With the new 2020 California Solar Mandate that requires solar on all single-family homes, the question many homeowners are now asking themselves is, “is now a good time to invest in solar?”
The popularity of solar is only escalating, given the new mandate. Over 2 million homes in the United States alone have solar. With perks like having control over your power while being environmentally conscious, many homeowners are evaluating the idea of solar. Not to mention the ability to sell your energy and make additional income through net metering.
With so many advantages to solar, there are a few factors to consider beforehand.
Before we dive into why now is the time to move forward with your solar purchase, we want to address that most crucial part, costs. The average cost of a solar system can range between $20,000 to $40,000 depending on your location and energy needs. Although the costs can be intimidating, homeowners have several options for sourcing these funds.
Power Purchase Agreement (PPA), this gives you the ability to lease the equipment without upfronting the costs.
Unsecured Loan: Through a financial institution or with LightStream
Home Equity Line of Credit (HELOC): Depending on the equity generated, you can take out a line of credit on your home to purchase. The perk on a HELOC is you can write off the interest paid on loan.
Property Assessed Clean Energy (PACE) Is a program available in selected states such as California, Florida, and Missouri. PACE can fund up to 100% of your project that you can repay for up to 20 years with an assessment added to your property tax bill.
Upfront, if you happen to have savings for this home expense, this is considered an investment because of the return savings on your electricity bill over time.
Let's start by pointing out that there are incentives for solar power.
Some of the incentives are:
Tax Credits: There are both federal and state credits available. These incentives provide you with money back through your tax returns and calculate as a percentage of your total cost.
Rebates: Typically paid through manufacturers and paid in a lump sum and amounts vary. Some rebates are a fixed amount, and others based on the size of your system.
Performance-Based Incentives (PBS): This is an incentive program based on the amount of electricity you generate. Energy companies pay you per kilowatt. These rates vary by city, state, and utility company.
According to Zillow, a solar PV system can increase your home’s value by up to 4.1%.
When outweighing the pros and cons, the value of solar is rising. The 2020 California Solar Mandate will only increase the popularity of solar mainly because of the rising cost of electricity (about 3% per year). Reports show an average savings of $600- $800 per year by switching and an average of 19,000 in a 30 year period. If you plan to live in your home for an extended time, the investment will save you tens of thousands of dollars over a multi-year period.