1. Energy prices are rapidly rising, despite overall inflation rates stabilizing
While inflation costs are beginning to stabilize and we’re seeing pre-pandemic prices in many areas like gas, food and retail, one industry is continuing to rise: electricity. Electricity prices have risen 34% over the last 10 years alone.
Transitioning to solar energy offers a hedge against rising energy costs, capping your monthly payment and giving you more energy independence from the volatility in the market.
2. Solar panel demand is rising nationwide
Demand for solar panels is rising. But what does this mean for consumers? With industry growth comes a higher demand for materials and personnel needed to do the solar installation jobs. This could equate to longer wait times for residential solar consumers in the future. There could be more supply shortages, like the temporary shortage the industry is seeing now.
One positive is the growth in demand will create more jobs in the solar industry. However, in a few years there could be a personnel lag while the industry catches up with the increased demand. As solar starts to enter the mainstream, getting ahead of the demand curve is a good reason to go solar soon.
3. Residential solar currently dominates the industry, but in a few years, a utility solar boom will take up more resources
Also shown in the chart above, is the forecasted boom that utility solar will have in the coming years. If you’re a homeowner considering transitioning to solar, you might want to make that switch sooner than later.
Right now residential solar projects are 31% of the solar PV demand, but by 2027 residential is estimated to fall to 16% of the market with utility solar growing rapidly, at 180%. As the industry evolves and demand continues to rise, resources will start to prioritize more large-scale projects. This means in the future, there could be longer wait times and less panels going toward smaller, residential projects. Times are a changin’, and the solar landscape will change, too. Home owners should consider this for their timeline to go solar.
4. The price of solar panels is declining
Solar panel prices have decreased significantly over recent years, making the investment more accessible and affordable for homeowners than before.
In addition, there are a variety of financing options that fit a diverse range of financial goals. Whether homeowners care about $0 down, low monthly payments or 0% interest rates, there are many options. Depending on your system’s energy generation and your local net metering policies (see point below) you could see an immediate payback on your monthly out of pocket electricity costs.
5. Transitioning to solar energy increases your home’s resale value
Homeowners will see an increase in their home’s resale value with a return on investment (ROI) that is higher than many other types of home improvements. According to Zillow, solar panels boost the selling price of the home by 4.1%. In our hometown of Austin, TX, the average home is $599k. That means the average homeowner will see an ROI of $24.5k added to their home value, just by upgrading their home to solar.
Additionally from an aesthetic perspective, solar panels have never looked better. Gone are the days with clunky and outdated panel technology. SunPower solar panels offer a sleek design through low-profile mounting system for homeowners who want a superior look, while being the most energy efficient option on the market.
6. Federal and local tax incentives favor residential solar right now, but are trending away
Currently, there are many local and federal tax incentives that help subsidize your home solar project, offsetting the costs of buying your system and paying for installation. Unfortunately, many local electric companies are moving away from the incentives for residential solar – including tax credits declining and net metering not being exchanged at the same rate that it used to.
Take CoServ Electric, based out of Dallas, Texas. It recently reduced the financial incentive for residential solar by offering the lower priced fuel rate as compensation for sharing energy back to the grid, rather than the higher return on retail rate. This trend is happening throughout the country. While every local utility is different, residential solar adopters should check with their provider to see what their current net metering policy is.
Being able to get grandfathered in on a utility’s net metering policy prior to policy changes, is a good reason to go solar now.
In addition, the federal government currently offers a 30% federal tax credit to qualifying individuals to help offset and subsidize the purchase and installation costs of switching to solar energy. The Inflation Reduction Act was extended through 2032, but it will decrease to 26% in 2033, which incentivizes homeowners to take advantage of the credit sooner rather than later.
7. Investing in a physical asset like a solar panel system is a safe investment when the market is volatile
When looking at different types of investments, a physical asset is less risky when the economy is in a tumultuous state. If you balance risk with reward, there’s very little risk to buying a physical asset. When the economy is in a tumultuous state like it has been, investing in equity or bonds could leave your head spinning on where your investment accounts will land when you need money the most.
If an investor is tired of seeing their earnings jump up and down in the equity markets, solar provides a consistent return that is only as volatile as the number of sunshine days a year, and doesn’t add to the stress of economic uncertainty.
8. Solar offers a hedge against extreme weather events and saves you money
Extreme weather events = higher energy prices. Weather related events cause energy prices to surge (think: a polar vortex causes people to crank up electricity to heat their homes all at the same time). Solar will not only offer a hedge against the rolling blackouts if the grid can’t handle the demand, but you also won’t be subject to demand-surge pricing.
Volatility in weather patterns is increasing. Take Texas’ historic winter storm in February 2021 that knocked out power for most of the state. Florida has seen an influx in disastrous hurricanes in recent years.
Solar provides more safety from the traditional energy grid. Recently during Hurricane Ian, the only Florida community that kept their lights on was a completely solar-powered community. Additionally, 3,700 Texans were able to keep their lights on by having Powerwalls during a deadly winter storm. Solar energy and backup power can provide more security during unprecedented events. SunPower solar panels are proven to stand up to harsh conditions such as hail, extreme temperatures, and hurricane-force winds, which give added peace of mind if you’re in a region that experiences regular extreme weather.
9. Solar panels decrease your carbon footprint and are a smart investment for generations to come
It goes without saying that investing in alternative energy has important implications for your carbon footprint. Solar generates electricity without emitting carbon dioxide or methane into the atmosphere.
Atmospheric carbon dioxide is absorbed by the atmosphere and stays for decades while radiating heat toward the earth, which warms the planet. Burning natural gas and petroleum puts immense amounts of methane into the atmosphere.
Solar energy sources require no methane for use or transmission. So the more solar power you use, the less natural gas and petroleum you use, and the less methane you emit. Switching to solar does a small part to helping our earth.
Offsetting your energy use by transitioning to renewable energy invests in a better world for those that come after you – your children and their generations to come.
10. Experts anticipate a global energy crisis in the next decade, with solar providing a hedge at a household level
One of the most pressing reasons for a collective investment in solar energy is the immediate need to diversify energy consumption and prevent an impending energy crisis in this decade. Take what is happening in Europe for example, where experts are predicting an energy shortage in the Winter of 2023-2024, with costs getting borderline unaffordable after not having access to Russia’s gas imports.
Energy trade has become increasingly more globalized, so as the European LNG crisis intensifies, it causes shortages in other parts of the world. For example, the US became the world’s largest LNG exporter amid the Ukraine war-driven demand, causing rising gas and power prices.
A global energy crisis due to macro events would cause even higher electricity prices in the future. This is a stark reminder that we need to be diversifying our energy sources on a national level, and put more resources into renewable energy. Investing in solar provides a hedge from the risk in an energy crisis.
The bottom line: Market trends will go up and down and the economy can become volatile. But the sun will always be shining. Investing in solar energy is a sustainable, reliable investment for you and yours’ future.