Everything You Want to Know About Going Solar
1. The Good:
Fixed, Predictable & Inflation Protected Bill
Solar gives you a fixed predictable bill that replaces your current electric bill and is not subject to ever increasing rates like the utility company. You will pay $76,000 over 30 years on average for electricity either way. A solar system gives you a fixed predictable monthly rate and after your term you own it!
2. Potential Tax Benefits
The Federal Tax Incentive Credit available to all property owners who go solar is 26% through 2022. Additionally, there are opportunities to take depreciation of the system in certain business/commercial projects. Talk to your CPA for advice and guidance around these items.
You would rather own your home than rent, correct? Why? Because after 30 long years or a lump sum of money you will own an appreciating asset outright versus paying someone else forever. The same logic can be applied to solar for your home. See our next point for more clarification.
4. Increased property values
Research shows that solar adds 4.1% Value to your home and homes with solar sell 17% faster. These numbers will only increase as the cost of alternate sources of energy continues to rise. By going solar now you are giving a future buyer of your home the equivalent of getting a 70’s muscle car with a locked-in gasoline cost from when it was manufactured – Do you think that would make it more valuable? I bet you’d find a lot of people looking for vintage cars. This is going to put more money into your pocket when you sell. See how much value it can add to your property here.
5. Environmental Impact
Last but not least, we all know that coal and other fossil fuels are harming our planet. Going solar is one small step towards a better future for our children and grandchildren.
The Four Big Questions:
Too often you only hear the good things about going solar. There are some negative items you need to be aware of. This is not to say these items make going solar a bad idea but, in order to fully evaluate your investment here are four things you should know. We discuss in more detail the drawbacks of solar here.
1. Dealer Fees
Solar Companies and lenders love to tout excellent interest rates. Some as low as 1 percent APR! However, the lesser talked about part of getting financed for solar is the 15%-26% Dealer Fee that is added to the loan. This can add tens of thousands to the cost of your system above the cash cost. Want to see a solar sales person squirm in their seat? Ask them to explain why there is such a difference between the cash cost and financed cost. If they say anything besides dealer fee, run for the hills and find an honest company to work with.
2. Your Payment CAN increase after month 18
Property owners who install solar systems in 2021 will receive a 26% Federal Tax Incentive Credit, which can amount to thousands or tens of thousands of dollars. Sounds great right? It is, but when financing the system many homeowners are unaware that the assumption of the lender is that you will apply the full amount of the credit to the loan principal within the first 18 months. If you don’t apply this money YOUR MONTHLY PAYMENT INCREASES.
3. Panel Degradation
On average solar panel productivity degrades at .5% per year. This means that in year 30 your system will likely be producing at less than 85% of its year one capacity. Understanding this point is important when considering how a consumer should size their system. Often oversizing the system by 10%-20% can be a great idea to account for this future degradation. Either way, if a solar consultant shows you thirty year figures that assume zero utility bill after 30+ years you should be skeptical unless they are producing 115%+ of your current usage with the system.
4. Batteries: The Juice Isn’t Necessarily Worth The Squeeze
For good reason many customers have become interested in the idea of battery-backed solar. We are of the opinion that batteries are not a fit for the majority of homeowners economically, despite recent events. The current use cases that make sense for installing batteries, in our opinion, are limited to certain markets where time of use plans, or unappealing net metering policies exist. In these instances, batteries can be very efficient and economical. However, in markets with net metering there is little use beyond backup for the occasional outage. For most, the number of hours they spend without power each year doesn’t currently justify the price tag batteries carry. There are far more economical options currently to solve the occasional outage such as Generac generators or something similar. We are not saying batteries are bad, we believe that they are indeed the future just not quite economical today
What does it cost and will it save me money?:
This is the number one question homeowners have. You might not like the answer though. The answer is – It Depends. There are a number of factors that can affect your price such as sun hours, roof orientation, electrical, roof or tree work. However, a solar expert from Caliber Solar will be able to determine the best fit for your needs.