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Norwalk, Connecticut Solar Power for Your Home – Leases, Loans, Rebates, and Incentives

Norwalk, Connecticut is a great place to live, work, and play. And whether you take the morning train to the city or spend your days in SoNo, it’s a great time to be a resident of the state of Connecticut. That’s because the state is committed to helping homeowners go solar, which means lower electric bills, clean energy for you and your neighbors, and big profits over time!

And because of that commitment from the state there are many ways to get into solar, even if you don’t have thousands to put down on a new system right now. In fact, the state has a great leasing program, and banks everywhere have loans available, because they recognize the earning potential of an investment in reliable, clean, solar energy.

Let’s take a look the financial picture of solar payment options:

Lifetime Return For 4 Different Methods of Going Solar in Norwalk, CT

The chart above shows the money you can make over the 25-year life of a solar panel system in Norwalk, based on how you choose to pay for it. You can see that the “Purchase” option—buying a system outright—will make you the most money in the long term, followed by other options. But looks are a bit deceiving here, because the Purchase option requires you to put a lot of money up front, it may not the best return on your investment.

Here’s some info about how each option could work for you:

 Option 1: Solar Lease

If we were going to choose solar in CT, we’d probably do a lease. Here’s why:

  • No money down
  • A fixed monthly payment that stays the same as electricity prices rise
  • The installer takes care of everything, including maintenance and repair
  • You just have to find an installer, sign on the dotted line, and then save money

Let’s repeat all that for those of you who like to read in paragraphs: you sign an agreement to pay a fixed monthly price for 20 years. The panels go up on your home and you get all the electricity they provide, which reduces your electric bill by just about the same as your lease payment. Over time, your payment stays the same, while the cost of electricity goes up by about 3.5% per year. Think back to how much you paid for electricity in 1995. Would you like to have the same bill now? That’s what a Connecticut solar lease can do for you.

Here’s the other major benefit of a lease: the installation company actually owns the system, and they do all the maintenance and repairs if any are ever needed. That takes away a ton of responsibility for you, the homeowner. All you have to do is get quotes from installers in your area, sign up for the leasing program through them, and get solar for no money down! You can sign a 20-year agreement with a fixed monthly payment that will guarantee your savings long into the future. Talk about a win-win!

 Option 2: Solar Loan @ 6.5% with Lump-Sum Payment

This is another great option for people who want to have a long-term commitment to solar but don’t have a lot of cash right now. Plus, at the end of your loan, you own the panels and the energy they produce, for as long as they last.

There are banks in Connecticut that are happy to give loans for profitable, low-risk investments like this. You can definitely find a home-equity loan or line of credit (HELOC) with favorable terms and a 20-year amortization period.

The first step is to get quotes from local expert installers in Connecticut. Then, start talking to your bank or credit union about loan options. Anything with a 20-year term and an interest rate of 6.5% or lower is great.

Getting a loan means you can get solar panels now and pay them off over the long-term. It will mean that your loan payments are a bit higher than your energy bill savings—about $38 per month. But as electric rates rise and you get closer to paying off the loan, you’ll start to see savings.

What’s the lump-sum payment? Glad you asked! Because you “purchased” the solar panels (with the bank’s money), you’ll get the federal government’s 30% Energy Investment Tax Credit (ITC) at the end of the year. That means $4,400 in direct tax relief. This is important: PAY THE LOAN DOWN BY THAT AMOUNT. It will save you thousands in interest and reduce your payment timeframe from 20 years to less than 12. It makes your investment’s rate of return a sterling 14.9%, which is a good deal better than an investment in the stock market, for example, and less risky.

Here’s how the numbers work for a solar loan with lump-sum repayment in Norwalk:

  • Installing a typical 5-kW solar system should start at about $17,500. Don’t worry – you’re getting a loan, and it will be for less than that amount.
  • Connecticut has a state rebate of $540 per kilowatt of panels. That reduces your cost directly from $17,500 to $14,800. That will be your loan amount.
  • The payments on a $14,800 loan with 6.5% interest over 20 years will be just about $110 per month, but you’ll be saving $72 per month on electricity. Essentially, you’ll pay $38 per month for the privilege of one day owning those panels.
  • Here’s that important part again: The Feds will give you a 30% tax credit based on the cost of your system. That’s $4,440. Pay the loan down by that amount! You can take the credit over two years if you don’t owe $4,440 in taxes this year.
  • With a conservative estimate of 3.5% per year for the future rise of electricity prices, you’ll start making an annual profit on your solar panels in year 12, and every year after for the 25-year life of your system.
  • Your total profit in 25 years will be nearly $19,000! The rate of return on your investment will be 14.9% That’s much better than investing in an S&P 500 index fund.
  • And don’t forget… your home’s value just increased by more than $15,000, too (your expected annual electricity savings over 20 years), and thanks to Connecticut’s property tax exemption for solar, you won’t pay taxes on any of it!

Remember: these figures are estimates. Your home is unique, and how much money solar will save you depends on that uniqueness. Thankfully, we know some experts in Connecticut. Just sign up for personalized savings estimates and one of them will be more than happy to go over all those details and help you craft a plan to get the maximum savings from a solar power system in your home. Your quote is 100% free, so go ahead and shop around… grab two or three, or five, and compare all your possible options.

 Option 3: Solar Loan at 6.5%

What happens if you take the loan and don’t have enough income to get the tax credit? Well, it’s not terrible, but it’s not your best option. You’re total loan payments will equal $26,483 over the 20 years, and you’ll end up with a profit of $7,381. The Internal Rate of Return (IRR) for this investment is a middling 6.99%. It’s not nothing, and honestly, it beats a savings account, but it’s more risk than the reward is worth.

The only way a solar loan makes sense without the lump-sum payment is if you can get a rate less than 5.5% on your 20-year loan. That pushes the IRR up over 10%. But don’t lose hope if you can’t get a tax credit! If you don’t have a lot of income but you want to get solar on your home, you’re much better off taking one of Connecticut’s excellent solar leases (see below).

 Option 4: Solar Purchase

Okay, so you’ve got some cash and you’re ready to buy. An outright purchase can be a good idea if you’re averse to financing. But for this option, the rate of return is actually lower, since you’re sinking a large amount of money into it now, as opposed to small amounts over time.

That’s why the solar loan with lump-sum payment is a great option. You’re taking advantage of someone else’s money paid back over time, reducing your burden and shifting costs to the future, which is actually better, considering how inflation works.

Still, if you’re the kind of person who wants solar now and likes to pay cash for big purchases, read on:

Here’s how the numbers work for a solar purchase in Norwalk:

  • Installing a typical 5-kW solar system should start at about $17,500. Don’t worry – the incentives available will reduce that number quickly.
  • Connecticut has a state rebate of $540 per kilowatt of panels, which is paid to the installer to reduce your costs. That system will cost you only $14,800 up front.
  • Next, the federal government will give you a 30% tax credit based on the cost of your system. That’s $4,440. You can take the credit over two years if you don’t owe $4,440 in taxes this year.
  • The electricity you’ll save in the first year of operation would have cost $869. That’s a movie date every other week for a year. With popcorn!
  • Those savings and incentives mean the first-year final cost of your 5-kW system is just $9,491.
  • With a conservative estimate of 3.5% per year for the future rise of electricity prices, your investment will be fully paid off after 10 years, and you’ll be making a profit until 2039 or later.
  • Your total profit in 25 years will be an astonishing $23,500! The rate of return on your investment will be 11.3%, which is way better than an investment in an S&P 500 index fund.
  • And don’t forget… your home’s value just increased by more than $15,000, too (your expected annual electricity savings over 20 years), and thanks to Connecticut’s property tax exemption for solar, you won’t pay taxes on any of it!

Remember: these figures are estimates. Your home is unique, and how much money solar will save you depends on that uniqueness. Thankfully, we know some experts in Connecticut. Just sign up for personalized savings estimates and one of them will be more than happy to go over all those details and help you craft a plan to get the maximum savings from a solar power system in your home. Your quote is 100% free, so go ahead and shop around… grab two or three, or five, and compare all your possible options.

Additional Information about Solar in Connecticut

Connecticut Solar Power Rebates

Connecticut offers a great rebate program, which offers direct payments to installers in the state, reducing the costs of installation for you! The current rebate is $540 per kilowatt (kW) of solar panels. Now, these rebates aren’t as amazing as they have been in the past, but they’re still really good.

For an average 5-kW installation, the CT rebates reduce the cost by $2,700. That goes a long way to making solar the best deal around. In fact, with the Federal tax credit, state rebate, and energy savings, the cost of a solar installation is cut in half after just one year of operation. Wow!

Tax Exemptions for Solar in Connecticut

Connecticut is at the head of the class when it comes to reducing the burdens on homeowners who want to do the right thing and go solar. When you pay for installation of solar panels in Connecticut, you won’t spend a penny in sales tax.

Furthermore, Connecticut exempts the value of your solar installation from property taxes. Numerous studies around the country have shown that homes with solar panels sell for more than homes without. The premium is about equal to the 20-year energy savings. That means a home in Connecticut with solar panels on it will sell for about $15,000 more than one without them, and the state exempts that extra value from property taxes!

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