Solar Panels: How Much Money Will They Save Me?

As you build or remodel your own home, you might consider solar panels. It might be a good idea to include some energy-saving innovations in your building plan as you look for a home construction loan. Besides, with rising fuel costs and all that free energy falling out of the sky, it seems to make sense to rig up some way to harvest the power of the sun and save on utilities.

But the savings will vary, according to several factors: government incentive programs, the climate of your location, and the type of panel you’ll be installing.

Installation: Costs vs. Savings

At this point, solar thermal panels (these only heat water) are much more economically viable than solar photovoltaic panels (that create electricity.)
Up front, a solar heating system will cost you a bit more than a conventional hot water heater, -- $1,500 to $3,000 total or $30 to $80 per square foot-- but will likely shave about 50% to 80% off your electric bill.
Your savings will be greater if solar heat displaces more common and more expensive fuel sources (electricity, oil, gas). Also, the more you use the panels, the more you’ll save. A house built in a cold climate with good solar resources will save much more money over time.
Solar panels with warranties (most come with about a 10 year warranty, although panels tend to last much longer) increase your investment even further.

State Programs, Federal Loans, and Energy Rebates

The FHA (Federal Housing Administration) and VA (Veteran’s Administration) as well as several other agencies offer Energy Efficient Mortgages (EEMs) to help homeowners finance their renewable energy projects.
In addition to that, many states (especially large states like California) offer tax incentives or rebates for installing certain energy-saving improvements. Some programs even pay by the watt, meaning the more energy you save, the more money you get back.

Environmental Benefits

After considering all the potential savings, you might forget that renewable sources are good for the earth as well. Anytime you cut back on fossil fuels, you reduce the amount of pollution and greenhouse gases released into the atmosphere. So, it’s not only a financial investment, but an environmental investment as well.