What Incentives are There for Consumers to Install Solar Panels?
Sep 20, 2022
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There is a great drive around the world for more governments, businesses, and individuals, to start using renewable energy sources. There are now cast solar farms in China, India, and the US, that are powering residential homes and helping to reduce the dependency on fossil fuels.
Solar energy is used to revitalize farming in Chile for indigenous people, and it is providing electricity to rural communities in Africa. As a sustainable power, it is also the most practical and accessible for residential homes in most parts of the world.
However, solar panel installations cost money, and they are still unaffordable for many families and individuals. Some governments have recognized this and put in place incentives and grants for solar power. Yet, many of these programs have expired.
How important are solar panel installations today?
Countries such as Argentina have seen great benefits from introducing solar farms. One, in particular, the Cauchari solar park, has over 1 million PV panels, and a capacity of 300 MW.
India and China have also invested heavily in solar farms, with these two nations operating the two largest installations in the world. Just recently, the US President, Joe Biden, declared solar panels essential to national defense.
For the environment though, renewable energy sources must be used more widely to avoid the use of fossil fuels. The planet needs to reduce carbon emissions, and find ways to decelerate climate change.
Unfortunately, Joe Biden isn’t giving away solar panels, and the cost is a deterrent to many.
Can you get any incentives to install solar panels?
Forbes estimates that the average solar panel installation will cost around 16,000 USD. But, the range can be anywhere between 3,500 USD to 35,000 USD.Clearly, solar incentives are needed to encourage installations, and fortunately many are available.
Many governments at the local and national levels have tried to motivate homeowners to install solar power. In India, there are schemes covering all states that offer up to 50% discount on solar panels, and Australia is trialing free solar panel installations for low-income houses. While this trial is only open to the first 3,000 successful applicants, it could be rolled out further.
In the US, there is the ITC, Federal Solar Investment Tax Credit to incentivize prospective solar panel purchases. This scheme offers a tax credit of up to 26% of the cost of the installation, including labor. The scheme is set to run until 2034 when it will hopefully be renewed.
A comprehensive list of state-wise incentives for renewable energy can be found at DSIRE. Other nations’ solar incentives can be found online through Google. A simple search may lead to the discovery of grants and schemes that you are eligible for.
Can you make money by generating excess electricity?
As well as possible incentives, you may also be able to make money by selling back excess electricity generated by solar panels.
As one way to be more environmentally friendly, and to encourage the use of solar power, utility firms are buying electricity from consumers in some regions. In the UK, the Smart Export Guarantee allows any electricity produced through renewable energy sources, to be sold back to the grid.
The US has a similar program called net metering, and the National Renewable Energy Laboratory explains that 41 states are now participating in this scheme as well as Puerto Rico, the US Virgin Islands, and American Samoa.
Are solar panel installations financially viable in 2022?
The cost of PV solar panels has been dropping ever since they were first introduced commercially to homeowners. The panels are more efficient than ever, and with local incentives, now might be an opportune time to commit to a solar panel installation.
There are at least four ways that solar panels can be more financially viable than they first appear. There are incentives as mentioned previously, then there are the buy-back schemes for excess electricity. Then there are two other ways that solar panels can assist homeowners financially.
The average US household can save up to $30,000 throughout a solar installation’s lifespan. General wisdom states that solar panels are most effective for 25 years. So, you could expect your solar panels to pay for themselves almost twice over.
The next way that solar panels prove to be a good investment, is by increasing the value of your home. Over 70% of prospective house buyers rate energy efficiency as essential when inspecting a home.
Summary
Incentives are important to help inhabitants of all countries transition to renewable energy sources. Fortunately, many governments have realized this and put in place practical schemes to assist homeowners to purchase PV panels.
However, more needs to be done to increase awareness of the need to move away from electricity generated by fossil fuels. Even privileged western nations such as the US are still generating over 60% of their electricity from fossil fuels.
Hopefully, as consumer demand increases for green energy, PV panels will become more affordable, and local governments will implement more schemes to help lower-income families turn to solar power.
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