Financing Your Solar Panels:
An 80%+ drop in solar panel costs in just a decade, plus several financing methods today – makes solar power more lucrative than ever. An investment in solar energy, like any other smart investment, should produce high returns without burning a hole in your pocket. A variety of government incentives, such as the Investment Tax Credit (ITC) or state-level rebates make solar an attractive proposition. Lower costs and the freedom to purchase or lease has made solar a highly accessible commodity for a much broader customer group.
Over the past year, the world has witnessed one of the most challenging times in human history. Covid-19 has destabilized economies and health systems. It has, however, also made us realize the importance of energy security and more sustainable ways of living. Worldwide, organizations like the UN and World Economic Forum have voiced the importance of a ‘green recovery’ from the pandemic. For homeowners – along with health and economic security – energy security now matters more than ever. But how much financial sense does solar really make? When it comes to numbers, is it really worth going for? Fortunately, the answer is yes. There are several reasons why solar is one of the most practical energy sources today.
Investment Tax Credit (ITC) for Buyers
Among the several incentives that make solar more lucrative today – the most important is the federal Investment Tax Credit (ITC). The ITC is a mechanism that allows homeowners or businesses to receive a tax credit equivalent to 22% in 2021 of their investment cost of a solar energy system. Who wouldn’t want to save 22% on a purchase?
Many states also have their own incentive programs for solar. These may be in the form of a direct rebate per kW of installed capacity or an additional tax incentive. For example, there is a sales tax incentive for purchasing solar equipment in California, or a utility rebate program in Minnesota.
Leasing Options for Solar Panels
If the buying incentives aren’t enough, there are also options to purchase solar panels on a lease-basis – where there is no upfront payment and homeowners can pay for the system on a monthly basis. It is, however, true that leased systems might mean extra work in transferring the lease when selling your house. Additionally, leased systems save slightly less than cash purchased systems in the long term. Despite these limitations, they are still a great solution for homeowners who are interested in residential solar financing instead of spending larger sums upfront.
Another plus with a leased system is that once the system is up and running, it can help pay for itself. Savings earned from the system can, in turn, be used to help cover lease costs. This
means the customer has a much more robust cash-flow and a significantly faster break-even.
Worldwide, solar is replacing coal as the cheapest power source. Over its lifetime, it costs dramatically less than grid power, while the availability of solar panel financing companies makes it even easier. Naturally, people from more diverse income brackets are now finding it easier to go solar.
Embracing Solar Power Now Easier
At NJ Solar, we understand the gravity of the pandemic and its social and economic consequences. And with this comes our willingness to support and educate homeowners – to make an informed decision toward going solar. Your solar investment will last decades, making it important to have a trusted installer like NJ Solar who will support you for years to come. It is equally important to make sure your installer is using trustworthy manufacturers, which is why we make sure to use the most efficient and top of the line manufacturers. To sum up, thanks to government incentives, financing options, and our reliable support – this is a golden time to choose solar for your home.