What are the Few Economic Benefits of Installing Solar Panels?
The economics for solar installations has done nothing but improve. As technology continues to get more efficient and cheaper to manufacture, buyers of solar enjoy better pricing and fiscal outcomes during their installation’s life. At no time has the cost of solar in California been better. Federal incentives are still in place, financing is available, and payback periods and partnerships are better with shorter turnaround times. Solar’s economics have continued to make it one of the better renewable energy options in California. Here are three reasons why.
Cost of Solar in California is Lower
The average cost of a solar system in California ranges from $12,495 to $16,905. Much of this is due to the cost of solar panels in California dropping more than 80% in the last ten years, making the average cost of solar panels and total install roughly $2.50 to $3.38 per watt. The federal SITC for buyers helps a lot by crediting 26% of the installation’s cost to the buyer’s taxes the following year. That is a huge difference to the same system almost costing buyers $50,000 ten years ago. The cost of solar panels in California being the most expensive part of the purchase.
There are additional incentives that lower the cost of a solar system in California for new buyers. Right now, some utilities offer additional rebates up to $300 or more. You may also get the average cost of solar in California down further, even $0 upfront, by financing with your solar company or through California’s PACE financing. You can get into solar leasing and PPAs as well, but not recommended. You can check out the pros and cons of leasing vs. buying solar to see for yourself.
The bottom line is the average cost for solar in California, along with the cost for solar panels in California, decreased significantly in the past decade, making prices better for you.
Net Metering Offers Residual Income
First of all, California operates under a state-wide net metering policy called NEM 2.0. NEM 3.0 expected to take effect soon, but for now, NEM 2.0 monitors and regulates the following between utilities and consumers:
● Imposing interconnection fees
● Changes regarding non-bypassable charges
● Requiring utilities to implement time-of-use rates
Right now, NEM 2.0 is still the most beneficial legislation for consumers, which is the big reason to get involved now. However, how does net metering give owners residual income opportunities?
Net metering monitors the amount of energy you produce with solar versus what you use from the utility company. If you use more than you make you pay, and if you use less, the utility pays you. Sizing your system to produce more electricity than you use is key to making this system work the best for you.
As soon as your install solar, you do not pay for electricity anymore, as long as your system is sized right. That means the money you use to pay for electricity is now a return you can use or offsets any solar cost you may have from financing. After 5.97 years, the average payback period for Californians, the money is now all yours. That’s a few hundred dollars each month to do with as you please for the next 25 years. Hence, residual income. You can invest that money in other ventures or pay down debt to increase the amount of passive income you get. Snowballing at its best.
Fewer Bills for a Bigger Budget
As mentioned above, once your solar system is in, you lose your utility electric bill. Now, you have to wait until your payback period is over before there is truly no bill, but at least you are paying yourself during that time. Additionally, California has property tax exemptions under the Property Tax Exclusion for Solar Energy Systems, allowing solar owners to exempt their solar system’s assessed value on their property taxes. Imagine what these two things alone can do for your budget.
You can cut costs more by installing solar water heating, one of the other huge costs homeowners.
No matter what, the cost of solar and cost of solar panels in California is down to provide lucrative economic benefits for buyers. All you need is the right solar company to handle it for you. Get started today and never look back!
