In most cases, installing residential solar panels is worth it. Solar panels typically last 25 years or more and can dramatically reduce or even eliminate your electricity bills — you can save an average of $1,346 annually on energy bills by going solar. Solar is a large upfront investment. But the cost of installing a system has decreased by more than 50% over the last 10 years, and incentives like the 30% federal solar tax credit can lower your cost even further.

However, certain conditions and roof features can mean solar isn’t worth it for you. For instance, if your roof is shaded, does not have enough space or is oriented north, your panels may underperform. Additionally, if you live in an area that experiences many cloudy days and has few solar incentives, you may see fewer savings over the lifetime of your panels. Every roof and solar project is different.

All of the solar panel systems that we install at Canary Solar are grid-tied. This means that they are connected to the electric grid and you will still receive an electric bill every month. However, solar panels allow you to offset your electricity charges, and you can eliminate both your rates and customer charges from your bill by producing your own electricity.

In most cases—especially during the summer—you will receive a zero or negative bill. The excess electricity your solar panels generate will be listed as a net metering credit and can be carried over to future bills. If your solar production did not completely cover your electricity usage, you will owe the balance.

The components of your electric bill and the level of credit you receive as a customer with solar vary utility-by-utility. Just as utilities set the rates you pay for electricity, they’re also able to set the rate you are credited for exporting solar electricity back to the grid. Arizona’s major regulated utilities like APS and TEP offer solar customers an export rate to compensate for excess solar power sent to the grid. The export rate typically credits solar users less than when net metering was available. Under current rules from the Arizona Corporation Commission, the export rate at the time you go solar is locked in for 10 years. Each September or October, the export rate is scheduled to decrease by up to 10% and reset for new customers installing solar. Under these rules, the longer you wait to go solar, the less the export rate will be worth and the less you will be credited for your excess solar energy.

The solar panel tax credit for 2023 (taxes filed in 2024) is 30% of eligible costs. It will remain at 30% for the tax year 2023 through 2032. The solar tax credit allows you to use a part of the cost of a solar power system to reduce the income taxes you owe. The U.S. Department of Energy says the tax savings on an average solar installation can reach $7,500.The actual percentage of the cost you can claim varies based on the year your system was activated.

The solar tax credit can save you money on your tax bill, but the amount of your credit can’t exceed the total amount you owe. That’s because the credit is “nonrefundable,” in tax speak. Put simply, if the credit reduces your overall tax bill below zero, the IRS is not going to cut you a check for the difference.
‍