Electricity rates are on the rise. In April of 2021, ComEd filed for its first electricity delivery rate increase in four years. Rising electricity rates make installing residential solar panels seem like a no-brainer. But are solar panels really worth it?
To determine if the investment will pay for itself and reduce or eliminate energy bills you’ll need to consider if your home gets enough sun and what your state offers in the way of tax credits and incentives.
Do You Get Enough Sun?
Whether or not you get enough sun depends on location, orientation, and roof type. What's your geographic location? Homes in Arizona will get more annual sun exposure than homes in Washington. Try Unbound Solar’s Sun Hours Map to find out how many sun hours your area gets.
Your home’s orientation and roof type are also key factors to consider when determining how effective solar panels will be at reducing your energy costs.
In the northern hemisphere, solar panels should face true south to get the most sun exposure throughout the day. Solar panels facing east or west generally produce about 20% less electricity than south-facing panels.
The pitch of your roof will also affect how effective your solar panels are. The ideal pitch varies by location. For instance the best year-round solar panel angle in Miami, Florida is 25 degrees while in Portland, Oregon it’s 46 degrees. Check out Energy Sage’s Best Solar Panel Angle by Zip Code to find what’s best for your area.
Online tools like Solar Reviews’ Solar Panel Cost and Savings Calculator can help you analyze your potential solar savings.
Will Tax Credits and Incentives Cut Your Upfront Cost?
To calculate the price of solar panels look at your regular energy usage. You can find this on your utility bill. Illinois’ electric rates rank 18th in the country. These high electric rates make solar power more attractive.
Once you’ve determined how much electricity you’re using you can determine what size solar panel system you’ll need to generate the same amount of energy. Residential systems vary in price based on their wattage. A 5kW system will cost between $3 and $5 per watt. That amounts to $15,000 to $25,000.
- Federal Tax Credits: There are tax credits and other incentives that can help with the initial set up cost. NerdWallet reports “a residential federal tax credit allows taxpayers to claim 26% of installation costs for systems placed in service by Dec. 31, 2022. The credit dwindles to 22% in 2023 and expires starting in 2024, barring renewal from Congress.”
- State Specific Energy Rebates: Illinois also offers energy rebates through ComEd and Ameren. Often, your installer can handle the paperwork and remove the total of the rebate from your final bill.
- Property Tax Exemptions: Homeowners in Illinois can exclude the added value of the solar system from the valuation of their property. A solar system can increase the value of your home by around $17,000. With a tax exemption, installing solar panels becomes more economically feasible.
With the rising cost of electricity and a variety of federal and state incentives, the upfront costs of solar panels can, in most cases, quickly be offset.
