In today’s world, switching your home over to solar power is not just about saving money. Though, with the price of electricity, this is a huge reason to switch to solar. But, another good reason to switch to solar is dependability. As long as you have an energy storage solution, or battery system, to where you can store your electricity for when you need it, then dependability is also a big reason to switch to solar power. Especially if you live in a state like California, where PG&E powers most of the state, and they turn off your electricity to protect against causing fires because the state has had so many wildfires. If you switch to solar, and have a system to store the electricity, not only can you save a fortune on electricity costs, you can have energy available when the power goes out as well. Stop following your kids around turning off the lights, and set your thermostat to a comfortable level. It’s unfortunate with the cost of electricity, and the high cost of living, that we forget that life is meant to be comfortable, and not a constant struggle to save costs just to be able to pay the bills each month.
Why Should You Switch To Solar?
•Save Money •Increase Your Home’s Value•Help the Environment•Have Reliable Electricity When You Need It•Recieve A Large Tax Credit
Solar Electricity Saves You Money
Switching to Solar dramatically reduces, and may even eliminate your home electricity bill entirely. In fact, you may even get money back, depending on your electric company. Every year the electric companies raise prices, having solar will make it so that you are not affected by their constant price gouging.
Adding Solar Increases Your Home Value
Going solar also increases your home’s value. Home buyers look for homes with solar so they know they will save hundreds of dollars per month or more on their energy costs.
Going Solar Helps the Environment
We all want a healthy and clean atmosphere, and switching to solar helps the environment. Feel good about doing your part in helping the environment for generations to come by moving over to the solar energy club. By switching to solar, you will eleminate three to four tons of carbon emissions each year.
Solar Power Gives You Dependable & Reliable Electricity
There’s nothing worse than hearing those thunder clouds, or seeing snow start to fall, and knowing that you may lose power. You can either get a whole house generator, or switch over to solar (or both) to have reliable and dependable sources of electricity. There is nothing worse than losing power when you need it the most!
Adding Solar May Give You A Large Tax Credit
Federal, State, and local incentives across the country are available for those that switch over to solar power as an incentive to switch to solar. You may get tens of thousands of dollars back on your taxes to help offset the startup costs of switching over to solar power.
Solar Options For Your Home
When you start looking into getting solar installed, it can be overwhelming. There are door to door people trying to sell you everything under the sun, there are countless companies online that do the same. The real answer is you can buy and own your own solar equipment, you can lease it from a reputable company, or you can sign up for a power purchasing agreement. Let’s go over these options to provide some clarity to help you make the best decision for your situation.
Solar Ownership
When you buy solar equipment, you own it. You decide who installs it. You decide who maintains it. You decide who works on it. This is the simplest way to break into solar. But, the big hurdle will be the cost. There are options here as well. With the solar cash option, you buy the solar system, just like you would for any other big ticket purchase, like buying a car. You will work with a solar dealer, and they will help you to decide on what you need to buy, and get it ordered, and then install it for you. In this purchasing method you will have payments due typically at a few different steps. You will provide a down payment to get the process started, then a payment when the solar panels are ordered, and a final payment once it is all installed and working. With the solar cash option, you can pay the money directly, or you can finance the purchase through a bank, or the solar company you are working with if they have that option available. Being able to pay those up front costs over time makes the dream of switching to solar an affordable option for most people. In my situation, for example, I was paying $850 a month to my price gouging electric company. Swithing to solar would more than pay the payment to finance the biggest and best solar solution on the market available for my home type with a huge savings each month on top of that as well. It’s a smart decision that will save me an enormous amount of money each month. By purchasing and owning the solar system on your home, it’s yours. You get all the benefits from it. This also makes you eligible for the tax rebates and other incentives that are available.
Solar Ownership Pros:
You may qualify for the rebates, incentives, and tax savingsLower energy costsPotential increase in property valueYou might qualify for solar net metering, where the electric company can buy the extra energy that your solar system produces that you don’t useYou own it, it’s yours!
Solar Ownership Cons:
High upfront costs, but financing may be an option to pay over timeYou pay the maintenance or upkeep costs
Solar Lease
A Solar Lease is an option where a third party owns the solar equipment. There is usually no up front costs in this option, and they will get it installed for you. With a solar lease you would typically pay a set monthly rate for your solar panel system, but you would receive free electricity from the panels, which offsets the monthly cost of the lease. Most states do allow solar leases, but it is not allowed in all locations. Check your local rules and regulations to see if this option is available for you.
Types of Solar Leases
There are two options available for leasing solar equipment, a capital lease, and an operating lease. Each one has their benefits and draw backs, so it’s important to understand what each least type offers so you know which one is right for you.
Capital Lease
With a capital lease, you are able to take advantage on all of the tax incentives and depreciation benefits that you get with solar. The monthly payments for this type of lease are typically higher than the operating lease option. When the lease is over, you will usually have the option to buy the system from the leasing company.
Operating Lease
With an operating lease, the leasing company owns the solar system, but you would pay a monthly fee to the company you sign the lease contract with. With this type of lease, all of the tax incentives and depreciation benefits go to the leasing company. This may be a good option for you if you know you wouldn’t be able to use the tax benefits that are available when you switch to solar. At the end of the lease, you can either buy the solar system from the leasing company, or you can renew the lease terms.
Solar Leasing Pros:
Low, or no upfront costsNo maintenance or upkeep costsLower energy costsPotential increase in property valueYou might qualify for solar net metering, where the electric company can buy the extra energy that your solar system produces that you don’t use
Solar Leasing Cons:
You don’t own the equipmentYou may not qualify for the rebates, incentives, and tax savings
Solar Power Purchasing Agreement (PPA)
A solar power purchase agreement (PPA) is an agreement where a solar company arranges for the design, permitting, financing, and installation of a solar array on a your house or property. They then sell the power generated to you, usually at a fixed rate. This rate is usually cheaper than your local utility company’s electricity rates, which saves you money each month. The payments within a PPA agreement are based on the amount of energy that the solar array produces that you use each month. This is where you will save a bunch of money, as long as you negotiate a great rate that is significantly lower than your power company’s rates. In this scenario, the company receives the income from the sales of the electricity to you, as well as any tax credits and other incentives from state, federal, or local incentive programs that are available to them. In some instances, you can negotiate the claim to the “green attributes” with the company you are entering into a PPA agreement with, to give you the ability to retain the Solar Renewable Energy Credits to give you the reduction in income taxes you would like. With a PPA, the term is usually signed for ten to twenty five years. During the agreement period, the solar provider is responsible for the operation and maintenance of the system. You may even have an option to do an early buy out, if you decide at some point that you would like to do that, so you would own the system and no longer be charged for the energy usage of the solar unit. If you are interested in this, it may be a good idea to work that into the contract with a set price at fair market value, so they won’t try to jack up the cost if you approach them to buy it in the future. The great part about this option, is that you typically pay no money for the installation or maintenance of this type of solar system. You just pay for the electricity you use from the system directly.
Solar PPA Agreement Pros:
Low, or no upfront costsNo maintenance or upkeep costsLower energy costsPotential increase in property value
Solar PPA Agreements Cons:
Probably no tax credits, incentives, rebates, or tax depreciation savings
Things to Consider When Planning the Switch to Solar
Placement of the Solar PanelsRoof ReplacementEnergy Usage Forecasting
Solar Panel Placement Options
One thing to consider when you start planning your switch to solar is where you would like to place the solar panels. They have many different options available, you could place them on your roof, on a detached garage, made into a car port like you see in parking lots, on your land, or even built into roof tiles.
Roof Replacement or Repair Before Installing Solar Panels
If you know your roof is aging, or is in need of repair, you may want to consider getting this done before you add solar panels to your roof. Otherwise you will have to pay the cost for the solar company to remove the solar panels for the roofing company to repair or replace the roof, and then pay them to put the solar panels back together. It may be a good idea to go ahead and do those repairs now.
Energy Usage Forecasting
If your like me, you are using less energy now than you typically would because of the ridiculous over priced cost of electricity. If you are planning on going solar, you should think about how much energy you aren’t using that you wish you could be using, so that you plan the new solar usage accordingly and get enough panels to supply the energy you need. Will you keep your house warmer in the winter, and cooler in the summer, if the energy is free and available? I know I would. Add that to your discussions with your solar company to make sure your solar system is sized for what you want.
Electricity Cost Options Comparison In California
Let’s compare the costs of the different options available in California. El Dorado County Home Builders highlights products and services that you might find interesting. We frequently receive free products from manufacturers to test. This does not drive our decision as to whether or not a product is featured or recommended. If you click a link on this page, then go on to make a purchase, we might receive a commission – at no extra cost to you, and this does not impact the purchase price of any products that you may purchase.