Now that you are aware of all the financial advantages solar panels may provide, let’s talk about the potential costs and drawbacks of installing a solar system.

Lack of Net Metering

Your solar system won’t be able to reduce your electricity costs to zero without your power provider’s favorable net metering policy. As a result, net metering is crucial to most consumers’ financial viability of solar panels.

This is not to argue that adding solar must be financially advantageous for your utility to have full-retail net metering. Since every net metering scheme is unique, you can save a lot of money even if you receive less than the retail rate for your solar energy. However, depending on the solar buyback program you have access to, you might need help to eliminate all of your costs, or it might affect how the system is built.

However, solar is not the most significant investment for you if there is no net metering policy available or if the utility purchases electricity for meager prices. Suppose you’re attempting to determine whether the net metering scheme offered by your utility will provide you with the savings you want. In that case, our solar calculator is a brilliant place to start.

Electricity Cost in Your Location

Solar panels might not be financially worthwhile if you reside in a region with meager energy costs. Electricity is less expensive. Thus, the potential savings are also less.

For instance, a system that produced 10,000 kWh of power would save the owner roughly $2,800 a year in Hawaii, where electricity costs $0.28 per kWh. However, given that power costs just $0.10 per kWh on average in Minnesota, someone who invested in a system that produced the same amount of energy would only save $1,000 a year.

It will take longer to see a return on investment if the upfront expenditures to install the panels are too expensive compared to the local power prices. In other circumstances, it can take so long to see meaningful savings that going solar is only worthwhile.

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