Due to electricity continuing to climb in price, the need to install and use panels to capture the sun's energy has also grown. In fact, a system that supplies renewable energy enables you to save money over time by using renewable energy sources such as the sun. However, the downside of installing solar power paneling and its system is its affordability. But with a federal program in place, the owner of a renewable energy system is able to take advantage of the Solar Incentive Tax Credit in 2023. In order to take advantage of this tax credit, let’s see why you should install solar panels in 2023 and if the investment is good for you.
Investing in the Sun’s Power
In recent years, the cost of renewable energy panels have dipped in price. This dip is considerable as compared to prices of the 2010s when it was not considered practical for many. There was a lot of difficulty in manufacturing and installing the panels, which is why they had a high cost. Plus, with low ratings in efficiency, the return on investment took a while. Eventually, the technology used in renewable energy improved, which helped to transform the renewable energy industry.
Since 2010, there has been more than 80% in reduction of cost for renewable energy panels and a 250% increase in efficiency. Because of this, a renewable energy power system now costs less and is able to provide a quick ROI.
Regardless of the drop in price, the paneling used today still costs a lot upfront. On average, a homeowner looking to invest in these panels should be ready to pay at least $21,000 to get started. When you get started, you will have many incentives to take advantage of for your home. A good example is the Federal Solar Investment Tax Credit and other programs offered by individual states so that costs could be offset.
Incorporating A Renewable Battery
When a renewable battery is incorporated, it is able to increase your tax deductions significantly as long as its size is more than 3 kWh. In fact, if the battery is more than 3 kWh, then you are able to deduct the entire 30% in tax credit.
Overall Cost Savings For Solar Panel Homes
In 2021, the annual average consumption of electricity usage was 10,632 kilowatt hours. This averaged to a monthly use of more than 880 kilowatt hours.
The renewable energy system used on rooftops produced as much as 400 kilowatt hours. Because of this, the possible savings could be about half of the utility bill you pay. Keep in mind that other devices used for the renewable system may also save you money. Don’t forget, the amount of sun and location will play a big role in how much power will be produced by the panels.
After the panels are installed and running properly, you can expect a yearly saving of more than $1,500 through the use of the paneling. After all of the incentives and tax rebates are taken into consideration, you can see the ROI begin in just 10 years after installation.
The good thing is that these savings are for the average home. There are several factors involved with the savings and efficiency of the panels. These involve the type of home, paneling, region, and size of the system. An example of this would be in a region that has more sun for longer periods of time, so that amount of money saved will be a lot more.
Is 2023 A Good Year To Invest In the Panels?
As compared to the past and the amount of return on investment, 2023 is considered to be a good year to invest in renewable energy panels. Below are a few of the reasons to invest in it.
The Change in the Tax Credit
The most impactful reason to invest is due to the revamping of the tax credit that oversees renewable energy from the sun. This revamping included a passing of the 2022 Inflation Reduction Act. The purpose of this bill is to control inflation and provide many additional benefits such as the tax credit not only continuing but expanding in the future. Prior to the passing of the IRA, the tax credit had an expiration set for 2024. However, it is now good for another 12 years. Also, the amount of tax credit will also be increased to 30% as opposed to a drop in the current tax credit.
Your Home’s Value Will Be Impacted By the Panels
Other than reversing a change in climate or decreasing the usage of energy, the use of renewable energy through these panels will have a positive impact on the real estate value of your home. On average, the paneling on a home is able to bring an additional 4% in the amount earned from the home’s sale. The amount will vary by state and could also include tax exemptions for property tax if renewable energy is integrated into a home.
What If New Technological Innovations Occur?
While there have been advancements in renewable energy and the panels used, the amount of advancement has not been significant enough for you to hold off with investing in paneling. If anything, the newest systems and technology used today is an upgrade from the past that allows more energy to be produced.