Have you been putting off installing rooftop solar panels on your home? If so, 2019 is a good year to take action and actually do it. Why this year? Read on.
The American media seems to take pleasure in portraying us as a bunch of money-grubbing consumers who are only out for ourselves, but I am not buying it. We do not have to listen to them.
I believe that we can use our purchasing power to benefit the greater good and ourselves.
Sometimes it might be a small purchase like buying socks at a locally owned store instead online and having them shipped to you via an airplane. Or opting to buy organic spinach grown by a local farmer instead of spinach that comes in a sealed plastic bag from somewhere out of state.
A rooftop solar system is a big purchase that meets the above criteria.
In this post, we will talk about how purchasing rooftop solar panels for your home is a long-term investment that will pay for itself and more, add renewable energy capacity to your community, and support local jobs.
March 8, 2019, marked the beginning of the seventh year that our rooftop solar system has been silently generating clean renewable energy from the sun. Our system is tied to the electric grid so we share electricity back and forth with PG&E the investor-owned utility currently providing service to our county.
Let’s deal with the financial stuff first.
Save Money on Electricity
The net cost of our 22-panel 5.34 kW rooftop solar system was $14,767 including tax credits that we will discuss later. Solar prices have been decreasing so now our system would cost less.
Purchasing rooftop solar panels requires a significant investment upfront. Beware of sticker shock that may cause you to waver and lose sight of the long-term benefits.
I propose a little exercise to help you think about a large amount of money in a different way and this one never pays for itself or provides free electricity.
Many people, perhaps including you, have a habit of buying a cafe latte, specialty juice drink, or another treat each day during the workweek.
Let’s say you do that 48 out of 52 weeks a year. To make it simple we will use $5.00 as the cost of the treat. Below is an example of how much money you will spend over a ten-year period on just that one item.
5 items a week x 48 weeks a year = 240
items per year x 10 years = 2,400 items x $5.00 each = $12,000.
You may think this is a silly example, but it does demonstrate how you, I, and everyone else can easily spend a large amount of money without really thinking about it.
Your tangible electricity savings will begin at the end of your payback period, which is however long it takes your electricity savings to equal the total net cost of your rooftop solar system.
Last May, I decided to attempt to calculate the payback period for our solar panel system.
I had the data. However, I soon discovered the complexity of the task. It would mean calculating electricity costs on an hourly basis 24/7/365 for 5 years. This was beyond the time I could allow to figuring it out.
Not willing to do nothing, I came up with a method to estimate our payback period, which turned out to be about 7 years. Even though it is likely that there are flaws in my approach, I think that I am well within the ballpark.
At this time next year, our rooftop solar system will have paid for itself and from then on electricity will be virtually free for the next two or three decades, except for PG&E fees. Solar panels decrease in efficiency over time, but after the 25-year warranty period ends, they will not suddenly stop working.
If you are interested in how I calculated our payback period, you can read about it in the post Rooftop Solar Panels are Worth It and this is Why.
Increase Your Home’s Value
In recent years, especially here in California, several things have occurred making it even more financially attractive to purchase rooftop solar panels for your home.
- In January 2017, the California Regional Multiple Listing Service recognized that a rooftop solar system is a positive selling point for many home buyers so they added standardized fields that enable realtors to enter energy production for their listings.
- The California legislature upped the ante on renewable energy in 2018 by enacting a law requiring solar panels on all new homes.
- I do not have a crystal ball, but I doubt you will disagree with me when I suggest that electricity prices will only continue to increase. Where I live the average price of a kWh of electricity has steadily increased by 22.4% in the past 6 years, which is substantially higher than the national inflation rate.
When you decide to sell your home, savvy prospective home buyers are likely to appreciate that they can instantly save on their electricity bills without doing a thing.
You can learn more about this topic by reading the post You Can Increase Your Home’s Value with Owned Solar Panels.
Receive a Solar Investment Tax Credit
Mostly free electricity in the future and adding to your home’s value are two sound financial reasons to purchase a rooftop solar system. A compelling reason to do it in 2019 it that this is last year can receive the full 30% federal tax credit.
- 30% for systems placed in service by 12/31/2019
- 26% for systems placed in service after 12/31/2019 and before 01/01/2021
- 22% for systems placed in service after 12/31/2020 and before 01/01/2022
- There is no maximum credit for systems placed in service after 2008.
- Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2021.
- The home served by the system does not have to be the taxpayer’s principal residence.
Visit the DSIRE website to learn more about federal tax credits and state incentive programs.
I hope you can see that owning a rooftop solar system makes financial sense. Now, let’s look at how going solar contributes to the greater good.
Build Renewable Energy Capacity in Your Community
Extracting, transporting, refining, storing, and burning fossil fuels (coal, oil, and natural gas) is a dirty and dangerous business that is jeopardizing the health and well-being of people everywhere, especially the people who live near fossil fuel extraction sites, rail lines, refineries, pipelines, and power plants.
Each one of us can choose to help our country get off fossil fuels by taking a variety of actions from running our dishwashers after peak electricity demand time to installing solar panels on our roofs.
Using the existing real estate available on top of our homes and other buildings to generate clean renewable energy just makes sense to me. The roof is already there so why not use it. If I were an investor-owned utility executive, I would be renting every rooftop I could get my hands on and installing solar panels.
Keep Your Money in Your Community
I am a fan of locally owned businesses, including solar companies, for a number of reasons. First and most importantly, I know that my money is supporting jobs in my own community versus lining the pockets of far distant shareholders who have never heard of my town or me.
Local companies are embedded in the communities they serve providing jobs, spending money, and contributing to causes important to their employees and the community.
We selected A.M. Sun Solar for our home rooftop solar project. I think they embody what is wonderful about locally owned companies. Here are a few examples.
The people at A.M. Sun Solar treat me like a person, not a number.
Years after our installation, Glen, Cory, and now Brian, are always willing to answer questions or provide information for a post I am writing.
Of course, just like any other company that you give your business to a locally owned company needs to provide quality products and services at a reasonable price. I chronicled this aspect of our relationship with A.M. Sun Solar in the posts Go Solar with Home Rooftop Photovoltaics – We Did and Rooftop Solar Costs Less than You Think.
Be Part of the Solution
Okay, so now I have shown you the money and presented you with an opportunity to help build the renewable energy capacity of your community while supporting local jobs. What could be better?
If you call a local solar company tomorrow, you could have solar panels on your roof before the arrival of the hot summer weather. This time next year you could be claiming the 30% tax credit on your federal income tax return.
Better yet, you will be taking a significant step to live more lightly on Earth.
Featured Image at Top: 12 of the 16 solar panels that were installed on our roof during our initial installation in 2013.
- ENERGY: Overdevelopment and the Delusion of Endless Growth – Book Review
- Go Solar with Home Rooftop Photovoltaics – We Did
- Reinventing Fire – Book Review
- Renewable Energy – Home Rooftop Solar Photovoltaics
- Rooftop Solar Costs Less than You Think
- Rooftop Solar Panels are Worth It and this is Why
- Why You Should Read Your Energy Bills – Electric
- Why You Should Read Your Energy Bills – Natural Gas
- You Can Increase Your Home’s Value with Owned Solar Panels
- What the Heck is Fracking?
- California Becomes 1st State to Require Solar Panels on New Homes. Here’s How It Will Reduce Utility Costs – by Natasha Bach, Fortune, 12/06/18
- California Gives Final OK To Require Solar Panels On New Houses – by Bill Chappell, NPR, 12/06/18
- California will require solar panels on all new homes. That’s not necessarily a good thing. – by David Roberts, Vox, 12/06/18
- CPI (Consumer Price Index) Inflation Calculator – U.S. Bureau of Labor Statistics
- Current US Inflation Rates: 2009-2019 – US Inflation Calculator
- DSIRE (Database of State Incentives for Renewable Energy) – NC Clean Energy Technology Center
- Electric Power Monthly – Average Price of Electricity to Ultimate Customers by End-Use Sector – U.S. Energy Information Administration (data is updated monthly)
- How Does Your State Make Electricity? – by Nadja Popovich, The New York Times, 12/24/18
- Inflation – reviewed by James Chen, Investopedia, updated 03/26/19
- Total Energy Monthly Energy Review – U.S. Energy Information Administration