mind, the savings that you’ll have in the years to come greatly outweigh the initial cost of solar panels.
Also, certain homes have the possibility of net-metering, or selling energy back to power companies. Because of this, solar panels can actually earn you long-term income.
Payback Period for Solar Panels
In order to figure out the payback period of your solar panels, divide the end cost by the yearly financial benefits. Depending on the system’s efficiency and the amount of energy being used, solar panels can pay for themselves in as little as four years.
For example, if an average solar panel installation costs $18,000, incentives will lower this price by a third. Then, through the average return, it only takes four years to pay the remaining two-thirds. However, even with less incentives or a higher installation cost, the average payback period is only twelve years—a small price to pay for long-term homeowners. If you are curious about your potential payback period for solar, we offer this calculation completely free for homeowners in Colorado Springs at CRJ Contractors.
Thus, in Colorado, with the combined benefits and average return, solar panels do pay for themselves. While immediate return is almost impossible, patient investors will be able to recoup the abundant financial benefits that solar panels bring.
Learn More About Going Solar in Colorado Springs
If you’re interested in finding more about how solar panels do pay for themselves, contact CRJ Contractors for your FREE estimate. We are experts in solar energy, and we can find you the best opportunities for solar incentives in your area. Give us a call today to schedule an appointment!