Two factors are making solar panel installation a better deal for homeowners than it was in the past—the federal and state tax incentives, and the rising cost of electricity from traditional sources.
According to a study from the Edison Electric Institute, electricity prices went up 2.5% annually from 2000 to 2006, (which means they beat inflation, which was calculated to be increasing 1.99% annually in that period) and are following a steady upward trend. That rising cost is being driven in part by the rising cost of fuels, such as coal and natural gas.
As those lines continue to go up, so will your electricity bill. That means making an investment in solar panels likely to pay for itself in a shorter period of time.
On top of that, there are the tax credits. In an effort to encourage homeowners to go green, the U.S. government has offered significant tax credits for installing solar panels as an alternate energy source. While a tax break that allowed renewable energy companies to recoup 30% of a new project back as a cash grant after construction expired this year, a residential federal tax credit of 30% will remain in place until December 31st of 2016.
Additional credits vary state by state, but if you live in a sunny state with a high solar rating—a measurement of the average solar energy available for your home—such as Arizona, California, or New Mexico, you may find additional incentives like cash back, waived fees, and expedited permits.