If your area receives a decent amount of sun hours every day, installing a solar PV system on your roof or in the yard can be a very wise investment made in renewable energy.
Why are solar panels so beneficial for households and companies, but also for the environment?
Having a solar PV system that generates free and clean energy for your home or business, can certainly reduce your energy bills, and will also decrease the carbon footprint of your household or company.
Today, is very important to use clean technologies in our everyday activity because only this way we can protect the environment by reducing the energy consumption from the grid.
Investing in Solar in 2020
Giving the fact that the price of electricity received from your utility company will only go up in the future, going solar is a useful investment only if your area receives on average at least four hours of full sun per day.
Investing in a new solar PV system is a lot better today than it used to be, but to be sure if solar is the perfect choice for paying less on energy bills and lower the carbon footprint of your building, obviously you have to make a pretty good initial analysis on the costs of going solar taking into account the number of sun hours per day in your area and the cost of utilities.
High Utility Costs
If you live in a state where utility costs are very high (Hawaii, Connecticut, New Hampshire, Massachusetts, Rhode Island, California, New York, Vermont, Maine, etc.), and there is a lot of sun, makes a lot of sense to go solar.
The higher the price paid on utility bills, the quicker you can recover your investment made in the solar PV (photovoltaic) system.
If you don’t know how to calculate if a solar PV system can help you pay less on energy bills, be sure that a solar company can give some really solid data on this matter.
Knowing how many sun hours per day you have in your area, the cost of utilities, the level of shading in your area, etc., they can help you better understand if such an investment would be beneficial for you or not.
Solar Financing Options in 2020
Of course that using your own money to buy a solar PV system is always the best option if you want to recover the money as quickly as possible.
However, not anyone can afford to buy a solar PV system on its own, so there are several options available on the market.
1. Solar loans
If you want to buy your solar PV system, a solar loan could be a great financing option because it can pay the entire cost of the system.
These loans are usually secured (using your property as collateral), but there are also solar loans that are not secured.
However, before jumping to get a solar loan, you need to understand that such a loan is only worth it if it meets a few basic conditions, such as:
1. The loan’s monthly payment should be smaller than the monthly savings on your electric bills in order to allow you to start saving money fast.
2. You need to save at least 40 percent on electricity bills over the lifetime of your solar PV system.
3. The solar loan should have the same structure (in terms and conditions) like any other home improvement loan.
In some states, you can even get a subsidized solar energy loan using below-market interest rates.
4. By buying your solar PV system you are eligible for incentives such as the federal investment tax credit (ITC).
To get additional savings on your income taxes, the interest on secured solar loans may also be tax deductible.
2. Solar leases and PPAs
If you only want to rent the solar PV system (instead of buying it), you can use a solar lease or PPAs (power purchase agreements).
These financing options are different from solar loans because they will give you the financial benefits of installing a solar PV system to lower your energy bills without having to pay for the system.
A few considerations about solar leases and PPAs
- Using a solar lease or PPA, means that the third party owner (TPO) is responsible for installing the solar PV system on the roof of your house or in the yard, and, in exchange, you have to agree to pay the company a below-market rate, which will let you use the electricity produced by the panels for the terms specified in the agreement.
- Choosing to finance your solar PV system with a lease or PPA, you can save between 10 and 30 percent per month on electricity bills without any upfront investments.
- Besides installing the solar panel system at your property, the TPO will be responsible for maintaining the system, and at the end of the lease, it might choose to remove the system from your property or sell it to you (at a fair price).
- Because you are only renting the system you are not eligible for incentives.
The real owner of the solar panel system (the TPO), will be eligible for receiving all rebates, tax credits and any other incentives provided by the government and your utility company. - If you can’t buy the solar PV system because you are already in debt, a debt consolidation loan can help you pay off all the old loans.
Final conclusion
The price of electricity received from the grid will only go up because the main resources used to produce it are limited (fossil fuels).
To be protected from the rising energy bills, you have to install a solar PV system.
A solar panel system installed today, will generate free and clean energy even after 20 years of usage, which means that these renewable energy systems represent long term investments that can help you reduce the carbon footprint of your home or company, and even become energy independent.
