There are several factors that go into the cost of a solar array for your home, including the state you live in, the size of your electricity bill, size of your home, the direction your roof faces (South vs. North), and so on.
In most cases, it would be far more effective to speak directly with one of our solar professionals to get a better understanding of what it will cost you. Today, most anyone can go solar for $0 down. Contact ClaraSolé and find out how you can start saving on your monthly utility bill right away.
Federal Tax Credits
The federal government provides tax credits that allow homeowners and businesses to subtract a portion of the cost of a solar energy system from the amount they owe in taxes. A tax credit is significantly better than a tax deduction because it is a dollar for dollar reduction in your tax bill whereas a tax deduction only reduces your taxable income. As a homeowner or a business, you will qualify for a federal tax credit equal to 30% of the net cost of your solar panel system. The net cost is what you actually pay for your system after deducting any cash rebates. For example, if the cost of your solar panel system is $10,000 after cash rebates, you will be able to deduct $3,000 from the amount you owe to the IRS (Federal taxes).
State Tax Credits
Some states offer tax credits for installing a solar panel system. As a homeowner, you will be able to deduct a portion of the cost of your solar panel system from your state tax bill. These amounts vary significantly by state. Contact us to learn more.
A lease and a power purchase agreement are exactly the same except for one key difference. In both you get to keep a solar system for zero down, and both come with monthly repayments. However, while in a solar lease you have to pay a fixed amount every month regardless of how much energy the system produces, and in a PPA, you pay per kWh of power your system generates.
Benefits of a Solar PPA
A PPA is ideal for anyone who does not wish to tackle the heavy upfront cost of going solar, and those who do not want to, or cannot utilize state incentives such as the 30% Federal ITC (Income Tax Credit).
Benefits of a Solar Lease
You can enjoy a reduced and fixed electricity bill for the duration of the lease which is usually between 20 and 25 years, while the leasing company worries about keeping the system in good shape.
You can purchase your solar panel system outright if you have cash or can take out a personal or home equity loan.
Cash Purchase – Pay in full up front or finance it yourself using a personal or home equity line of credit. If eligible, you can apply for federal and state solar energy tax rebates. Solar Loan – CSLoan offers you the ability to own the solar system and pay for it over time. Get the most competitive rate you qualify for through our network of lending partners.
To buy or lease solar panels, is a common question and there is no right or wrong answer to this. The answer on which option is better is often times - it depends. It depends entirely on where you live, as well as what your energy and financial requirements are. With that said, let’s look closer at each option and what they each offer:
Buying solar panels offers:
- Access to all the state-sponsored rebates, incentives, 30% Solar Income Tax Credit, and Solar Renewable Energy Credits (SRECs), which can save you a lot of money over the life of the solar panels,
- No monthly payments for the solar, and a lock on long-term energy costs.
- On the other hand, you can lease solar panels for little or even zero down, and since your lease repayment will most likely be less than what you pay to your power utility each month, you start saving money from the start.
Leasing solar panels offers:
- Minimal money upfront or zero down (PPA),
- A fixed monthly amount to company that owns and maintains your system, and the total of your lease payment plus remaining power bill could be less than your previous electric bill, depending on your energy usage.
- Not to mention, the upkeep of the system becomes the company's responsibility in a lease. However, as you do not own the solar power system in a leasing agreement, the financial incentives get passed to the solar power company. These savings are ultimately passed through to the customer in the former of a lower rate (PPA), lease payment (Lease) or upfront cost (Pre-Paid lease).