Everyone knows that solar is a great renewable resource, but there’s a misconception out there that it’s not really affordable, especially in this economy. While this USED to be the case, the last year has really brought solar prices down to earth, so to speak.
Reason 1: 30% uncapped Federal Tax Credit
This means that if you buy a solar energy system today, the Feds will give you a tax credit of 30% of the system’s cost. A tax credit is like a tax gift card for the IRS. If your system costs $15,000 after state rebates (see below), the Feds will give you $4,500. If you owe $4,000 in taxes this year, then you’re covered. However, the left over $500 will have to be put towards next year’s taxes. They won’t give you a refund.
Reason 2: State/and or Utility Rebates
Between the State and Federal rebates/tax credits, your system’s cost may be cut in half or more. That’s true in California, Colorado, Arizona and Connecticut, New York, Massachusetts, Florida, and many others. To find out what rebates are being offered by your State and your utility or town, check out our states to the right which summarizes all the State programs.
Reason 3: Low Up Front Costs (Seriously)
One reason why people say they can’t go solar is because they say they can’t afford the upfront costs. Today, there are many ways to go solar without paying anything down. Nothing. O. This can be done through an energy efficiency mortgage (EEM) through the Feds, or through a Solar Lease through www.solarcity.com. There are special solar loan programs that many installers and banks offer now. In addition, many utilities and/or state offer loan programs for solar and other renewables. See if your state or utility has one by clicking your state on the right.
But the best financing deals right now are through cities who offer “Berkeley” type municipal bond programs. With these, you don’t finance your solar through a bank, but through a tax assessment on your home. Interest rate is low, so the tax assessment should work out to be less than your current electric bill. Also, if you sell your home, no problem. Instead of you having to pay off the loan, the new home owner takes over the payments (and your solar). The tax assessment is typically spread out for 20 years. The program is coming to San Francisco, and San Diego and is already in Connecticut and Boulder, Colorado and Palm Desert, CA. More cities are signing on because it costs other tax payers zero, so it’s a no-brainer. Check with your city to see if it’s coming soon to your area.
Reason 4: Payback is in 9-15 years, these days.
I know it’s tough to think long term, but if you size your system correctly and finance it (not lease it or go through a PPA), you could not only be saving money on day 1 compared to your regular electric bill, you could actually be saving much more after your system is paid for in 9-15 years. This will depend on your state and type of financing, but it’s real. Solar panels are usually guaranteed for 25 years, so after the 9-15 year payback, you may be getting nearly free electricity, saving hundreds if over a thousand per year in costs that you would have been paying to the utility.
Reason 5: Solar Prices have Come Way Down Recently
The price of your system is going to vary by where you live, how much electricity you use, and the rebates and financing. I’d like to say that if you buy a system, it will run you after incentives and rebates anywhere from 13 grand to 20 grand for big energy hogs. That’s a HUGE generalization, but think about this. Those same systems used to cost 40 grand or 50 grand just a couple of years ago. If you do decide to get a quote (and I hope you do), the installer should give you a “per watt” quote. If you’re in a solar friendly State, make sure it’s somewhere between $5.50 and $7.50/watt, installed, perhaps even in the $5.00 range in competitive markets like Colorado. So let’s say an average 4 Kilowatt system should run–before rebates and tax credits– $7 x 4000 watts=$28,000. But don’t panic! That gets cut down to around $14,000 or less, depending on where you live.
So, what’s stopping you from getting a quote from a local dealer. It’s free, so what can you lose?