As an Orlando resident, you already know why they call it "City Beautiful", but do you know what could make it even more beautiful? Huge energy savings through the installation of solar panels on your home! Orlando, Florida is one of the sunniest cities in the United States (hello Sunshine State!) and a prime candidate for profitable solar energy systems. Before we start, here is our Orlando Solar Report Card:
One point that we'd like to make before we dive into the nitty gritty is that there is currently a Federal Tax Credit available to homeowners who install solar panels on their homes. This solar tax credit offers you a staggering 26% return on whatever you spend on installing your solar system. This 26% has been extended for the next two years but we aren’t sure it will be extended past then. That means you only have a limited amount of time to take advantage of unprecedented solar panel savings!
While solar is an incredible renewable energy source and is certainly better for the environment than traditional electricity, the real reason most homeowners want to go solar is to drastically reduce their power bill. So let's talk about the economics of residential solar power.
The great thing about Florida solar is that it has some of the cheapest solar prices in the United States. The average installation comes in at a $2.69 cost per watt, making it the fourth cheapest state to install a solar system in. Here's an infographic breaking down the total cost of installing solar in Orlando:
The average solar energy system size is about 5 kilowatts (kW) or 5,000 watts, which should cover your average home. If you multiply 5,000 by the $2.69 cost per watt, you get a very reasonable total of $13,450 for the total installation. This will be right in the ballpark of quotes you will get from different Orlando solar companies.
But as we mentioned in the opening, you can drastically reduce this cost by applying for the "Federal Tax Credit for Solar Photovoltaics"
Now let's talk about reducing that average solar cost of $13,450. The best way to do that is simply by taking advantage of the Federal Tax Credit for PV systems which have been extended another 2 years!
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Let's take that $13,450 and simply multiply it by 74% (100% - 26%) to get the true cost of going solar.
And the answer is....$9,953. That's far cheaper due to the $3500 in tax credits!
Beyond this discount, there are also other incentives for installing solar panels on your home. The first is that, despite adding massive property value, the property tax on Florida homes (including Orlando) do not increase when you transition to solar panel energy. This is great news because Orlando Florida home values have been shown to increase in value by an incredible 4% when they install solar panels. That is just pure value with no increase in property tax — awesome!
But there is one final incentive and this one will make any homeowner incredibly happy: as a solar customer, you don't have to pay sales tax on your solar installation. That's right, no sales tax! Typically a $13,450 purchase in Orlando will run you $807 in sales tax alone (based on the standard 6% sales tax in Florida). But not for a solar panel installation!
Okay, so now we've taken a $13,450 solar installation, deducted $3,497 in tax credits, added value to our home without increasing the property taxes on it, and saved $807 in sales taxes. Pretty good! Though we aren't even to the real benefit of installing solar panels: the energy savings! So let's dive into it.
For this section we are going to continue with the 5KW example as this will cover most average Orlando homes. From there, it's just a matter of calculating what you pay for electricity (which is calculated in kilowatt hours or kWh) and then subtracting the amount of energy created by the solar panels!
According to the Orlando Utilities Commission, the cost of electricity in Orlando is approximately 11.42¢/kWh.
A 5 kW system in Orlando should produce an average of 6,750 kWh a year.
6750kWh X $.1142 = $770.85
So when you go solar and choose a 5kW system, you are basically creating 6,750 kilowatt hours from the sun instead of paying the electric company for it. Which means you are reducing your power bill by an average of $770.85 each year!
The next calculation is determining how soon you will pay off the solar panels and start reaping pure solar profit. To do that we just take the estimated cost of the solar panel installation in Orlando after the solar tax credit ($10,491) and divide it by the yearly savings ($770.85).
$9,953/$770.85 = 12.9 years.
This may not seem like huge savings, but let's compute how much you will save after 30 years of going solar — this is the approximate life span of home solar panel setups. We simply subtract the 12.9 years it takes to pay off the solar system from 30 years total, and then multiply that by the $770.85 in annual power bill savings.
30-12.9 = 17.1 years X $770.85 savings per year = $13,182 lifetime energy savings.
That's pretty good! But there is more to the equation and we'll cover that in the next section.
Before we fully answer this, here is a breakdown of Return on Investment for home solar panels in Orlando!
Over $13,000 in lifetime energy savings is pretty great! The main hurdle is finding the money to pay for the approximately $10,000 solar system. Luckily there are a lot of well-developed solar financing options out there. And...there are other benefits to going solar in Orlando.
Perhaps the greatest future benefit of Orlando solar installations is that the price of electricity continues to rise. In the last 10 years the national average price per kWh (basically the metric used to track electricity prices year over year) has risen 15%. And we all know this isn't likely to change as our natural resources become more and more strained.
If the trend of 15% increases every 10 years continues, the price of electricity in Florida and everywhere else will be 50% higher in 30 years. Not only that, but electricity prices are prone to extreme fluctuations that can stretch your budget farther that can be hard to predict. When you go solar, you insulate yourself from wild swings in electricity prices.
We alluded to this earlier, but transitioning to solar in Orlando has shown to increase property value by about 4% — if your home is now worth $250,000, that's a $10,000 increase! That's almost the cost of the entire solar power setup!
Whether or not you decide to go solar for moralistic or environmental reasons, I think we can all agree that a home powered by solar is far better for everyone involved than a home powered by purely natural gas. Florida also has net metering laws that allow the solar power that you're not using to be fed back into the grid where your entire community can benefit from it (don't worry, the utility companies credit you back per watt!).
One of the more philosophical reasons to transition to solar is that you free yourself in large part from the electrical grid. You aren't subject to the whims of your local utility company and, if anything should happen to the grid itself, your home would be self-sufficient on the solar panel setup.
If you're interested in learning the specifics about installing a solar panel system on your Orlando FL home, there are plenty of reputable solar companies in Orlando. These solar installers can help you seamlessly transition you to an energy efficient home that will give you years of gigantic savings on your electricity usage costs.
Solar Action Alliance is, first and foremost, a resource to help teach potential solar customers (you) about the ins and outs of residential solar, but we also connect customers with reputable, low-priced local solar companies who we have thoroughly vetted. If you're interested in connecting with a solar contractor who can give you a full quote on a PV System (solar panels) for your home, simply enter your zip code below to get started.
As we mentioned, 2021 is truly the year that you want to consider becoming a solar customer in Orlando. Energy prices are on the rise, the 26% tax credit only lasts for 2 more years, and you live in the Sunshine State — there is no better place to take advantage of the power of the sun than Central Florida.
So what are you waiting for? Get started on the process of saving massively on your monthly energy bill! Just enter your zip code and get estimates for solar panel cost, system size, incredible financing options, and some great warranty options.