6 Reasons Why You Should Not Be Waiting to Go Solar
There are a number of reasons going solar is a good decision. There are also a number of reasons now is the best time to make the switch. You’ve probably noticed that electricity rates are rising. Maybe you’ve heard of the Federal Investment Tax Credit? And maybe you’ve even heard that ITC is expiring. Or maybe you’ve heard the term Net Energy Metering before, but you don’t know what that means. Read on to find out and to learn about the top 6 reasons you should not wait any longer to go solar.
1. ITC is Expiring
The ITC (solar solar investment tax credit), which has helped drive the growth of the solar industry since its passage in 2006, begins to expire in 2021. For many people, the ITC alone is the reason not to wait to go solar. The ITC is an IRS program where 30% of the total cost of your solar project is returned to you in the form of a dollar-to-dollar tax credit. For example, if your solar project costs $30,000, you will owe $9,000 less in federal taxes. It is the government’s way of paying for 30% of your system. It gets even better – not only can you apply the cost of your panels and components, but any other work you paid for can be applied as well, such as roof work and construction. Home batteries too!
If you don’t have the tax liability to apply the entire ITC to your taxes the first year, you can carry over the remainder to subsequent years for every year the ITC program is in existence. It is suggested you speak to your tax professional to understand exactly what impact the solar investment tax credit will have on your tax situation.
If you wait until the last minute to go solar before the ITC expires, you could end up waiting too long. There will be a rush of homeowners trying to go solar before the deadline and solar contractors won’t be able to install everyone in time. To guarantee you get your solar project installed before the ITC deadline, it’s important you get your project moving soon.
2. Net Energy Metering is Changing
On top of the fact that the savings of ITC are soon fading away, changes are also coming soon to net energy metering (NEM) – the billing mechanism used by utilities for solar customers. But, if you go solar before these changes hit, you’ll be grandfathered into the benefits of the current program for the next 20 years.
The current Net Energy Metering structure recognizes the solar electricity that a home produces to be of equal value to the electricity the home draws from the utility grid at night and on cloudy days. When a solar system produces excess electricity, your meter literally runs backward as the power flows onto the grid. When you need that power back your meter runs forward as the power from the grid flows back to your house.
With Net Energy Metering’s current set up you are enjoying full retail credit rates (price per kilowatt hour) for the electricity you are generating and providing to the utility company. However, the utilities set a cap of 5% of their aggregate customer peak demand for the current program – for SDG&E that equates to 607 megawatts of installed solar. This 5% cap is expected to be reached by the first quarter of 2016, which is sooner than anyone originally anticipated.
No one knows for sure yet what the changes to Net Energy Metering will look like once the 5% cap is reached, but there’s speculation time-of-use charges will be included. Time-of-use charges would mean you no longer get an equal credit for all of the electricity you generate and give back to the grid. Instead, for example, if your system produced excess electricity at noon, you wouldn’t get that same amount of electricity credited back to you later in the day when there is peak demand. The minimum monthly fee is also expected to change – jumping from $5 a month to $10, or possibly more.
The benefits of the current net energy metering program are passing away in 2016, so now is the best time to go solar in order to lock in savings for the next 20 years!
3. Electricity Rates are Rising as Fast as Inflation
You know electricity rates have been rising for years and so does your wallet. The CPUC (California Public Utilities Commission) recently passed a new rate structure that will affect more than 30 million people throughout California, leaving many Californians with higher electricity bills.
Installing solar on your home or business is the best way to stabilize your energy costs. With solar you won’t have to deal with steeply rising electricity rates and your wallet will thank you.
4. Solar Panel Efficiency is at a Plateau
Since the conception of solar technology, solar panel efficiency has increased dramatically. Panels are more efficient than ever. Their efficiency was once increasing rapidly year by year, but as the technology has gotten more and more advanced, it no longer makes sense to wait to go solar in order for the technology to become more efficient. In recent years, solar panel efficiency has increased by small percentages, which is not enough of an incentive to hold off on getting your solar system installed before the expiration of ITC and changes to Net Energy Metering.
5. The Cost of Solar Panels Could Rise
With so many solar rebates already expired and the ITC soon to expire, solar panel cost is likely to rise. While it’s unlikely that changes to manufacturing or solar panel efficiency will negatively impact solar panel cost, the removal of incentives will hit homeowners’ bottom line and ultimately increase the amount of time it takes for them to experience a ROI. As I mentioned before, homeowners can expect electricity rates to rise in the future, and unfortunately the same may be true for the cost of solar panels.
6. Do Solar Panels Increase Home Value?
Something you might be wondering about when considering solar is Do solar panels increase home value? Recent research shows that yes, they do. Lawrence Berkeley Labs conducted a multi-state study which proved having a purchased solar system on your home increases the value of your house more than almost any other home improvement investment. In fact, it has a 43% return. Compared to say a bathroom remodel (only a 2% return), or even a kitchen remodel (a 2% loss), that’s a substantial increase in value which adds up to more than the initial cost of the system itself. If you go solar before the ITC expires, you’ll get even more out of your investment when it comes time to sell. So do solar panels increase home value? Absolutely. If you’re considering selling your home in the future a purchased solar system is a must-have investment that will increase your home’s value. The additional premium to your home value has the potential to offset the added solar panel cost entirely.
And there you have it
The top 6 reasons you really shouldn’t wait to make the switch to solar. Want to get your system installed before ITC expires and changes to Net Energy Metering are in place? Then request pricing from us today and see how much solar can save you!