Solar Panels in the United States

Solar Savings Infographic

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Most people are familiar with solar panels in one form or another. Whether you’ve seen solar panels on a neighbor’s house, set up near a construction site or powering one of those little solar toys they are all doing the same thing. The panels are creating electricity from the sun itself without relying on any additional fuel. Solar panels can help meet energy needs and lower utility bills. They’re a cleaner form of energy than power produced by burning coal, oil or natural gas. Solar panels are simple to use and they continue become more accessible as the technology becomes more affordable.

How Solar Panels Work

Solar cells work by collecting energy from sunlight and directing it through a set of wires for use elsewhere. They rely on complex reactions to continuously generate power, but are highly reliable and designed to function for 20 years or more.

A solar cell works by taking photons, or particles of light from the sun, and using them to knock electrons free from the atoms built into the cells to generate a flow of electrons or electrical current. In order for a cell to work, there needs to be two layers of semi-conducting material, one with a positive charge and one with a negative charge.

After the photon breaks electrons free from the atoms within the cells, the electrons are pulled aside by conductive plates mounted at either side of the cell. The electrons are transferred to wires where they can be fed into inverters and used as an AC power source for your home.

Why Invest in Solar Panels?

It makes sense to invest in solar panels because they produce energy consistently for up to 25 or 30 years without needing fuel. The initial expense to buy a 5 or 10 Kwh system might seem high at first, but that price is more reasonable when you consider that it offers value for between 20 and 30 years after the purchase.

Think about buying solar panels like you would when buying a car. Sure $20,000 sounds like a lot to spend on a vehicle, but as long as you own the vehicle for 10 years you are really only spend $2,000 a year for transportation. $30,000 might seem like a lot initially, but if the panels are saving you a few thousand on your utility bills each year the price makes sense.

Common Solar Incentives

Financial incentives for residential solar projects vary greatly depending on the state where your property is located and the year in which your system is placed in service. Here is a look at the general types of incentives.

Loan programs are offered at the federal and state level to purchase solar systems and equipment. State programs, for example, may offer a low or zero interest rate, typically for a term of ten years or less.

Personal tax incentives, such as tax credits and deductions, reduce the upfront cost of purchasing and installing a residential solar system if you decide to buy. Eligibility requirements (such as which types of equipment qualify for the credit) and the maximum amount you can deduct vary by state.

Property tax incentives: Adding a solar system to your property may increase the value of your home, which could mean higher property taxes. Solar property tax incentives exclude or reduce this added value for taxation purposes. This incentive keeps you from being penalized for adding renewable energy systems to your house.

Rebate programs are available from states, local governments and utilities in varying amounts. For example, your state may offer a cash incentive when you install qualified equipment like solar panels.