Solar Panel Incentives and More
Want to add solar to your home but don’t think you can afford it? Use these tips to get huge discounts on solar, and in some cases, get it for free.
Solar panels are an affordable way to reduce your dependence on fossil fuels and shrink your carbon footprint. But how much do solar panels cost, exactly? And how do you pay for them? Do you need a loan? Will it take years to get a return on investment?
These are all valid questions about a significant home improvement. Find out the different ways that homeowners can finance their solar panel systems, the best installers to choose from, and the various incentives and tax credits available to those who choose to install solar, below.
Solar Installation Process
Solar panels have a very specific system process that is followed throughout the installation. First, the property must be inspected and evaluated for solar panels. Next is the design process and the finalizing of installation blueprints according to the property evaluation. After that comes the process of getting all the necessary permits, which can vary in each city and state.
Once the permits are all squared away, installation of the solar panels should only take a couple of days and then the installation process is finalized with final inspections. The last step involves getting the panels the proper utility connections needed to turn on the panels, so they begin to produce their energy.
Top 5 Solar Installers You Should Work With
Feel free to take a minute and check out each of these top-performing solar installation companies. With a home improvement project as massive as solar panel installation, you will want to know you are working with the best of the best.
Federal Tax Credits
If you are wondering what a tax credit is, it is a tax reduction that is applied to your taxes. And if you are wondering how much money you save with this program, it is pretty substantial. For example, if you buy a $30,000 solar system and qualify for the 30% federal tax credit (which is the most common option), then your out-of-pocket cost would only be $23,333.
State Tax Credits
The amount of the credit you receive depends on how much solar energy your system produces and how many years you have been in business. In California, for example, the credit is worth 30 percent of installation costs up to $2,500 per kilowatt (KW). So, if a system produces 1 MW over its lifetime and costs $10,000 to install, the state will pay $30,000.
The deadline to apply for these credits is December 31st of each year. But do not wait until then as applications are processed on a first-come basis. You can check here to determine whether or not you qualify for this incentive program by entering your zip code and other relevant information into their database.
Utility Solar Programs
If you are interested in getting solar panels for your home, a utility solar program is a great way to do it. There are plenty of programs available in many states across the country, and they all have different benefits, so it is important that you do some research on which one is right for your needs.
Solar leasing options
This is a very popular option, and it has several benefits:
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You do not have to own the equipment. This means that you can go with a leasing company that offers flexible terms, such as paying monthly rather than upfront. It also means that you do not need to worry about the maintenance of solar panels or their eventual replacement. You simply pay your monthly bill and enjoy cheap electricity.
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You do not have to worry about selling the equipment at some point in the future if you decide to move or change houses as this is something lease companies handle for you.
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Your system automatically adapts as technology changes over time—meaning that after 20 years or so (when your old panels are likely obsolete), you can upgrade for less money than if you had bought them outright.
Solar purchase loans
There are several types of loans you can use to finance solar panels. The most common is a loan that pays off over 20 years, during which time you enjoy interest-free payments. Some lenders even allow you to deduct the cost of your loan from your taxes.
Another option is a loan with no fixed term—instead, it charges an annual fee for as long as you have the system in place (can be up to 30 years). These loans typically do not come with any other perks like tax breaks or interest-free payments. You may want to consider this if you do not want someone else making monthly payments on your behalf or if financing is not available through other means (like your local bank).
There are many financial benefits to installing solar panels. Here are a few:
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Solar panels are cost-effective. They provide electricity at a fraction of the price of other forms of energy, and they pay for themselves in just a few years—sometimes as quickly as two or three years.
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Solar panels save money on electricity bills and property taxes. Your energy bill drops as your solar system generates more energy than you use at any given moment, which means you pay less per kWh than before. You also get an annual credit on your property tax bill because net metering reduces your electricity costs by the value of the excess power generated by your panels (see above). This could amount to saving you hundreds or thousands of dollars each year.
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Solar panels can save money on home insurance premiums. If you install these systems correctly, they increase the value of your house by an estimated 17% according to some estimates from MIT researchers published back in 2009/10--and most insurance companies reward homeowners who invest in improving their homes' resale value with lower premiums later down the road when that time comes around again.
