Why go solar in 2023: all benefits explained
Updated
Significant price drops and big-time bill savings are just two of the reasons why installing solar panels has become so popular.
There are currently over 2 million homes that have solar panels installed in the U.S., and as the Biden Administration aims to make the power sector carbon-free by 2035, that number is expected to rise - quickly.
Let's go over 8 reasons why people are going solar in 2023.
1: The federal solar tax credit reduces the cost of solar
A huge incentive for homeowners to go solar in 2023, is the federal solar tax credit. With the passage of the Inflation Reduction Act in August 2022, it now covers 30% of a solar system’s cost.
SolarReviews ran a survey on over 400,000 U.S. homeowners who received a solar quote on Solar Reviews. The data showed that the solar tax credit was the single most important financial incentive when going solar.
The below table shows average system sizes and their costs before and after the federal solar tax credit is applied. In 2023, the average cost of solar is between $2.75 and $3.35 per watt, depending on the size of the system.
| System size | Average value of tax credit | Average system cost before tax credit | Average system cost after tax credit |
|---|---|---|---|
| 4 kW | $3,900 | $13,000 | $9,100 |
| 5 kW | $4,875 | $16,250 | $12,390 |
| 6 kW | $5,400 | $18,000 | $15,960 |
| 7 kW | $6,195 | $20,650 | $19,250 |
| 8 kW | $6,600 | $22,000 | $23,100 |
| 9 kW | $7,425 | $24,750 | $25,480 |
| 10 kW | $8,250 | $27,500 | $29,120 |
2: Solar reduces your energy bills
The solar power your panels generate from the sun can reduce your electricity costs or even eliminate your electricity bills altogether.
With grid power getting more expensive, having a solar energy system allows you to generate your own power, and as such, provides a sort of insurance policy against the effects of future electric rate increases.
Avoiding the rising electricity prices during your system’s 25-year lifespan is very appealing, especially with monthly savings increasing over the years as power gets more expensive.
3: Battery storage keeps the lights on in a power outage
Battery storage allows you to store the solar power that your solar panels generate. You'll also be able to keep your appliances running, like your refrigerator, in the event of a power outage - which will prevent your food from spoiling - saving you an extra trip to the grocery store, as well as wasted money!
Solar batteries and home energy storage solutions have become significantly cheaper in the last few years, thanks to improved technology. You can also claim the 30% solar tax credit on a solar battery.
4: Solar increases the value of your home
In 2019, Zillow released a study showing that homes with photovoltaic solar panels installed sold for 4.1% more than similar homes without solar panels on them.
Based on current median-valued homes, this suggests that going solar adds an extra $9,274 to the property value of an average home. This value is a large proportion of the total cost of a system after claiming the solar tax credit.
So even if you were contemplating moving within the next few years, solar would still be a worthwhile purchase. Not to mention, you'll save money on energy costs before the move, too.
5: Solar is a smart investment
Homeowners typically generate a return on investment of between 10-20% on their residential solar energy system. This is a payback period of only 5-10 years on a system that will last 25-30 years.
If you were to invest in the stock market, getting that type of return on your investment would be considered out of this world. Stocks and shares go up and down; the return on investment from a solar system also could be said to have a much lower risk profile.
It is certain that you will continue to use electricity, and so the investment income from solar (in the form of electric bill savings) is very secure and reliable. We think this point is often overlooked by people considering the investment case for a home solar system.
6: Solar is good for the environment
Solar power doesn't pollute the air or produce greenhouse gasses. It replaces other non-renewable power sources like oil, gas, and coal, and using a renewable energy source stops the need to use fossil fuels to generate our electricity.
The Biden Administration aims to stop the use of fossil fuels by 2035; we will have to reduce our carbon footprint to achieve this and solar panels are the best way to do it.
7: The price of solar panels has dropped significantly
The price of a 6 kW system today is around $11,340 to $13,860, after applying the 30% solar tax credit - that’s an almost 80% decrease from what it was 10 years ago!
This means a solar panel system is now much more affordable for most American homeowners, especially as zero-down solar loans and other flexible financing options are now easily available.
8: Advanced solar calculators
Our state-of-the-art solar calculator powered by Google Project Sunroof will put solar panels on your roof automatically. It will tell you all the information you would want to know before going solar, including:
- How many solar panels you need
- How much solar panels will cost you
- How much solar panels will save you
- Which incentives you are eligible for
You can also check out reviews and get competitive prices from local solar companies near you. This gives solar buyers peace of mind that they are picking the right solar company, based on good reviews and fair prices.
Oliver Sendy
SolarReviews Blog Author
Oliver is very passionate about the solar industry. He loves that solar is great for the environment but is also an excellent investment. He has gained hands-on experience working for a solar installation company, which informs his writing about solar.