The Bright Side of Residential Solar Panels and What to Avoid Before You Buy
It happens every year. Arizona homeowners seldom think about the cost of our electricity month to month—until the first day we experience a 100° temperature reading and a sigh of depression is exhaled. The hotter it gets, the bigger our electrical footprint and associated cost. Although solar energy isn’t new to our State, public sentiment towards it continues to be accepted more favorably. So, before you purchase residential solar panels, here’s an overview of benefits, shortfalls, and options to make an informed decision.
Electric Companies and Solar Energy Are Two Separate Entities
Don’t call your APS or SRP about solar energy just yet. You’ll want to review the variety of choices available through third-party solar panel companies who focus their business on helping residential customers balance usage through ecosystem friendly products.
In fact, electric service companies must work with renewable energy sources, according to the Arizona RPS (Renewable Portfolio Standard) law. IOUs (Investor Owned Utilities) such as APS and SRP must pull 15 percent of their power from renewable sources, like solar, by the year 2025.
But there’s a three-way relationship between you, the consumer, and the utility and solar panel companies: It’s how the magic happens.
Solar Serves Financial and Ecosystem Benefits
While most of us complain about the horrendous heat (yeah it’s a dry heat, not always) our onslaught of sunshine (the most in all 50 states) provides the perfect backdrop for solar. With the increase in electricity use from May through October, the cost per unit also rises, and with it the risk for rolling brown outs. Just ask a Southern California resident, it’s a summer staple over there.
And with each year in Arizona comes an increase in the cost for electricity, whether there is an uptick in need or not. Residential solar panels are the essential stopgap to rising rates year to year.
Keep more of what you love.
This is how it works. A representative from the solar panel company of your choice will review your annual electric bill in terms of rate plan, cost of use, and level of usage. With additional consideration to
the way your property faces (North/South or East/West), square footage, age of home, and the presence of other energy saving characteristics of the property, you will then be given a recommendation on the amount of panels needed and where they will be positioned on your roof.
A fixed monthly rate is what you will pay for electricity for the life of your solar term, subject to a small, capped percentage-based increase.
Electricity and Solar Use Example:
Monthly electrical bill remains at $100.00
Utility company pays YOU to buy your solar energy overage, referred to as Net Metering
Any unused electricity generated by solar panels is credited to utility company account
At year end, any unused electricity will be credited to you (or reimbursed via check)
For overage of electrical usage in a month, payment will come from credit amount in utility company account
By referring to the above example, if you have a monthly credit of $22.00, at the end of a full year, that’s $266.00 saved. In addition, with the monthly fixed rate of $100.00, even during the summer months, compared
to high usage bills equating to $250, $330 or more every 30 days, solar makes a lot of sense and cents.
With residential solar panels, you get more of what you need, at less cost, while doing your part to support our ecosystem. Think of it as an individual effort to support a healthier community.
Let go of a dinosaur mentality.
As with any investment, one looks at the initial cost and the length of time it would take to cover those costs and begin to see a return.
If you are a homeowner who doesn’t plan on staying in your property for more than 5 or 10 years, putting on energy-saving panels may not seem like a wise decision, especially if you are using a loan to pay for the product. But there’s more than one way to skin a solar cat.
Increase Home Value with the Addition of Solar Panels
Glancing through any community in the Southeast Valley, you’ve likely noticed more solar panels installed on residences recently than in years past. And for good reason. Solar panels in Arizona add value to a home, both market and perceived value.
According to Zillow.com, properties with solar panels garner a 4.1 percent value increase, reflected in property sales. Real estate agents across the country are seeing a wave of would-be homebuyers making specific
requests to only view homes that have solar panels.
Solar Panels Come in Many Packages
Entering into the solar panel marketplace can be a tad overwhelming, especially if this isn’t your normal wheelhouse of knowledge. There is no one-size-fits-all solar program which is why doing your own due diligence to discover what works best for your situation is key. The recent extension of the existing Federal ITC Tax Credit is another prime example of why going solar sooner than
later is wise.
Purchase Residential Solar Panels
Truth be told, because I am closer to retirement than not, I never thought that solar was a fit for me. Until I learned about a lease program available through Our World Energy, but I’ll get to that in a minute.
Before you buy residential solar panels, it’s important to understand every detail of the associated purchase contract, and whether you can afford to commit to the program.
Of course, you always have the option to pay for solar panels and the installation in cash up front, but it might be easier to choose a loan program with payments for the short- or long-term, with no pre-payment penalty.
Lease Solar Panels for the Home
But for those who don’t feel comfortable diving into coveted savings or taking a financial hit by breaking through a 401k, Louis Banen of Our World Energy suggests the no out-of-pocket cost solar lease program.
Are you wincing at the thought of a lease? I certainly did, until I learned about the details and how the benefits not only serve the homeowner who initiates the lease but also the future homeowners who purchase a
home with the solar lease already in place.
No out of pocket costs. A warranty for the work done. The utility cost benefits can transfer to a new homeowner, if selling the home during the lease term. Why wouldn’t anyone want to at least investigate the
bountiful possibilities?
What to Look for in Solar Panel Programs
With a solar program in place on a property, it’s important to remember that just because you were able to qualify for a solar loan doesn’t mean that the new owner of your property will be able to do the same. If, and
when, you look to sell your property with solar panels, make sure to disclose the information regarding the current solar loan program and how the buyers can apply for approval.
The benefits are clear cut, as long as you gage the best way to get into the programs available. There are differences in how solar panels work with SRP compared to APS. Consulting with a solar panel industry expert is crucial to making a sound decision that’s easy to live with.
Consider the following before going solar:
Out-of-pocket costs
Current need
Short- or long-term need
Overview of savings
Interest rate on solar loan
Projected length of time living in property
Life left and condition of existing roof
Life left and condition of HVAC unit (if on the roof)
If you’re thinking of replacing your roof in the near future, it may be smart to coordinate the new roof and solar panel installs simultaneously. Depending on the type of roof you have (clay tiles, shingles, built up) some
roof tiles may have to be removed to effectively install the solar. Ask if the solar company will cover any roof replacement costs if there is damage done in the process. You don’t want to be on the hook if something turns sour.
Now that you have the basics on what to watch for before you buy or lease a solar energy system, what are you waiting for?