That depends on what you’re spending on electricity, the amount of power that an installed solar photovoltaic (PV) system can provide, your finances, and your time frame for living in your home.
Calculate your average monthly electric expenses by tallying your electric bills for the past 12 months and dividing by 12. Plug that figure, and your address, into a solar calculator such as Google Project Sunroof, EnergySage, or SolarReviews. Those tools will combine that information with aerial views of your roof from Google Earth, Tesla Maps, or another aerial photography tool to estimate how big a PV system your home could handle, how much you could save over, say, 20 years, and your investment’s break-even point: that is, when a purchase would begin to pay off. The average homeowner who buys a solar panel system could break even in 8.7 years, EnergySage says.
Savings and break-even estimates for the same property can be wildly different among the calculators, so consider them a starting point in your decision-making. But if you plan to sell your home before the earliest break-even point, a solar purchase probably doesn’t make sense.
If your roof is old, the answer is no—at least not until you replace it. Asphalt shingles that are 10 years old or more should be replaced before adding a solar array on top, says Ana Almerini, a spokesperson for SolarReviews. New solar panels are warrantied to last, on average, 25 years, while most roofs are warrantied for 30 years or less. If your 10-year-old roof needs to be replaced at its 30-year mark—20 years into your solar array’s lifetime—you’ll need to remove everything to reroof and then reinstall the solar system, a costly proposition.
With newer roofs, you’ll still only know for sure if a solar installation is feasible after a solar company rep checks out your roof and surrounding foliage in person. They’ll determine whether there’s too much shade or other obstacles, or the roof has problems that don’t make an installation worthwhile. That inspection costs you nothing and takes place before you sign on the dotted line. Or, If you’d rather find out whether your roof is a candidate before you shop—avoiding the calls, texts, emails, and visits to your front door you can expect from aggressive salespeople—pay a roofer for an inspection.
Check, too, with your municipality—and homeowners’ association, if you have one—to find out about any restrictions on the type and placement of solar panel arrays.
The most powerful savings tool for homeowners who buy their solar systems is the federal solar tax credit, available for installations through . It allows you to subtract 30 percent of the cost of buying and installing solar heating, electricity generation, and other solar home products from your federal taxes. There’s no dollar limit on those expenses; you’re entitled to that 30 percent tax break whether you spend $20,000 or more than $100,000 on costs associated with a residential solar system.
This break is available to all taxpayers for their primary or secondary residence located in the U.S. Taxpayers of any income level can take advantage of it. You can use it whether you itemize your taxes or take the standard deduction. Keep in mind, though, that the solar tax credit is available only if you purchase a solar system; if you lease one, you can’t take advantage of the credit. And if you don’t typically owe taxes, the credit isn’t useful.
You also could further your savings in these ways:
Local and state incentives. Your state may offer additional breaks, including tax rebates or sales tax exemptions (see this state-by-state compilation from Solar.com, an online solar marketplace). Your municipality may exempt your solar system from your home’s assessed value, so your taxes don’t rise even as your home value does.
Rebates. Your electric utility, as well as certain installers and manufacturers, also may offer rebates for buying and installing a system.
Sale of your excess electricity. In a handful of states, solar-home owners can arrange to sell their excess power to utilities. They sign up with a marketplace that assigns the excess electricity a certain number of solar renewable energy certificates (SRECs); those SRECs are then traded in a marketplace with fluctuating prices. The District of Columbia and eight states—Delaware, Illinois, Maryland, Massachusetts, New Jersey, Ohio, Pennsylvania, and Virginia—have such marketplaces. In some areas of Michigan, Indiana, Kentucky, and West Virginia, residents can participate in Ohio’s SREC marketplace.
Leasing is commonly marketed as a way to finance a solar installation for those who aren’t using cash. The benefit of leasing—usually a 20-year commitment—is that you put no money down. Your energy bills are instantly lower, based on a formula the solar provider devises. Maintenance is handled by the solar company as well. Typically you pay a set monthly amount for electricity— regardless of how much power your system produces. (In a power-purchase agreement, a lease variant, you pay for what your system produces.)
Just be aware of the pitfalls and caveats of leasing, which make this type of financing less beneficial to homeowners than cash purchases or loans. For one, the solar panels, racks, and inverters on your roof aren’t yours, and the solar company that owns them—not you—benefits from all the available tax incentives. Interest rates can be higher than for financing you obtain yourself. Your monthly payment also can rise each year with a lease, versus a loan payment that stays constant.
And, depending on where you live, your home could be more difficult to sell with a leased solar system in place. If the new buyer doesn’t want to continue the lease, the solar company will remove its panels and you’ll have to pay what you still owe on the lease. Buyers who agree to assume the solar lease need to report those payments as their own debt when applying for a mortgage, added to any credit card balances, student debt, and car loans they already owe. “That lease payment could throw the buyer into a higher interest rate, or not qualify them for a loan at all,” says Sandra Adomatis, a real estate appraiser in Punta Gorda, Fla., and an expert in valuing green homes with The Appraisal Institute, an industry group.
Taking a loan from the solar company also isn’t ideal. The interest rates the solar company will charge may be higher than what you’d get by seeking an independent lender yourself. And solar dealers often tack on significant origination fees—up to 30 percent of the system’s cost, compared with 1 to 5 percent for traditional loans. “I wouldn’t use the financing from the solar company,” says Garrett Mendelsohn, founder and CEO at Solar Bootcamp, based in Palmas del Mar, Puerto Rico, which teaches solar company representatives how to sell systems virtually. “Ninety percent of the time, you’re paying a high interest rate and huge dealer fee.”
If you’ve been in your home a while, a less costly way to finance your solar investment is through a home equity loan or home equity line of credit (HELOC) or loan, borrowing off your home’s built-up value. The interest rate is likely to be lower than if you seek a personal loan for the job. And, you can deduct the interest on your federal tax returns for a major solar installation; the IRS permits such deductions when home equity is used to “substantially improve” your home.
For HELOCs and other types of loans, consult comparison sites like Bankrate, Lending Tree, and SoFi for competing interest rates and terms. New-home buyers and those refinancing also can check out Fannie Mae’s HomeStyle Energy Mortgage Program, which can help you bundle a solar loan into the new mortgage.
After closing, keep an eye on interest rates. You can refinance when current rates, now relatively high, begin to fall.
Solar installers are typically one-stop shops, offering you panels and inverters—and the racks that hold them—as well as installation. In addition to offering their own financing, they may sell extra warranties, monitoring, and maintenance.
To find installers, search for “solar installer,” or input your address and other basic personal information into comparison websites like EnergySage and SolarReviews; each analyzes the quality of local providers and their products using technical measures; they both also use consumer reviews. (EnergySage doesn’t require your number, a boon if you want to avoid texts.)
The not-for-profit Consumers’ Checkbook is another source of reputable installers, providing reviews of local services in seven major metro areas—Boston, Chicago, the Delaware Valley, Puget Sound, San Francisco, the Twin Cities, and Washington, D.C. In the Bay Area—subject to California’s relatively new mandate that new, low-rise residential construction include solar photovoltaic systems—Consumers’ Checkbook has reviews on 132 solar contractors.
Before you arrange for an in-person or Zoom consultation from companies you identify through these tools, ask providers to show proof that they’re licensed in your state and municipality to do the work where you live. Check, too, with the Better Business Bureau in your area for complaints. Confirm that the companies have been certified by the North American Board of Certified Energy Practitioners (NABCEP), a trade organization that sets standards for solar installers. Your utility company or state energy board also may list providers that meet certain quality standards. The New York State Energy Research and Development Authority (NYSERDA), for instance, offers a search for solar contractors with a “Quality Solar Installers” designation.
Neighbors with recent installations might be willing to talk to you about their experiences with solar contractors. Or, ask for input through community forums like NextDoor and the Facebook page for your community. And when you contact a company, find out how long they’ve been doing solar installations. Choose a company with several years’ installation experience, and ideally a presence in more than one state, Mendelsohn advises. He also recommends finding a company that uses its own, in-house installers.
You will get efficient and thoughtful service from New Energy Era.
You’ll see lots of figures and factors in a solar proposal. But there are five really worth focusing on when comparing offers.
Price per watt or kilowatt. That’s the upfront cost divided by the size of the system. The lower the cost per watt, the better the system’s value. You can use each company’s estimated cost per watt to compare proposals. “It’s like unit pricing at your supermarket.” explains Vikram Aggarwal, EnergySage CEO.
Warranties. They may differ for the workmanship, the solar panels, and the inverters—that is, the mechanisms that take the direct current (DC) that the solar panels create and convert it to alternating current (AC) electricity that our homes use. A standard solar panel warranty is 25 years, Aggarwal says. Inverter warranties range from 10 to 25 years.
Rated power. This is a measure of the system’s efficiency—that is, how much electricity it puts out under ideal conditions. Rated power of at least 400W is preferable; Aggarwal recommends 420W to 440W, because he says it’s the most efficient. The solar company should also give you a projection of how much the power production will degrade by the time the warranty expires. Solar panels’ productivity degrades at a median, 0.5 percent a year, according to the Department of Energy’s National Renewable Energy Laboratory. At the end of a typical, 25-year warranty, that translates to productivity of 87.5 percent.
Annual production. You may notice that the proposals you get from different companies show dramatically different estimates of the amount of power they can provide—from, say, 100 percent of your current needs to 125 percent or more. Why bother with all that excess power? If, say, you add an electric vehicle to your power consumption, planning for more power may be worthwhile. “If you think you’re going to buy an electric car in next four to five years, you may want to oversize your system now,” Aggarwal says. “Most installers won’t be willing to add new panels and inverters in the future.” Depending on the arrangement with your utility, you may be able to sell back the excess power, reducing your electric bill further.
Quality of the solar equipment. You can look on EnergySage and SolarReviews for comparisons and judgments of solar panels and inverters; names like Canadian Solar, LG, and QCel show up highly rated there. For inverters, experts we talked to preferred microinverters, individual units attached to each panel, versus string inverters, which are connected to both the panels and each other like Christmas lights. As with Christmas lights, string inverters are annoyingly interdependent. “If one panel goes out, Aggarwal says, “the whole system goes out.”
The solar industry is rapidly expanding; it is predicted that the amount of solar installed in the U.S. will quadruple over the next ten years. Our government recognizes that we need solar to combat the climate crisis and is providing incentives to help boost the expansion. The Biden administration recently announced the creation of the Solar for All program, which provides $7 billion to deliver solar to low-income households across the country.
With this growth comes an increase in the number of solar companies. And, as solar emerges as a profitable alternative to fossil fuels, it inevitably attracts its share of bad actors. In pursuit of profits, some solar companies prioritize their own interests over those of the consumer. Knowing this, potential customers need to be well-informed to avoid being misled by unethical business practices.
Buyer beware! Some solar companies have adopted aggressive sales models to maximize profits and expand their customer base quickly. These models incentivize salespeople to prioritize profits over customer satisfaction and transparency. Some “solar sales bros” take to social media to openly brag about the earnings they achieve through selling solar systems. One video features a door-to-door salesman describing his approach as “being a sheep in the doorstep, and a wolf in the door.” This example highlights a trend towards high-pressure sales tactics in the industry.
Many solar installers outsource their sales operations to freelance networks that work purely on commission. These networks negotiate a minimum price with installers, which is the lowest amount the installation company will accept to install a system. For example, let's say that minimum price is $3 per watt installed. Networked salespeople are then allowed to mark up the price, often $5 per watt or more, and pocket the difference. This potential gain can tempt salespeople to overpromise the system's capabilities or understate the long-term costs, putting homeowners at risk of making a decision that will hurt them in the long run.
How do salespeople get away with these unethical sales tactics? One reason is that the business structures of these larger firms often prioritize rapid profit generation. These large solar companies have used complicated financial investment models to accelerate their growth, intensifying the push to acquire more customers. Many national companies package together hundreds of consumer solar leases into asset-backed securities (ABS) to sell to investors, allowing companies to immediately access capital that would otherwise accumulate gradually over the lifespan of the leases. This financial maneuver, while innovative, increases pressure on the company to quickly expand their customer base in order to keep these ABS-based financial models running.
It’s this pressure for rapid growth that can lead companies to overlook unethical behaviors among their salespeople. There have been many instances where the terms of solar panel leases and loans were obscured by salespeople eager to close deals quickly — regardless of whether the conditions were fully understood or beneficial to the customer. The drive to hit sales targets and the opportunities for financial deals with investors can often take priority over fundamental values of customer service and honesty.
Another common tactic of unethical solar companies is advertising "free" solar panels. This kind of messaging is misleading, creating a false sense of urgency and misinformation – there is no such thing as a free solar installation. While a generous federal tax credit and other state-specific incentives are available to residents across the nation, no state or agency will pay for you to go solar. As a result of these ads, homeowners may enter agreements based on inaccurate information, ultimately finding themselves with unexpected financial obligations and lower-than-expected savings.
These issues highlight the importance of choosing a company with a responsible business model. That's the strength of employee-ownership models like ReVision, where employees are owners. This approach helps ensure that employee-owner's interests are aligned with the long-term health and reputation of the company. Our team members work hard to reflect this commitment from the initial site visit to the final system walk-through, upholding our values of responsibility, transparency, and kindness every step of the way.
We’re also a Certified B Corp, meaning we prioritize the planet and our local communities over profit. We don’t owe anything to outside investors, so we can make decisions based on what is best for the customer and the long-term health of our environment.
Also, we’re local! We live and work in these communities with you. We’re not going to scam you because we’re good people, but also because we’d probably just run into you the next week at a farmers' market.
Before agreeing to anything, research the company and check its reputation. Ask your friends, neighbors, and colleagues for recommendations. Look through a company's reviews and social media comments to get an idea of what other customers say about their experience.
Avoid Rush Decisions: Be wary of high-pressure sales tactics such as "today only" offers. Solar is an investment, and businesses should understand the importance of their customers making informed decisions.
Read the Contract Thoroughly:Understand all the terms and conditions before signing any documents. Look for hidden fees, cancellation terms, and understand what the contract covers. Do not sign incomplete contracts or those with blank spaces.
Energy Savings Projections:Salespeople might present optimistic energy savings and cost projections. Review these projections carefully and compare them with current utility rates. Understand the factors your salesperson is using to calculate these savings.
Trust Your Instincts:If something feels off or too good to be true, it probably is. Trust your instincts and feel comfortable saying no or asking the salesperson to come back at another time after you've had a chance to think it over.
Ask Questions:Don't hesitate to ask detailed questions about the products or services offered. A credible salesperson should be able to provide comprehensive and straightforward answers. At ReVision, our primary goal is to provide straightforward solar education and work with you to achieve your energy goals. We will never pressure you or force you into a decision that isn’t right for you.
Check out our homeowner's guide to going solar to learn more about these questions.
Are there any conditions or actions that could void the warranty?
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