Mike O'Keefe's Blog
There’s little doubt that we all want to do our part to protect the environment and solar energy gives us an opportunity to get off fossil fuels. In a perfect world, we would all promptly discard our furnaces and adorn our roofs with solar panels. But if we lift up our eyes for just a moment, only a small percentage of homes have taken the initiative.
That’s largely because we do not live in a perfect world and converting to solar must be cost-effective for the average homeowner. There are a variety of factors that everyday people can weigh to determine if solar panels are worth the investment in 2020.
Calculate Your Annual Electricity Usage & Cost
Understanding energy costs tends to be complicated in the U.S. According to the Energy Information Administration (EIA), the average monthly electric bill was $117.65 in 2018 with the average price per kWh coming in at 12.87 cents. But costs around the country can differ dramatically. The EIA’s 2018 regional calculations highlight precisely those differences.
As you can see, energy costs around the nation complicate decision-making. Places such as New England have far fewer sunny days to power systems yet struggle with the second-highest utility bills. In the Noncontiguous Pacific category, Hawaii leads the nation in high energy bills at $168.13 per month. Given the high number of sunny days the islands enjoy, solar panels would seem to be a viable option in terms of savings and environmental protection.
Solar Panel Tax Credits are Available
Although much of the conversation revolves around the “average” cost of a system and the range of kWh savings, it’s safe to say that all solar is local. Deciding on a system in your state will be a matter of calculating how much energy it can generate based on sunlight and how many panels you will need.
The good news is that the federal government continues to offer the investment tax credit (ITC), which allows homeowners to deduct up to 26 percent of installation costs. Some states and local municipalities may offer additional benefits. But based on the ITC, the average 2 kW system is expected to be discounted from $5,920 to $4,381. Higher producing solar systems such as a 10 kW system enjoy reductions from $29,600 to $21,904. Still, all this data doesn’t answer the question of whether solar panels are cost-effective in 2020.
How to Know if Solar Panels Fit into Your Budget
Doing “solar math” involves figuring out your average monthly electricity cost. Take into consideration how much that utility bill has increased during the previous 10-20 years. Now calculate the size of the system needed to power your home. If you live in low-sun northern states, you will likely need a large system. The next step is to look at your investment.
Most homeowners finance solar systems with a common goal of the monthly payment being equal or less than your current utility bill. If you can power the home and get even close to current grid costs, it’s entirely likely this is a prudent move. As you can see from the past decade or two of electric bills, they keep increasing. The sun doesn’t charge extra year-over-year.
If you plan to list your house in the foreseeable future, you should do everything possible to differentiate your residence from the competition. That way, you can show homebuyers exactly what your house has to offer and increase the likelihood of a fast, profitable home sale.
Now, let's take a look at three tips to help you optimize your home's potential.
1. Boost Your House's Curb Appeal
Your house's curb appeal may dictate how quickly your residence sells. If you allocate time and resources to transform your home's exterior from drab to fab, you may be able to reap the benefits of a speedy home sale.
Mow the lawn, trim the hedges and perform other home exterior upgrades. By doing so, you can take your house's curb appeal to new heights.
Also, if you need assistance with home exterior projects, you can reach out to local home improvement professionals. Contractors are available in cities and towns nationwide, and these professionals can help you enhance your house's curb appeal in no time at all.
2. Remove Clutter
Clutter is an eyesore that home sellers need to eliminate. Because if your home is overloaded with antiques, decorations and other items, it may be tough for homebuyers to envision what life may be like if they purchase your residence.
If you own lots of items but want to keep these belongings, there is no need to worry. You can always rent a storage unit where you can store various items until your house sells. Or, you can contact family members and friends to find out if they can store some of your belongings for the time being.
On the other hand, if you want to get rid of assorted items, you can host a yard sale or sell items online. This will enable you to simultaneously remove clutter from your house and earn extra cash.
3. Conduct a Home Inspection
Identifying home problems sometimes can be difficult. Luckily, home inspectors are available who can analyze your residence and offer valuable property insights.
Typically, a home inspector will review your residence over the course of a few hours. The inspector then will provide you with an inspection report that details his or her findings. If you analyze the inspection report closely, you can gain comprehensive insights into your house's strengths and weaknesses and prioritize home improvements.
If you need help finding a home inspector or completing other home selling tasks, you may want to hire a real estate agent as well. A real estate agent will help you revamp your house both inside and out and ensure your residence stands out to property buyers. Perhaps best of all, a real estate agent is happy to respond to any of your home selling concerns and questions, at any time.
Maximize your house's potential – use the aforementioned tips, and you can update your residence and differentiate your home from the competition.
153 High Rd, Newbury, MA 01951
153 High Rd, Newbury, MA 01951
If you work from home either full or part-time, you may want to give the home office deduction a go on your taxes. The problem with this deduction is that it can be tricky.
Are You Eligible?
Your workspace needs to meet the criteria for business use. You need to use your work space regularly and as your principal place of business. If you don’t work from home as a self-employed individual, your employer must require you to work from home due to a lack of office space or other circumstances. The keywords in this part of the clause are “exclusively, regularly, and must.”
First, you’ll need to calculate the percentage of your home that’s used for business. This means that if your office is 100 square feet and your home is 1,000 square feet, you use 10% of your home for business. If you own the space you’re living in, you can deduct 10% of the mortgage interest that you pay each month. Keep in mind that you can’t double dip either. This means the amount of mortgage interest that you deduct on other parts of your taxes is reduced. If you rent your home, you’d deduct the percentage off of your monthly rental payments.
Home Office Maintenance
If you own your home, you are able to deduct a portion of your property taxes, insurance, utilities, maintenance, and other expenses that are associated with your home office space. These expenses vary because some are direct such as the expense of you painting your office. Others are indirect. Home insurance applies to your entire home, so you would only apply a portion of that to a deduction. For the direct expenses, you are able to deduct the entire cost.
For the indirect expenses, you’ll go back to applying the percentage of your home that is used for work. This means if we’re working with a 10% figure, you are able to deduct 10% of your utilities, 10% of your home insurance premiums, and so on.
If you rent, you can still deduct many of the same things that homeowners can from your taxes for a home office expenditure. The only thing that you’ll lack as a renter is the ability to write off things like mortgage interest, property taxes, and homeowner’s insurance. Know that you’ll be able to write off a portion of your renter’s insurance.
The Complicated Stuff: Depreciation
You are able to depreciate the value of a home office as your home ages. It’s not always necessary to do this, so you should consult your tax professional before you decide to make this type of deduction. Equipment in your office, such as your computer, can be claimed as a depreciation over time as well.
The important thing when it comes to your home office tax deduction is to do your homework. You don’t want to miss out on important savings!