A Solar Energy Fixed Payment: Budgeting Made Easy
One of the little talked-about benefits of solar energy is you know what your power costs long term. In a rapidly changing world, there’s comfort in knowing what the future holds. Whether you pay cash, finance, or lease a solar system you can budget it, but not with a power bill. Solar is a fixed cost, but your power bill increases every year. With solar, your monthly payment remains consistent. Unlike fluctuating utility bills, which can surprise you with unexpected spikes, solar payments are predictable.
Solar Energy is Insurance Against Power Company Rate Hikes
The major power companies in Florida have raised rates by as much as 80% over the past 6 years.
Homeowners who bought a solar system 6 years ago have or are near paying it off, which means free power for the next decade and a half or more. So, any homeowner who bought a solar system 6 years ago has protected themselves from major price hikes by the power companies. In the meantime, their cost of power is going down while homes without solar, power bills are going up, that’s why solar energy is such a good idea.
Solar is for the Savings Minded
Solar energy is much cheaper than the power companies. A 7K home solar system net cost is $19500 installed and will offset $200 of monthly consumption. That’s $2400 a year. a 7K solar system cost is offset by what would have been paid to the power company in 8.2 years. A 7K solar system will produce power for 25 years or more, totaling $60,000 plus price increases. A guaranteed savings of at minimum $42000 plus rate hikes is impressive considering you would have paid that money to the power company.
A Solar Energy Fixed Payment is Budgeting Made Easy!
Create a Home Solar Plan
Determine Your Primary Objective for Home Solar
I Want to Get the Maximum Financial Benefit from Solar
To achieve the maximum financial benefits from solar requires tier one solar panels and inverter without battery backup. Without question paying cash for a home solar system offers the greatest return on investment from it. Buying a basic no frill home solar system for cash is a ‘Free” investment because you’re using the power company’s money. Paying cash for a basic no frill home solar system is the ideal scenario for the greatest return on investment.
I Want Battery Backup to Have Power During Power Outages
Partial battery backup is a nice luxury to have but it comes at a price. Expect about 15% to 20% less return on investment than without battery backup. Partial battery backup is a necessity for anyone with medical devices and do not have the luxury of losing power during outages.
I Want Whole Home Battery Backup
Homeowners that purchase whole home solar frequently need additional power for charging EV’s. Whole home battery backup features state-of-the-art Tesla Powerwall 3, which doesn’t require an electrical panel upgrade. Whole home backup is ideal for higher income households that enjoy the finer things in life and can afford them. Make no mistake about it, the return on investment is diminished with whole home solar battery backup because they are expensive. Expect about 35% to 50% less return on investment.
The Condition of a Roof is Critical for Home Solar
New Home
New homes are perfect for solar energy for several reasons. New homes run at peak efficiency which means a smaller solar system is required. In addition, the roof and solar panels will age simultaneously. The combination of peak efficiency and a new roof is the perfect scenario for home solar.
Recently Replaced Roofs
There’s no better time to go solar than when a new roof is installed. A new roof will age simultaneously with the solar panels. In some situations, doing solar and the new roof in one package can qualify for a greater ITC tax credit.
Roof Needs Replacing
It’s recommended to purchase a new roof and solar in one package to get the best cost possible. If you purchase a new roof and solar panels together as a package, you can apply the Investment Tax Credit (ITC) for the entire combined system. An older roof will not pass a solar installation contractors site inspection. Solar cannot be installed on an aging roof, and it must be replaced. It’s Imperative to consult with a tax professional or check the latest guidelines from the IRS
Determine Payment Method for Home Solar
I Want to Purchase Home Solar for Cash
Unlike the auto industry that makes huge profits from finance contracts the solar industry does not make additional income from financing. Because solar financing is a huge pain for everybody involved most solar companies prefer a cash sale. Homeowners reap greater financial benefits from paying cash for solar. Paying cash for solar energy by far, offers the greatest return on investment.
I Want to Finance Home Solar
Financing solar is tricky because traditional banks don’t do solar loans. The solar industry includes finance companies that exclusively finance solar systems. These specialty finance companies have a high credit score requirements and include additional closing costs that run into thousands of dollars.
Financed solar systems cost more per kilowatt compared to paying cash. Financing is tricky because anybody that has excellent credit can obtain their own loan for a much shorter term and without closing costs. Buying a home solar system with a credit card can benefit from perks as well.
I Want to Lease Home Solar
Leasing home solar is great for the environmentally conscious homeowners that want solar but can’t afford to purchase it. It’s difficult to determine the real savings for homeowners from leasing a solar system because they are renting from the power company and leasing solar is the same thing. Leasing has additional challenges when you sell your home because it has to be transferred to the new homeowners. Paying cash and financing home solar systems is a straight-forward purchase agreement, leasing not so much. If you want to break away from dirty energy, then leasing a solar system is for you. Leasing home solar offers a percentage of monthly savings off what you presently pay the power company, but they are long term agreements.
Determine Kilowatt Hour Offset - Solar System Size
Partial Offset
Many homeowners choose to purchase a smaller home solar system to start out and expand it later. This option is quite popular with cash buyers because it’s less strain on the wallet. If a homeowner consumes 1000kW of power per month but their solar produces 60% of kilowatt consumption, that equals a 60% Offset. A 60% Offset means a homeowner will get a power bill for the 40% that’s not being Offset.
100% Offset
100% Offset means a solar system is designed and sized to cover an entire average monthly kilowatt consumption of a home. It’s not possible to get an exact 100% Offset because of different variables, the most important one being the fluctuating power consumption by a household. Places like Florida have extreme differences in kilowatt consumption due to heavy A/C usage during summer months. Most 100% home solar systems will produce 90% to 110% offset of monthly kilowatt usage.
130% Offset
130% Offset is popular with EV owners for obvious reasons, they have to charge their EV. Oversizing is also popular with growing families anticipating increased power consumption as their children grow. 130% Offset is also popular with homeowner’s solar systems designed with a whole home battery backup system that can store excess production.
Understanding the 30% Federal ITC Tax Credit is Important
Meet or Exceed Income to Qualify for Tax Credit
To meet or exceed the ITC Solar Tax Credit requirements means your annual income tax liability is much greater than the amount of your solar tax credit. If you owe $20000 in income taxes for the year you purchased home solar, and your tax credit is $5,000 you will then pay $15000 income taxes. The most important thing to do is consult with an income tax expert to be sure you qualify before buying home solar.
Do Not Qualify for Solar Tax Credit
Any homeowner who does not owe or pay annual federal income taxes does not qualify for the Solar ITC Tax Credit. The tax credit should not be calculated into any solar deal.
Not Sure if You Qualify for Solar Tax Credit
Consult with an income tax expert to be sure you qualify before buying home solar. Tax professionals can help you to determine if you qualify for the ITC solar tax credit. It’s imperative to consult with a tax professional or check the latest guidelines from the IRS to be certain you qualify for the ITC solar tax credit.
Local Solar Company
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- Warranties Local companies frequently go out of business
- Tax Credit Misrepresentation
National Brand Solar Company
- Misrepresentation about what to expect from home solar
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- Long Distance relationship
- Lack Flexibility
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