The most commonly asked question from customers
The most common question we get asked about going solar is “How much does it cost?” Of course! It all comes down to affordability. The answer to this question however can be misleading if you are not considering the full picture in context. If you are going to look at the total price of a solar power generation system, it is critical to also look at the cumulative cost of staying with your utility company and compare the two. Solar energy is an investment, and one that pays off exponentially more over time.
Understanding the benefits of solar short and long-term
If you go with a financing term, it will be on a fixed monthly payment, while utility companies continue to raise their rates to accommodate upkeep of the grid, company bonuses, and inflation. It may take up to 3 or 4 years before utility costs become more expensive than your fixed monthly payment on the system, but as time goes on the utility prices never stop increasing and at the rate of approximately 5% every year. This is important to know because from the time the monthly utility rates become greater than your monthly financing fees, you will find that your solar power generation system will become increasingly cheaper than utility costs. And once your system is completely paid off, you will own the panels and its capacity to produce electricity for your home. By this point (unless you have increased your energy consumption after your system has been designed and installed), your solar will be essentially free. All that you will have to pay each month will be a meager grid connectivity fee for the purpose of net metering and backing up your system with a bank of electricty from the utility company.
It is important to note that if you get a full-coverage system (covering your average kW hours annually), some months your solar energy production will exactly match your needs, some months you may produce a little extra, and other months you may produce a little below your electricity usage. This is because not every month will produce exactly the same amout of sun-power due to fluctuations of weather during seasonal changes. But you should break even in energy production/usage every 12 months.
Solar Return on Investment Checklist
Payment Options: Cash or financing term
Financing Term Duration: 10, 13, 15, or 20 years
Loan Approval Period: Same or next day
Solar Power Generation System Price: $30,000 (for average-sized 7 kW systems)
Comparative Utility Company Price: $48,000 (over 13 year period for average energy consumption equal to the output of a 7K system)
Differential in Cost: Savings of approximately $18,000 or 37.5% going solar (over 13 year period)
Interest Rate for High Credit Candidate: 0.99%–2.99% fixed rate (depending on state)
Utility Cost Projection: Increase 5% per year on average
Solar Cost Incentives: Federal tax credit (equal to up to 30% off system costs), state tax credit (varies by state), utility company programs such as solar renewable energy credits (SRECs), GST promotional offers, etc.
Additional Benefits: Significantly reduce dependency on depleting fossil fuels and utility company, increase property value (without increasing tax liability), contribute to cleaner environment, support the U.S. economy, and indirectly improve long-term health
You can see in the graph below how solar saves you money over time. As the price of utilities increase, your financing term remains the same for the entire duration. After you pay off the system, your only charges will be a monthly grid-connectivity fee and occasional usage of electricity from the utility company on months you generate less than 100% of your electricity demand. The example below depicts the solar savings potential with a typical 13 year financing term.
Contribution: Geddy F.