Rooftop solar panels are a significant home improvement. Not only are they better for the environment, but they also bring down monthly power bills. We know what you’re thinking. “The catch must be the price for rooftop solar panels, right?” Nope! Residential solar systems are also affordable, especially during these times. We’ll explain how.
How Much do Rooftop Solar Panels Cost?
Fossil-fuel-sourced power requires substantial factory processing before power companies can sell it as electricity. On the other hand, sunlight needs almost no processing for use as electricity.
In fact, the small panels can turn sunlight into electricity for your home under their own devices. Comparatively, fossil fuels require factories, energy, and equipment, as well as humans to convert fossil fuel into electricity.
For that reason, solar power, including the cost of solar panels, is more cost-effective than fossil-fuel power. According to the Department of Consumer Affairs Contractors State California License Board Manufacturers (CSLB), “The cost of a new solar system typically ranges from $15,000 to $35,000. The variance depends on how many KW [kilowatts] of electricity the system can produce, as well as the specific installation costs.”
Manufacturers must think of everything when determining the retail cost for rooftop solar panels. The type and size of the solar panels are among the first considerations because they establish how many total KW the panels can produce.
However, federal and state tax incentives lower the final cost of the panels from the consumer’s perspective. Many consumers don’t even have to pay up-front for installation.
Regardless of your choice, solar panels pay for themselves in the long run. We’ll discuss those details below. For now, we want to share the two options you have for putting a solar system on your roof.
Financing for a Residential Solar System
Just like a home or car, you can buy or lease solar panels. Let’s go over the strengths and burdens for each option.
Purchasing rooftop solar panels means you’re in control. That’s not so great if a solar panel happens to need maintenance. It also means that you must wait until the following year to receive tax benefits on the system.
However, it increases the value of your home and it’s yours to keep. Furthermore, it significantly reduces your electricity bill. In fact, you have control over all the electricity it produces. If the system produces more power than you need, you may be able to sell the excess to a power company.
There are several loans available to accommodate a solar system. For example, the Property Assessed Clean Energy Program (PACE) pays the initial costs for solar installation. You keep your cash in your own pocket.
The tax collector then includes repayment for the upfront costs on the property’s tax bill. PACE financing attaches the loan to the property instead of the individual property owner(s). In other words, the property owner isn’t responsible for the loan if the property changes ownership.
Leasing a solar system is akin to leasing a car. The lessor pays for the use of the solar system. The lessee benefits from the long-term advantages of owning a solar system.
For example, the lessee owns their home and wants to lease rooftop solar panels. The lessor buys the solar system. The solar company installs the system on your roof.
The lessor can use solar energy with no up-front money out of their pockets. Instead, they make a small monthly payment for all the energy they want. In other words, they significantly lower their electricity bill without the responsibility of ownership.
However, the lessee cannot sell excess energy to a power company or benefit from other solar incentives. Furthermore, the lessee doesn’t benefit from any state or federal tax breaks.
Are Rooftop Solar Panels Worth It?
You can’t put a price on the benefits of solar energy to our health and our environment. But let’s face it; a solar system needs to make sense to our wallets, as well.
According to Mental Floss, “The savings you earn by going solar can take anywhere from seven to 20 years to cover the initial cost.” After you recover your initial cost, Mental Floss points out that the average savings is “a whopping $20,000.” That’s in addition to the savings on your electric and tax bills before you recover the initial cost.
You enjoy those savings throughout the life of your rooftop solar panels, regardless of how much you still owe. NerdWallet encourages consumers, especially those with “high energy rates and a suitable solar rating” to go solar.
Furthermore, solar panel performance, as well as an abundance of solar panel manufacturers have driven down the cost of solar system installation. Getting a solar system is more affordable now than it’s ever been.
Additionally, “It’s worth installing solar panels in your home while the 26 percent tax break in place,” says NerdWallet,” for the good of the environment and your wallet.