Installing solar panels in your home is an excellent way to make a home more energy efficient and environmentally friendly, but setup and up-front costs can make the move unsettling to many homeowners until they find the right residential solar financing sources. To make the process more inviting and less costly, states and companies are increasingly offering new financing arrangements for PV (photovoltaic) system installation.
According to the Solar Energy Industries Association, the U.S. residential solar market grew nearly 62% in 2013 and has kept on track since, with even higher expectations for 2015. The face of the solar panel owner has evolved: it’s no longer just for early adopters or super-conscious environmentalists. Young homeowners and families are looking to install panel to help combat high energy prices.
Energy prices are sliced dramatically through the use of residential solar systems. Homeowners can typically save 10% to 20% of their electric bill using solar power, although the exact savings will depend on how much electricity is consumed, the efficiency of the panels and current electricity costs.
In the beginning of the residential solar evolution, homeowners would have to front the entire cost and buy the solar panels and then rely on government tax credits and state incentives to help make the price tag more palatable. But the cost of solar panels has fallen sharply since the end of 2010, making them more affordable and residential solar financing plans, such as those offered in conjunction with SunLender programs, make the upgrade to solar painless and affordable.
Industry gurus herald the fact that the prices of solar panels have decreased by 70% over the last six years, which have seen a cost decline every year.
Additionally, new solar lease agreements that are available in some states have also increased the demand for solar panels. Under these deals, a homeowner doesn’t have to pay any money upfront and essentially leases the equipment for 20 years. The homeowner isn’t on tap for the costs of any repairs and maintenance of the panels, but is locked into a long term agreement.
A 20-year agreement is a long time, but an owner can lock in their monthly rate to eliminate any price hikes that are common with utility companies.
The cost savings continue over the life of solar financing agreements as the typical escalation rate on solar energy is 1% per year compared to the 5% to 7% increase electric companies pass on to customers each year.
Popular solar financing programs, with solar leasing at the forefront are involved in a huge majority of residential solar panel installation. Some customers use home equity loans or a traditional loan to cover costs, but most customers are opting for the solar leasing model.
Solar panels can be erected on pretty much every residential rooftop across the country, but they will be more efficient on roofs that face the south or south east and ones that don’t have any obstructions that would prevent the sunlight from reaching the panels. Heavily shaded roofs are an issue, but if there is enough sunlight for a garden, there is enough sunlight for solar panels on your roof.
Additional cost savings can be provided to residential solar users living in a state that offers state credits(along with federal tax incentives) that will lower the upfront cost. Under the federal tax credit solar systems that are installed from Jan. 1 2009 to Dec. 31 2016 can get a federal tax credit of 30% of the cost. State incentives will further reduce the cost of the system.
If you are interested in installing a residential solar system and need more information on residential solar financing, contact your SunLender representative.