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San Antonio is famous for its Tex-Mex cuisine, its bustling River Walk, and its consistently excellent NBA team (Go Spurs!). Seriously, we’re in it every year, division champs for the majority of the last 20 years. Sorry, enough Spurs talk (Go Spurs!) Let’s get on to something else San Antonio has in abundance: sunlight.
All that nasty heat you’re feeling when you’re walking down the sidewalk in the summer (and let’s be honest, in the fall, the spring, and the winter, too); that’s all energy. Thousands of terawatts. Millions of megajoules. So why aren’t you grabbing some of that energy and turning it into electricity to power your home?
Think it’s too expensive? All those solar panels on your neighbors’ houses can’t convince you? We’ll show you how solar in San Antonio makes sense now, even if you don’t have $20,000 to spend.
Here’s what we’d do if we were deciding to go solar in San Antonio:
Our Solar Strategy for a Home in San Antonio
As you can see in the chart above, paying a whole bunch of money up front to get solar installed on your house makes you the most money over the long term. Those green bars start to rise quickly after 2027, when your system has paid back your initial investment and the profits start piling up!
That said, not everyone is ready to spend $20,000 on a long-term investment, no matter how much it’s going to make them. If you do have that kind of money, get solar installed ASAP, and it will save you buckets of money in the next 25 years. But if you’re like us and your cup holders hold about the same amount of money as your bank account, read on!
If we were interested in going solar in San Antonio, the first thing we’d do is get quotes from trusted local installers. Normally, at this point, we’d tell you to check out solar leases, which can save you money now, and thousands over time. But San Antonio doesn’t allow leases. CPS Energy, the municipal power company, offers sweet rebates for installing solar on you home, but only if you pay up front. So what’s a middle-class homeowner to do?
Get a solar loan from a local bank. That’s what we’d do. First, get your quotes; then, talk to your banker, or find a good local credit union. A home-equity loan that’s equal to the cost of your new system (minus that sweet rebate) is the perfect way to get into solar with nothing down.
BUT! Here’s the important part. You’re also going to be getting thousands back from the federal government at the end of the year, because they have a tax credit that covers 30% of the costs of your system. For a typical 5-kW system (after rebate), that’s $3,600. When you get that tax credit, use it to pay off the loan!
It’ll reduce your principal and you’ll pay off the loan 8.5 years early, saving thousands in interest charges. That early repayment is essential, because it means you’ll be able to make nearly as much money over the long term as someone who paid up front. By following this plan, you’ll end up with over $8,000 in profit over the 25-year life of your system.
That basically means you get solar panels on your roof for free, and as electric rates increase over time, your investment is safe! If you’re curious about solar loans, here’s how the numbers work:
How the Numbers Work for a 5-kW Solar Loan in San Antonio
What do all these numbers mean for your finances? Let’s take a look:
- Installing a typical 5-kW solar system in San Antonio should start at about $20,000. Don’t worry – that’s going to drop quite a bit.
- CPS Energy offers rebates of $1,600 per kilowatt. Your 5-kW installation will get you a fat rebate of $8,000, reducing your first-year cost to just 12,000.
- Your loan from the bank should be for this amount. The payments on a $12,000 loan with 6% interest over 20 years will be right around $86 per month, but you’ll be saving $43 per month on electricity. Essentially, you’ll start out paying $43 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 on the $12,000 cost of your system. Pay the loan down by that amount! You can take the credit over two years if you don’t owe $3,600 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 over $8,300! The rate of return on your investment will be 8%, which is just about the best you could expect from an investment in the stock market.
- And don’t forget .. your home’s value just increased by more than $10,000 (your expected annual electricity savings over 20 years) and 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 San Antonio. 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 San Antonio
San Antonio Solar Rebates
San Antonio’s CPS Energy has a strage relationship with home solar. They’ll offer you a rebate, but they can’t give the same rebate to installing companies who want to lease a system to you. Effectively, that means no leases. Still, those rebates are pretty sweet, equaling about 40% of the total sticker price of your system.
That’s good news! CPS is currently giving rebates of $1,600 per installed kilowatt (kW) of solar panels. For a typical 5-kW system like we’re talking about, you’ll save 40% of the cost in up-front rebates. That is sweeter than ripe lime on a taco platter!
Property Tax Exemptions for Solar in San Antonio
The state of Texas exempts solar installations from property tax. That’s wonderful news for you, since the value of your home will go up by several thousand dollars when you add solar panels. Basically, for each $1,000/year reduction in energy bills, you can estimate that you’ve increased the value of your home by $20,000.
And thanks to the bright and beautiful Texas legislature, all of that new value won’t be taxed. Ya-hoo!
Solar Loans in San Antonio
Many banks and credit unions now offer loans for installing solar. It can be a great way to get solar with very little money down, but make sure you’re getting a good interest rate! The thing about a loan for the whole cost of your system is that the initial payments are probably going to be higher than the electricity savings, for a few years. Utility companies raise rates by about 3.5% per year, but your loan payment stays the same, meaning you’ve got a built-in protection against cost increases.
Let’s say you agree to pay your system off over 20 years at 6%, AND if you pay the loan down early with your big federal tax credit at the end of year one, you’ll actually do pretty well compared to the cash purchase option. You’ll still pay slightly more than your current energy bill for 11 years, and after that, it’s all profit, baby! More than $8,300!
If you can get a lower interest rate, it becomes an even better deal. Anything under 4% will get you close to making the same profit as the people who buy outright, all without spending a cent up front. Even at 6% interest, your investment performs better than the folks who paid up front, because you’re making small payments over time, rather than one big one right now.
Take another look at how the different payment options stack up visually in the chart again: