Millions of people across the country have figured out that adding solar panels to their home is a great way to save money while helping the environment. But like any technology, it’s easy to assume that advances in panel design and manufacturing efficiencies will continue to drive prices even lower than they are today. So why not wait?
The truth is far more complex, and urgency is critical – especially now – for maximizing a solar investment. Calculating the ROI of a residential solar purchase requires careful examination of many variables. From time-sensitive federal and state tax incentives, to the noodle-like rigidity of our local utility rates, maximizing return has much more to do with timing and your home’s physical location than panel price alone.
Here are four factor to consider when calculating how quickly your solar energy system will pay you back.
1. Use grandfathering to avoid future increases: Several proposed rate changes that – if approved – will introduce new monthly demand fees into your energy bill. Saving money with solar on a demand-based rate plan requires several additional components that can easily increase the price of a rooftop solar energy system. The good news is that it has promised that any customers who sign a residential solar contract on or before July 1st, 2017, will remain on the current non-demand rate plan for 20 years. So, if you’re a customer who want’s maximum solar savings, now is the time to act.
2. Go solar in fall or winter for a quicker return: Most utilities support some sort of net metering program. Net metering allows homeowners who generate their own solar electricity to feed excess power back into the grid in exchange for energy credits. Customers can use these energy credits to further offset their bill in the hot spring and summer months. As such, installing solar in the fall or winter rather than waiting until spring is the best way to ensure you’ve banked sufficient credits to keep your summer bills low in the first year. This is particularly important this year, as policies are currently under consideration to reduce or even eliminate net metering all together.
3. Join SRP’s Advanced Inverter Study and Save up to $3000: SRP is looking to better understand how solar customers use the electrical grid. As such, they’ve commissioned a study that gives new, qualifying customers access to a free inverter, a $250 demand manager rebate, and a $10 monthly bill credit when they go solar. It’s a total of $3000 in savings. There is no participation required, SRP simply wants to review your systems performance through 2018. After the study, qualifying customers will be allowed to keep the free inverter. This program can also be combined with state and federal tax incentives for even more savings. Quantities are limited so contact us directly to learn more.
4. Temporary tax incentives add up to big savings: The Federal Incentive Tax Credit (ITC) can offset as much as 30% of a solar purchase. In addition, some states offer a flat $1000 tax credit for going solar. In 2016, congress voted to extend the federal ITC through 2019, after that it drops to 26% in 2020, and then 22% in 2021, before dropping permanently. We all know that policies can change with political agendas. Given the potential for significant savings, we highly recommend taking advantage of these programs while they’re available.