The amount of solar power plugged into the electric grid has surged over the past few years. According to a 2022 survey by the Pew Research Center, 8% of American homeowners are already aboard the solar panel train, and an additional 39% said they had seriously considered transitioning to solar power. These results came in before the long-term extension of a 30% federal solar investment tax credit (ITC) for new solar homeowners.
Solar panels offer a holistic clean energy solution beyond powering homes, from reducing carbon footprints and fostering biodiversity to substantial savings on utility bills to potential profits through net metering. Discover why embracing solar energy is a responsible environmental choice and a savvy financial investment that can make your household energy-independent.
Key takeaways:
Solar panels decrease your greenhouse gas emissions, reduce air pollutants and even preserve biodiversity.
Financially, solar panels can save you money on utility bills, increase the value of your home and potentially make you money with net metering.
Federal, state and local incentives make solar panels more affordable for the average homeowner.
Solar panels benefit the community by providing jobs and generating energy.
Environmental benefits of solar panels
Solar panels are a transformative force reshaping the U.S. energy landscape for more sustainable living. Learn more about the environmental merits of solar panels and their role in reducing greenhouse gas emissions, mitigating air pollution, alleviating water usage, preserving biodiversity and promoting energy independence.
Decrease your greenhouse gas emissions
One of the primary environmental benefits of solar panels is their role in decreasing greenhouse gas emissions. By harnessing energy from the sun and converting it to usable energy for everyday life, solar panels reduce the need for traditional fossil fuels, which release harmful greenhouse gases like carbon dioxide into the atmosphere. Transitioning to solar power helps mitigate climate change by delivering a clean, renewable energy alternative that minimizes the carbon footprint associated with conventional energy sources.
Reduce air pollutants
Solar panels reduce greenhouse gas emissions and contribute to a cleaner atmosphere by decreasing air pollution. Traditional energy sources, such as coal and natural gas, release pollutants like sulfur dioxide, nitrogen oxide and particulate matter, all of which can have detrimental effects on air quality and human health.
As a clean and emission-free source, solar energy does not contribute to air pollution, creating a healthier and more sustainable environment.
Reduce water usage
Another key environmental benefit of solar panels that many people don’t think of is their ability to reduce water use during electricity generation. Unlike conventional power plants that need water for cooling and other processes, solar panels generate electricity without consuming water.
This fact helps regions already facing water scarcity and drought conditions. By embracing solar energy, people and communities can contribute to water conservation efforts that are coming to the forefront, especially in water-challenged states in the West.
Biodiversity preservation
Solar energy infrastructure typically has a lower impact on ecosystems compared to traditional energy extraction methods. By minimizing habitat disruption and reducing pollution, solar panels contribute to the preservation of biodiversity.
Energy independence
Investing in solar panels enhances energy independence at home and nationally. It cuts the reliance on non-renewable energy sources and global markets.
Financial benefits of solar panels
Solar panels also offer financial perks that can positively impact short-term expenses and long-term investments. With solar power systems, homeowners save substantially on their utility bills, gain increased market value for their homes and have the potential to generate money through local net metering policies.
Solar panel systems come with long warranties, usually for 25 years and up to 40 years for some brands. After an upfront financial investment to install a system, most homeowners break even on their investment within 10 years. After that, savings stack up.
Save on utility bills
Homeowners can reduce their reliance on conventional grid power by harnessing the sun’s energy to generate electricity. This transition shows up as lower monthly energy bill costs, providing a straightforward way to cut expenses while enjoying a clean and sustainable energy source.
Increase your home’s value
Beyond monthly savings, installing solar panels increases the value of your home. The real estate market increasingly values energy-efficient features, and solar installations signal a commitment to sustainability.
Studies show that homes with solar panels attract higher resale values, positioning the initial investment in solar technology as a smart financial move that enhances the property’s market appeal and potential return on investment. A recent Zillow study found that homes with solar panels sold for 4.1% more than those without solar panels.
Profit with net metering
Net metering lets homeowners turn the solar power they generate into profit. With a local net metering policy, homeowners can return surplus energy to the power grid, earning credits or direct payments from their utility company. This exchange offsets a homeowner’s monthly electricity cost and turns solar energy production into a revenue-generating endeavor.
Tax benefits of solar panels
Solar panels also have tax benefits. All U.S. homeowners benefit from a federal tax credit, and some across the country can also tap into state and local tax credits, incentives and rebates. The happiest solar customers are those with access to all three levels of tax benefits.
Take advantage of federal tax benefits
The best incentive for homeowners to transition to solar power is the federal investment tax credit (ITC). The ITC allows homeowners to deduct 30% of their solar installation costs from their federal taxes the year after they buy a solar system. The credit is in place through 2032. The credit is scheduled to decline in 2033 and 2034 before expiring in 2035.
Use state and local tax benefits
Many states and local governments provide their own sets of tax benefits for solar panel installations. These can include additional tax credits, rebates or exemptions that further alleviate the financial burden for homeowners.
State-level programs vary, so homeowners should research and understand the specific incentives available in their area. These localized benefits complement federal initiatives, creating a more tailored approach to incentivizing solar adoption.
Property tax exemptions
Some jurisdictions offer property tax exemptions for the added home value resulting from solar panel installations. According to the Solar Energy Industries Association (SEIA), 36 states allow property tax exemptions for solar energy. One example is New Jersey, as long as the system is used to fulfill on-site electricity, heating, cooling or general energy requirements.
The tax exemption ensures homeowners enjoy increased property values without increasing property tax assessments.
Sales tax exemptions
Sales tax incentives are available in 25 states, according to SEIA. They exempt the purchase of solar energy systems from state sales and use taxes. This exemption significantly lowers the initial costs of installing solar panels.
In Colorado, for example, all sales, storage and use of components involved in producing alternating current electricity from renewable sources and those used in solar thermal systems are exempt from the state’s sales and use tax.
Performance-based incentives
Some regions offer performance-based incentives (PBI) in which homeowners receive financial rewards based on the actual energy production of their solar panels. PBIs are rewards tied to the real energy output of a solar system. The incentives are usually calculated based on the energy produced (measured in $/kWh) over a specific period.
In the California Solar Initiative, for example, incentives are paid monthly over five years based on the actual energy produced by the solar system. The incentive rate ($/kWh) stays constant for the entire contract term.
Additional benefits of solar panels
Solar panels also offer additional benefits that extend to the security of your energy supply, support for local employment, and positive community impact. Learn more about how these benefits foster resilience, promote job growth and contribute to the well-being of your community.
Have a secure energy source
A notable advantage of solar panels is establishing a secure, reliable energy source. Solar systems generate electricity by harnessing sunlight, a consistently available and renewable resource. Unlike traditional energy sources that may be subject to fluctuations or geopolitical uncertainties, solar panels provide a dependable and local energy supply.
When they equip their system with solar batteries and storage systems, homeowners can store excess energy, enhancing energy security and ensuring a stable power source even in challenging circumstances.
Support local solar jobs
“The solar industry has been growing consistently, being a great source of jobs for Americans,” said Kyle Baker, chief revenue officer at Solar Savings Direct, Inc. “Every election, the politicians focus on job growth data, and the outlook for solar appears to be very sunny.”
Investing in solar panels contributes to the growth of the local economy by supporting jobs in the solar industry. Solar/renewable energy creates 1.5 times more job growth than investing in fossil fuels. The Bureau of Labor Statistics projects the solar industry to grow 22% from 2020 to 2030, which is much faster than the average job growth rate.
As the demand for solar installations increases, so does the need for skilled manufacturing, installation and maintenance professionals. By choosing solar energy, homeowners actively participate in job creation within their communities, fostering a sustainable and resilient workforce that aligns with the global shift toward renewable energy solutions.
Benefit your community with net metering
Net metering offers financial rewards and fosters a sense of community benefit. Through net metering, excess energy generated by solar panels can be shared with the local grid, contributing clean energy to the community.
“This is true,” said Robin Saidov, owner/host of the podcast Your Energy Footprint and director of asset management at Axium Infrastructure. “However, homeowners should be compensated for the benefits they are providing to their utility that may avoid upgrades to the local distribution system as a result of the residential solar installations. Solar panel economics are such that homeowners should be able to invest at a significant discount to their current electric rate in many areas.” Benefit your community and your savings — it’s a win-win.
Bottom line
The benefits of solar panels make a substantial impact on the lives of homeowners — far beyond environmental considerations, encompassing substantial financial savings, tax incentives and additional perks.
The environmental advantages — reducing greenhouse gas emissions, combating air pollution and promoting water conservation — make solar panels a compelling choice for those seeking a sustainable lifestyle. Financially, the potential for savings on utility bills, increased home value and profit through net metering highlights the immediate and long-term economic gains.
The accessibility of federal, state and local tax benefits adds a layer of financial feasibility to solar investments. Solar panels contribute to energy independence, local job creation and community well-being, making them a holistic and forward-thinking homeowner solution.
