According to the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE), enough sunlight hits the earth’s surface every hour and a half to power the globe’s energy needs for an entire year. The trick is converting and storing that power efficiently—a challenge that many homeowners, corporate entities, and energy companies are already tackling.
If you are interested in increasing your home’s energy independence, you’ll want to explore several ways to make sure your investment will pay off. Here are five things to consider about solar power:
1. Calculate Potential Savings
Some areas enjoy more sunny days than others. Using the National Renewable Energy Laboratory’s PVWatts Calculator, enter your location and determine your expected solar savings based on your local energy cost. The calculator lets you modify the inputs, depending on the type of system you plan to install.
Proceed to the results section for an annual savings estimate, including a monthly breakdown. Compare the yearly savings to the cost to purchase and install a system to determine if solar is a good investment for your home.
2. Consider Energy-Related Mortgages and Refinancing
If you are buying a home or retrofitting your current home with energy-saving upgrades, including solar panels, you may be eligible for a loan to help finance it. To learn more about your options, explore Fannie Mae’s HomeStyle Energy Mortgage.
3. Explore PACE Loan Options
Depending on where you live, your home may be eligible for a property assessed clean energy (PACE) program, which helps property owners finance the upfront cost of a solar system. Repayments occur through a voluntary property assessment, typically spread over 10 to 20 years.
The loan is attached to a property, rather than to a person. If you decide to sell your home before the repayment period ends, you’ll need to pay off any outstanding debt or transfer the obligation to the next owner.
4. Tax Credits, Rebates, and Savings
If you are planning to add solar panels to reduce your dependence on utilities, be sure to take advantage of all the potential savings, credits, and benefits available to help defray the cost.
The Database of State Incentives for Renewables and Efficiency (DSIRE) offers a tool that can help you identify federal, state, local, and utility company incentives and rebates in your area. Be sure to check with your tax advisor or CPA before taking the plunge, since some programs are scheduled to expire soon.
5. Check With Your HOA
If you live in a community governed by a Homeowner’s Association, make sure your governing body allows solar panels. Some HOAs require specific solar energy approaches that preserve the look and feel of the neighborhood. If your HOA doesn’t allow solar panels on individual homes, community shared solar may be an option.
Other Considerations and Resources
Real estate agents, appraisers, and homebuyers are embracing solar energy options on homes. One of the benefits of going solar is that it will likely increase your home’s value, according to a 2015 six-state study by Berkeley Lab. Additionally, photovoltaics may help your home sell faster.
You may also be interested in learning more about the U.S Department of Energy’s SunShot Initiative, a collaborative national effort to make solar energy fully cost-competitive with traditional energy sources by 2030.
The SunShot Initiative also provides helpful consumer resources designed to simplify the “going-solar” process, including tips for financing a residential solar project.