Solar Installers PA
Solar Installers, PA, an informational site for home and business owners, as well as installers, will help you find ways to reduce or eliminate monthly energy costs. Adding solar power or a wind energy system increases the resale value of your home or office building and can last 40 years, or more!.
Solar installers, PA looks at the subject of safe solar installations, the benefits... how it works, and will offer tips and advice on a variety of related topics. Each area of our state has great geographical variety. We also experience a wide variety of weather. Solar installers, PA, will help to explain what to look for to maximize your installation anywhere in the Commonwealth.
Enjoy Solar Installers, PA
- Keep up with the ever changing solar and renewable energy industry
- Maximize your investment.
- Increase the value of your home.
- Protection in the event of a power outage or disaster.
March 2011 Comparing the Financing Options for Solar PV Systems
As the available government-sponsored financial incentives are shrinking, the value of a well designed and installed solar PV system must be weighed against a poorly installed, albeit less expensive system. There are three important factors, and one underlying solution to consider before making your choice amongst installers.
The Factors
1. System efficiency and power production. It's all about the kilowatt hours of electricity produced. Power production can be reliably projected. Top installers achieve top results.
2. System durability. The design, materials used, and the skill of the installer will determine this.
3. Safety. Electrical power generation systems should be designed and installed by electrical professionals.
The Solution
A Nationally Certified Solar PV System Installer, who is licensed to perform electrical work, or a certified individual who employs a professional electrician, should be selected as your solar PV system installer. There are only two agencies recognized as having national certification programs: Underwriters Laboratory (UL) and the North American Board of Certified Energy Practitioner (NABCEP). Underwriters Laboratory certified PV installers are (by prerequisite) licensed electricians having a US Department of Labor OSHA 30 Certification Card. This additional certification is awarded to individuals that have completed a minimum of 30 hours of occupational safety training. They have been tested by Underwriters Laboratory, and have been proven to possess the knowledge and skills to design and install solar electric power systems.
NABCEP also tests the knowledge of the installer in these areas, but the individual is not required to have an electrical background or electrical safety training. It is important to note that the electrical construction of your solar PV system should be performed by a licensed electrician. If this is the case and the certified installer will be on-site during the construction, you have probably made a good choice regarding the question of "who should I trust to install my solar PV system."
Let’s take a look at some of the financing options you can find in today’s market.
SOLAR FINANCING OPTIONS
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OPTION
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CASH PURCHASE
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HOME EQUITY LOAN
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OTHER LOANS
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SOLAR LEASE
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RESDENTIAL PPA
(POWER PURCHASE)
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UPFRONT COSTS
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High, full cost needed
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Low, Closing fees?
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Low, closing fees?
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Low, may have a pay down opt
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Low, pay down opt or prepay electric option
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|
WHO OWNS
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Homeowner
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Homeowner
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Homeowner
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Solar Company
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Solar Company
|
|
ONGOING PAYMENTS
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None
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Monthly Loan Payments
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Monthly Loan Payments
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Monthly Lease Payments
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Monthly Electric Payments
|
|
WHO MAINTAINS
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Homeowner
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Homeowner
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Homeowner
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Solar Company
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Solar Company
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|
WHO GETS TAX CREDIT
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Homeowner
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Homeowner
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Homeowner
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No Credit
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No Credit
|
|
TAX DEDUCTIBLE
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N/A
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Interest, yes
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No
|
N/A
|
N/A
|
Cash Purchase Option: If available, this avoids finance charges and fees, and has no monthly payments. It should be weighed against other investment opportunities. Your installer should be able to provide performance and production information that will foretell what the system will generate in savings. It is important here to recognize the rising rates for electricity in this estimate of future savings.
Home Equity Loan: Borrowing against the value of your home is a common form of financing. The interest rates associated with this type of financing are usually the most favorable. These loans are secured loans (guaranteed by the value of the house). The interest on these loans are tax deductible. Refinancing of your existing mortgage is much the same (in terms of benefits) as a home equity loan.
Other Types of Loans: Unsecured (not backed by collateral) Loans, and Solar Loans generally have less favorable terms than a Home Equity Loan. The interest on these are not tax deductible. However, they can often be obtained at reasonable rates and keep the ownership (and all the benefits of ownership) with the homeowner.
Same As Cash Financing: This is financing that may be offered through your installer. It is interest free, but must be paid back by the due date (usually 6 months to one year). There are programs offering as much as $45,000 unsecured. This may give the homeowner an advantage in shopping for long term financing. All of the benefits of ownership, incentives, and tax credits remain with the homeowner.
Solar Lease: In this case, you do not own the PV system. The solar company and it’s financial partners own the PV system. As the owner, the solar company takes any of the rebates or tax credits. Sometimes, the solar company takes care of the system maintenance and repairs. Sometimes they do not. At the end of the lease, the lease can be renewed, or the homeowner can buy the system (in its current condition with whatever life expectancy remains), or the system will be removed. In this scenario, the homeowner makes lease payment to the solar company but these are offset by the savings on the monthly utility bill. Terms of these leases may vary.
Solar Power Purchase Agreement or PPA. A solar PPA is similar to a lease in that the solar company owns the system on the homeowner’s roof. Instead of leasing the equipment, the homeowner must purchase all of the electricity that the system produces from the solar company. Generally, the agreement will be for up to 20 years. The solar company gets any rebates, incentives or tax credits. In some cases, the homeowner can make a bulk purchase of electricity that the system should produce. Otherwise, the homeowner will receive two electric bills, one from the solar company and one from the utility company. Hopefully, the sum of the two bills is less the original utility bill prior to system installation. At the end of the agreement, they can renew the PPA, or have the system removed.
Summary
When considering these options, it is important to project where you may be…financially, and otherwise, during the term of, and for the duration of any loan or agreement. If you anticipate that you may want to sell your property before the term of a solar lease agreement or PPA has expired, you may want to take into consideration the marketability of your home with a PV system belonging to someone else on the roof. In the case of the homeowner who owns his/her system outright, it has been demonstrated that the system will add considerable value to the property. It has been estimated that for every $1,000 you reduce the annual operating cost of a residence, you increase the property value by $20,000.00. While it seems attractive to have a solar PV system installed on your roof with only your rebate as a down payment, and monthly payments for electricity made as you go, you should be sure you can live with the terms for the duration of the agreement. It should be clear who must pay for a roof replacement if needed. The buyout of the system should be priced at the going rate, based on the life expectancy of a system that is already 10-20 years old.
There is no doubt that a solar PV system can be a good investment if it is a high quality, highly productive system that will stand the test of time. The effort to find a certified installer and then carefully considering the available financing options will be worth the time you spent.
Solar Installers PA is written by Anthony Guerrera, Certified PV Installer and Member of the Pennsylvania Solar Energy Industry Association.