It’s pretty awesome that when you install solar panels, you’re doing a big part to help the environment and combat climate change. But, let’s be real. We know that for many people, the number one motivator in a solar panel investment is the potential return on that investment. That is, everyone wants to save money on their energy bills. And we don’t blame them! The costs of energy are only increasing and an opportunity to save money that doesn’t leave you sitting in the dark is a good one.
But, will you really save money by going green? After all, it’s not as if a solar installation is 100% free. In this post, we’ll take a look and give you as much information as you can to make an informed decision about your solar investment.
How Does It Work?
A lot of people ask this question. We know, we know. It can sound a bit too good to be true when everyone is shouting from their rooftops (pun intended) that there are zero costs involved. The caveat is that it depends on a number of factors including:
- The type of financing you get
- The design of your solar array
- How much energy you’re able to generate
So, Do You Really Save Money By Installing Solar Panels?
With all of those things to consider, an overwhelming majority of the time the answer is a resounding yes, you will save money.
The biggest factor is the type of financing you get because, as it turns out, there are two $0 down options: Here are your options:
- Solar loan: You essentially finance the purchase of the installation in the same way you would finance a car loan. You won’t have to put any money down up front, but you will have to pay off your loan (plus interest) on a monthly basis. That said, you will be able to offset your monthly loan payment by the reduction in your energy bills and your loan payment won’t go up over time (unlike your electric bill). Additionally, you’re putting value into your home which is always a win!
- Power Purchase Agreement (PPA): With this option, there is no cost to you for installation. Once your system has been installed, you buy the power off the system like you normally would your utility, but the rates are 20-30% lower because it doesn't include many of the delivery fees or taxes. Overtime you will have controlled the cost of your energy. The best part is that it is warrantied and insured for 25 years, and you can buy the system at any point after year 5, less what you have already paid for power!
- Purchase the system outright: This option has an upfront cost, which involves purchasing the system outright. Once you’ve paid for it, though, it’s yours. And so is all of the energy it produces, which means you don’t owe anyone a single cent on a monthly basis except for - potentially - the energy company (if you didn’t generate enough energy to cover your usage for the month).
How Do I Save Money By Installing Solar Panels?
With the solar loan and PPA options listed above, you may be wondering how, exactly, you save money every month if you’ve got another bill to pay.
The answer is fairly simple. When you have a solar panel system installed the goal is to create a scenario where it’s more cost advantageous to get power from your solar panel system rather than to continue purchasing it from the grid. . The cost of the solar loan is typically less than the cost of your average monthly electric bill. So, although you’ll have to pay down the loan every month, you’ll still be saving money comparatively.
Of course, if you purchase the system outright, you could have a zero balance on your energy bill every single month. That means once you’ve made the initial investment, you’ll no longer have a monthly bill - and the savings there could quickly add up.
However, all of that really depends on how much energy you’re able to generate. In most scenarios, putting one or two panels on your roof won’t generate enough electricity to power your entire home. Therefore, you’d be paying for the solar panel system and your electric company for the difference. That’s why it’s important to work with your trusted solar advisor to maximize your power-generating potential.
Are you ready to start saving? Contact us to learn more today!