The Dollar and Cents of Going Solar - Are You Ready?
If you are thinking about going solar, here are some things that you should consider before you do or do not get them installed. Solar power is a great choice; it can save you a lot of money, but you must ensure you are informed. Make sure you know these questions you should ask before going solar.
Solar panels can lower a three-digit energy bill to under $10. Let’s examine their cost-effectiveness and highlight some critical questions that will help you make an informed decision.
The dollars and cents of going solar
Most residential homes need a five-kilowatt solar panel system to meet their energy needs. According to the Center for Sustainable Energy, this will cost homeowners between $15,000 to $25,000 or $10,500 to $17,500 after the federal tax credit.
1. Cash.
Paying upfront will bring you the biggest return on your investment. Your solar panels will pay for themselves in five to seven years.
2. Lease agreement.
Solar leasing is available in about half the country. You’ll pay a monthly rent instead of an upfront fee for your panels. The leasing company will install them and collect any government credits or incentives on your behalf.
Leasing solar panels is generally not recommended, as they do not provide the lessee any lasting value. It usually contains an escalator clause, which increases lease payments by 3 percent a year. It can deter potential homebuyers if you sell your house before the lease ends.
3. Solar loan.
These loans, created to fund this purchase, can be secured or unsecured and have high origination fees.
4. Home Equity Line of Credit (HELOC).
Except for cash, the most financially responsible way to finance your solar panel purchase is through a line of credit against your home’s value. Stop by Elevate Credit Union to learn about the low interest rates on our home equity line of credit; find out more here.
Are solar panels for you?
Ask yourself these questions before making a decision:
A. Which way does my roof slant?
In the United States, south-facing roofs are the best recipients of solar energy. Next up are west-facing and then east-facing roofs. North-facing roofs are the least desirable for solar.
B. How much sunlight does my roof get each day?
Are there obstructions, like neighboring homes, trees, or hills, that block the sun from reaching your roof? Sunlight should hit your panels for at least five hours a day.
C. How large is my roof?
An average residential solar system will need 20 panels to receive sufficient sunlight and roughly 500 square feet of roof space.
D. How old is my roof?
Installing your panels on a roof with many years of life left makes sense.
E. How expensive is my electricity?
The higher your local electricity rates, the more cost-effective your solar panels will be. You can determine the rate you pay per kilowatt hour by looking at your most recent energy bill.
F. Are there government incentives in my state?
Local, state, and federal incentives may exist. To learn more about government incentives and access the database, go to energy.gov.
Now that you know the questions you should ask before going solar, contract with a quality company. And if you have decided to go solar and need financing, Elevate is here for you. Don’t forget to stop by one of our locations to ask about our financing options or learn more about a Home Equity Line of Credit.