I am sure that the thought of installing solar is about as thrilling as mowing your lawn or remodeling your bathroom. But, like adding a new shower stall or cabinets, solar can be a home improvement that has its advantages- by paying for itself and then some! Here is the How To find out if solar is right for you!
Is Now a great time to think about solar power?
If you decide that solar power makes sense for you, now is a good time to check out your options. Most of us already think that solar power is a great idea. Your ability to capture free sunlight and convert it to energy? Just think of the possibilities! You’ll save on our electric bills and not waste our natural resources that we have available! It seems everyone wins!
Solar power to others may seem too expensive unless you are a modern day McGyver who can build almost anything. Other home improvement projects just seem to be higher on project lists than installing solar. This has all changed in the last few years. Solar is definitely on the increase and many systems are much less expensive than they used to be.
Here are a few examples of the affordability of solar:
- Federal and local subsidies bring the cost of solar down even further. The US federal renewable-energy tax credit—which expires at the end of 2016—cuts the cost of a solar power system by 30%, and state and local incentives also further reduce the price. So, a system that costs the average $21,400 would end up being about $15,000 after the federal credit, and local credits would make it cost even less. If you save $1,500 a year on your electric bill with solar, it’ll pay for itself in 10 years or less. (And the savings would continue for future homeowners, which would make the system a selling point for your home when you decide to sell it.)
- More financing options means solar is more affordable for more people. With new leasing plans and solar loans, you don’t have to have thousands of dollars in cash upfront. You can rent the system and still save on your energy bills or get a loan that allows you to own the system with $0 down and no installation costs. In other words, you can go solar without tying up a lot of cash.
- The cost of solar panels and systems have dropped significantly in the past few years. Between 2011 and 2014 the cost of systems have dropped around 60 percent.
Remember, that the federal tax incentive for solar installation is set to expire at the end of 2016.
How Much You Could Save with Solar Power
In some cases, solar power could eliminate your electric bill entirely (after recouping the installation, system, and maintenance costs), and in other cases the solar panels will simply cut your utility bill by between 10% and 50%. (Solar panels are useless during the night, so you’ll still need to depend on your local utility company unless you get solar batteries to store excess power.) How you pay for the system and how your home is set up will factor into how much you can save. Average monthly electric savings are between $100 and $200, so the average homeowner could recoup the investment in several years.
If you have a roof that faces south, southeast or southwest and you pay at least 12 to 13 cents per kilowatt-hour (kWh) for electricity, solar is probably a good option If your roof is more than 20% shaded, you may need a ground-mounted system.
If you’re not in California or another sunny area, don’t worry. Even areas in cold climates or with many cloudy days (such as New England and the Pacific Northwest) could still benefit from solar, since systems can capture sunlight scattered by clouds or humidity, not just direct sunlight. Also, apparently, solar panels work even more efficiently in colder temperatures.
Estimate Your Savings
As much as solar power might sound like a no-brainer, not everyone will benefit from it, and taking on debt for it might not ultimately pay off. To find out if solar is right for you, head to EnergySage and/or Solar-Estimate to calculate your estimated savings. These sites use Google Maps to look at your roof surface, incorporate federal and state incentives, and estimate the increase in property value if you buy the solar power system outright. Use caution with Solar Estimate. It seems they require you to submit your phone number and I have seen reports that some contractors will call you about installing solar.
Grab your latest electric bill to calculate the savings using these calculators. To get a more accurate estimate, however, you’ll need to get a solar installer to come to your home and check out your roof personally. Houses that are covered by trees or other buildings might not be suitable for solar power.
How to Pay for Those Solar Panels
If you decide to go forward, you’ll get the most return on investment if you pay for the system with cash and plan to stay in your home for a while, but there are other financing options. Here’s a quick overview of them:
- Buy the system outright or get a loan to purchase it: You’ll see 100% of the utility savings as soon as you recoup the cost of the investment. If you use a loan to purchase the system, it’ll take longer to recoup the investment than paying for it upfront, but you can still cut your electric bill by 40% to 60%, Money says, even after factoring in the loan payments. Compared to leasing or a purchase agreement, you’ll save more on your utility bills every year and also likely increase your home’s property value. However, keep in mind you’ll also have maintenance costs.
- Lease the system: You pay a fixed monthly amount for using the system and get a guaranteed amount of electricity in return—at about 10% to 20% lower than your current utility costs. Most leases include maintenance of the system, but you won’t be able to get any tax breaks or rebates with this method, since you don’t own the system.
- Power Purchase Agreement (PPA): With a PPA, you pay for the amount of electricity you use, much like you do already with your utility company. As with a lease, you don’t need to make a downpayment and you don’t own the system. It’s just a different contract type that’s like a lease but the amount of energy you pay for would likely vary by season.
In all three cases, the solar power system works like this: The solar panels capture sunlight, a solar inverter converts it into current that can be used in your home, and the electric panel in your home (which might need to be upgraded) feeds the energy from the inverter to your home’s circuits. The electric meter monitors your energy usage, so if your panels generate excess power, that gets sent to the utility company, which will give you a credit for the energy. A Solar Inverter in a nutshell is a photovoltaic system. You are now powering the grid!
As with any other home improvement project, shop around and get several quotes from installers before committing. Ask about the warranty and maintenance on the system, look for certified installers (“certified photovoltaic installation professionals” to be precise), and ask for referrals or recommendations from people you know.
With our cabin in the mountains we plan to depend on the local electric co-op in the beginning and use solar when we can. The rates with our local Co-Op are pretty reasonable.