Solar in Virginia
People in Virginia are increasingly looking at solar panels to solve their electricity needs. After all, Virginians have the 7th highest monthly electricity bills in the entire country, averaging just over $133 dollars per month.
Solar energy in Virginia is popular for another reason. Savvy homeowners know that 14 percent of the state’s electricity is powered by coal and nearly 1/3, 30 percent is powered by nuclear generators. Both are definitely a priority to stop in the future if the Joe Biden administration has its way.
And if both coal generators and nuclear generators were stopped in Virginia? Estimates are that the $133 monthly bill might turn into a $200 monthly bill in hurry.
There is a second reason solar power Virginia is on the fast track right now. As solar companies in Virginia like to point out, the Federal Tax Credits for creating a new solar system are rapidly dwindling.
In 2019, the Federal Tax Credit was 30 percent. As of the end of December of this year, the tax credit drops to 26 percent, and if, as most people reading this will be affected, the 2021 tax credit is 22 percent.
So, assuming a Virginia resident wants to completely cut his energy bill down to zero, how big a solar system will he need?
As the average Virginian uses 1117 kilowatts per month, your average homeowner might get away with a 9-kilowatt solar panel system, but on average a homeowner will typically need a 10-kilowatt system to make up that entire 1117 kilowatts per month.
So how much is a 10-kilowatt system? Naturally, it varies, but a good benchmark is $2.90 per watt. So a 10-kilowatt system will, in general, be around $29,000 before the Federal Tax Credits are applied.
Breaking it down further, the cost of the same system, after-tax r rebates, would roughly $22,600.
Assuming a yearly electricity bill of $1600 ($133 x 12) it would take a little over 14 years to pay off your electrical bill and then be free of electrical bills for the next 10 to 15 years. Assuming the former, you would save roughly $16,000, and if the latter, $24,000.
Of course, it’s not exactly that simple. For one thing, Solar Panels in Virginia, as elsewhere do suffer what is called degradation.
Degradation happens when solar panels develop minute irregularities after being exposed to the environment.
A survey of The National Renewable Energy Laboratory of 2,000 solar panel systems across the globe reveals that on average, solar panels degrade at .4 percent per year.
So if you have a 10-year-old system, your panels would be generating 96 percent of their capacity. At 20-years old, the system would be down to 92 percent capacity.
At 30 years of age, the system would be functioning at 88 percent of capacity.
So a person buying a solar system with sufficient kilowatts may go completely without any bills for 20 years, and at 30 years he might use perhaps $30 to $50.00 per month.
All of this is based on the idea that electricity bills stay around the same amount. Not only on average, do bills go up 1.5 percent per year, but if coal and nuclear were taken out of the Virginia equation, prices could skyrocket as much as 30 percent or more in 10 years.
There is also a second aspect of solar ownership in Virginia. According to Zillow, a solar unit boosts the price of a home by 4.1 percent.
For most Virginia residents, that’s an extra $12,000 when they sell their home. It may not be a dollar for dollar return on what you invested but if you add that to living electricity-free for several years, it comes darn close.
And, you can be sure that when your house comes with the added benefit of practically free electricity for the new owner, it makes a house much easier to sell.
This year, the last part of 2020 and 2021 is the time to fully explore solar panels for your home in Virginia. The tax rebate is still 26 percent for the latter part of 2020, and a respectable 22 percent for 2021. However. for residential homeowners, the tax credit completely disappears in 2022.
So if the idea of the Federal Government helping you to pay for your solar panel system to the tune of several thousand dollars, don’t wait too long. Not only will the tax credit disappear in 2022, but those who wait for next November or December may find that there is a sudden rush on solar panels and it’s not possible to complete before the expiration date.
Remember, the tax credit applies to when you finish the completed solar install, not to when you start it.