By Jennifer Lubell
A solar system doesn’t just run on panels alone, and the initial cost of switching to solar energy can leave many homeowners feeling overwhelmed. But in reality, the investment is a bit more complicated than that.
To get the best value and price for your system, Ruben Ugarte, senior director of business development at Horizon Solar Power in Temecula, Calif., recommends the following tips:
Educate yourself on the product
Some people think they can buy two dozen panels at a certain price and then determine the value of those panels combined, says Ugarte. But homeowners should be aware that solar involves an entire system of panels, inverters, and the BOS (balance of systems), which includes all other elements such as wiring, the mounting and or racking, monitoring and charge controllers. When purchasing a system, Ugarte suggests homeowners select a trustworthy name brand they’re already familiar with or have used before.
Research the installer
Homeowners that hire the wrong person for the job could end up losing lots of money. Ugarte recommends that people do their homework on contractors. Research the company’s track record online. SolarStory can help you get started: we have gathered data on installation rates and average pricing for top installers all around the country, and we can connect you to a solar energy provider who has the experience that matches your needs.
Get multiple quotes
This will offer perspective on pricing range and which companies are using top tier brands. A solar contractor worth their salt will use high-end solar energy brands. You want to get value for your dollar, but you also don’t want to hire a contractor that uses low end brands, which won’t give you a good return on investment.
Know the different types of financing options
Buying versus leasing a system are the two most common arrangements with solar energy. These are very different transactions and homeowners should do a cost benefit analysis of each, Ugarte advises. Many homeowners see the value of ownership, which replaces their relationship with a utility for a generator. “Many people purchase solar systems with a loan, which allows you to come to table with not a lot of money,” Ugarte explained. “You get on a payment plan, just like you would a car.”
Others looking to save money and minimize their risk choose may want to consider a lease instead. If you choose this route, your solar panels will be owned by a third party, which means you won’t be responsible for maintenance. However, you will not be able to benefit from the sale of extra energy back to the grid.
A power purchase agreement is another option that’s gained popularity as the price of going solar has come down. With a PPA, you can purchase solar power from a developer at a price lower than what a utility would offer without having to own the system or worry about its upkeep. Everything is fully covered and insured. “Wall Street understands that solar’s not going away, so numerous financial lenders have come to market and are supporting this verticals growth,” Ugarte said.
Find out what tax breaks/incentives are available
Purchasers of solar systems may qualify for a federal tax credit worth 30 percent of the cost of the system (not counting any cash rebates) through 2019. The investment tax credit, or ITC, does diminish in value over time, falling to 26 percent in 2020 and to 22 percent in 2021. For residential systems, the incentive ends in 2022. You should also find out if your state offers a tax credit, incentive or rebate program for solar ownership.
“The great thing about solar is the cost has really gone down over the last decade,” Ugarte said. No matter how you invest to pay for your system, you’ll still be paying less for electricity than what you’ve been paying to your utility. You’ll also generate and support clean energy, adds Ugarte.