For most of the things you buy, you won’t see any positive financial return on your investment. Does your car generate an income for you? Unless you’re renting it out to your friends, probably not. Solar panels, on the other hand, do pay for themselves over their lifetime, and then can start paying you back. Not a bad deal. Here’s a quick guide to how to spend as little as possible on your solar panels so you can generate the best return.
Note: the simplest way to learn about your local solar economics is to sign up for a free account with One Block Off the Grid. Not only will the provide you with specific local incentives and rebates, but they’ll also call you for a free consultation (if you wish). You can also use their free solar estimate tool.
Depending on your location, your local government or utility company may be able to give you a great deal. Several states offer generous rebates on solar. Your state may also offer personal tax credits, a property tax exemption, sales tax exemptions, and loans. 29 states have renewable portfolio standards, and 16 of those have specific provisions for solar power, meaning you can get paid for the extra power your panels pump out.
You can save on your federal taxes with the Federal Solar Tax Credit, which gives you a credit equal to 30% of your out-of-pocket cost for solar. If you did get a rebate, that will be subtracted first. If your tax liability for the year isn’t as big as your credit, the extra amount will be rolled over to the next year.
You can also get the price of solar down by working with a group solar discount. By buying as a group, neighbors can negotiate with solar providers.
After you’ve reduced the cost of solar power through rebates and other incentives, you can find creative ways to cover the rest of the purchase price. Some homeowners choose to finance solar with home equity loan. People often discover that they’re actually saving more on electricity than they’re paying on their loan, so they’re saving money right away.
Having solar panels means you’ll be paying less for electricity, and if you’re generating more power than you need, you may be able to actually sell it back to your utility company and make them pay you. If electricity rates go up, that’s no longer a bad thing– you’ll be making more money.
You’ll also increase the value of your home (see: solar home value). A study from the Appraisal Institute showed that for every dollar you save in electric costs, your home jumps up $20 in value! That’s a much better deal than other types of home renovations. You can often recover more than 100% of your initial expense.