Is installing solar a wise investment for your household? If you can make home solar work for you, you could start seeing home solar savings in as little as five years. There are several important tips you can follow to make sure going solar costs you as little as possible.
If you’re considering taking part in the worldwide shift towards sustainable energy, here are four ways you make this affordable for your household. First, find out when your system can begin to pay for itself. Learn about the tax credits that are available to you. Keep the costs of your solar installation low by comparing quotes. And look into your options for loans, leases, and community solar.
- Home Solar Pays for Itself in 5-10 Years
- Tax Credits Provide Home Solar Savings
- Save on Going Solar Costs
- Leases, PPAs, and Loans
Home Solar Pays for Itself in 5-10 Years
Depending on how high your current energy bill is, your system can quickly start paying for itself in energy savings. On average, home solar costs completely pay off in about 5 to 10 years. If your home is in the U.S., this will probably apply to you! But you’ll want to take a close look at your current energy bill, and compare this with your going solar costs, to forecast this timeline for yourself.
Once your installation has paid for itself, how many years of pure savings can you look forward to? An average system lasts for 25 to 30 years, so you could be looking somewhere between 15 and 25 years of home solar savings.
Tax Credits Provide Home Solar Savings
If you live in the United States, the federal Investment Tax Credit (ITC) is available to you through the end of 2021. It allows you to deduct 30% of your solar installation. You just need to fill out IRS form 5965[1]IRS and include it with your tax return. You’ll qualify for this credit for the tax year you had solar installed.
There are many state-level rebate programs and tax incentives available, depending on which state you live in. The solar installer you work with can offer you expert advice on which of these local incentives you can take advantage of. You’ll want to begin that conversation early in your process to maximize your home solar savings.
Save on Going Solar Costs
When you’re ready to find a solar installer, our solar installation guide recommends working with a small company with a strong track record. The NREL, a federally funded lab, found that comparing quotes and selecting the right solar installer for your project can lower your expenses by 10% or more. There’s are a lot of other home improvements you could fund with those substantial home solar savings!
To get an approximate idea of what your budget for installation might look like, estimate your home solar panel cost.
Leases, PPAs, and Loans
If you’re on a limited budget, you can still save on your monthly bills by going solar. Switching to sustainable energy doesn’t necessarily require a huge upfront investment. There are programs available to make it financially realistic for you.
If you want to install your own solar panels, you may want to look into solar loans. Secured solar loans are available if you can use your home as an asset. Unsecured solar loans have higher fees and interest rates than secured loans, but they use the solar panels as the asset instead of your home. Many of these loans are available with 0% down, so it’s possible for most homeowners to go solar. Make sure to compare interest rates, and learn whether your lender has a solid track record, to get the best deal on your solar loans.
Leases and Solar Purchase Agreements allow homeowners to buy into green energy without actually owning the solar panels themselves. By using community solar, you can share a system with your neighbors instead of paying for the whole installation.
Now you know several options for funding your solar installation, you’re ready to move onto the next step in our guide to going solar.