According to the figures received from the department of energy, homes which have chosen to use solar panels for charging their phones or turning on the fan on a hot summer’s day are in fact using 40% of the energy from the sun. Is this investment worth it? Should you splurge on a solar panel? This guide is designed to help you make up your mind.
Before diving straight to your decision, it is essential to take a close look at how to finance solar panels. This decision also includes consideration of the processes you need to go through before experiencing the benefits.
Things to Consider Before Installation
Before you look into installing a solar panel in your home, you must compare your current situation with the lifestyle you are willing to adopt for the future.
#1 Lifespan of solar vs. your stay
First of all, you need to know how long you’re going to stay in the house. For instance, if you decide to purchase and install a residential solar panel which will work for the next 10 years, make sure you install only when it’s possible for you to live in this house for that long. In case of taking a lease, solar panels are typically installed for 20 years or more. If there are chances of moving, talk to the solar company you are entering into a contract with. Find out if they are willing to transfer the contract to the person who moves in after you.
#2 Fulfilling your energy needs
Make a list of the number of items you use on a daily basis and estimate the amount of energy they consume in kilowatt hours. This way you’ll be able to get a rough estimate of the total energy required and figure out whether solar panels will be able to replace your current system. You can contact your local department to figure out the exact amounts your home and applications use.
The place where your house is situated matters a lot. This includes the amount of sunlight that can fall directly on your roof. Homes that are situated in such a way that a building, trees or other houses tend to cover them, the solar panels ability to function is blocked by these factors. In order for the solar panel to work, the angle, as well as the condition of the roof, will also need to be conducive. If you live in a city or a country where the winter season lasts for more than 8 months, chances are that installing solar panels might not be the ideal choice for your home.
#4 Extra power
There are instances where your home and appliances do not consume all of the energy transferred from the grid to your home on a daily basis. This means that you need to find out whether you are paying for the extra power which goes unused. That way you can arrange for a solar panel installation without having to pay for extra power since you would’ve already made the necessary arrangements with people handling it.
#5 Size matters
Depending on your daily needs, figure out the size of the system your home would require. The size varies for every house and the number of appliances that are used. If your home is weatherized, you might not need a size that is huge since the energy needs would be less.
Financing and Purchasing
Purchasing would definitely mean you get the whole package. That would require enough cash to be able to pay for all the expenses which would be substantial. The cost, however, varies from one system to the next and sometimes you may end up with a system that costs as much as your first installment on a vehicle. In cases like these banks, finance companies, personal installment loans, credit union etc come to your rescue. Such healthy measures involving paying for the whole system can be handled easily through loan financing programs which deal with funding processes.
But, before you let the bank handle your financial matters, you should consider the annual percentage you will have to offer to the bank. Moreover, the process of transferring the payment should be discussed beforehand. There might be an increase in the loan after some time so that possibility should be questioned before agreeing to sign. In matters like being unable to pay the loan on time, banks get the right to hold property before the debt is paid.
1. Periodic Payment
A lot of people may wonder can you lease solar panels? You’re not restricted to only purchasing since there are other options to look at. One of them would be a lease, which means signing a contract giving you the right to put to use as much power as you’d require. This also includes the option to cut down some power bought by you in case you do not require it. You will not have to worry about extra power being transferred despite the refusal since the company you’ve signed the contract with will not credit you for the power that returns to the grid unused. All of the maintenance and billing matters will be in the hands of the leasing company. You should expect the monthly charges to increase as time passes by.
2. Electricity Power agreement
This is a long-term contract, which means it can be up to 20 years or even more. This agreement involves a company of your preference being given the authority to install a solar panel in your home. This agreement is entirely different from a lease. In case of a lease, you are offered as much power as you’d put to use and you are bound to pay only for the amount that you use. However, in an Electricity Power Agreement, they set a specific price for the power being generated by the system and being transferred to your home. An advantage for installing a solar panel in collaboration with the Electricity Power Agreement would be reduced price in comparison to others since the company gets incentives and even tax credits.
Before you sign a lease or an EP Agreement
Get yourself educated on several companies that handle leases or other agreements. The general details you review should mention everything specifically including their performance, brand popularity, and size. Drawing a comparison will help you identify flaws and specialties and will make the decision a quick task. The company you choose make you feel that your needs will be fulfilled and that there will be no going back once you decide to associate yourself with it. It is best to avoid choosing a company that is your first option only because the majority prefers it since you and your home’s needs might end up having a clash which you would overlook.
Make sure you are able to afford the cost that would include the installation charges as well. Give a thorough look at their backup methods being offered in case there is a power failure. Companies that are prepared for the worst should be at the top of your list. It is important to think about the security of your future in cases like repairs whether the company would be willing to cooperate or not. The lifetime guarantee it promises should be checked before making the final call.
Things to do
The entire process may begin at one point but can turn out to be never-ending if you do not show close attentiveness throughout.
Double-check before you sign
Learning how to finance Solar Panels for your home also requires ensuring that you’re making the right decision by being cautious enough to avoid any future troubles. Once you have selected the company you’ll be approaching for installation of solar panels at your home, you are required to make another decision with vigilance. Signing a contract may sound like being one step away from getting work done but it is a two-sided commitment. It includes all the terms that need to be fulfilled by the company you’ve chosen to let you offer its proposals and other responsibility matters.
Before signing, there is a list of things you need to check carefully.
1 – Duration
First and foremost, the duration of the contract should be similar to what the company has shared with you verbally.
2 – Cost
The amount you’ll have to pay on a monthly basis should be looked over thoroughly, making sure you know that if the payments are likely to increase with time, you can afford it.
3 – Additional Fees
There might be additional fees you are supposed to pay that will be a part of the contract. If you’ve decided to approach a company that will handle repairs and maintenance, make sure they include it in the contract to avoid any future inconvenience.
Choosing to sign a contract should carry the ability to protect your future needs and wants when it comes to your solar panel system. There are several questions in this matter that need to be answered and mentioned in your contract. For instance, depending upon the kind of agreement you’ve signed, the payment of tax credits or incentives should be clearly mentioned. Future events like choosing to sell your house should have an alternative decided and mentioned in the contract. This would include answering questions in relation to how matters will be handled by the company once the house owner leaves or whether there is a possibility of transferring your contract.
You should have a discussion with the company regarding what happens once the contract ends and the cost of getting it removed. At times, people wish to get solar panels removed and put an end to the contract early. To avoid unpleasantness, these matters should be discussed before choosing to lift the pen and sign.
What happens when you leave?
Make sure you know what you will go through as a part of your contract when you decide to move to a new home. Even selling the house will raise a number of questions. Will the new house owners be given the solar panels? What are you going to do if they refuse to purchase it? Will you be able to afford to transfer the solar panels to your new location? If the contract allows, you can easily get it transferred to your new home. In some places, matters like these involve a written form of notice as a proof of necessary decisions being made to avoid trouble. Or if you’re fortunate enough to have the new house owner agreeing to purchase the solar panels or use them, make sure there is a contract you get signed as proof, so that there is no unpleasantness later on.
Now that you are clear about the various options you have, it won’t be long before you’ve decided to get solar panels installed using a method that suits you and your home best. Whether it is purchasing a solar panel involving additional payment of incentives and for tax credits or if it’s signing up a lease or another agreement like PPA which would be a way involving less heavy payments, you get to have the best use of solar energy.
All that has been shared with you is to ensure that you pick an option that goes well with your needs or requirements. Will your wallet allow for all the expenses in installing solar panels or would it adjust well to an agreement? Any method on how to finance solar panels is guaranteed to work if you make all of your decisions with a conscious mind and if you are aware of all the options involved.