The Solar Revolution has caused hundreds of thousands of homeowners across the United States to switch to an energy efficient solar system to power their homes, versus paying rising energy costs from power companies. But with a wider variety of financing options available now more than ever before, the biggest question still remains: Should I purchase my system outright or simply lease it from the installation company?
Buying Solar Panels Outright
The average size of a home solar system ranges greatly, and can cost anywhere between $10,000 – $50,000. Keep in mind this cost is for the solar panels themselves which is around 30% of the overall price. Costs above and beyond that are for labor and operational fees.
Here are the averages for a standard home installation, in regards to the percentage each component of the system to cost.
Solar panels – 30%
Balancing the system – 20%
Labor – 15%
Permits and inspection fees – 15%
Operational costs – 20%
It is generally better to look at the cost per Watt to get an overall price of what the system will cost. As a rule, the larger the system, the lower the rate per Watt.
Because the US Government heavily supports all solar initiatives, homeowners will also receive a 30% Federal Tax Credit to offset the cost of the system, as well as solar incentive programs of 35% in certain states.
For example, let’s say you paid for a system at $23,000, you can save $6,900 with the federal tax credit off the purchase price, plus what you will save on your monthly bill, AND any state incentives that apply to your state!
Unlike energy rates from power companies which will rise year on year, the price you pay for electricity from your solar panels is fixed for the next 20 years, in most cases. In a small amount of cases, the yearly increase is agreed upon upfront at a rate usually between 2% and 3% . This means no more hidden costs and surprise fees on your energy bill.
Just because you don’t have the capital to pay for the solar system up front, does not mean you have to pay anything upfront to reap the benefits.
Solar loans are one way to do so. Not only will you be reducing your electricity rates by up to 40%, but you’ll also be investing in an asset that will add value to your home.
Solar loans are low interest, which allow you to receive your system on finance and pay it off over 20 – 30 years. Payments are usually based on the amount of electricity your panels produce, and you can increase or decrease your monthly payments with no repercussions.
When the system is paid off, it’s yours. You will then reap all the rewards of clean, free energy, and increased property value.
There are many options available to help you get cheaper, cleaner energy and there’s a solution for everyone. Whether you want to make an investment for your home, or you simply want to reduce your energy bills, if you own a home, solar can work for you.
Solar PPA And Solar Leases
Solar PPA’s and Leases are another way own the system without having to pay a lump sum upfront. Just as you would with your current utility bill, you would instead pay a monthly sum for your solar electricity. Your monthly bill will be substantially lower, and your rates will be fixed for the next 20 years, rendering you immune to rising energy costs.
Your solar installer will install your panels for $0 down. They will retain ownership of the equipment but will maintain and insure the system. All you do is receive reduced rates on your electricity.