Solar Power Prices
If you are a homeowner in Arizona, there are basically two ways you can acquire affordable solar panels and become energy-independent: Lease or Purchase. When you lease, the leasing company takes all the tax incentives, when you purchase, you take them. (If you need a tax credit, you may want to consider purchase, check with your tax advisor.)
Consider the options below, then call us for more help in choosing the best plan for you. We’ll create an actual, no-obligation custom quote for your home with no high-pressure sales gimmicks.
1. Solar Lease
Everyone is talking about the monthly solar lease. You basically pay a low monthly lease payment for the equipment and then all the electricity it produces is yours. The thinking is, you can either continue paying your electric company for the electricity you use, or you can “pay yourself” to harness the sun and lease your “very own power plant” on your roof instead.
One of the best things about leasing is that your solar system gets installed completely for free. Only after your system is producing electricity will you start receiving your monthly bill. And if you’ve chosen to make a down payment, that payment will be added into your first month’s payment due after the installation is complete.
Some people think the free installation is just “too good to be true.” Well, the trick is that you have to have a high FICO score in order to qualify for a monthly solar lease, usually from 680 to 700. A FICO score is not the same as a credit score, it is a mathematical model that takes into account many different elements on your credit reports from the major agencies, including credit history, amounts owed, etc.
If you sell your home, your lease agreement is easily transferrable to the new homeowner, providing they have the same high FICO score you have. (They probably do if they can qualify for a mortgage.) And another option if you sell your home is to buy the system and transfer it to the new owner. All of this is spelled out in your solar lease agreement.
Leasing a solar array is far cheaper in most cases than continuing to pay your utility company’s increasing rates. You can essentially “lock in” your electricity generation costs for the entire lease term – 20 or 25 years. Your new, minimal electric bill plus your new lease payment will still total less than your current electric bill alone, so you’ll be saving money from day one. Certainly over the life of the lease you’ll save hundreds if not thousands of dollars.
The monthly cost to lease depends on the system size you need to cover your kilowatt usage. Everyone’s electricity usage is different. Two families in the exact same home with the exact same floor plan can vary drastically in terms of kilowatt hours used per month, so the number of panels and size of system needed varies tremendously.
Keep in mind that kilowatt (kW) system size is not as important as the amount of kilowatt hours (kWh) – actual power – your system will produce. So if other solar companies have been pushing you into 5kW, it may not produce as much power as a more efficient panel, so be sure to ask them what brand of panel they’ll be installing. And be certain to examine their production guarantee over the years (if they have one.) Years two, five and even twenty may not be all you’d hoped with other companies. Be sure to read the fine print.
What you need to know about Solar Incentives and Solar Tax Credits:
Even though most of Arizona’s major utility companies have a small utility rebate in place to offset solar costs for homeowners, these are on a first-come, first-serve basis. The amounts drop without warning. Call and ask us about the current rebate amount available in your utility’s service area. Legislators are being pressured by big monopolies and big oil companies to change the rules about renewable energy. Make your voice heard, because solar is good for everyone!
If your financial situation allows, you can pay some money down to get your monthly solar lease payment to be as low as possible. In general, each $1,000 dollars you put down lowers your monthly payment by $10. Another way to lower the monthly cost is by adding a yearly “escalator” percentage to the price that either matches or is a bit lower than the percentage by which your utility company is expected to increase their rates. (Beware, because some solar marketing companies add in price escalators as their standard business practice and you’ll only find out by reading their fine print.)
At Sun Valley Solar Solutions, we spell out every aspect of your lease in writing. The manufacturers of the solar panels we install guarantee electricity production, and fully warrant and insure your system for the entire 20 or 25 year lease term. Keep in mind that you can’t make additional payments to “pay off” the lease early.
Note: In order to have an electricity production guarantee, some of our leases require wireless internet access all twelve months of the entire lease term. Be sure to let us know if this is a problem for you. Also, with leasing, there is currently a long wait time between getting your system installed and turning it on. This is totally up to the financing company.
Keep in mind that the leasing company gets the benefits of all the state and federal tax write-offs with a lease rather than purchase. If you need a tax write-off, check out the cash purchase/solar financing option below so that you can take these credits to offset your income taxes.
2. Solar Purchase: Loan or Cash
If you purchase a solar electric system, whether by getting a loan or paying cash, solar becomes part of your home’s real property, adding instant value. Estimates according to a study published in 2011 by the National Bureau of Economic Research found that solar panels added a $20,194 premium to the sales price of a home (houses in the study were in the mid-$500,000 range.)
Many different forms of financing are available for a solar system purchase. You can get a same as cash loan to fund the state and federal tax credits for the year. You can get a line of credit or second mortgage on your home to fund the entire thing. Or ask us about our other financing options.
Of course you can always pay cash. Essentially, with cash purchase, you pay $1,000 down, 60% when the system is installed, and the balance at the time of system commissioning by your utility. Your average return on investment is around 7 – 10 years, depending on your system size.
Depending on the panel brand, with a purchase you’ll have a 25 year warranty on panels, 10 year inverter warranty, and a 10 year workmanship warranty from Sun Valley Solar. (The state of Arizona requires only 2 years, that’s how confident we are about our work.)
Note: Solar panels are very durable, and have no moving parts. After the Arizona hailstorms in the fall of 2010, we had to remove solar panels so that roofs underneath and surrounding them could be repaired, then reinstall them still in excellent condition. You should still add a purchased solar system to your homeowner’s insurance policy.
Call us today for a no-obligation, no-pressure, FREE consultation with one of our professional Solar Integrators – 480-361-6041. We will share as many facts and give you as much information as we possibly can to help you make an informed decision about solar.