Inflation is top of mind for nearly every American right now. Things are getting more expensive gas, groceries, rent, you name it. If you’re thinking about ways to protect your wallet from constant price hikes, we’ve got an answer for you: take control of your electricity bill.
We spend hundreds every month on electricity and the cost of energy is only going up thanks to inflation, climate change, international relations, etc. But there is a way you can lock in a price for electricity for the next 20 years, shielding your monthly expenses from ballooning over time, and the potential to save you $30,000 or more ($3,500 if you rent).
So, how do you take control? Go solar. In this article we’ll explain how you can use solar energy as a savings tool and why you can’t afford not to start today. (Renters, stay tuned, we have solar options for you too.)
Solar is an investment, a really good one.
When you install a solar system on your home, you’ll generate free power for your system’s entire 25+ year lifespan, meaning you’ll save a lot of money (think tens of thousands). Additionally, by investing in a solar energy system now, you can lock-in the price you pay for electricity today in order to protect against future increases in electricity costs. The availability of attractive solar loan options means most people install solar without any cash outlay on the cost of solar and start saving immediately.
At the end of the day, the panels on your roof produce more value in electricity over their lifetime than they cost to install, making solar one of the best investments you can make.
Here are five reasons why solar is a smarter investment than other traditional investments (like the S&P 500):
- It has a great return on investment (ROI): most investments are either risky or have low ROIs; solar is a low-risk (typically warrantied for 25 years), high-return investment.
- It has assured returns: as long as the sun keeps shining, your solar returns will only go up – you don’t have to worry about things like a global pandemic or the fluctuating market impacting your investment.
- It’s tax-free: unlike traditional investments, solar gains come from monthly savings, not earnings, so they aren’t taxable.
- It protects against inflation: between 2012 and 2022, residential electricity prices increased by almost 24% – and they’re expected to continue rising! Going solar helps insulate you from volatile price spikes from electricity sources like natural gas, coal, and oil.
- It increases your home value: assuming you pay for solar with cash or a loan, your system will increase your home’s value by 4.1%, on average.
No Roof Required!
If you’re a renter, live in a condo, or live amongst tall, shady trees, you might not be able to install panels at your home. But thanks to programs called community solar, any electric utility customer can save on their electricity bills by subscribing to large, local solar farms (think of those big fields of solar panels you see along the highway) that generate and distribute electricity to the grid. If there are farms nearby, anyone can sign up and start saving – no roof required.
There are so many reasons to love community solar – here are some of our favorites:
● It’s free and easy to sign up or cancel
● It saves you 5-15% annually on electricity
● It supports local renewable energy and green jobs
● It’s great for renters and homeowners
While community solar won’t necessarily protect you from inflation in the same way a rooftop solar system could, it will still allow you to save – typically about 10% annually. It’s also easy to sign up and doesn’t have cancellation penalties (find an open project in your area).
No cash? No Problem.
We know what you’re thinking, solar panels are expensive, right? You’re not wrong, but remember, solar panels will create more value in energy than they cost, so you will save over the life of the system. You’ll save the most long-term if you install solar on your property and pay upfront with cash, since you’re not paying any interest or fees on a loan. However, there are plenty of ways to go solar without having to dish out thousands of dollars immediately, allowing you to start saving on day one!
Install solar with a $0-down loan
Installing solar with a loan means you’ll own your system immediately, allowing you to take advantage of incentives like the federal solar tax credit (which enables you to deduct 26% of your system’s cost) and local or state incentives. Many financing providers now offer $0-down loan options, a competitive interest rate, and a 5, 10, or 15-year term. In many cases, your loan payment will be lower than your current electric bill, allowing you to save immediately. And once you’ve paid off your loan, you could go years without having to pay an electric bill!
Sign up for community solar
Did we mention that it’s free to subscribe to a community solar project? In some cases community solar providers will pay you to join their project in order to meet deadlines defined by state and local legislators. More states are starting to offer this option, which isn’t yet available everywhere, and it’s great for renters and homeowners alike.
How much could you save with solar?
Let’s say you install solar on your property or sign up for community solar – what are we actually talking about in terms of dollars saved? Here’s a sample breakdown, assuming you spend $150 each month on electricity and your system will cover 100% of your electricity needs:
Maximize your ROI by comparing your options.
Like any major purchase, you’ll want to get some quotes and compare your options. EnergySage offers a free marketplace where you can estimate your property’s solar potential, get personalized quotes from vetted installers and save 20% – all without sharing a phone number. Sign up for EnergySage to get quotes and speak with unbiased Energy Advisors who will help you navigate your solar journey. The 26% tax credit is set to drop from 26% to 22% at the end of the year, so now is the best time to maximize financial savings.
EnergySage will help you maximize your savings and use that money towards more exciting things like a car or a vacation, or create a savings cushion for the future. And by using an app like Mint, you’ll be able to track how much you’re spending on your electricity each month to ensure you’ll see the savings down the line by going solar.
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