MYRTLE BEACH, SC (WMBF) - As we head into the hot summer months, and the A/C kicks into high gear, you may be looking for ways to reduce your electric bill.
Some homeowners are turning to the sun to supplement their energy consumption but solar is not so cut and dry.
“A good average would be a 50% reduction in their electric costs,” explained Brian Hungerford, Solar Project Manager with Carolina Energy Conservation.
While cutting your electric bill in half sounds great, it does come with upfront costs.
You’re looking at $15,000, upwards to $60,000 for a very large system. Hungerford acknowledges these costs seem high at face value, but he says the out of pocket costs end up significantly lower. Tax credits at the state and federal level combined with utility company rebates can help offset the high initial investment.
“Thirty percent for the federal tax credits, then we have a 25% with the state tax credits,” explained Hungerford.
That means, if you went with a solar installment with an initial cost of $30,000 right now, tax credits would equal around $16,500. Keep in mind these are applied at tax time, reducing your tax liability, in turn reducing the amount of money owed to the IRS. Any leftover credit would then rollover to the following year.
The clock is ticking to take full advantage of these tax credits. The current 30% federal tax credit only lasts through the end of 2019.
“Next year it will go down to 26% and then the year after that it will go down to 22%, and then in 2022 there will be no federal tax credit for residential solar panels,” said Hungerford.
Even after tax credits, you’re still looking at thousands of dollars to have a solar system installed. Many homeowners turn to financing to help spread out the cost of these systems.
One of the most commonly asked questions is, when can I expect to see a return on my investment?
“We’re seeing about a seven to eight year payback period. Also seeing a pretty good rate of return of investment about 16 to 18% over 25 years,” explained Hungerford.
So you’re looking at a long term investment, but Hungerford says you’ll begin to see the difference in your electric bills instantly. The goal is a 50% reduction in cost. He says that’s not the only way the panels work to make you money. A system called net-metering allows unused energy generated by the panels to be sold back to your power company.
While ideally, you’d sell that power at the same price you pay for power, that’s not the case locally.
For example, Santee Cooper pays you less than 40% of what you would pay for that same power from the grid. To help offset this reduction, they currently offer a $3,600 rebate once your solar system is installed.
“So they buy it back at a little less than they sell it to you at. You are still able to sell energy back to the utility, back to the grid, back to the utility company and get credit for that,” said Hungerford.
Maximizing your savings means changing your habits, too.
Solar panels produce the most energy when the sun is at the highest point in the sky, typically in the early afternoon. Since there is no place to store this generated energy, anything unused is instantly sent back to the grid. So to take full advantage of the system, you’ll need to use the most energy in your home during those peak sunlight hours.
“During the time of day when the solar panels are producing, you’re getting all that nice sunlight energy, that’s when you’ll want to be doing all your heavy load things. Doing your dishwasher, taking a shower, things like that,” explained Hungerford.
Things like the slope and direction your roof faces, the amount of shade your home sees and even the solar panels you purchase, go into determining how effective solar will be in reducing your energy costs. Many installers will perform a free assessment of your home to help determine if you’re a good candidate, and more importantly, how long it will take for you to break even from the initial cost.
According to the solar foundation, solar jobs have been growing in South Carolina. As of 2018, there were 2,983 solar-related job across the state, a yearly growth of 5.4%. The solar foundation expects this growth to continue with a projected 8.3% increase in 2019.
With an increasing number of options, how do you find a reputable installer?
“Ask how long the company has been in business. You want to ask, make sure they are NABCEP certified, that’s really big. You want to make sure they have a local office that you can stop in. That its not some company working outside of the area. Things like that are ways homeowners can decipher who’s legit and who’s not legit,” warned Hungerford.
Before installing a solar system, you’ll want to check up on your homeowners insurance policy. Brian Payne with Field Insurance says to give your agent a call ahead of time. Most insurance companies cover solar systems but not all do. Plus the additional value of the system will need to be included in your home coverage, which Payne says can induce a small increase in your yearly premium.