Wondering if solar panels are worthwhile for your home?

Considerations that helped me with the decision

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Wondering if solar panels are worthwhile for your home?
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Wondering if solar panels are worthwhile for your home?

Americans will use 18,000 megawatt hours of solar energy each day in 2013, according to the United States Department of Energy. That's a lot of juice, but before you head up to your roof to start installing an expensive new solar photovoltaic (PV) system or a solar heating array, you've got to consider the potential cost of the system versus the potential benefits.

I live in Illinois near St. Louis, Mo., and I thought that solar energy was a no-brainer when I was looking for a way to improve my home energy expenditures. I did end up using some solar power, but I decided against the massive $2,000-$3,000 PV panels that are selling well with many ecologically conscious homeowners.

If you're thinking about solar power for your home, here are a few factors you should consider.

Research different types of solar systems

When experts discuss home solar power, they're generally talking about solar heating or solar PV panels. PV panels power everything and anything in your house, and if you're taking in more energy than you use, the system can store the extra electricity in a battery.

You don't go completely off the grid, but you can save 20-30 percent off of your home electric bills depending on where you live, the type of panels that you buy, your electrical company's policies, and other factors. There's a lot going on, so you need to consider what you're currently paying for your electric bills and your potential savings.

To cut your risks, have a licensed home energy auditor check out your home and give you a savings estimate. If you do buy solar panels, you can pay anywhere from $2,000-$10,000 depending on the number of panels you install, and you'll probably pay a few extra hundred for professional installation.

A single PV panel starts at around $500 and provides 130 watts of power, although that number drops gradually. By the 25-year mark, you'll probably get about 80 percent of the rated power. You'll likely need to make a serious investment for serious savings, and even with state-of-the-art units you might need to wait 20-25 years for the investment to completely pay off its initial costs.

A solar heating system, on the other hand, can decrease electrical bills by 10-15 percent right out of the gate. However, that doesn't necessarily make them a worthwhile investment. Consider scheduling a home energy audit to see if there are safer, greener ways of keeping hot or cold air in your home.

For instance, by using spray foam installation and by performing a few window repairs, I dropped my average home energy bills from about $200 to $160 in the winter. That's a 20 percent savings, and from an ecological standpoint, it's an arguably better option since there's no carbon footprint from the solar panel manufacturing process.

Know how solar works where you live

If you live in a part of the country that doesn't get a ton of raw sunlight, either of the solar options listed above could end up costing you more to purchase and install than you'll ever save on energy costs. You can still use solar energy, however, but you'll get more of a benefit from a solar-powered attic fan or other small system that regulates home energy.

Once again, you'll need to do some calculations or use some common sense to figure out how your home energy bill will respond to new solar panels. I can't stress enough the importance of a qualified energy audit when deciding whether to take on an investment of this size.

I'm not against solar power at all; in the long term, it's going to be an amazing technology. For most homeowners, however, the technology needs to become a little more efficient to make the investment worthwhile.

You should also take government energy programs into account -- you might be able to deduct a portion of your panel costs, for instance, depending on your state of residence -- and remember that energy costs will probably increase by about 3 percent per year in the United States. Solar panels might be worth it for your home, but do the math before you spend the cash.

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