Solar panels have become a popular alternative energy source for home and business owners. As their prevalence has been on the rise, it’s natural to ask questions like, “Are solar panels right for me?”, and “How does a solar panel even work?”. By better understanding solar panels, you can make a more informed decision when considering all of your options.
How Do Solar Panels Generate Electricity?
When sunlight hits a photovoltaic panel, more commonly known as a solar panel, an electrical field is created by the photons in light. This causes charged electrons to flow as electricity. When solar panels are strung together, they can generate enough electricity to power a portion or all of your home or business. Typically, solar panels are made of a combination of silicon with an aluminum frame.
Why Should You Use Solar Panels?
1- Energy Savings
When you receive an electric bill each month, a few things comprise your total bill. This includes not only the cost of your local utility to transport the electricity to your home but also the cost of creating the electricity at a power plant. These power plants are typically run by traditional fuel sources such as coal, natural gas, or nuclear energy. When you utilize solar panels, you become your own electricity generator. This means that for every kilowatt-hour that your solar system produces, this is one less kilowatt-hour that you have to pay your utility for. For example, if you generate 500 kilowatt-hours in a month and the cost from the utility is ten cents per kilowatt-hour, you would save fifty dollars per month on your electric bill.
2- Renewable Energy Credits
In addition to saving on your electric bill, some states allow you to sell renewable energy credits for the electricity that your solar installation generates. These energy credit markets are created through state renewable portfolio standards which mandate a certain percentage of electricity generation in the state come from renewable energy resources. The sale of renewable energy credits is yet another way that your solar system can pay for itself even faster.
3- Tax Credits
One of the reasons solar arrays have such short payback periods is because of the tax credits available. In addition to some state-specific tax credits, every solar system in the United States is eligible for the Investment Tax Credit, more commonly known as the ITC. The ITC allows you to reduce your tax liability for that year by 30% of the total cost of your solar system. This includes the materials and the cost of installation by a certified solar installer. For example, if the total cost of your solar system is $10,000, you will receive a tax credit of $3,000. This is a dollar-for-dollar reduction in the total amount of taxes you will owe for the year.
Having the background knowledge about how solar works and many of its benefits makes going solar a no-brainer. Solar panels are worth the investment because of the many unique advantages they provide both to your home and the environment.
