Should I lease or own a Solar Power or Photovoltaic System? Consider ROI
Owning your own Solar PV system is always a better choice. Here’s why:
First, when you purchase instead of lease a solar system, it dramatically raises your home’s value as soon as you install it. But if you lease a solar system, you’ve created a debt liability that a potential home buyer will probably not want to assume. What potential home buyer would want to assume a lease on a used solar system that will only save him or her 6 to 15% on their electric bill? And if the potential home buyer wants nothing to do with your legally binding debt or can’t qualify for the lease assumption, then you’ll have to pay a hefty penalty to break your lease agreement.
Second, a purchased solar system will not only pay itself off in as little as 6 to 12 years, but it will continue to make you money over its 30 to 50 year expected lifetime.
Third, with a solar lease you won’t receive a state or federal tax rebate (30% tax credit) because you are not buying the system. The leasing company will get the rebate because they will own the system that you’ll be making payments on for the next 20 years.
Basically, loans are much better investments than leases. If you need to finance, you would be better off with a home improvement equity loan or a renewable energy loan. The interest on your monthly loan payments is tax deductible with a loan (not with a lease).
Please call us before you sign on the dotted line. We want to help you make a decision that is right for you. We can install a system that is custom fit for your needs, plus we monitor our systems so you can actually see in real time how much energy your modules are producing. We’ve seen “lease” installations with modules that are installed in the shade! Please don’t be left in the dark – give us a call.
Why should I install a Renewable Energy System?
Installing a Solar energy system is similar to buying a car with all of the fuel it will ever need. The upfront costs are more substantial, but you wouldn’t have to stop to fill it up ever again. Solar and Wind Energy Systems are not new technologies. They have evolved to become more efficient, aesthetically pleasing, and financially viable in recent years. It benefits you, it benefits the environment and it builds a sustainable future. Global warming, rising energy bills, and energy dependence affect all of us. Many people choose to become part of the solution. Capturing solar energy and wind power are ways to make a real contribution to sustainability. Right now, with Federal and local Incentives, an investment in a solar system will carry an even greater return on investment. As energy costs increase, the rates of return get better.
Return on Investment
With the deflated cost of equipment and additional incentives, the actual time to recoup your investment has dramatically decreased, and, as energy costs increase, that time will continue to decrease. The impressive returns on investment make a solar system provide better returns than putting your money in a bank. The solar panels are guaranteed to produce power for 25 years and have proven to exceed that time. Your system will have paid itself off far before that time frame, and you will have invested in much more than just interest.
$4,000/kW – $1,200 Tax Credit = $2,800
1,400kWh/year x 25 years = 35,000 kWh
$2,800/35,000kWh = $.08/kWh
Clean Fuel Source
Solar is clean. No matter what you think about the plentiful supplies of coal and natural gas, the fact is they are dirty, unhealthy and harmful to the environment. You can do your part to keep healthy living conditions for the present and leave future generations a sustainable place to live.
Don’t get mad at the energy companies for raising prices; get even. Manage your risk against future increases in energy costs by locking in your cost now. With the additional incentives available, the cost of solar electricity is virtually the same as power company electricity. As the power companies raise their prices, yours will be locked in.
The fact that we are in continuing conflicts in the middle east is in no small measure related to foreign sources of energy. As solar and wind resources are developed here in the US, our need to acquire those foreign resources should decrease. You would be making a contribution in that direction by installing a renewable energy system. Also, the scientific proof of CO2 levels relating to global temperatures is no longer in question. Congress is discussing these issues in depth, and will likely lay down new laws in the future regarding this issue. Many countries around the world are already acting on these findings. Solar electric systems produce no CO2, allowing you to lower your carbon footprint dramatically.
I would like to install a Renewable Energy System, how do I get started?
If renewable energy systems sound like a good idea for you, the first step is to determine if your property is a candidate. Commercial applications all have additional incentives attached that make renewable systems even more desirable.
Solar Photovoltaic (PV) Electricity. If you have a flat or south facing roof with little or no shading, pv panels can be mounted for best efficiencies. PV panels require direct sunlight, so partial shading is highly undesirable, unless it is only during low impact times of the day. The relatively high cost of these systems make them a long term investment, but they are very reliable with little to no maintenance required. Many panels are still generating electricity over 30 years after being installed during the energy crisis in the 1970s. There are no size limitations on these systems, so you can install one panel or enough panels to supply your entire needs. The 30% federal tax rebates and accelerated business depreciation apply to these systems, so the return on investment is much better than in recent history. KCP&L Missouri additional utility incentives have now been added to make a system a very good investment.
Heating. New construction or major renovations can use passive solar design to create an extremely energy efficient space. All new buildings should make full use of passive design to decrease the overall energy demands of the building over its life. This type of design uses the building’s orientation, sun exposure, and proper building materials to store solar energy for heating and to avoid solar gain for cooling. A radiant floor heating system can then integrate solar thermal panels to supply much of the energy necessary to heat the space. Heating bills would then be reduced or eliminated. As the price of natural gas or propane continues to rise, your solar heat will remain free.
Hot Water (Solar Thermal). If you have a flat or south facing roof with little or no shading, solar thermal panels can be mounted for best efficiencies. Even with some shading, indirect sun rays will supply about half of the energy of direct sun rays. Trees that lose their leaves during the winter will not completely shade the panels when the winter sun is closer to the horizon. The more hot water that is used, the more energy savings these systems can realize. Businesses such as restaurants and hotels that use large volumes of hot water are prime examples of entities that would benefit greatly from such systems. There is no limit on the 30% federal tax rebate for commercial systems, so the return on investment can be excellent. Anyone using propane or electric hot water heaters are prime candidates for these system. The payback in these circumstances is very fast, because propane is so expensive and electricity is so inefficient for heating.
Wind Power (Wind Turbine Electricity). Remember, just because you think it’s always windy at your location, it doesn’t mean you are a good candidate. If you have at least an acre outside city limits and your average wind speed is more than 12mph, you are a candidate for wind power. If your land is located on a high point or there is little tree growth or large obstructions, even better. The wind can be efficiently harnessed just about anywhere in Western Kansas. Still, with a high enough tower, some places in Missouri and extreme Eastern Kansas are candidates. As a rule of thumb, the larger the turbine size, the greater the return on your investment. In locations where average wind speeds exceed 15mph, there is no bigger ‘bang for the buck’ than wind for creating electricity. That being said, wind turbines require ongoing maintenance that PV does not require. This is a factor to consider. Prime candidates for wind generators would include farms, manufacturing plants, and homeowners that want to be part of the clean energy solution.
My property is a good candidate for Renewable Energy and I want to install a solar or wind system, where do I begin?
If you feel that you are a good candidate for a solar energy system, we would love to hear from you. Please email or call, and a Good Energy Solutions representative will consult with you to start the process.
Things we will need: 1) a description of your roof’s orientation and roofing materials 2) a description of your utility sources 3) the percentage of energy independence you desire 4) copies of your past utility bills. We will then schedule a visit to do a site assessment to help determine your options. You will receive:
• Detailed recommendation of which system will work best for you
• A price quote for that system
• The rebates and incentives you are entitled to
• A financial analysis of return on investment
• Financing options if you wish or need to finance the system
When we agree on the system you wish to install, the next steps will proceed in this order:
1. You will sign an installation contract and submit a 10% deposit
2. We will obtain the proper building permits for your system
3. If you are building or remodeling, we will collaborate with your contractor to enable a seamless installation
4. We require 65% of the project cost on the day the solar equipment arrives. This will occur once utility applications and building permits are accepted.
5. The balance is due upon completion of the installation
6. You will now be the proud owner of your own renewable energy plant and part of the overall energy solution.
How much does a solar PV system cost?
A Good Energy Solutions system will typically cost between $3-$5/watt installed for a quality, custom-designed solution. Good Energy Solutions prides itself on providing our clients the best equipment on the market at the most reasonable price possible. A typical home system will cost between $10,000 and $25,000 after incentives, but the system will generate electricity for 30 to 50 years or more. It will pay for itself and keep on going as electrical utility rates increase. Read more about Solar installation and Cost of Solar by Good Energy Solutions.
Can I sell power back to the utility? (Array Size and Net-Metering)
Different utilities and cooperatives have different policies when it comes to purchasing customer-generated electricity by solar or wind energy systems. In most cases, a net-offset of your electrical usage is what we’ll propose. Current policy and economics don’t allow for substantial over-generation to make financial sense to the customer.
It’s important to avoid “over-sizing” your solar array if you are interested in the best return on investment. The goal is to avoid over-production based on the solar net-metering laws (kWh used vs. kWh produced are reconciled at the end of the month). A basic rule of thumb is to figure out how much solar is needed to completely eliminate your annual utility bill, and then reduce the array size by (the equivalent of) 15%. If you heat with electricity, then reduce your array size by (the equivalent of) 30%.
What kind of maintenance is involved for solar energy systems?
Very little maintenance is required with a solar energy system. A quality designed system will typically only need a good washing every year or so, and only then assuming the modules are dirty. A light snow usually melts quickly or slides off the glass. Solar has no moving parts; if it is designed and installed correctly, a SunPower system should produce for 40+ years. Mid-range quality systems you can count on for 30+ years.
Will hail damage my solar panels?
Solar panels are extremely durable against hail and actually provide protection to the roof against impact and UV damage.
Do I need to clean snow off of my solar panels?
Very rarely. Snow melts off of solar modules faster than the roof because the modules heat up faster. Snow slides off of the glass of the module. If mounds of snow should need to be removed a quick sweep with a broom will do the trick.
Do I need to wash my solar panels?
Modules are for the most part self cleaning. Because they are tilted and glass is low friction most dust slides right off. That dust which remains is usually rinsed off by rain.
Can I truly go "off-grid"?
While battery-based solar energy systems are possible, they are typically a bit more cost intensive. Using the electrical grid as the battery, and remaining grid-tied during times of little sun provides a very efficient, always reliable way of generating and using power.
What if my residence isn't ideally situated for a Good Energy Solutions solar energy system?
Optimal solar applications require ample south-facing exposure. Good Energy Solutions will work with you to identify the best practical location for your solar energy system. Every site has it’s intangibles and unique limitations.
What is Energy Management and Why is it important?
Energy Management is the process of monitoring, controlling and conserving energy in a building, organization or home. The process of managing energy results in saving money and energy. Collectively, if we reduce our energy use we reduce damage to our planet and our dependence on fossil fuels. Energy prices, energy emission targets and and legislation are all effected by our energy management.
I want to manage our energy use: how to get started?
The first step is to gather your energy usage information from your electric bill or collect data with an interval metering system. Good Energy Solutions can install a system (Neurio) that automatically measures and records energy consumption during different times of the day or on different days of the week. These patterns make it easy to find routine waste and peak usage times. Next, the collected data is used to find opportunities to save energy and estimate how much energy each opportunity can save. Opportunities for energy savings include replacing faulty equipment on HVAC systems, retrofitting LED lighting or upgrading insulation.
Are LEDs all the same?
No. Some LEDs are better quality because they run cooler and therefor last longer. Also, superior LEDs provide a consistent luminous light that is equivalent to the light quality of fluorescents. Cheaper LEDs are not able to provide luminous light for the entire room; instead they leave dim areas in between light fixtures. Learn more about LEDs here.
What is the best way to get started saving money and energy? Cut your kW hours?
The best way to save money or energy is to determine what energy is being wasted. Have you changed your CFL and incandescent bulbs to LED? Have you had an energy audit and blower door test on your home? Have you upgraded your heat pump? More attic insulation? We can provide you with an energy audit to determine energy waste and provide you with upgraded energy efficiencies. After you have successfully tightened up your envelope then consider installing a renewable energy system. It doesn’t really make sense to spend money on an oversized system to create power that is wasted. Learn more about energy audits and our energy pyramid here.
Why Good Energy Solutions?
Good Energy Solutions is a full service energy partner that is able to provide comprehensive consulting and services in electrical, renewable energy and energy management in the central US. Our experienced team provides custom solutions in Solar Photovoltaic (PV) and energy storage systems. We are dedicated to customer satisfaction through quality design and installations and back our promises with long warranties. Good Energy Solutions is “Energy with Integrity” and a SunPower Elite and Commercial Dealer. We are customer focused and local in Kansas and Missouri.
What kind of Tax Incentives are there for Solar?
A 30% tax credit applies for a home or business. For a business, and additional (the equivalent of) 30% (deduction depending on your business tax rate) can be used for a special 5 year period for accelerated depreciation for solar property. The bottom line is that a business can install a $100,000 solar system, and the net investment, after $60,000 of incentives will be $40,000.
When it comes to Solar Panel Quality, How do Solar Panels Differ?
As with many products, there is a wide range of quality in the Solar industry. The best in the world, is from a U.S. company called SunPower. In general, the lowest quality solar panels are made in China. In the quality mid-range there are a variety of options. Length of warranties and the amount of electricity produced vary. Three factors that determine quality solar panels are: production with robotics (vs. manual assembly; frame strength to reduce module stress and moisture penetration during harsh weather; STC vs PTC (the lab-tested wattage of the panel vs. real world conditions).