If you explored solar in 2020, we can almost guarantee that you heard about solar cost increases scheduled for 2021. Before December 2020, the solar investment tax credit (ITC) was set to drop from 26 percent to 22 percent. However, the recent $1.4 trillion federal spending package alongside the $900 billion COVID-19 virus relief spending bill included extended renewable energy tax credits. The ITC will stay for two more years.
This means residential, commercial and industrial solar projects that begin construction in 2021 and 2022 will still receive a tax credit at 26 percent. All markets will drop to a 22 percent tax credit in 2023, and the residential market will drop to 0 percent while the commercial and utility markets will sit at a permanent 10 percent credit beginning in 2024.
How Much Will Solar Panels Cost in 2021?
Solar installers and homeowners alike can rejoice in the news of the two-year extension of the ITC. But what does this mean for the cost of going solar in 2021? Largely, it means that the costs of solar will, if nothing else, not increase over the next year.
In 2021, experts anticipate solar panels will cost for an average-sized installation in the U.S. between $11,144 and $14,696 after solar tax credits. The average price per watt for solar panels ranges from $2.51 to $3.31.
Solar Industry On Fire
In 2020 alone, solar power experienced a 37 percent growth in the United States.
In fact, the Solar Energy Industries Association (SEIA) forecasts a 43 percent increase in solar power installed in the United States between 2021 and 2025 compared to solar installed during the last five years. Also, data from ResearchAndMarkets.com suggests “global renewable energy market growth from $184.3 billion in 2020 to $226.1 billion by 2021—with solar leading the way.”
One of the leading factors in this boom in solar? Electricity prices continue to rise in a decade-long streak. In fact, residential electricity costs are projected to rise between 1.2 percent and 2.8 percent in 2021. This is a national figure. In areas like California and Texas, homeowners can see price spikes as high as 14 percent. For homeowners, solar is an affordable and accessible alternative to high-cost electricity and serves as a great way to save on monthly utility bills.
The Reality of the Cost of Going Solar in 2021
Okay, so we have thrown a bunch of statistics and figures at you, but what does it all mean? Let’s dive in!
The cost of installing solar has and continues to decrease for homeowners across the country. The real difference for homeowners like you, however, isn’t how much solar costs going into 2021, it’s how much you can expect to save.
Electricity prices keep climbing every year while the cost of solar is lower than ever before. If solar seems expensive think about it this way.
You’ll pay your electric company for the rest of your life, at the mercy of whatever the utility company charges. This figure will continue to increase due to lack of available energy resources. And, regardless of whether or not you make more money, the bill will climb higher and higher every year.
To put it simply: solar costs are going down and the 26 percent tax credit has been extended as electricity rates increase. There is no better time than now to make the switch to solar. By choosing the right solar company to install your panels in 2021, you can capitalize on some major savings.
Choosing the Right Solar Company
Making the switch to solar can prove both challenging and technical. Between the countless options for solar panel brands, inverter technologies, warranties, efficiency and degradation rates, incentives and rebates, etc., without the right organization to help you through the process, it can be overwhelming.
Installers like NRG Clean Power leverage decades of experience to offer streamlined and affordable services. Not only do installers like us have industry knowledge on how to best install solar systems, we also know all of the rebates and incentives available. We can ensure you receive the best deal and get access to all qualifying federal and local rebates and incentives. While the ITC helps save homeowners a huge portion of their solar investment, most homeowners also qualify for state and local programs. This further reduces the cost burden of solar. It also means you will spend less on your already-inexpensive residential solar system, maximizing your savings!