Recurring bills, if not managed, can end up taking a big chunk of your monthly income. That’s why when budgeting they should be the first thing to scrutinize. Electricity bills are a recurring expenditure and depending on the size of your household and the number of appliances that run on electricity, the cost can be substantial. That’s why cheaper alternatives should be the go-to if available. One of the best alternatives is solar energy. It isn’t just affordable but also saves you the frustration of dealing with inflated energy bills and power shut-offs. But are solar panels worth it?
Benefits of solar panels
Reduce/eliminate electricity bills
This is the major reason why most people opt for solar panels, especially in areas that receive an adequate amount of sunlight. However, even regions that are generally cold all through the year get at least 2 hours of sunlight daily. Even though sunny days generate more solar power, modern solar panels can still draw energy even when the sun isn’t shining. As long as there is natural light outside they can generate enough energy to run the average household. After the cost of purchasing the solar panel as well as installation and maintenance, you won’t incur any other costs.
In many households, annual energy bills are usually more than $3,000. You won’t be spending this much on energy bills if you opt for solar power. Instead, you can save that amount and invest. This isn’t just for a year but for as long as you are using solar energy. Additionally, homes with solar panels may fetch a better price on the market. Consequently, solar panels protect the roof from natural elements like debris, snow, and rain. They also make your home energy-efficient in summer since the sun won’t be beating directly on the roof.
Rebates and tax credits
You can also enjoy federal tax credits if you install solar panels on your property. Many states also give rebates for people using renewable energy. Some solar panel dealers also offer installation as an after-sale service saving you the additional costs. Coupled with Solar Renewable Energy Credit you will end up getting more out of the deal than you could have ever imagined.
Effect on the environment
Solar panels provide a clean renewable source of energy. Additionally, they don’t produce harmful greenhouse gases as is the case with fossil fuels. Traditionally, electricity comes from natural gas and coal which pollute the environment. This traditional production of electricity also relies heavily on water resources. In this era where natural resources are strained and environmental pollution is at an all-time high and water levels are rising due to global warming, conserving the environment should be a priority. Adopting solar energy is one of the best ways to do so.
The sun’s energy is infinite hence switching to solar power gives you energy independence. This cannot be said about natural gas and coal. The electrical energy you get from the solar panels is based on their exposure to direct sunlight. Thus, you will be sure of a stable power supply and predictable energy bill. This is crucial, especially when your energy demands go up. Also, solar energy is your best option in places with frequent electricity interruptions. Your work or life doesn’t have to come to standstill just because you don’t have electricity.
Once you make up your mind to move to solar energy the next thing to consider is whether to buy or lease the system. Buying the solar panel gives you ownership rights immediately. You can pay in cash or apply for a solar loan. On the contrary, you can lease the solar panel system from a service provider or through a power purchase agreement (PPA). In this case, the third party will be the owner of the equipment and they can repossess it if there is a breach of the agreement or once the lease is over. The decision on whether to buy or lease depends on several things including your reason for switching to solar energy, financial goals, and also your preferences.
When to buy a solar panel
Consider buying the solar panel if you want to:
- Reap the full benefits of solar panel purchase and installation.
- Enjoy state and federal tax credits
- Increase the property value
- Install it in business premises where you can deduct the cost of purchase and installation when filing taxes.
When to lease a solar panel
It would be best to lease the solar panel system if:
- You want to avoid maintenance and repair costs
- There are no state or federal tax credits to enjoy
- Not enough money to pay for the system in cash or you can’t secure a solar loan
Pros of buying a solar panel
Once you pay for the solar panel system you become the owner outright. Therefore, you won’t have to adhere to a bunch of rules on how to use or maintain the system as is the case when you lease it.
Installing a solar panel in your property can automatically drive its value up. This will be a silver lining when you put the home up for sale. Also, since you own the property you don’t have to dismantle the whole system when selling the property. You can leave it for the next owner. In this case, it can help you negotiate a better price.
Taxes and rebates
Solar power tax deductions, credits, and rebates can only be enjoyed by people who have bought the system. Given how much money goes into paying taxes, you should take advantage of any legal leeway available to lower the amount.
You can move with it
Even if you are changing houses you can still take the solar panels with you – assuming they’re installed in such a way that makes that possible! Thus, once you buy one you are all set.
Cons of buying a solar panel
High initial cost
You’ll spend between $15,000-$25,000 in purchasing the average solar panel system. You will also have to budget for permits and contractors. Many people cannot afford that kind of money on a whim hence leasing is quite popular.
You need the right environment
Your roof should have the right environment for the installation. Too much shade will hinder direct sunlight from hitting the solar panel. This limits its ability to harness the power. There should be no neighborhood rules against solar panel installation as well. Be sure to check with your homeowner’s association if you have one.
Pros of leasing a solar panel
No upfront costs
Solar panels are costly and if you have a big property you may need 10-20 panels for complete coverage. You don’t have to spend a fortune to enjoy solar power when you can opt for leasing.
No installation or maintenance cost
Besides solar panel purchasing, installation and maintenance costs can add up quickly. To avoid stretching your finances you can lease the system. The service provider takes care of these costs.
You don’t have to buy a solar panel if you only need solar energy for a given amount of time. If you live or run a business in an area with an inconsistent power supply then solar energy will be a great substitute. In cases where you won’t be there for long, you can opt to lease until you move.
You have someone to call for help 24/7
The service provider is always a call away in case something isn’t working right. In the event that you own the system, any repairs or troubleshooting necessary will be on you.
Cons of leasing a solar panel
Expensive in the long-run
If you plan to use solar energy for a long duration then leasing probably isn’t the best option. Increases in the price of electricity in the future will be passed onto you. Thus, even though you won’t incur much initially you will be paying a lot of money to the service provider in the future.
No tax credits or rebates
Since you didn’t directly purchase the solar panel you won’t enjoy the federal or state tax reliefs, rebates or credits offers to those who opt to buy the system.
It can be a hindrance when selling the home
If the lease is still active when selling the home it can be difficult to find a buyer. Not every potential buyer will be willing to take on a 20-year solar panel system lease.
Solar energy has been around for ages and with improvement in technology, the current solar panel systems are powerful, effective, and convenient. Additionally, with the right number of solar panels, you can free yourself from reliance on the traditional electricity supply. Currently, some states are considering scheduled power cutoffs, and should this be implemented then solar energy will save you from the frustrations that come with that. You can never regret choosing solar energy. The only decision you have to make is whether to buy the system or lease.