Are The Solar Panels Paid For Already
Just because there are solar panels on a home doesnât mean that the homeowner owns the panels. There are three possibilities for how the owner acquired the panels:
- The homeowner paid for them. This means that the owner either paid cash for the system, or took out a loan.
- The homeowner used a lease or power purchase agreement . With a lease or PPA, the homeowner doesnât own the solar panels, but they are instead owned by the solar company.
- The homeowner used PACE financing. In California, Missouri, and Florida, solar owners can use the PACE financing program to pay off solar panels with an assessment on property taxes.
Depending on which of these is the case, youâll have different follow-up questions for the homeowner.
You Need To Stick With It
Staying in a property for a long time is key to maximising the benefits of solar panels, according to a couple who have had them for the last four years.
Ross Power, 38, and his wife Abi Gilchrist, 41, both professional musicians who run London and Kent Soul Choirs, installed PV panels at their home in Whitstable, Kent, in 2015. They got a fixed 12.8p/kWh rate under the generation tariff and earn about £600 annually. They also use the panels to heat a water tank and are paid the export tariff. Together with savings from using their own power, that adds up to around another £600 a year.
Yet despite the loss of the FiT scheme for new customers, they maintain there are still savings to be made – but you need to stick with them. It does appear there is less incentive to install panels, says Ross. But if you want to be greener, do it. We have seen huge savings in our energy bills regardless of the money earned through the feed-in tariff.
There are downsides: The panels become less efficient over time, so earning potential will fall. You have got to keep the panels clean and this costs about £100 each year.
Cashing In On Other Solar Incentives
Along with the federal solar tax credit, there are a number of rebates, programs and state tax incentives that you may be eligible for depending on where you live. In some cases, these other financial incentives may impact your federal tax credit. Heres what you should know:
- Rebates from your utility company: Typically, subsidies from your utility company are excluded from income tax returns. In these situations, the rebate for installing solar must be subtracted from your system cost before you can calculate your tax credit.
- Rebates from state-sponsored programs: Rebates from the state government generally do not reduce your federal tax credits.
- State tax credits: Any state tax credit you get for your residential solar system will not decrease your federal tax credit amount. However, getting a state tax credit means the taxable income you report on your federal returns will be higher, as youll have less state income tax to deduct.
- Payments from renewable energy certificates: Any payments you receive from selling renewable energy certificates will likely be considered taxable income. As such, it will increase your gross income but will not reduce your tax credit.
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The Best Way To Reduce How Much You Pay For Electricity Is To Use As Much Of Your Own Energy As Possible
If you own your solar system, the electricity you get from it is free. Thats why it makes sense to use as much of your own electricity as possible. Plan to do things that use a lot of power, such as doing laundry, during the day. Home batteries also help you use more of your own power because they charge from your solar during the day.
If you live in California, home batteries make a lot of sense because you pay high rates for electricity from 4 PM to 9 PM. All three of the states largest utilities charge their highest rate during the 4 PM to 9 PM period. Running your home on power from your batteries during those hours helps you avoid paying those peak evening rates.
Do Solar Panels Work In Scotland
If you think that Scottish weather might not be conducive to generating solar power, think again.
Firstly, we should note that sunlight is not an absolute requirement for solar panels. , and will still produce electricity on a cloudy day. Its the daylight thats essential.
The Energy Saving Trust estimates that a standard 3 kilowatt peak solar PV system in Scotland generates about 2,300 kilowatt hours of electricity each year. This amounts to approximately 75% of a typical households electricity usage.
Whats more, Scotland has been no stranger to extremely sunny summers in recent years.
A study by WWF Scotland found that since 2017, homes with solar panels have generated more than 100% of typical household electricity needs in seven different cities, including Edinburgh, Glasgow, and Dundee.
A summer heatwave in 2018, for instance, broke Scottish solar power records in multiple places. Solar panels provided Aberdeen with 136% of its average household electricity demand, and provided Lerwick with 117%.
The future of solar power in Scotland is certainly a bright one.
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How Is The Lease Negotiated
Once all the previous factors have been accounted for and the value of the land has been determined, its time to begin negotiating the terms of your solar lease. Generally, the solar developer will draft up a lease which is to be reviewed by the landowner. Everything will be in here – length of lease, monthly rent, required acreage – so make sure youre well informed and happy with the terms to ensure your earn as much as possible from your solar land lease.
With all these factors taken into account, just how much can a solar farm actually earn for landowners? According to figures from Landmark Dividend, leasing your land for solar panels could net you a profit-per-acre anywhere between $21,250 and $42,500! Please do remember that these figures can vary massively from project to project and, in many cases, will fall well below the amount suggested by Landmark Dividend. Of course, in some scenarios, the numbers could be even higher. This is especially true for solar farms spanning hundreds of acres which can see six-figure profits.
Should I Still Get Solar Panels
Energy companies do not have to start making payments under the SEG scheme until January 2020, but one company Octopus Energy has already launched two tariffs. The first pays a fixed rate of 5.5p/kWh and the other a variable rate.
Solar panels installed now will be eligible for the scheme and consumers can sign up to suppliers as and when they offer tariffs, or wait until 2020. One benefit of installing now might be to avoid an increase in tax from October this year VAT on solar panels and batteries will rise from 5% to 20%.
Natalie Hitchins, head of home products and services at Which?, expects solar installations will slow this year, but says that people invest in them for a number of reasons and often it wont be about making the money back quickly, instead seeing the environmental impact as the most important thing. Anyone hoping to make money under the smart export guarantee should think carefully. We dont know what rates or contract terms will be offered and rates might vary widely between energy companies, she says.
Anthony Kyriakides, head of renewables at the Energy Saving Trust , agrees there is significant uncertainty. How will people search for different tariffs and compare offers? he says. It is understandable that many homeowners will hold off until things are clearer.
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Does The Electric Company Pay You For Solar Energy
In certain circumstances, an electric company pays for solar energy if their customer uses less energy than they generate from their solar system. Electric companies determine how much power a customer has used over the course of a year. If the customer has used less electricity than their solar system produced, then the customer may receive a bill credit at the end of the year. However, there may be other factors, such as Time-of-Use billing, that can affect how the electric company bills for power usage.
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What Are The Downsides Of Free Solar Panels
Free solar panels are no longer available in the UK, however, if you have opted for the free solar panels deal it may be good to be aware of some of its downsides.
You might have trouble with selling your home if you wish to at some point. Some people can be thrown off by the big solar panels on the roof, even though they will be the ones using them and the electricity they provide.
If you entered a 20-25 year agreement with a company, you will have to include this in the selling process and ensure that the next homeowners will also agree to the terms assuming the agreement can even be transferred.
All in all, there downsides are that you dont own the system, and hence don’t receive the FiT payment yourself.
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Why Ownership Is Key
Many of these great benefits are only available when you own your solar system. Not with a Power Purchase Agreement , like National Solar Companies sells.
When you choose a PPA, the solar companies will keep the tax credit for themselves
youll still be saving money but no where near as much.
The most important aspect of PPAs to understand?
Having a PPA or a leased system can make it more difficult to sell your home!
Any purchaser has to a. Qualify with a high FICO b. Be willing to assume a 20-year monthly payment agreement with an escalating cost.
While on the other hand, if you own the solar system outright it can make your home more appealing and increase the price.
Property Taxes And Your Solar Panels
The last thing to be aware of is that adding solar panels to a house increases its value, and depending on where you live, that could increase your property tax bill. However, some states and municipalities have property tax exemptions for solar systems. This means that even though adding solar panels to your house will increase its equity, a property tax exemption means that your home assessment doesnât increase. This can save you a lot of money in the long run.
However, some states have a property tax exemption that lasts only for a restricted amount of time, such as ten years. This means that after the exemption expires, you could see an increase in your property assessment and taxes. Be sure to find out what the rules are in your city and state.
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When Your Bill Looks Too High: 3 Possible Reasons
Sometimes, homeowners call us surprised. In most cases, theyve just received that first true up bill, and the total seemswrong.
Maybe it looks too high, or they used more electricity than they expected they would. In these situations, its easy for a homeowner to get a bit panicked, believing their system isnt working, or that they made a mistake installing it.
Fortunately, this is seldom the case. Here are a few reasons a solar bill might look too high following the installation of a residential system:
Buying A House With Owned Solar Panels: Questions To Ask
The easiest case is when the homeowner paid cash for the solar panels. It means that when you buy the home, you will fully own and be responsible for the solar panels.
If they used a loan, they may have an outstanding balance and still be paying off the loan, even after selling the house. As a practical concern, this doesnât affect your ownership of the panels: you will own them outright, even if the original owner still has a remaining balance on their loan.
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How To Profit From Solar Energy
Solar energy has become a more viable option for consumers and businesses as technology has advanced and the cost has fallen. A report by the U.S. Department of Energys Lawrence Berkeley National Laboratory reports that the cost of utility-scale solar projects has fallen by 70% from 2010-2018. This decrease in production has also decreased utility prices.
Renewable energy sources are typically more in demand when the price of fossil fuels is high, but there are still many ways to profit from solar energy both when oil prices are low and when the price of oil rises in the future.
How Do You Claim The Solar Investment Tax Credit
The solar tax incentive is claimed as part of your annual federal tax return. Any reputable solar company should provide documentation and instructions on exactly how to claim the ITC as part of your solar installation. Below is a quick overview of what that process will look like. Though fairly simple, its best to consult with a tax professional when filing your return.
To claim the federal solar tax credit, follow these steps:
As a reminder, the tax credit only offsets the taxes you owe on your return. If the taxes you owe are less than the credit you earn, the credit will roll over year after year.
In addition to the ITC, be sure to file for any sales and property tax exemptions that may be available in your state.
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Solar Panel Costs By State
Solar panel costs in the U.S. typically include equipment and installation services. Visit the Solar Energy Industries Association website to learn about local incentives and tax credits in your area. Its usually in your best interest to take advantage of state clean energy programs when you can it lowers your upfront costs and shortens your payback period. According to our analysis, Washington is the greenest state, followed by Oregon and New Hampshire.
South Australia’s Home Battery Scheme
The Home Battery Scheme gives all grid-connected South Australians access to state government subsidies and low-interest loans provided by the Clean Energy Finance Corporation to help pay for a home battery system and new solar if required.
The subsidy is available to all South Australians and calculated on the kilowatt-hour capacity of the battery purchased. Energy Concession Holders are eligible for a higher subsidy, ensuring low-income households are supported to access the Scheme.
While the subsidy is applied to the battery component only, participating households can apply for finance available through the Australian Governments Clean Energy Finance Corporation, to help pay for the balance of the battery and to purchase new or additional solar panels if required.
A set of minimum technical requirements for battery systems are in place to ensure the batteries are safe, reliable and capable of being linked into a virtual power plant.
The ability to aggregate home battery systems – either now or at a future point in time – creates opportunities to address network issues and smooth loads by balancing out peak power demands.
Households are able to choose whether or not their home battery system operates as part of a virtual power plant.
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Can You Make Money With Solar Panels
It is possible to make money from owning solar panels. By installing solar panels in the US, the customer is entitled to earn money for every kWh that is injected back into the grid. The customer is also entitled to claim an important tax credit amount.
This can only apply with the Feed-in Tariff policy, which is only available in some states of the US as we will discuss in this article. Despite the Net Metering scheme, which is the most popular mechanism, this will only allow you to save money, not earn it. If you are more interested to know how much you can save by investing in solar panels, check out our solar calculator tool which will help you get a more accurate estimate.
Solar Panel Myth Busters
Some people believe solar panels only generate electricity when it is sunny, or that solar panels don’t work in colder climates. We are happy to bust both myths – as neither is true!
Once you have panels installed in your home you can monitor the production figures via the internet on cold or overcast days and see how efficient they are for yourself.
However, one surprising feature is that, to fit with legislation, if there’s a power cut, solar panels are designed to also stop working.
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Solar Energy: An Overview
Solar energy typically works by converting light energy from the sun into electricity. Photovoltaic energy is created by using flat solar panels that can be affixed to a structure’s roof or arrayed across open spaces. Another method, known as thermal solar, uses a series of mirrors to focus the sun’s energy on a single point to turn water into steam, which then turns a turbine. For consumer and business applications, photovoltaic solar panels are much more common than other types.
The cost for solar power in Q4 2019 was below $.20 per KWH in all of the states recorded and below $.15 and $.10 per KWH in some states. The national average for fossil fuel electricity was $0.13. Prices are comparable, but the real savings from solar come in future years due to the 2.2% inflationary prices per year for fossil fuel electricity. With solar, you are locking in costs at a constant rate. The only additional cost factors are the upfront costs of installing a solar system and the fossil fuel electricity costs needed when solar doesn’t cover all energy needs.
While the most efficient solar panels on the market today have efficiency ratings as high as 23%, the majority of panels range from a 15% to 20% efficiency rate. The most efficient solar panels and their efficiency rates are: