Can You Afford the Upfront Home Solar Cost? Solar Savings Advice for Real Homeowners
Do you wonder if the upfront cost of home solar installation is a good investment? Let’s look at your potential solar savings and some advice on how to lower the upfront price tag. Home solar costs drop over time, so once you install you’re in a great position for solar savings as a homeowner.
How can you get there? If you’re one of the many homeowners hoping for home solar savings as you do your part for the planet’s future, here are four places to start. Build your budget around a realistic look at when your system will start paying for itself. Compare solar loans. Learn about tax incentives. Finally, get some tips on keeping your solar installation costs low.
Home Solar Payback in 5-10 Years
Home Solar Payback in 5-10 YearsAn average home solar power system can last for 25 to 30 years. How many of those years will be pure savings after your investment pays for itself? The size of your current monthly electricity bill will help you calculate whether going green makes financial sense.
If your bill is high enough right now, a solar installation can pay for itself quite quickly. The average homeowner will see a complete payoff for home solar in about 5 to 10 years. Do you fall into that category? If you’re in the United States you probably do. Look at real forecasting data on when home solar will pay for itself.
Secured Solar Loans vs Unsecured Solar Loans, Leases, and PPAs
You don’t need to have big financial reserves to start saving money by switching to solar. Going green to cut energy costs can actually be even more urgent if you’re on a tight monthly budget. That’s why you’ll want to take a look at some of the programs that can help you afford solar installation. If you don’t have great credit or a lot in the bank, there are a few types of solar loans that might help.
Secured solar loans are for homeowners who want to go solar, and can use their homes as an asset. Unsecured solar loans use the solar panels themselves as the asset. However, unsecured solar loans can have higher fees or interest rates than a secured loan.
Many solar loans offer financing without cash upfront. So as a homeowner, don’t assume that the cost will be a barrier to going green. Do make sure that you’re working with a lender who has a good track record, and always compare interest rates to get your best deal.
Loans aren’t the only way to get some help funding your solar installation. Leases and Solar Purchase Power Agreements (PPAs) give you the option of buying clean power without owning your own panels. Community Solar choices can help you co-own a system that’s shared with neighbors so that you’re not fronting the whole installation bill.
Solar Power Tax Credits
Through 2021, the federal Investment Tax Credit (ITC) lets you deduct 30% of the cost of your home solar installation. If you’re a homeowner in the United States, you’ll immediately qualify for that credit when tax season comes around in the year that you had your home solar costs. You’ll only need to fill in the simple 2-page IRS Form 5965[1]IRS and send it with your taxes.
In addition to this nationwide boost, state programs can also lend a hand, depending on where you live. Your solar installation company should be able to give you seasoned, firsthand advice about local incentives. Start that conversation as soon in your process as you can, because what you discover might help you go solar faster.
Cut Solar Installation Costs
Once you are ready and able to go green, it’s good solar advice to keep your costs low by finding a small company with a track record of proven experience. A national study by the NREL[2]NREL (a federally-funded science lab) has shown that the right solar installer can save you 10% or more upfront on your home solar costs. As a homeowner, there’s plenty you can do with the money that choosing the right installer will keep in your pocket. We have some good advice that can help you cut your home solar installation price by being a smart consumer and comparing quotes.