Millions of U.S. homes are now powered by solar panels. Also known as solar cells, these panels create electricity from sunlight, which can be used to power a home’s electrical system. While installing solar panels is almost always a smart investment, there are a few things homeowners should know beforehand.

Solar Panels Are Eligible for a Tax Credit

Under the Solar Investment Tax Credit (SITC), homeowners who purchase solar panels, inverters and other solar power equipment can write off 30 percent of its cost from their federal income taxes. The federal government recently renewed the SITC, ensuring that it’s available until at least 2021.

Homeowners Can Sell Solar Power to Utility Companies

In addition to receiving a tax break, homeowners who invest in solar panels can also sell excess solar power to their utility provider. Known as net metering, this arrangement involves selling additional, unneeded power generated by solar panels to a power company for bill credits. Homeowners can then use these credits to pay for utility power at night when their solar panels have a lower power output.

The Cost of Solar Panels Has Declined

Solar panels are no longer a luxury item that only the rich can afford. According to SEIA, the cost of solar panels has declined by 70 percent over the past eight years. Furthermore, solar companies are now charging less to install them. Combined with the SITC and net metering, it’s hard to ignore the cost-savings benefits of solar power.

There Are Different Types of Solar Panels

Not all solar panels use the same technology to convert photons into electricity. There are different types of solar panels, the most common of which include polycrystalline, monocrystalline and thin film. Polycrystalline is the most efficient but also the most expensive. Thin-film has become a popular alternative because of its space-saving properties.

Shade Will Affect Power Output

Because they rely on sunlight to create power, solar panels don’t work as well when installed in a shaded area. Therefore, homeowners should evaluate their landscape to determine which area receives the most sunlight. For most homeowners, installing solar panels on a roof offers the strongest sun exposure and the highest power output.

These are just a few things that homeowners should know before installing solar panels. Homeowners who are thinking about investing in a solar power system should contact a professional solar company to learn more.