How much for a solar panel
We’ve all heard howcan help you save money on your energy bills. However, how much do they really cost? Our guide will teach you everything you need to know about the cost of s.
Here are six tips for minimizing the upfront costs of installing a solar panel system in your home
Six Tips for Managing Residential Solar Power’s Up-Front Investment Costs
Step-1: Claim Your Federal Tax Credit for Capital Investments (ITC)
Solar energy systems installed on residential property are eligible for a 30% Federal Investment Tax Credit (ITC). The federal government is offering a 30% tax credit on the total cost of a solar system through 2019. The ITC will remain at 30% until 2019, after which it will gradually decrease to 20% until 2022. The tax credit will remain at 10% at that time. Now is the time to maximize the 30% ITC.
Step-2: Submit an application for state, local, or utility-related incentives and rebates.
Consult your state or local government to learn about available tax credits. Numerous states offer tax credits, rebates, performance payments, property tax exemptions, and sales tax exemptions as incentives. For example, residents of Utah are eligible for a state tax credit covering up to 25% of the cost of an eligible system, or $1,600, whichever is less. While California does not offer a statewide tax credit, local municipalities and utilities do. Your professional solar contractor can assist you in obtaining all available credits and incentives.
Step-3: Utilize Financing Options
You are not required to pay the entire cost of the solar energy system upfront. There are enticing financing options available that require little or no money upfront to assist homeowners in upgrading to solar power. Solar loans, solar leasing, or a power purchase agreement are some of the available options (PPA).
Solar Loans: Solar loans are classified as secured or unsecured. These loans allow homeowners to buy solar panels over time. Securing a loan, such as a home equity loan, requires collateral. Secured loans feature lower interest rates, and all fees and interest are deductible. Unsecured loans, like credit cards, have no collateral. A higher interest rate and longer repayment period are typical. Unsecured loans are often not tax deductible.
Leasing from Solar Companies: Solar leasing allows you to hire solar equipment. They own and install the system, and you pay a fixed monthly fee regardless of how much solar energy it produces. Aside from the initial cost savings, your monthly power bill is lowered, and you often break even or save money in the first year. The solar company also manages the system’s operations, monitoring, and maintenance.
Power Purchasing Agreement: Like solar leasing, a power purchasing agreement is owned by a third party. However, you pay a predetermined amount per kilowatt-hour for electricity, and the utility pays you a fixed fee for surplus power. The main benefit of solar leasing is cheaper monthly utility expenditures.
Step-4: Reduced Utility Bills
One of the most compelling reasons to invest in a solar energy system for your house is the savings on your monthly electric bill. If the system is properly designed and you reside in an area with reliable solar energy, you can completely offset your power expenditure. Given that utility rates grow by between 2% and 8% annually, owning a solar energy system protects you from rising rates. After the first investment, capital expenditures should be recovered within 10–12 years, but your system should continue to generate electricity for at least 25 years.
Step-5: Equity accrued as a result of the home’s increased market value
While regional property markets differ, it is widely agreed that installing solar panels and a home energy system adds value to your home. Consult your solar installer and a local appraiser to ascertain your home’s value.
Step-6: Net metering and PPA Agreements can help you save money.
Net metering is an option that some states and utilities offer in certain locations. This is similar to a PPA, but with a small distinction. When your solar energy system creates more energy than you consume, you earn credit. Consider your meter running backward.
In comparison, with a PPA, you pay a fixed rate for the electricity you consume and the utility agrees to purchase any excess energy generated by your system. In either case, your utility bills will steadily decrease.
Whether you are aiming to lower your electricity expenses or reduce your carbon footprint, the benefits of solar panels are hard to overlook. Invest the time to obtain all of the necessary information including house size, solar insolation, and current electricity rates. Go about the installation process wisely and make it worth the investmen