Solar Homes Sell Faster And For More Than Non-Solar Homes
The widespread use of solar energy around the world is a testament to the times we live in. Finally we are waking up the to the reality of renewable energy and our responsibility in the bigger scheme of things. According to the U.S Energy Information Administration, installed solar photovoltaics (PV) across the U.S have increased by an astonishing 418% from 2010 to 2014!
This has seen the cost of solar panels dropping by 70% since 1998, all pointing to one inevitable scenario. A cheaper, more reliable, renewable source of energy for everyone. With the widespread popularity of solar energy and the favourable benefits in terms of property value, reduced energy bills, Federal solar tax credit and more, there still remains two burning questions everyone seems to be asking. What is the cost to get solar up and running at my home or business?
Its difficult to give a straight answer without considering all the unique factors of costs and savings which largely depend on your geographical location. These include minute differences such as the price of solar panels in your state, the cost of your energy bills, the size of your solar installation, and most importantly, the financing options available to you.
This new trend in residential solar has been powered by some really interesting new financing options, like the solar leasing “$0 no down” and “low money down” options. Zero down refers to the down payment amount required to finance the solar system, which in this case is nothing.
Financing options to look out for include:
PACE, or , is the latest in solar financing. It is basically a loan from the city to finance your solar energy system. You pay back the loan through your property tax bills over an average of 15 – 20 years.
The PACE program doesn’t require any upfront cash payments, nor does it reduce your home equity. When you sell your home PACE’s liability is transferred to the new home owners. Because PACE is backed by the city and the IRS, you can feel assured that nobody will try scam you.
Is it better to own or lease solar panels?
A solar lease works the same as a car lease and it differs from a solar power purchase agreement ( PPA ). With a solar lease you are paying to lease the equipment, but with a PPA you pay for the power the panels produce. When leasing you also pay a monthly fee to use the equipment someone else owns, which means that you don’t need to have a large, upfront payment. Studies have shown that owners of leased solar systems produce more hassle free solar energy because they are maintained, insured and guaranteed by the leasing company. This eventually ends up in a more efficient system which saves more over time. That being said, solar panels require virtually zero maintenance while keeping them clean of debris and dust will certainly maximise performance.
So, even if you are not going to stay in the home long enough to benefit from your solar system for an extended period, it still makes more sense to purchase.
State and local rebates can make a huge difference in the cost of your PV system. Federal Solar Tax Credit allows you to claim up to 30% back from the cost of your solar energy installation.
To qualify for credit you must owe federal taxes. The credit you receive from your solar rebate will reduce the amount of tax you owe.
Without tax liability, the credit won’t help you, but it does roll over to the next year. Existing homes, newly constructed homes and second residences qualify for this credit on installations between 2009 and 2016.
Similar to Net Metering, a solar feed in tariff is a way for utility companies to compensate home owners for energy they put back into the grid. The rate you get for your energy produced is the same rate you pay for electricity. A second meter measures how much electricity you send back into the power grid. Solar feed-in tariffs guarantee rates and long-term contracts, making it easier for home owners to get a bank loan and a lower interest rate. Contracts usually last 15 to 20 years.
Also known as Solar Renewable Energy Certificate, SRECs produce a certain amount of credits per year. Homeowners are able to sell them on the open market. This not only saves money for homeowners, but can generate an income.
SRECs are currently only available in states where a Renewable Portfolio Standard (RPS) exists with a specification for solar power. SRECs are actively traded in Maryland, Massachusetts, Pennsylvania, New Jersey, Ohio, North Carolina, Delaware, and Washington D.C.
Home equity loans were the most popular form of purchasing solar energy in the past, using loans from personal banks and credit unions. These loans are now taking into account the value solar energy systems add to homes and their cumulative loan-to-value ratio ( CLTV ). This allows more people to qualify for a Home Equity loan. Studies show that solar homes sell faster and for more than non-solar homes, proving that solar increases the value of your property.
How Much Money Can Solar Energy Save Me?
The cost of solar power can vary greatly from state to state.
Luckily state, regional and local incentives are bringing costs down considerably.
States like California, New York, Colorado and New Jersey can save up to 10% on fuel bills over 25 years.
Consider the same amount invested in U.S treasury bonds will only yield a return of 4% or under, solar’s future looks bright.
The average solar system savings for U.S regions over a period of 20 years based on monthly savings.
The National average now stands at roughly $20 000.00 over a 20 year period.
You may assume that high energy costs in an area will have a slower return on investment, but this isn’t always the case.
A state with good incentives create a low net cost. Even if electricity is cheap in a specific state, the payback period can be long. If electricity prices are high, your savings are higher, allowing your solar system to pay for itself faster.
The amount of time your average solar energy system takes to pay for itself based on monthly savings across U.S regions…
The fact remains that, it does not matter what state live in, or the actual cost of your installation. Once you are deemed a suitable candidate and your installation has been complete, solar power is free and the system begins to pay for itself. You also get to have control over your power expenditures over the next 20 years.
Solar energy promises to change the way we utilise renewable energy for the future.