Solar is Less Expensive Than You Might Think – 8 Reasons Why

Photo taken by Mitch Kennedy

Did you know that the cost of solar panels is now 100 times less than it was 20 years ago? Now is the time to rethink the outdated perception that solar is “too expensive”, and look at many forms of assistance to help you get solar for your home or business.

1) The end of the year is a great time to take advantage of federal tax credits for home and business

The Solar Investment Tax Credit is a 30 percent tax credit that will expire at the end of 2015. For example, a $10,000 solar system will reduce the taxable income by $3,000, saving you $800 to $1,000 in taxes. More information on tax credits and incentives can be found at the Database of State Incentives for Renewable Energy (DSIREUSA).

2) And don’t forget state tax incentives

For example, here in Connecticut there is no sales tax on renewable energy systems, and no property tax either. Many other states have similar laws; the database listed above can guide you.

3) Consider joining a Solar Cooperative / Buying Club

Solar cooperatives are a way to pool purchasing power and share resources and best practices regarding financing and installing solar projects. Amicus Solar is the largest solar cooperative, having 48 offices in 26 states in the U.S. Another method run by the Clean Energy States Alliance (CESA) creates a buying club within a state. Events for each city or town, called “Solarize _(insert town name)__”, are then run in 18-week periods. They offer tiered pricing on packaged residential systems as more people sign up for the program. Forty-three towns in Connecticut have already had Solarize events. Typical savings from a cooperative or group-buying event are 15 – 30% off the total installation price. Google “Solarize (your city here)!” to check out the Solarize program.

4) Low-interest financing through the FHA, credit unions or local banks

Check with your local bank or credit union to see if they participate in PowerSaver Loans, a program of the Federal Housing Authority (FHA):

This program can be used for a wide variety of energy-efficiency projects, such as boiler or furnace replacements, new windows, and insulation.

5) Look into the REAP program offered by the US Department of Agriculture

The Rural Energy for America Program (REAP) provides “financial assistance to agriculture producers and rural small businesses for the specific purpose of purchasing, installing, and constructing renewable energy systems.” These are grants or low interest loans.

6) Take a look at “Portable Solar Power” systems

Do a web search for “Portable Solar Power” and you’ll see systems that range from phone chargers to tow-behind trailers with pop-up solar panels. Obviously these systems would also come in handy if the grid goes down. While not big enough to run a whole house or business, they can keep critical systems up when there is no electricity.

7) Determine what you actually want & ask more questions

Maybe you thought you had to have a complete “off-grid” installation. Maybe you thought it would decrease your resale value. Neither is true. Start thinking about what you want, look at decreasing the use of electricity in your home or business, and then size your solar system. If you know you will save 10 – 20% off your electricity bill by changing light bulbs to high-efficiency ones, then you just decreased the cost of your solar system by 10 – 20% as well! The US Department of Energy’s “Energy Saver” website is a fantastic resource to help you get started.

8) Consider the “hedge” and return on investment

The more solar power you can generate yourself, the greater the percent of your electric bill that remains at a fixed price as time goes on. US Department of Energy reports that the national average increase in power costs is 3% per year. The Northeastern US, California and Hawaii see larger increases of 5 – 8% per year. The solar power is a hedge against inflation, spikes in oil or gas prices, and extreme weather events such as the Polar Vortex that drive up energy costs.

Solar Photo Voltaic (PV) is a very low-risk investment. The technology has been around for over 50 years; the panels are warrantied for 10 to 15 years and have a lifespan of 25 years or more. At the time of this writing, financial investments that would also be considered low risk, such as Certificates of Deposit, were at 1 – 2.5% interest for 5 years, and long-term (10 & 20 year) municipal bonds were in the 3 – 5% range. Comparatively, a solar PV system with an 8 to 12-year payback has an investment yield of 3 – 10% over its 25-year life. So if you are going to invest some money, why not invest it right on your roof or in your backyard where you can keep an eye on it!

What other ways do you see solar as being good for your bottom line?

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