Should I Get Solar Panels Now or Wait?
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Homeowners interested in solar panels for their home have, at some point, asked themselves when is the best time to get solar. Solar is an investment, which means there are several factors to consider.
As with other investments, it is wise to consider all of the factors involved before jumping in. Taking an in-depth look at these factors increases confidence in the product and the value it can offer.
Some of the factors worth looking into include the worth of the array, the impact of future technology advancement, and whether the interested party qualifies for residential solar.
Solar Panels and the Worth of the Investment
When purchasing a dollar store item, people don’t think twice about the life of the product. Dollar store customers expect low quality from these products and often are surprised when it does well.
However, when a purchase costs more, people expect it to add value to their lives so they can justify the expense. Often this value comes in the form of durability, long-term savings, or convenience.
Determining the worth of big-ticket items is a practical and smart consumer practice. Three ways to determine the worth of home solar panels include added monetary value to the home, increased independence, and savings.
The Added Value of Residential Solar Panels
Home improvement projects often add both monetary value and functionality. Residential solar offers a clean energy option that homeowners can control while increasing the value of the home.
According to Zillow, solar panels increase the value of homes by 4.1 percent. The home’s increased value won’t pay off solar. However, the home’s value increase does cover a large portion of the original cost.
How Solar Increases Home Value
Owned solar arrays add value to homes because they save the new homeowner money on their electricity bill. These savings have become influential to many homebuyers, which is why solar can increase the home’s value.
Solar Financing Options and Home Value
One key factor to remember when looking at solar is that that not every solar financing option will increase home value. While a solar loan or cash purchase will increase home value, homeowners don’t own leased solar panels, and therefore they don’t add value to the house. If the homeowner plans to sell their home in less than 20 years, a leased solar array will hinder them more than it helps.
Solar Panel Savings
Increased home value makes solar worth considering because it isn’t the only return that this investment offers. It is in addition to the projected savings of residential solar.
The cost of solar, when compared to the local utility rates throughout the life of home’s solar panels, is often drastically lower. Solar savings are even higher when the customer decides to use a loan or pays in cash.
The savings of solar are dependent on solar’s Levelized Cost of Energy and the retail electricity rate of the utility throughout an array’s life. According to EnergySage, the average projected solar savings are between $10,000 and $30,000.
The Value of Independence
While savings are a motivator for purchasing solar panels for home use, it isn’t the only reason it has value for homeowners. Residential solar fulfills psychological and physical needs.
How Residential Solar Provides Power When the Utility Can’t
Our lives are powered by electricity, to the point where it would be difficult to live without it. However, many don’t have a backup plan for when it’s gone.
Our failure to prepare for the worst occurs because most of the time, it isn’t a concern. The majority of power outages do not last long enough to make much of a difference in our daily routine, aside from having to reset our clocks.
However, when lengthy power outages occur, many wish they had thought ahead. Homes with solar panels and battery backup can continue to function when the grid is down. Solar power can help keep food in the fridge and the freezer preserved while powering other essentials or the entire home.
Solar Panels and Increased Security for Homeowners
You can’t put a price tag on security. Solar panels not only increase homeowner security during a crisis but also on a day-to-day basis. Having a plan for when something might happen offers peace of mind and hope.
The Cost of Waiting for Better Solar Technology
Because the price of solar has drastically decreased over the past several years, many fear that the cost of solar isn’t as low as it might be in the future. While this might be the case, these individuals aren’t considering what is lost every month they are without solar power.
The current price of solar is already below most local utility electricity rates. Every month a homeowner goes without solar, they are missing out on the savings that home solar panels could have provided them. As utility rates continue to go up, and the value of the dollar goes down, the buying power of the dollar decreases.
Although a solar array may cost less in the next five or 10 years, inflation would make the cost close to the same. The cost difference would come from the savings the homeowner missed out on over the years spent waiting.
The Variables That Go Into the Cost of Solar
Another factor to consider is the cause of the decrease in solar costs. Solar tech has been the main contributing factor to the past price decreases. However, solar panels are no longer a large part of the cost of residential solar.
The Role of Soft Cost in Solar Price
Soft costs, such as solar permitting, have become the leading cost variable in the price of residential solar. Soft costs, however, are not as significant as solar technology pricing once was. Even with continued decreases in technology and soft costs, solar prices won’t decrease at the rate they once did.
Residential Solar Rebates
Another factor to consider is whether waiting for the right technology update is worth missing out on current solar rebates. The federal rebate for solar currently covers 26 percent of a solar installation. Federal rebates cover a large chunk of the overall price of solar, and they are decreasing with each passing year.
The Price of Waiting for Tesla Solar Shingles
Another consideration that many have is whether to wait for Tesla solar shingles to become affordable or even available. Solar shingle roofs are best for new builds and homes that need the roof replaced.
If this isn’t the case, solar shingles cost significantly more than an array with solar panels. Even the Tesla site refers customers to solar panels if they don’t need a new roof.
Waiting for Price Decrease in Other Tesla Products: Powerwall
While Tesla has become a household name, it isn’t affordable for everyone. The Tesla home battery is one of these products that many individuals feel is above their pay grade.
However, this doesn’t mean customers that can’t afford it now have to go without battery backup. Purchasing the amount of battery backup that is affordable and necessary to get by now, and waiting later to install a home battery is a practical way to stay prepared, without overextending one’s finances.
Qualifying for Solar Panels
The last and probably most important thing to consider is whether you qualify for solar. Not everyone is in a place in their life where they can get solar. For some, this is a question of being able to afford solar. However, most can’t install solar because their home doesn’t qualify.
Ensuring the home qualifies is a necessary part of determining the right time to go solar. Several different things can make or break a residential solar installation.
Determining what might prevent the home or homeowner from qualifying can help customers plan for the future. It can also help homeowners that thought they couldn’t afford solar, realize that they actually can.
The Role Credit and Taxes Play in Solar
Credit and qualification for the ITC are essential ingredients for acquiring solar panels for a home. Individuals that don’t have either of these will not qualify for solar.
Why Credit Matters
Credit scores play a role in solar purchases. Unless the customer is paying in cash, the homeowner’s credit determines whether they are eligible for a specific financing program.
Why Qualifying for the Federal Tax Credit Matters
The other thing to consider is whether the homeowner owes federal taxes. The ITC is a federal tax credit applied to solar installations. Those that lease solar or don’t owe federal taxes don’t qualify for this tax credit.
What Usage Is and Why It Matters
Usage is the amount of electricity a home uses. To create accurate solar estimates, solar companies need at least 12 months of usage. Usage tells them how much energy the homeowner needs to produce with their solar panels.
There is a delicate balance between making a profit and saving the customer money. This balance is why solar companies turn away homes that have low usage.
If the home’s energy usage is too low, there are a couple of things that can increase the home’s energy consumption and qualify for solar. Two of these things include adding electrical appliances and increasing the number of people living in the home.
Home Factors Used to Determine Solar Accommodation
There are lots of factors that go into whether a home is a good fit for solar. Some of these factors include shading, direction, pitch, and the azimuth of the roof. A solar professional will verify whether these things will prevent maximum solar production before the system is approved.
Ground Mounts for Homes That Don’t Qualify
Homeowners that don’t have a qualifying home may not be a lost cause. If the home can’t qualify for solar, unshaded space in the backyard is worth considering.
Ground mounts, otherwise known as backyard panels, need at least 210.12 square feet of unshaded space. The property line setback requirements of the city the home is in can increase the minimum space required for an array.
Home Types That Don’t Qualify for Solar
Another thing to consider is the type of home. If the home is a modular home, mobile home, or the person applying for solar is not the owner, it will not work.
When to put solar on your home is a complex question. We hope the above guide has helped make it digestible. If you feel it is time to look at solar, don’t forget to compare quotes.