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This home modification may be the easiest way to slash your energy bills — but it all depends on where you live

Generally, it is more economical to buy solar panels in states with higher electricity rates and lots of sun.

Solar panels

Photo Credit: iStock

It's not news that solar panels can seriously cut your energy costs and are getting cheaper all the time. 

But does this mean that solar panels are right for you and your budget? Before you invest in solar panels, you'll need to know a few things about how they could financially impact you. 

How much do solar panels cost?

The cost of solar panels will vary depending on where you live. But generally, it is more economical to buy solar panels in states with higher electricity rates and lots of sun. 

The amount of money you'll need to install panels will also depend on the size of the system and the type of solar panel you choose. While the price of a solar array fluctuates significantly, Forbes has reported that the average cost of a rooftop solar panel setup costs about $16,000

But the amount of money that you'll actually need to set aside can be notably lower if you take advantage of tax credits. 

Due to the Inflation Reduction Act, you can get up to 30% tax credit on solar panel installation and equipment, which could save you thousands of dollars.

How does solar save you money?

Zillow recently found that solar panels can increase the value of your home (close to $9,300 more). This higher value is because solar panels reduce your energy bills, making your home more attractive to potential buyers.

The amount you'll save annually on your energy bills because of your panels could be up to $1,500 if your home's solar system is effective. 

Plus, if your area uses net metering, and if your solar panels produce more electricity than you use, you can actually sell it back to the utility company.

So if you're looking for an investment in your home that will also help cool down the planet, solar panels could be a lucrative option.

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