This phenomenon occurs when a neighbor installs a shiny new set of panels on their roof and then sets up lawn chairs to admire their new array, happily offering a detailed breakdown of their anticipated savings to anyone who passes by.
Are you ready to be that person? Even if you’re not the gloating type, it’s a great feeling to save money and harness the sun’s energy to power your home — if even in a small way.
Aspiring solar-panel recruits have the option of renting or buying.
Before determining which is best for you, start by making sure your home is a good fit. Too many trees shading your roof for most of the day? The carbon footprint and aesthetic drawbacks of cutting those down or even trimming them back may outweigh the benefit of panels.
Next, examine the amount of roof space you have to devote. An average solar panel system will generate 5000 watts of energy, requiring 500 square feet of unshaded roof space.
Still on track? Your next decision is whether to lease, PPA, or purchase outright.
What’s PPA, you ask?
PPAs are also known as ‘power purchase agreements.’ Users pay a set rate to ‘rent’ panels that is based on the local power utility’s average rate. This is locked in and won’t rise when your utility increases their fees. Often times with PPAs, after five years you can purchase the system outright.
With leasing, you pay-per-month and may never have the ability to eventually purchase the system. Leasing is only optimal if you do not plan to stay in your current home for more than five years.
If you plan to stay in the same home for the rest of your life (or at least 20+ years), than the outright purchase of panels is undoubtedly the best option.
The down side of buying a solar panel system is the same as owning your home — you commit yourself to paying for maintenance and upkeep out of your own pocket. Most solar panels last 30 years or longer, but inverters may need to be replaced every 15 years or so. Under a leasing or PPA option, this maintenance would be taken care of.
Also, depending on your state and the tax refunds it offers, the price of purchasing solar panels can vary greatly. If you’ve decided that panels are right for you, research whether or not your state provides green energy kick-backs for switching to solar before running the numbers for PPA, leasing, and buying, calculating several different potential terms for each (5 years, 10 years, 20 years).
For each model, a variety of ‘solar financing’ options may be available in your area.
If your state has high electricity costs, then solar panels are an even smarter purchase to make. In Hawaii, it’s possible for solar panels to pay for themselves in less than ten years. Once you reach that point, feel free to pull out the lawn chair and gloat.
[Photo: Powerhouse Museum/flickr]
About the Author: Bahram Nasehi is a Vice President and partner at Dulles Glass and Mirror. He is instrumental in the development and manufacturing of commercial and residential glass products including custom mirrors, frameless shower doors, glass table tops, shelves and replacement glass.