Make Up to $3,000 per Year
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With an emphasis on renewable energy sources, governments worldwide have been incentivizing people to make the switch. Many tax credits and benefits are available if you switch to solar energy to power your home. You can also make some extra money with your solar panels. Here’s a look at how an investment in solar panels can turn into a side hustle.
Check Out: 7 Things You Must Do To Start Making $1K a Month in Passive Income
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How can you use your solar panels to make a side income?
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Selling Excess Solar Panel Energy
“When your solar panels produce more energy than you need, you can sell the excess energy back to the grid, allowing anyone in the community with a need to use it,” said Scott Lieberman, founder of Touchdown Money. “To do this, your solar panels upload energy to the grid from the sun, and you can draw energy from that source whenever you use it. If you don’t use as much as you take in, you get a credit from your electric company.”
When you install solar panels, you’ll likely generate more energy than you could use. When this happens, you can sell your energy to the utility company and share it with your neighbors. This process will allow you to turn a solar panel system into a side hustle income stream through savings.
Read Next: How I Make $5,000 a Month in Passive Income Doing Just 10 Hours of Work a Year
Setting Up Your Solar Panels
“In December 2020, I installed a 24-panel solar system in eastern Iowa, leveraging both federal and state tax credits to offset costs,” said Chad Gammon, a financial planner at Arnold and Mote Wealth Management. “With the assistance of my local installer, navigating tax credits and paperwork was seamless. Additionally, they facilitated the setup with the local electric company for credits.”
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When you set up your solar panel system, you want to ensure that you take advantage of the tax credits and can share your excess energy with the utility company in your state.
How Much Can You Make From Solar Panels?
“Selling excess energy isn’t a way to get rich quickly, but it’s a way to earn a few extra dollars,” noted Lieberman. “Most people can make about $3,000 a year from selling excess energy, which becomes about $250 a month.”
If you were already considering switching to solar, you could be further inclined to do so after finding out that this could be an additional income stream.
Solar Panel Savings
“The average cost per month for electricity in my area is $188 per month, or $2,256 per year in 2024,” noted Gammon.
The best way to profit from your solar panels is to sell your energy back and save money on your monthly bill. Gammon shared exact figures on how much he saves with his solar panels:
“My current electric bill averages $10 [per] month or $120 per year after selling my electricity back to the electric company. This is roughly a $2,136 savings per year. I calculated my payback on the panels to be in a little under six years.”
Based on where Gammon lives and his energy usage, he can save over $2,000 per year on his energy bill. This extra money could be put back into your bank account and used toward your other financial goals.
Solar Panel Considerations
Here are a few key points to consider before you invest in solar panels.
Tax Credits Are a Bonus
You want to look into the tax credits to see how much money you could get back from installing your solar panel system. The credits and incentives will depend on your state and what’s available.
The most popular tax credit is the solar investment tax credit (ITC), which is currently 30% of your total system cost. The installation must be completed before end of the tax year. Solar panel systems installed in 2020 and 2021 were eligible for a 26% tax credit, which was bumped up to 30% in August 2022. It’s worth pointing out that this is a credit and not a tax deduction or refund, meaning that it reduces your tax bill.
This federal tax credit is available to any American property owner who owns a solar panel system. You can’t lease the system to be eligible for the credit. You’ll want to ensure you properly claim your credit to gain the full financial benefit of making the switch.
Long-Term Results
“Moreover, beyond the financial gains, there’s peace of mind knowing that even if I were to sell my house, disclosing a $10 monthly electric bill would undoubtedly be a selling point, underscoring the long-term benefits of the solar investment,” said Gammon.
In many cases, your solar panel system could help increase your home’s future value. This is a long-term investment that comes with short-term financial results in the form of savings on your utility bill.
Closing Thoughts
If you’ve been thinking about switching to solar energy for your home, there are financial incentives that could make it worthwhile. By utilizing the tax credits and selling back your excess energy, your solar panels could put money back into your pocket.
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This article originally appeared on GOBankingRates.com: Turn Your Solar Panels Into a Side Hustle: Make Up to $3,000 per Year
