Is Solar Worth It?
While we would like to say solar is a worthwhile purchase no matter what, the facts beg to differ.
That's right. Not everyone is a good fit for solar.
Furthermore, not everyone qualifies for solar. While the standards for qualification vary from solar company to solar company, several factors matter to you as the consumer, no matter what. Not seeing what you're looking for on this page? Visit our "Is Solar Worth It?" blog posts
Energy Usage (Not Square Footage) Determines the Size of Your Solar Array
The first step to determining whether going solar is worth it is finding your energy usage. If your energy usage is too low, purchasing solar panels won't prove cost-effective. You’ll spend more money than you would if you stay connected to the grid.
The baseline requirement for Go Solar Group is an average of 500 kWh per month in electricity consumption, which typically warrants a 12 to 15 solar panel system. This system size translates to 6,000 kWh annually. Homes with <500 kWh (kilowatt-hours) per month in electricity usage won't benefit as much.
However, there are exceptions to this rule: If your home is a new build with no documented electricity usage, we are happy to install a home solar panel system. We prefer to start customers without usage data with a small residential solar system to gauge how the new home will affect electricity consumption patterns. If the system needs more panels to offset the power bill once you've moved in and logged some usage in the new home, we (and most companies) can install more panels as needed.
Beware of companies trying to sell you huge solar arrays based on the square footage of your home. Square footage is not an accurate determinant of how many panels the home needs. If you want, one of our inside solar consultants can talk to your electricity provider and help you verify your usage history. A year of accurate usage will help us create a free customized quote for your home.
Any solar company worth its salt will ask for your monthly energy bill and utility provider to determine whether it’s worth it to get a solar quote. Your utility should also have access to and provide you with a more in-depth breakdown of your power bill.
You can also use an energy usage calculator if you're in a rush. The U.S. Department of Energy's home energy use calculator can help you find your home’s overall power usage and what factors contribute most to your usage. There are also numerous third-party usage calculators available. Or, if you're interested in learning what solar can save you and already know your monthly electricity usage, visit our market-specific solar savings calculator pages.
If You're Not Paying in Cash, a 650+ Credit Score is Generally the Baseline Requirement
That leaves us two main options for purchasing panels: cash and loans. Cash provides the most savings since there is no interest involved, but most people don’t have enough cash lying around to pay for a solar installation outright.
A loan can be spread over several years and puts you in control of your power right now. At Go Solar Group, we require a credit score of 650 or higher. Depending on your credit score, we may be able to help you go solar for zero down.
Homeownership is Necessary
If you aren't the homeowner, Go Solar Group can't install modules on the property unless the owner decides to have them installed. Homeownership is a requirement because of the need for a permanent location for the installation.
Does Your Home Receive Enough Sunlight?
Several solar calculators claim they can calculate an accurate quote without physically meeting your home. They accomplish this task by using Google Maps and similar tools.
Unfortunately, determining how much sun your home receives isn’t that simple. Here are some of the factors that go into figuring out how much sunlight your home receives.
The Shade Factor
How much shade your home receives can impact the viability of solar. Go Solar Group's preferred residential solar inverter (SolarEdge) is optimal for homes that receive no shade or lots of shade. This inverter works well for these extremes and the range in between because it optimizes each solar panel individually, rather than taking them all as a single group like many inverter brands.
However, if you have a home with lots of trees, your roof may not receive enough sunlight to make solar panels worth it. You can, of course, have some or all of the foliage removed.
Pitch and Azimuth
When it comes to solar, azimuth measures the angle of the roof in comparison to the sun. Having the correct azimuth measurements for your roof is immensely helpful for maximizing the potential gains from your solar modules. The best roofs face south, as they receive the most direct sunlight throughout the day. East or west-facing roofs can also provide enough sunlight if other factors don’t obstruct the transduction process, but north-facing panels are often too shaded to make them worth it.
Pitch refers to roof incline. Your roof can face east, west or south. However, if the pitch isn’t right, you aren’t getting the most out of solar panels.
Steep roofs lose valuable daylight hours when the sun is overhead, but shallow roofs lose energy at almost all points except midday. Determining whether your roof has a good pitch and azimuth is part of an in-person solar quote. While programs can project and predict these measurements, having a potential installer analyze your home in person with the correct software is the best way to go.
Tax Credits and Other Solar Energy Panel Incentives
Once we’ve determined that your home is a solid structural fit for solar energy panels, we can move on to the offered incentives. These incentives comprise a big part of the savings associated with solar, so if you don’t qualify for these incentives, it probably isn’t worth it to go solar unless your reasons for doing so aren't strictly financial.
The Federal Solar Tax Credit (ITC) and Taxable Income
Why does taxable income matter? If you earn taxable income, you can save up to 26 percent off the total cost of your installed solar array through 2021 (some social security qualifies as taxable income, and so does the money earned from investments, even if you're not working). However, on average, the typical residential solar customer is still working and qualifies for the taxable income portion of the solar screening process via their place of employment.
The solar ITC would have phased down to 22 percent in 2021, but in 2020, Congress renewed an extension. Homeowners who install solar by 2022 are now eligible for a dollar-to-dollar tax credit worth 26 percent of the total system cost. Those who install solar in 2023 are eligible for a 22 percent credit. While four percent may not seem like much, it can add up quickly if your home's energy usage is high enough to warrant more solar panels than the standard 12-to-15-module roof-mounted system.
Because the solar ITC represents a large amount of savings for those interested in solar, we at Go Solar Group discourage those who don’t owe federal taxes from going solar. Solar becomes much less affordable without these incentives.
State-Level Solar Incentives
On top of the potential savings from the federal government, state governments also offer incentives. These incentives comprise an integral part of ensuring you save the most. Let’s go over some of these state-level incentives for a better grasp of the potential savings in your area.
Nevada Solar Incentives
Nevada has been at the forefront of solar energy efforts in the United States for years. The Nevada state government offers many incentives for potential solar homeowners. Given that NV Energy offers net metering practices as the state's official and regulated power-giving entity, solar is extra beneficial for Nevada homeowners who add whole-house battery backup, like the Tesla Powerwall, to their homes.
The most important state-level offering for Nevadans is the solar battery backup storage incentive. Battery backup charged purely through solar can save Nevada homeowners thousands on their purchase.
New Mexico Solar Incentives
New Mexico has many potential solar savings opportunities for homeowners.
First, on top of the federal ITC, New Mexico passed a state-level solar tax credit. This credit is worth 10 percent of the system or $6,000, whichever is lower. Like the federal solar ITC, this is a dollar-for-dollar tax credit that can wipe out the taxes you owe to New Mexico.
Additionally, New Mexico offers 100 percent property tax exemptions for solar installations. While not as large as the potential savings from the New Mexico state solar tax credit, this exemption still puts money in your pocket.
Finally, New Mexico offers sales tax exemptions for various solar products, like panels and batteries. It also allows sales tax exemptions on some solar services.
Leasing Panels Makes Them Less 'Worth It'
Solar may seem like an expensive long-term investment if you're researching the benefits of buying panels up-front. However, leasing doesn't make solar cheaper or more cost-effective. Leased solar panels have many hidden downsides for the consumer. For this reason, Go Solar Group does not lease solar panels.
Net Metering (Not All Utilities Offer This)
Solar panels produce extra energy during the day. However, unless the home has enough battery backup units installed to store this excess power for later or the homeowner enters into a net metering agreement with their local utility, this solar generation goes to waste.
Net metering is when you send the extra power generated during the day back onto the power grid in exchange for a credit on your power bill from your utility company. Sometimes net metering can even involve payment to the homeowner if their power generation exceeds their needs for the month.
Your local utility’s net metering policies can make or break the ROI of installing solar on your home. The impact of metering policy makes knowing your local net metering policies essential.
New Mexico Net Metering Policies
New Mexico utility-level net metering policies can vary. In practice, most New Mexico residents get a full retail exchange for their credits. Utilities with this 1:1 ratio have one of the best solar metering policies out there.
Nevada Net Metering Policies
Nevada residents, on the other hand, often receive a 75 percent retail rate exchange. This rate makes net metering viable, but it isn't as good as 1-to-1 metering. The fewer net metering returns from your utility company, the more sense a battery backup system makes for your solar home.
So, Is Solar Worth it For You?
When we take all these factors together, a picture of your home's solar viability emerges. In summary, solar is worth it when the homeowner:
- Uses enough electricity for solar generation to save them money.
- Has a good credit rating or can pay in cash.
- Has an unshaded roof with the proper pitch and azimuth.
- Will owe federal taxes in the fiscal year of the solar array's installation
- Can benefit from state-level incentives.
- Has favorable net metering policies.
That seems like a lot! However, most people will fulfill #1, #2, #4, and possibly #5.
A good credit rating and favorable net metering policies will vary from person to person, but both are attainable to most homeowners interested in solar! Should you choose to go solar, our solar incentives page can give you an excellent idea of what to expect in Albuquerque, New Mexico; Reno, Nevada; and Salt Lake City, Utah.