Save Money with Home Solar Systems

The popularity of home solar systems has grown rapidly in the past few years, not just because making the switch to solar is a good environmental decision, but because it is now a smart financial decision. The combination of helping to preserve the environment for future generations while also saving money has made making the switch to PV an easy decision for thousands of households. 


  • How Does A Home Solar System Work?
  • What Financial Incentives Are Available To Reduce The Payback Period?
  • How Long Will It Take For The System To Pay For Itself?
  • Can A Home Solar System Help Me Go Off The Grid?
  • What Happens If The System Generates More Electricity Than I Use?
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How Does A Home Solar System Work?


Even though the cost of solar panels continues to decrease every day, there are still many financial incentives to make your system even more cost-effective. The most significant renewable energy financial incentive is offered by the federal government and is known as the Investment Tax Credit (ITC). The ITC covers 30% of all equipment and installation charges for residential Solar systems. This includes the modules, wiring, racking to hold the panels in place, and inverters as well as the cost of the installation crew to properly install the system. As an easy example, let’s say a solar system cost $10,000. This means that on the following year’s tax bill, you will pay $3,000 less. A tax credit is better than a tax reduction because it is dollar for dollar savings instead of just reducing your taxable income. In addition to the Federal ITC, the state of Arizona also offers some financial incentives for PV systems. Perhaps the most notable is the residential PV tax credit. This tax credit allows you to reduce the following year’s tax bill by the lesser value of either 25% of the total installed cost of the system or $1,000. Finally, Arizona allows for a sales tax exemption on all Solar technology. The ability to receive this tax break saves homeowners an additional 5.6% of their total equipment costs. By pairing the Federal ITC with these other tax credit and tax break programs, it is easy to see why so many homeowners know the value of investing in a residential solar system.

How Does A Home Solar System Work?

At its core, a home solar system generates electricity for your home to use when the sun is shining. The amount of power that it produces is dependent upon a few factors ranging from the capacity of the array to the cloud cover in the sky at a particular moment in time. Luckily, our team can use historical weather data and past energy usage reports to give homeowners a better idea of how much electricity they can expect to see a particular system produce. Solar panels are made up of smaller cells, all of which generate electricity and transmit this electricity through wires to an inverter. An inverter is a device that changes the direct current, which solar panels produce, into alternating current, which is the type of electricity that comes out of the outlets in almost every home. Because solar energy requires no burning of fossil fuels and exclusively relies on sunlight as its fuel source, it is considered to be 100% renewable and highly sustainable

How Long Will It Take For The Solar System To Pay For Itself?

The great thing about a PV system on a roof is that it is relatively easy to calculate the payback period in which the system will pay for itself. Because solar saves a household money, many view it as an investment as opposed to an expense. The first step to figuring out how long it will take for your investment to break even is to look at the household’s most recent electric bills. This will give the homeowner an indication of the total price per kilowatt-hour that they are paying for electricity. This can be viewed as the “value” of every kilowatt-hour that a Solar system will generate because the homeowner no longer need to pay a utility to supply it. Next, our team who designs and installs your system will be able to provide an estimate of how many kilowatt-hours your PV system will be able to produce in one calendar year. This number can then be multiplied by the estimated output of the Solar system to calculate the total expected annual savings. Finally, by dividing your total installed cost after all incentives are subtracted by the sum expected yearly savings, homeowners can get a rough idea of how many years this investment will take to pay for itself. Any solar energy produced by the array after this point can be viewed as “free” electricity. 

Can A Solar System Help Me Go Off The Grid?

Solar (photovoltaic) technology can absolutely be a part of a homeowners decision to go off the grid. Typically, solar panels are connected to a solar battery which gets charged during the day and discharges at night when you still require energy despite the sun having already set. A solar battery needs to be an appropriate size for the usage of a home. Homes that have high energy usage will require a larger battery that can operate for more extended periods of time. It is essential to understand that a solar panel for an off-grid system is usually much more extensive than one connected to the grid. This is because the off-grid system must account for one hundred percent of the energy usage around the clock. Typically, the PV system is sized to generate 100% of the home’s energy demand in the middle of winter when the hours of available sunlight are at a minimum. This way, the system will never run into a scenario where it is unable to meet the full electrical load pf the home. 

What Happens If The System Generates More Electricity Than I Use?

One of the great things about Arizona is that even if a solar system generates more electricity than a home is using during peak electricity generation hours, this electricity is still reflected on your monthly utility bill. This is through a process called net billing. When the Solar system exports excess energy to the grid, you are credited for the avoided cost of the energy on your bill. This means that the local utility is essentially paying for this excess energy at a predetermined rate. To get an exact figure for what this avoided the cost of electricity is, it is recommended that homeowners contact their local utility. It is also important to remember that there is a cap to the size of the home’s Solar system. The array can only generate a maximum of 125% of the home’s total electrical usage. This means that a home that uses 10,000 kilowatt-hours per year can only install a solar system, which generates up to 12,500 kilowatt-hours annually. 


The Federal ITC is set to drop down from 30% to 26% of the total installed cost of the solar system by January 1st, 2020, if not extended by the United States Congress. With this deadline in mind, be sure to schedule your solar installation with us by the end of the year! These systems have gotten so valuable that it costs homeowner’s money each day they put off making the switch to renewable energy.

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3321 E Atlanta Ave
Phoenx, AZ, 85040

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