6 Tips For Managing The Upfront Investment Costs Of Residential Solar Power

The solar panel cost for homeowners is now more affordable than ever thanks to the advances in the industry and the support of significant tax credits, rebates, incentives and homeowner leasing options.

Here are 6 ways to reduce upfront costs for residential solar power.

  1. Claim your Federal Investment Tax Credit (ITC).
  2. Request State, Local, and Utility Rebates and Incentives
  3. Get Financing Options
  4. Enjoy Lower Utility Bills
  5. Equity from an Increased Home Market Value
  6. Savings with Net-Metering & PPA Agreements

What is the Cost of Solar Panels? A Summary

What is the cost of a home solar power system as a financial investment? The cost of solar panels is just one aspect of the equation. The complete answer depends on many factors. What size system will you need to provide enough energy for your home? What are the local utility costs? Which type of solar panel do you want? Is the solar system going to require battery backup or can it be connected to the grid? What kind of racking is needed? These are the answers we’ll be covering below. For an in-depth look at home solar systems, be sure to read our Ultimate Guide to Solar Power for Homes.

The system’s size will determine its overall cost. The system’s size will depend on the energy requirements of the home, roof space and regional solar profile (how much sunlight is available). The average US home energy consumption is 909 kWh per months or approximately 11,000 kWh annually. It varies from one region to the next. In Texas, it is closer than 1200 kWh/mo. in Utah, it hovers around 800 kWh/mo. California generates 560 kWh/mo. A 5-kW (5,000-watt) solar power system can produce between 435 and 700 kWh per months under average conditions. A 5-kW system in California could be sufficient to offset all of your home’s electricity use, but it might not work in Utah. A 10-kW system in Texas would be sufficient to offset all household energy needs. A professional installer will provide an estimate that covers all aspects of solar panel installation.

If you have a professional installer, the total price should include the installation cost, including the cost of solar panels, DC-AC inverters, wiring, all electrical components, permits approval, paperwork, as well as the cost of solar panel installation. Remember that the size of your solar power system will determine how much it costs. There are some ways to save money on hardware. While solar panels may vary in price, the quality and construction of the panels determines how much power is produced. Simply put, less energy will be produced by cheaper solar cells. You get what you pay when you use solar energy, especially with panels.

There are three main types of solar panels used in home solar power–monocrystalline, polycrystalline and thin film. Monocrystalline solar panels, which convert the sun’s energy into electricity at 15-20% , are the most efficient. Monocrystalline systems require fewer solar panels and more roof space. Monocrystalline panels also perform better in hot weather than other types of panels. Because of their efficient manufacturing process, polycrystalline panels are less expensive than monocrystalline. They create multiple (hence the “poly”) silicon Crystals. These panels are less expensive than monocrystalline but they have a lower efficiency rating (13-16% +/-.). Monocrystalline panels may be more expensive than monocrystalline, but homeowners might not consider the slight loss in efficiency.

Thin film panels are the cheapest. This is because they are made from thin flexible black films. Thin film panels are much cheaper than crystalline panels due to their mass production. You might expect that panels with lower prices are less efficient. Thin film panels have a 9%+/- efficiency and require twice the space as crystalline panels. The same racking system can be used to mount both types of crystalline panels. For a 5-kW crystalline solar power system, you will need approximately 400 square feet of roof space. Because thin film panels are lightweight, racks for them are much cheaper. The savings from lower installation costs might be offset by lower power consumption and a larger roof area. Your solar professional contractor can explain all the nuances of a solar home power system and design a custom system for your home that meets your demands. An experienced solar installer can help you with all aspects of permitting and paperwork, as well as helping you to take advantage of the many incentives and financing opportunities.

Six Tips to Manage the High Initial Investment Costs of Residential Sun Power

These are six ways to manage the initial costs of installing a solar energy system at your home.

1. Claim your Federal Investment Tax Credit (ITC).

A 30% Federal Investment Tax Credit (ITC) is available to homes with solar energy systems. The Federal government will allow a 30% tax credit for solar systems through 2019. Through 2019, the ITC will be at 30%. It will gradually decrease until 2022. The tax credit will be 10% at that point. You have until now to fully take advantage of the 30% ITC

2. Apply for State, Local, or Utility Incentives and Rebates

To find out what tax credits may be available, check with your state government. Many states offer incentives such as tax credits, rebates and performance payments. They also provide property tax exemptions and sales tax exemptions. For example, Utah residents benefit from a Utah state tax credit which covers up to 25% of eligible system cost, or $1,600, whichever is less. California doesn’t offer a statewide tax credit. However, local municipalities and utilities offer many incentives and rebates. A professional solar contractor will ensure that you receive all credits and incentives.

3. Get Financing Options

The full cost of a solar power system doesn’t necessarily have to be paid at once. To help homeowners make the switch to solar power, there are many financing options available that don’t require any down payment. These options include solar loans and solar leasing, as well as a power purchasing arrangement (PPA).

4. Solar Loans

There are two types of solar loans: secured and unsecure. These loans enable homeowners to purchase solar power equipment and invest in it. Secured loans, such as. A home equity loan is a secured loan that uses your equity as collateral. Secured loans typically have lower interest rates and can be claimed against taxes for all costs and interest. Unsecured loans are similar to credit cards in that they don’t require collateral. These loans typically have a higher interest rate, and a longer repayment period. Tax incentives are generally not available for unsecured loans.

5. Solar companies offer leasing

You basically rent the equipment with solar leasing. The system is installed by a solar company and you pay a monthly fee, regardless of how much electricity it generates. You will save money or break even in the first year due to the benefits of having little or no initial capital. The solar company also manages the operation, monitoring, maintenance, and repair of the system.

6. Power Purchasing Agreement

Power purchasing agreements are similar to solar leasing in that the equipment is owned by a third party. You pay a fixed price per kilowatt hour for electricity, and the utility pays a fixed amount for any surplus power you produce. The main benefit is lower monthly utility bills, just like solar leasing.

  • Enjoy Lower Utility Bills

A home solar power system can reduce your monthly electricity bill, which is one of the best reasons to invest. You can reduce your monthly utility bills if the system is properly sized and located in an area where there is consistent solar energy. Your solar power system can be an investment in your future, as utility rates rise annually by 2 to 8%. Capital costs should be paid off in 10 to 12 years. However, your system should continue producing electricity for at least 25 years after the initial outlay.

  • Equity from an Increased Home Market Value

Although regional housing markets may vary, it is widely accepted that adding solar panels to your home and an energy system to it will increase its value. To determine the value of your house, talk to your local appraiser and your solar installer.

  • Savings with PPA and Net Metering Agreements

Some states and utilities offer net metering options. Although it is very similar to a PPA this has a subtle distinction. Net metering is when your solar power system produces more power than you use. This gives you a credit. It’s like your meter running backwards. A PPA, on the other hand, allows you to pay a flat rate for electricity and the utility will purchase any excess electricity generated by your system. Your utility bills will remain lower regardless of which option you choose.

Affordable Solar Power Installation

Solar power systems for your home are a viable and attractive alternative to traditional utility-generated electricity. There are many ways to lower the cost of residential solar power investment. These include the federal Investment Tax Credit or any available state, regional and municipal credits, incentives, rebates, and other incentives. You can also find solar leasing options, conventional financing options, or power purchasing agreements to lower your initial costs. You can protect yourself from rising utility rates by investing in a solar power system at home. It will also increase your home equity and help the environment. Your monthly utility bills will be lower if you do this. The available financing options and incentives make it possible to lower upfront costs for solar power systems.

 

 

 

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