5 Things You Need to Know Before Installing Solar Panels in Your New Home
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Moving can be a hassle—no shocker there. But here’s a hot take you may find a little more surprising: moving can actually be pretty awesome. There are plenty of positive aspects you can focus on to make your move less of a chore and more of an exciting adventure of new experiences and new beginnings.
For example: there are few things as fun as moving into a home and making it your own—especially for first-time homeowners whose home improvement and design sensibilities were previously limited by a landlord’s constraints. As a homeowner, the size, scope and style of your projects are determined, for the most part, by you and your personality.
If your personality is one that is particularly eco-conscious—or if you’re just interested in saving some serious money on monthly utility bills—solar panel installation is the perfect home improvement project to help you save money while setting your living space apart from the rest.
However, we’re not talking about painting a statement wall or updating your kitchen cabinet hardware here. Solar panel installation is a home improvement project that requires a significant investment of time and money—but it’s one that could yield huge dividends in the long run.
To help minimize your costs and maximize your returns, we’ve put together this list of 5 things you need to know (and do) before installing solar panels in your new home.
1. Location, Location, Location
It may be a classic real estate adage, but “location, location, location” rings truer than ever when it comes to choosing a home that’s right for solar panel installation. More specifically: when it comes to your ability to save with home solar, the state where you live matters most.
Each state sets its own laws and rules for solar panel installation, including how much renewable energy the state requires utility companies to buy, how much money you can save for each kilowatt-hour of solar energy, and whether you can pay for your solar panel installation costs over time, or are responsible for the entire amount up front.
The consumer-focused website Solar Power Rocks grades states based on their “solar-friendliness,” and offers a look at average installation costs and solar energy production per state. The site also estimates savings you can expect after installing solar panels in your home, as well as state-specific incentives—such as tax credits or rebates—you may be eligible for.
When it comes to incentives, the great news is that every taxpayer in the country can take a federal tax credit of 30% of the cost to install solar, which saves you a ton of money. Combined with other incentives in some states, you can reduce the time it takes for solar panels to pay back their cost down to just 5 or 6 years.
2. Research, Research, Research
After you’ve established that your state supports your solar dreams, the next step is to determine if your home is right for solar.
First, prioritize cost efficiency
If you’re considering switching to solar power, the first step is to figure out how much energy is currently needed to power your home, and look for cost-effective ways to reduce that energy before committing to solar. A kilowatt-hour saved is kilowatt-hour earned, and you may find that reducing your usage before installing solar is much less expensive than paying for more panels.
Your state might even have a public program to help you audit your home energy usage, replace old light bulbs with more efficient ones, and look for abnormal spikes in usage that can indicate problems with wiring. Your utility company might also offer rebates to help you purchase energy-efficient modern appliances that operate using much less electricity than older models.
After you’ve taken these energy-saving measures, give yourself a couple of months to compare average usage to past years. How much electricity you need is an important measure of how much solar power you’ll need to generate.
Next, rate your roof
Is your roof optimized for solar panel installation? The ideal candidate is:
- Not too old (less than 10 years)
- Made of asphalt shingles, standing-seam metal, or tiles
- Built with a large, un-obstructed face pointing somewhere between southwest and southeast
- Free from shade throughout the day
Not all of the above criteria are requirements, but if your roof doesn’t meet them, a solar panel installation will probably be much less cost-effective.
For example, solar panels can be installed on an older roof, but you may end up paying to remove and re-install the panels if you need to re-shingle during the installation’s 25-year lifespan. Similarly, shade can decrease solar energy output, and obstructions on your roof can lead to increased labor costs.
3. Get Multiple Solar Quotes, and Check the Math
In the past, it was required practice for a solar salesperson to do an on-site assessment to provide you with a quote. These days, LIDAR (Light Detection and Ranging) surveying and other advanced technologies make it possible to determine your roof’s pitch, daily sunlight hours and more without the presence of a salesperson, and solar companies offer ways to get multiple, hassle-free quotes for home solar online.
After you’ve done the work, be sure to check the math! Compare cost, equipment, projected energy production and savings estimates—we even recommend following up with a neutral 3rd party to check whether the estimates you’ve gotten are reasonable and supported by existing data.
The National Renewable Energy Laboratory (NREL)—a taxpayer-funded organization within the U.S. Department of Energy—is one such neutral third party. They’ve built a free, online tool called PVWatts, which you can use to compare the estimates of solar energy production you get from installers with an unbiased data set.
4. Be Prepared to Pay Before You Save
How many major home improvement projects will make you money over time? Solar panels don’t just do that: they add to your home’s value the instant they’re installed, while saving you more and more money the longer you utilize them. Just be warned: before you can earn these savings, you may have to spend some money.
On average, a solar system installation costs approximately $25,000 before any tax incentives and savings—but don’t get sticker shock! You may be eligible for a federal solar tax credit that will knock $7,500 off the cost the first year your panels are installed. Plus, your solar installation will save you, on average, upwards of $1,000 a year, with the amount of savings increasing as your utility company raises rates.
In some cases, state incentives such as solar performance payments can reduce payback time for solar down to as little as 5 years. It all depends on the state you live in.
Or, pay while you save with a solar loan
Because solar panels pay back their cost and add value to your home, many banks, and even solar installers themselves, offer loans that can help you get panels now and pay as you save.
Depending on your state and credit history, you can get a solar loan that covers the whole cost of your system, and get low monthly payments that cost less money than you save on your energy bill, essentially making solar a no-cost investment with savings that increase once the loan is paid off.
Ways to save without buying solar panels:
In some cases, you can sign a contract to purchase the energy produced by the solar panels, rather than paying for the system itself. This is called a “power-purchase agreement,” or PPA for short, and it can save you money even if you aren’t eligible for the federal solar tax credit. It works because you pay the solar company a lower rate for energy than you would be paying to the utility company. In fact, you will still pay a small amount to the utility company, because your home will still be connected to the grid and getting energy when the sun isn’t shining.
One thing to know before signing a PPA: it’s a contract, potentially lasting 2 decades or longer, and signing one can make selling your home more complicated, because under a PPA, you don’t actually own the solar panels; the solar company does. Transferring that ownership can prove to be difficult depending on the company that manages the PPA.
Finally, very few states currently offer community solar programs, where a developer installs a huge number of solar panels in a field somewhere, and people can sign up to pay the developer for the solar electricity, offsetting their bill and saving a few pennies for every kilowatt-hour of sun power.
Community solar comes with its own pitfalls, and it is almost always less financially sound than going solar on your own roof (if you can).
5. Solar is a Commitment
Solar panels come with 25-year production warranties, meaning you’re guaranteed at least 85% of the original electricity production from those panels by the end of their 25th year. This is a pretty sure bet: there are plenty of examples of solar installations from 30 years ago that still produce nearly as much energy as they did when new.
That’s a great thing, but it also means you need to plan for the future. Be sure you’re choosing the right installer, who also provides warranties for not only their work, but the roof penetrations they’re going to need to perform while installing your system. Additionally, 10 or 15 years post-installation, most home solar systems need a new central inverter, which can cost $1,000 or more.
As mentioned above: get multiple quotes for solar, and check the math. Talk to former clients of the installer you choose, and get the facts about this long-term commitment before you sign anything.
Happily, there’s one aspect of solar ownership that never stops being fun: spending the next 25 years telling everyone how great your solar panels are.
Curious to learn how much money solar could save you? Get your free home solar installation quotes here.