As I write this, I just finished a meeting with my client who decided to make the switch to solar. Once we finalized his project details, we determined that he qualifies to claim $9,000 tax credit for this year (there is a 30% federal tax credit available to homeowners purchasing solar). He currently has $7,500 worth of tax liabilities left to pay for 2023. He didn't initially know about the solar tax credit incentive, and was pleasantly surprised when he discovered that the rest of his tax liabilities will now be covered and on top of that he will be getting paid by the IRS for the $1,500 difference!
Tax credit aside, there are many benefits to owning a solar system. In this blog post, we will discuss these advantages and what to look out for to determine if solar makes sense for you. With solar, the following advantages are available, and they are huge! 1. Reduction or elimination of electricity bills - rent your electricity no longer and increase personal cash flow!
*Note: You will always need to pay the monthly connection fees, with or without solar. The connection fees vary across utilities but normally range between $11-$13 per month. 2. 30% federal tax credit available - you will be credited 30% of your solar project total toward your tax liabilities by the IRS. In order to qualify, you must have tax liabilities. Please note, if your annual tax liabilities are less than the 30% amount of your solar project, the difference rolls over and can be applied towards your tax liabilities in future years. The IRS will only pay you back for a difference if your total tax liabilities for the year are greater than the 30% total of your solar project. 3. Increase property value without increasing property taxes (effective until 2025). 4. Upfront payment not needed - simply finance your purchase and swap out your current utility bill with smaller monthly loan payments. 5. Future-proofing for increased usage as appliances are shifting from gas to electric 6. Going off-grid (with a complimentary battery backup system) 7. Going green by contributing to a cleaner present and future Of course before making the decision to purchase a solar panel system, it is important to ensure that solar makes sense for you. The good news is that most homeowners in Southern California are a good candidate for solar. From my experience, I find that homeowners shopping the solar market fall into one of these four primary categories: Homeowner 1 - The spender, cookie cutter installation This homeowner pays a significant amount of money annually to their utility company, and has an ideal, suitable property for solar. This homeowner has a decent roof with good sun exposure and no structural issues with their property. Most commonly, businesses and multi-person households fall into this category. A solo homeowner may also have high usage, but this trend is seen most commonly when multiple people share a rooftop. These homeowners are averaging a minimum of $100-$150 per month on their electricity bills. This homeowner notices the constantly increasing utility rates more than anyone else. In the majority of cases, a solar installation for this homeowner can be a no brainer investment. The cost of their solar panels, compared to their cost of electricity side by side guarantee a significant amount of savings over the lifetime of their system. For the highest users, you can expect six figure savings over the lifetime of your system! Homeowner 2 - The spender, but there are issues with the property Like homeowner 1, this homeowner also spends a considerable amount on their electricity bills. However, their property has issues. Here are the most common issues we notice with properties, which need to be addressed before solar panels are installed: ⁃ Roof needs replacement ⁃ Rooftop lacks structural integrity ⁃ Shading ⁃ No electrical wiring is connected to the unit's rooftop that solar will be installed on, so trenching ends up being needed. ⁃ An electrical panel box upgrade is planned, but there is a code violation with the existing location which calls for extensive work during a relocation. These issues are common and for this homeowner, the costs of addressing them are justified in the majority of cases. For example, if you will save $80,000 over the lifetime of your system, but need to pay $8,000 for a new roof, $72,000 is still a considerable return on investment - not to mention that the roof will need to be replaced whether you decide to install solar panels or not. It would have to be a very extreme situation such that the additional costs needed for property repairs will outweigh the benefit of a solar investment. For shaded properties, solar still can make sense depending on the unique schematic. However an additional number of panels will typically be required to make up for shading losses. Homeowner 1 and 2 can have the same usage, but if homeowner 2 has a shaded property, they will likely spend more on their system to reach the same electricity consumption offset as homeowner 1. The key here is ensuring that there is a positive ROI on your purchase. Homeowner 3 - The very low spender, cookie cutter installation Realistically, from a financial standpoint, this homeowner can get by with or without solar, as the return on their solar panel investment likely won't be "life-changing" (and of course this term is subjective). Even the lowest spender will still net positive on their solar investment. It's simply a matter of answering, "are my projected savings significant enough to me for this to be a fulfilling investment?" However it is important to note that going solar is not just a financial decision. Climate change is increasing and literally compromising our world's future, so it goes without saying that there are huge environmental benefits to going solar. If you are someone who advocates for that, you may justify your purchase for reasons beyond the financial. Homeowner 4 - Very low spender, but there are issues with the property This homeowner is spending less than $100 a month on their electricity bills and there are certain components of their property that make solar unfeasible. For instance there may be significant shading over their rooftop, with barely any sunlight reaching it. The number of extra panels they would need likely wouldn't even make sense financially (or even be worth it depending on how bad the shading is). If trees can be trimmed or removed, the homeowner may reconsider solar. As you can see, there are so many variables involved! Going solar is a big decision and when done right, is a step towards financial freedom and a more sustainable future. OneSun is here to help you determine if you are a good candidate. Our estimates are free and no-strings-attached.
Fill out our quote form for a customized solution and see what solar can do for you!
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