Have a Sunny Outlook on Solar Panels

Note to Board President/EO

This column is long and can be broken up into 2 segments

Now’s the time to jump on the solar bandwagon. You can buy your own system at a big box store, or lease one from a solar provider. Either way, you’ll trim your monthly electric bill.

In addition to trimming energy costs and making your house more comfortable, you can take advantage of current rebates and tax credits that practically beg you to get on the solar bandwagon. Those incentives won’t last forever.

Need more convincing? Here are the top reasons to go solar:

The Price is (Getting) Right

As solar panels and installation methods get more efficient, the price of residential solar electricity has dropped a whopping 46% since 2010.

Meanwhile, the national average cost of an entire household system — one big enough to power the everyday needs of a family of four — has fallen from about $36,000 in 2010 to around $24,000, factoring in permits and installation.

That still puts solar in the range of a new car — and out of the reach of many — but there’s much more to the cost story.

Rebates, Incentives, and Credits

Rebates and incentives offered by the local, state, and federal government can total as much as 50% of a system.

The biggest is the tax credit from Uncle Sam. Until Dec. 31, 2016, you’re eligible for a tax credit of 30% of the price of your installed system.

Payback Times are Shortening

As system prices fall, payback times — the number of years it takes to recoup your investment — are shortening. Payback times are now about half of what they used to be just five years ago; the average payback time is now around 11 years.

Local electrical rates determine how much money you’ll save, and how long it’ll take your energy savings to pay back the cost of a system.

After your payback is complete, years of pure energy savings add up. With annual savings averaging about $600 (and going up 2% to 3% each year), you’ll save thousands of dollars over the 25-year lifetime of a system.

You Don’t Need Lots of Sun

Annual energy savings from solar is much more about your local electrical rates than how sunny your locale is. Ohio averages about 175 sunny days a year. Areas with the highest rates enjoy more savings and more rapid payback on their systems.

You Don’t Have to Pay Up Front

One of the latest innovations in home solar is the leasing plan. With leasing, you pay nothing up front for your solar array. A crew comes over, sets you up with panels, a converter, a connection to the grid, and you’re good to go.

You sign a long-term lease agreement of 15 to 25 years and pay only for the solar-generated electricity, which is typically priced 10% to 25% lower than the cost charged by a local utility provider.

You’ll still pay your utility company nominal monthly maintenance fees to keep the grid up and running, plus charges for any electricity you use in excess of what your solar system can provide. Some solar leasing companies guarantee that whatever you spend — combined — will be less than your old monthly electric bill.

Leasing is a good way to go if you’re interested in adding solar but the upfront costs are a deal breaker. With leasing, you won’t own the system and won’t be able to reap the benefits of free electricity when the system is paid off, but you’ll still trim your monthly electric bill.

Big Box Home Improvement Stores are on Board

Solar panels and systems are no longer exotic specialty items. In fact, you’ll find them at major retailers about as cheap as they can be found. For the DIYer determined to shave up to $5,000 from the cost of solar installation, off-the-shelf panels and converters are available.

Net Metering

Net metering is the term for what happens when your solar panels generate enough electricity to send the excess back to the grid — in effect, making your meter run backwards.

The regular, grid-produced electricity you use, minus whatever you generate from your rooftop panels, equals the “net” — what your utility company ultimately charges you. If you make more juice than you use, you typically get a credit that rolls over to next month’s bill.

It’s a terrific benefit for owners of solar installations and one way that solar helps pay for itself.

Soft Costs are Lowering

As prices for panels fall, solar energy is increasingly affordable. But prices will only fall so far.

Today one of the biggest hurdles are soft costs – the price of obtaining permits, connecting your system to the grid, and having everything inspected (whether your installation is pro or DIY). On average, soft costs add more than $2,500 to the price of home solar.

Trimming soft costs is an initiative of the U.S. Department of Energy, which has a stated goal of reducing the 2011 costs of solar energy 75% by 2020.

Solar Adds Value

Studies by the Appraisal Institute, a worldwide association of real estate appraisers, say a home improvement that leads to documented energy savings can yield up to a 20-to-1 valuation. At that rate, if your solar enegery system saves $1,000 per year, you can expect a $20,000 increase in your home’s value.

An actual valuation increase depends on the location and condition of your house.

So, falling costs, a host of temporary incentives, and thousands in value-adds might just make this a great time to add solar power to your home.

And remember, the next time you are ready to buy or sell a home, be sure to contact a REALTOR, a member of the _____________________ Board of REALTORS.