Solar panels are more affordable then ever. Keep reading for how to buy solar panels for cheap in 2019.
The transition towards solar energy continues to accelerate in the United States. Americans on the fence are learning that solar energy is more accessible, prevalent, and affordable each year.
In fact, there is now enough capacity to power nearly 6 million homes. Energy costs are on the decline, while the number of U.S. installations is on the rise.
The solar industry is fueling job growth across the nation. States like California and Texas are leading the way in replacing conventional energy with solar.
Read on to learn how to buy solar panels for cheap in 2019. Explore tips on how to transition to solar power on the cheap and reap the monthly cost savings.
How Much Do Solar Panels Cost?
The initial investment costs to switch to solar energy are not cheap. Independent estimates for solar energy costs total roughly $20,000.
The solar panels cost $6,500, while it takes another $2,500 to balance the system. The second largest cost is for solar installation. It costs $3,000 for labor and another $4,500 for permits, inspections, and other fees.
Finally, it costs another $3,000 for operational costs. This leaves many homeowners wondering how they can afford to buy solar panels.
What Are the Keys to Finding Cheap Solar Panels?
The most important tactic for finding cheap solar panels is shopping around. Getting competitive quotes is one way to ensure that you find the cheapest price.
One of the primary cost drivers is the brand and where it is produced. For instance, solar panels from China are the cheapest on the market. A good strategy is to ask prospective solar companies about the solar panels being used.
Another area where you can save money is by finding the cheapest installation price. This involves several variables like the hourly labor rate, installation time, and experience. Installation is another area where shopping around is certain to benefit you.
Some people are not looking to convert to solar full-time and just want an emergency solution. Websites such as PoweredPortableSolar.com sell portable solar generators that are cheap and offer clean energy.
Is Converting to Solar Power Worth It?
Before people make the change, they want to be assured that there is a positive return on investment (ROI). Of course, it is important for many people to use a clean energy solution. However, the bottom line is still the overriding factor for many consumers.
The financial benefit to you is that using solar power reduces your monthly electricity bill. It becomes much cheaper to run your air conditioner in the summer or turn the lights on. Therefore, the largest cost savings come in the summer months.
Industry experts performed an analysis of alternatives to see when the conversion yields a positive ROI. The break-even point to pay off the initial investment with savings is around the 10-year mark.
Obviously, there are many different variables that affect the break-even analysis. Your initial investment and home size play a significant factor. Also, people who live in warm weather states like California or Texas are likely to see more savings than someone living in Maine.
For this reason, some estimates predict a break-even point in as little as 3 to 5 years. Regardless of when, the important takeaway is that you begin pocketing the cost savings immediately after you reach the break-even point.
What Are the Options for Purchasing Solar Energy?
Not everyone has $20,000 lying around to buy solar panels. The good news is that there are a number of purchasing options that make the conversion possible. Besides paying cash, there are two primary options to buy solar panels and other investment costs.
The first option is taking out a solar loan to pay it off over a fixed period of time. One of the most significant benefits to this choice is ownership.
The solar panels become your property once the loan is paid off. In many cases, this is enticing to prospective buyers if your house is on the real estate market.
Another benefit is that taking out a solar loan allows you to capitalize off of generous grants and tax credits. We will have a follow-up section on the various grants and tax credits offered by federal and state governments.
Businesses can increase their ROI by choosing a loan over a lease. This is because solar panels can be treated as a depreciating asset and serve as an income tax deduction.
There are some negatives to opting for a solar loan. The most impactful negative are maintenance costs. Since you opted to buy solar panels and have an ownership stake, the responsibility of maintenance costs falls to you.
Also, loan terms are typically shorter than lease terms. This means that your monthly payments will be higher.
Leasing or Signing a Power Purchase Agreement (PPA)
The next choice is leasing, an option that is commonly referred to as a PPA. Like a car lease, a third party owns the entire solar system.
There are a number of convincing benefits to choosing this purchasing type. For starters, lease terms are generally more spread out than a solar loan.
Instead of a 10 to 20-year solar loan term, leases and PPAs run from 20 to 25. This results in lower monthly payments to help you buy solar panels.
Another impactful benefit is that you are not responsible for maintenance under a lease or PPA. The third party who owns the solar panels is on the hook. Also, third parties typically develop apps that track energy performance.
While the positives are significant, there are also legitimate disadvantages to this choice. Without the addition of tax credits and grants, you will not achieve the same ROI as a solar loan. Also, you do not own the solar panels at the end of term and may need to renew the agreement.
What Are the Federal and State Programs to Buy Solar Panels?
Both federal and state governments offer programs to help make solar energy more affordable. The federal government specifically allocates funding to states to reduce energy consumption.
A number of federal agencies offer funding opportunities through grants, tax credits, and rebates. These agencies include the Department of Energy, Environmental Protection Agency, and the Department of Agriculture.
At the state level, assistance varies depending on where you live. Before deciding to buy solar panels, our advice is to perform online research on state programs to reduce investment costs. For example, California offers a 30 percent tax credit for investing in solar energy. Both individuals and businesses alike can take advantage of it.
A Recap of Solar Energy Costs
While the ROI varies depending on the variables, it is without question that you will see cost savings. This is true regardless if you take out a solar loan or a lease.
What better deal is there than saving money on energy costs while helping save the environment? If you enjoyed this article about how to buy solar panels for cheap in 2019, check out our tips section for other great content.