Rising Electricity Costs Emphasize the Need for Solar
Rising electricity costs across Colorado skyrocketed more than 67 percent between 2001 and 2014, exceeding growth of median income as well as the rate of inflation during that time. Residential electricity rates climbed from 7.47 cents per kilowatt hour in 2001 to 12.18 cents per kilowatt hour in 2014, or 63.1 percent, while the median Coloradan’s income only grew by 24.1 percent. Although 2016 experienced a brief decline in the price of electricity, the U.S. Energy Information Administration projects average U.S. residential electricity prices to continue their upward climb by another 3 percent in 2017, according to its latest Short-Term Energy Outlook.
Rising Electricity Costs
Because the price of electricity depends in part on the price of the fuel used to generate it, electricity prices have increased along with natural gas prices. Additionally, costs associated with infrastructure changes to use natural gas instead of coal plus costs related to implementing pollution controls for aging power plants are built into the residential electricity rates, causing prices to fluctuate ever upward.
Declining Costs of Solar Energy
The price of solar panel installation decreased by more than 60 percent in less than a decade. In the first half of 2016, residential solar prices fell 8.6 percent. Much of the falling costs have been due to technology and manufacturing improvements as well as government support.
The state of New York is nearly finished building a sprawling Buffalo factory for SolarCity. Once complete, the gigafactory will be the largest solar manufacturing plant in North America and among the largest in the world. The factory will produce perhaps the most efficient solar panels commercially available and will be capable of manufacturing 10,000 solar panels a day. Increased production capacity and improved efficiency of the panels is projected to further lower the cost per panel.
Time to Invest in Solar Energy
Investing in solar panels for your home promises several potential benefits. As discussed above, the cost of solar panels has declined steadily and is projected to continue to drop in price. Additionally, several financial incentives offered by federal, state and local agencies can help lower your installation costs even further. For example:
- Low-interest energy loans help you install panels with no upfront cost.
- Renewable energy systems, such as solar, qualify for a federal tax credit of 30 percent of your purchase price.
- Solar energy systems are exempt from Colorado state sales tax as well as Regional Transportation District and Scientific and Cultural Facilities District sales taxes, which saves you thousands of dollars.
- Grant and rebate programs are available to qualifying homes in certain locations of the state.
Solar energy is a great way to reduce your power bills from the first day of operation. The source of energy, the sun, is always free. The more panels you install, the greater power capacity you generate. That is power you don’t need to buy from the electric company. As electricity rates from the utility companies continue to increase, your solar system installation can help guard against these fluctuations. Your savings only grow larger over the years.
If you generate enough solar power, you can also generate passive income thanks to net metering and excess energy rebates, which further help offset the investment cost. Depending on the number of panels installed and your household’s use of electricity, you might store more in your solar banks than you need. Thanks to the net metering policy, you can receive retail credit for surplus energy that your solar system provides to the electric grid.
Installation of a solar power system also boosts your home’s property value. One study found that solar panels raised the selling price by more than $20,000. For many installations, this equates to nearly 100 percent return on investment, which is much higher than other remodel or home improvement projects. So you reap the benefits of lower utility bills while living in your home, and potentially recoup the costs of the installation if you eventually sell the house.
With rising elecricity costs, solar power is more affordable than ever. A solar energy installation saves money on your utility bills, provides an opportunity to generate income from excess storage and financial incentives and credits, and raises your property’s value. Beyond financial perks solar power reaps less tangible but still significant environmental and health benefits, such as reduced greenhouse gas emissions and improved air and water quality. Are you considering adding solar panels to your Colorado home? Request your free solar panel consultation today! Start enjoying the benefits of clean solar power.
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