Are Solar Panels a Good Investment?

In short, yes! Solar panels are absolutely a good investment. Especially in California and Colorado, where the sun shines around 250 – 300+ days per year, solar power stands out as a reliable, cost-effective, and environmentally friendly energy solution.

That said, when it comes to ROI, it’s important to consider various factors first. Not every property is perfectly situated for direct sunlight, but there are some easy workarounds that can improve performance. Similarly, if your roof isn’t in good condition, you’ll probably need to replace it first. 

To further explain, let’s explore the key factors impacting your solar panel investment:

• Day of sunshine in your area
• Energy savings
• Leasing vs. buying
• Improved property value
• Solar tax credits and incentives

Days of Sunshine In Your Area

Before going solar, research how much sunshine your area receives annually. If you happen to live in an area with a high number of cloudy days per year, you’ll probably need to increase the number of panels you install in order to generate enough power. This will add to your upfront costs and extend your payback period. 

Fortunately, both California and Colorado are blessed with an abundance of sunshine throughout the year. Since solar panels convert sunlight into electricity, they’re a perfect fit for homeowners seeking to harness the power of the sun and reduce their reliance on traditional grid-based electricity. (Amidst failing power grids, this is a huge motivation for many California and Colorado residents.)

Energy Savings

As we mentioned above, larger solar systems will have a longer payback period, but your energy savings (combined with tax credits – more on that below) can reduce it substantially. 

According to EnergySage, California homeowners can expect to save upwards of $64,000 over 20 years on energy costs, with a payback period of under 6 years. In Colorado, EnergySage estimates that homeowners can save nearly $17,000 in energy costs over 20 years, with a payback period of roughly 12 years. 

Granted, these numbers are based on averages, and they don’t include the 30% federal investment tax credit that’s available for the next 10 years. So, it’s important to find out the specific numbers for your home’s system. 

Schedule a free solar estimate with Photon Brothers today and we’d be happy to share your projected 30-year savings and estimate payback time! And if you choose us to install your system, you can rest assured that your panels will still perform at a minimum of 90% efficiency even after 25 years. We’re proud to offer a 25-year production guarantee and 25-year parts and labor warranties!

Leasing Vs. Buying

We generally don’t recommend leasing solar panels. In fact, we’ve written an entire blog on whether you should lease or buy solar panels.

Simply put, leasing doesn’t provide the same amount of energy savings. With ​“cookie cutter” designs that don’t take into consideration the right type, number, or placement of panels, you won’t reap maximum sunlight. 

Additionally, leasing can make it more complicated to sell your home, which brings us to another important factor…

Improved Property Value

A national report by Zillow shows that the average home sells for about 4% more when solar panels are installed. In California, where the median home price is just over $725,000, that adds up to an extra $29,000 when it comes time to sell the property. That’s a pretty big return on investment, particularly when paired with energy savings along the way.

Properties with solar panels also sell faster and are more likely to get their asking price. If two buyers can choose between one home with solar panels and another without, the house with solar panels gets the first bid. This is especially true in areas with high energy costs, such as California and Colorado.

Solar Tax Credits and Incentives

Homeowners across the U.S. can take advantage of a 30% federal tax credit when installing solar panels. As part of the Inflation Reduction Act, this credit will be available for the next ten years and is applicable towards any renewable energy system, including solar panels, inverters, batteries, and more! This is one of the largest tax credits we’ve seen and will significantly improve your ROI.

In addition to federal, there are also numerous state and local rebates and incentives that can help reduce your upfront costs. For example, in California, the state offers the California Solar Initiative (CSI) program, which provides cash incentives based on the system’s performance and size. 

Want help finding rebates and tax credits to lower your solar installation costs? Call Photon Brothers at (720) 370‑3344 (Colorado) or (805) 351‑3371 (California) and we’d be happy to help you. Plus, we can review solar financing options to help make your upfront solar investment as stress-free as possible!