Is Now A Good Time To Buy Solar Panels?
In a sunny climate like Southern California, installing home solar is a great way to save money on your energy costs while also contributing to a cleaner environment. But solar can be a large home investment, and we realize the upfront costs of going solar can be daunting. According to the Center for Sustainable Energy, a home system installed can range between $15,000 and $25,000. So the question many homeowners ask is: Is now a good time to buy solar panels?
Saving With Solar Panels
As energy prices continue to rise in California, waiting to go solar means delaying savings on your electric bill. Please take a look at your electric bill, typically the higher it is, the more likely you'll benefit from switching to solar. Many homeowners' goal is to significantly offset their monthly electricity bill, if not to eliminate it entirely. This is an excellent energy goal to have, but the reality is that no two households are the same. Your home may use significantly more or less electricity than your neighbor or even the average American household, and this will affect the size and cost of a solar system needed to meet your needs.
Incentives to Buy Solar Panels
Since 2006 when the Federal Investment Tax Credit (ITC) began, it has played a considerable role in helping the solar industry grow by more than 10,000%. This credit, often referred to as the Solar Tax Credit, currently allows homeowners to deduct 26% of the cost of installing home solar from their federal taxes. This credit was due to drop from 26% to 22% as of 2021, but Congress just extended it for two more years as part of the COVID-19 virus relief spending bill.
Many states offer low-income solar rebates that help homeowners go solar if they have lower-than-average income where they reside. Solar Renewable Energy Certificates (SRECs) are also in some states, which homeowners can sell back to utility providers. California currently allows homeowners to sell SRECs to their utility. Be aware that as each state's renewable energy goals are reached, the SREC programs will be phased out.
Government incentives for solar energy have been vital for many homeowners who wanted to go solar. However, in the coming years, these incentives are decreasing or expiring altogether.
Buying or Leasing Solar Panels
Purchasing solar with cash always gives you the maximum savings on electricity over the system's life, and buying solar panels outright also allows you to take advantage of the federal solar tax credit and other state solar incentives.
But what if you don't have that kind of cash available? Because solar is such a significant investment for your home, a better option is to take out a zero-down solar loan. Many low-interest-rate solar loan options allow you to take advantage of the federal tax credit.
Other homeowners will opt for a solar lease. These leases allow you to avoid the upfront costs of installing solar but do not provide much lower savings over the lifetime of your system. Also, since you don't own the system (the leasing company does), you're not eligible for solar incentives like the federal solar tax credit.
Installing Solar Panels Increase Home Value
Whether you intend to stay in your home or sell in the future, adding solar is a proven way to boost the value of your home and sell it faster. The average residential solar system of 3–6 kilowatts could add tens of thousands of dollars to your home's sale price. And according to a National Renewable Energy Laboratory study, homes with a solar power system sold up to 20 percent faster than a home without solar.
With the events of 2020, solar panels are now cheaper than they have ever been, and now is the time to finally go solar. If you need help making sense of incentives, deciphering your electric bill, or want to explore the financing options available, contact us today. We are here to answer all of your solar questions.
