If you’re thinking about adding solar to your home, one of your top questions is likely about cost: What is the initial cost of installing solar panels, and are there financing options available? At Current Electric, we understand that going solar is a significant investment, but it’s one that can bring lasting savings and value to your home. To help you make an informed decision, let’s break down the costs, potential financing options, and why solar might be more affordable than you think.
Understanding the Initial Cost of Solar Installation
The cost of installing solar panels on a home varies depending on factors like system size, panel quality, and installation specifics. Here’s a quick look at what influences costs:
System Size and Capacity: Larger systems that produce more energy cost more but also save more in the long run.
Equipment Quality and Type: Higher-quality, efficient panels might have a higher upfront cost but deliver better long-term performance.
Installation Factors: Roof type, pitch, shading, and other site-specific details can impact the cost of installation.
On average, a residential solar system can range between $15,000 and $25,000 before incentives, with costs varying by region. Fortunately, there are ways to significantly reduce the upfront expense.
The Role of Tax Credits and Incentives
Incentives make solar more affordable than ever. For instance, the Federal Investment Tax Credit (ITC) allows homeowners to deduct 30% of the cost of installing a solar system from their federal taxes. This means that on a $20,000 system, you’d be eligible for a $6,000 tax credit, bringing the effective cost down to $14,000.
State and local incentives, as well as net metering policies, may provide additional savings, further reducing the initial cost and helping you get a quicker return on your investment.
Financing Options for Solar Installation
1. Solar Loans
Solar loans are a popular option that allows you to finance your system over time, similar to a car loan or mortgage. With a solar loan, you can own the system from day one, take advantage of tax credits and incentives, and pay back the loan through fixed monthly payments that often match or are lower than your current electric bill. Solar loans usually have competitive interest rates, with terms ranging from 5 to 25 years.
2. Solar Leases and Power Purchase Agreements (PPAs)
In a solar lease, you essentially “rent” the solar system for a monthly fee. With a Power Purchase Agreement (PPA), you pay only for the energy produced by the system. While you won’t own the panels in either scenario, leases and PPAs allow you to start saving on energy costs with little to no upfront investment.
3. Home Equity Loans or Lines of Credit
Using a home equity loan or line of credit (HELOC) to finance your solar installation is another option. This approach leverages your home’s equity to fund the project, typically offering favorable interest rates and tax-deductible interest in some cases. Homeowners often use these loans to pay for a solar system up front and then enjoy the monthly energy savings without financing costs.
4. PACE Financing
In some areas, Property Assessed Clean Energy (PACE) financing is available. PACE financing allows homeowners to finance the cost of solar through their property tax bills, repaying the system over an extended period (typically 10–20 years) as an additional property tax assessment.
Making Solar Affordable: Calculate Your Savings and Options with Current Electric
At Current Electric, we guide you through every step of the financing process, from understanding costs and incentives to finding the right financing option for your needs. By creating a tailored solar plan, we’ll help you take full advantage of incentives and savings, reducing your upfront cost and maximizing your long-term benefits.
The cost of going solar can feel like a big step, but with financing options, tax credits, and the potential for substantial savings, it’s one of the best investments you can make in your home’s value and your monthly energy expenses.
Ready to Start Your Solar Journey?
Curious about how affordable solar can be for your home? Contact Current Electric for a free consultation to explore your financing options and see how solar power can work for you! Let us show you the path to energy independence and lasting savings.