Should I Add Solar Panels to My Home?
"Going Solar" is a hot phrase going around right now. There are billboards, magazine ads and television commercial circling the nation focused on how easy it is to add solar panels to your home and the resulting benefits. However, just like many homeowners, you might be wondering if "going solar" is really as good as it sounds. If you're considering jumping on the solar band wagon, we're here to share some of the pros and cons so you can make the best decision for you and your family.
The Pros of Adding Solar Panels to Your Home
- Lower Electric Bill (Smaller Carbon Footprint)
- Depending on the size of your home and your electricity use, adding solar panels to your home can drastically reduce your monthly bill. According to an article in Forbes magazine, adding solar panels can reduce your bill by an average of $84 per month.
- Installation Prices are Lower than Ever
- Since 2011, the price of installing solar panels has dropped by 60%. There are also federal and local tax credits & subsidies to help lower the upfront setup costs.
- Tax Incentives
- The Federal Solar Investment Tax Credit (ITC) is a 30% tax credit for residential and commercial properties that utilize solar energy. Some credits are ongoing for each year.
- Flexible Purchase Options
- Because of the increased interest in solar energy, there are not only more companies to choose from for installing solar panels but also ways to afford the installation. You can choose to lease, buy or finance your solar panels. Make sure than any financing option has a lower payment than your average electricity bill to ensure that you are saving money.
- Added Home Value
- As we are still in the new phases of adding solar panels to homes, there are many who believe that the increased energy efficiency will increase home values as well add buyer appeal. There is some debate as to how "much" value will be realized and could depend on your area.
The Cons of Adding Solar Panels to Your Home
- Not a Simple "Quick Fix"
- Keep in mind that installing solar panels to your roof is a more comprehensive project and definitely not a DIY weekend adventure. You will need a professional who can recommend proper panel size and placement as well as install additional wiring that is necessary for energy conversion and use. There are also people who are concerned with the damage done to a roof during installation that may result in water leaks.
- Hefty Upfront Cost
- While we listed that installation prices of solar panels is lower than ever and there are a variety of ways to finance the project - the national average of installation is $17,000. This can be a lot of up-front expense for many homeowners who will need to have a long-term plan to see overall savings.
- Increase in Insurance Premium
- If you decide to add solar panels to your home, expect to see your homeowners insurance premium to increase to cover the potential replacement of these fixtures.
- Leased Panels Don't Add Appraised Value
- If you choose to lease solar panels, keep in mind that you don't own the panels. Appraisers will not add value for the solar panels in your overall home assessment because the panels can be removed at any time and are not permanent fixtures to the home.
- Financed Panels May Turn-Off Buyers
- When you secure a loan to pay for your solar panels and then decide to sell your home - the new buyers must be willing to not only buy your home but also take over the solar panel loan. This can make it difficult for some buyers who may fail to qualify or who don't like the terms of your solar loan.
- Added Maintenance & Repair Requirements
- Just like any appliance or fixture, solar panels are not "super" panels. There is necessary maintenance and cleaning required to keep your panels operating properly. As the panels age, there will also be necessary repairs to keep everything in working order. This investment might be worth it but it's important to factor these costs in when making your decision.
We hope that this information helps you make a more informed decision about the positive and negative outcomes of adding solar panels to your home. When in doubt, talk to your mortgage professional before making a decision. Good Luck!
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