Solar Panels for Home Use

There are now more than 1 million solar systems installed in the United States, according to a recent report by GTM Research and the Solar Energy Industries Association. Q3 2016 was record-shattering by all accounts, and the solar industry is poised to almost double year after year. Despite widespread growth, there are misunderstandings and misconceptions that cost solar shoppers money. Keeping these common mistakes with solar panels for home use in mind can reduce the cost of going solar and your expenses over time.

Mistake #1: Not Making the Wisest Decision to Buy or Lease a Solar System

Solar leases and power purchase agreements (third-party-owned systems) soared in popularity several years ago but are now on the decline. These third-party ownership arrangements allow homeowners to install a solar system on their home without actually purchasing the equipment. Many agreements enabled homeowners to go solar for no money down, but the agreements are often 20 years in length. In many states, the homeowner pays less for the solar electricity than if they were purchasing it from the power grid, but some solar shoppers may be leaving money on the table.

There are a couple of disadvantages to solar leases and power purchase agreements. Homeowners are entitled to the 30 percent federal tax credit when they own the solar system but not for third-party-owned systems. This has a huge financial impact because a tax credit is a dollar-for-dollar reduction in federal income taxes owed. For example, a $10,000 solar system could qualify for a $3,000 tax credit. Solar leases also got a bad name because they can complicate home sales if the new homeowner doesn’t or cannot take over the agreement.

There are now many more financing options available for solar panels for home use than there were several years ago, and this is a big reason that third-party-owned solar systems are dropping in popularity. Many of these options have low fixed rates and require little, if any, money down to go solar. Ultimately, whether it is more financially savvy to lease or to finance a solar system depends on the terms of the contract and the loan agreement. Just make sure that you understand the terms of each agreement before deciding so that there aren’t any surprises down the line.

Mistake #2: Installing a New Solar System on an Old Roof

Solar energy systems are designed to last 25 to 30 years. It can be costly to remove and reinstall the panels if you need to replace your roof during the life of your solar system. If your roof will need to be replaced in the near future, complete the roof work first and then install your solar system. It might, however, be possible to complete some roof repairs around the solar system, depending on the solar panel mounting hardware and the needed repairs.

Mistake #3: Not Shopping Around to Get Competitive Solar Bids

Although the cost of installing a solar system has fallen dramatically, the soft costs still constitute a lot of the total system cost. These costs vary widely by the solar installer, so it’s a good idea to shop around. Like any other home improvement project, there can be a big difference in the cost of installing a solar system with different installers. UnderstandSolar is a great free service to link you to top-rated solar installers for solar estimates, and the EnergySage Marketplace has been praised by solar shoppers because the platform allows installers to put in bids and for homeowners to make an apples-to-apples comparison of the various options.

Mistake #4: Overlooking Energy-Efficiency Improvements Before Going Solar

Did you know that the U.S. is the worldwide leader in wasting energy? Before getting solar panels for home use, it’s a good idea to consider how much energy your home really requires, especially if you want your solar system to generate most of your power.

This is partially for financial reasons. In most states, consumers are compensated for solar power using net metering. At the end of the one-year period, your electric usage and solar credits are tallied up. If your solar system generated less energy than your home consumed, you pay the difference. If the solar panels produced more energy than you used, surplus solar energy credits are typically reset to zero. This means that most solar homeowners won’t get compensated for excess power, making proper solar system sizing important.

In many cases, it is cheaper to boost home energy efficiency than to buy a larger solar system. Keep in mind that your cooling system and possibly your water heater may account for a lot of your total electricity use.

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By Sarah Lozanova

Sarah Lozanova is an environmental journalist and copywriter and has worked as a consultant to help large corporations become more sustainable. She is the author of Humane Home: Easy Steps for Sustainable & Green Living, and her renewable energy experience includes residential and commercial solar energy installations. She teaches green business classes to graduate students at Unity College and holds an MBA in sustainable management from the Presidio Graduate School.