Whether you are looking to flip a home for a quick profit, settle down and perhaps raise a family, improve your retirement situation or just save on your power bill, residential solar is an enticing option. It’s easy to think that traditional approaches to energy will carry us into the future without incident but times are changing; nearly all of the backbone production infrastructure that made traditional energy cost effective, such as steel production, has gone overseas. This means that we’re placing our energy security in the hands of other countries like China. The days of deep discounts on goods from China, and the broader Asian market, are numbered. It’s time for smart Americans to diversify.
Home solar installation costs have dropped significantly in the last ten years. Refinements in the manufacturing process of cells — which we will cover in a future article — have dropped the cost quite a bit: 13-19% just over the course of 2013. The L.A. Times recently ran an article entitled “US Electricity Prices May be Going Up for Good” and we tend to agree. The decommissioning of nuclear power plants, coupled with the vulnerability to climate variance that coal-fired plants in the US face, bode well for a decentralized approach. Some Californians found themselves with power bills in the $600-$700 range due to the disruptions caused by the 2014 polar vortex.
Taking the Long View on Home Solar and Home Efficiency
If you’re thinking of putting down roots, or even just want to improve the resale value of your property, installing a solar array can definitely pay off. Over the course of twenty years, Texans for example can save nearly $21,000, according to Clean Power Research, a company that specializes in predictive analytics for green energy applications. With the quality of newer solar arrays it’s even possible to drive that number up by performing regular maintenance, allowing the panels to run even longer.
You can further amplify the value of a transition to solar energy by reducing your household energy footprint. Don’t worry! This isn’t a call to live a granola lifestyle, and you won’t have to give up any of your quality of life. You only need to reduce your footprint by modernizing your home appliances. Look for devices with the Energy Star logo, and ensure you set up power saving options on your electronics. You can also boost the power efficiency of your home by improving your insulation. Home insulation works both ways: yes, it keeps you warm, but it also keeps cold air in, making your AC system less costly to operate in the summer.
Although the jury is still out on climate change among politicians, a majority of climatologists agree that old approaches to energy production are damaging the environment and worsening world climate disasters. Take action now, lead by example and be part of positive change in your community. If you can save money and make a difference at the same time your choice should be clear.
While it helps to take a longer term outlook when making a decision on solar for your household, there are also short term gains to be had, so read on.
Solar Cost Savings
The US Federal government has even stepped in to make the transition to solar easier by providing a 30% tax credit on solar projects until at least Dec 31st 2019, according to Energy.gov “Residential Renewable Energy Tax Credit” page. There are also additional credits to be had at the state and municipal level, as well as a number of programs available in partnership with local power companies. On top of the cost savings, some local power companies will even pay for owners of larger arrays to connect to the power grid, earning them a nominal side income. If you happen to be in one of these locations and have the space, such as on a ranch or a large acreage, you might be able to make a living as an independent grid contributor.
Building Home Equity With a Solar System
A solar system is a great boon to home equity. Why, you might ask? Because when you sell your home you can factor in the value of the solar array and the future cost savings, into the list price for the home. Having solar will also help your listing stand out if you are selling, both for the practical minded buyer interested in utilities savings, and for the eco-conscious crowd. So with the cost of the array and the long term savings, the average Texas home will gain tangible equity value.
If your goal is to spruce up a property for the resale market, solar is a relatively quick project you can have done alongside an overall renovation. While you’re at it, consider upgrading to a solar powered LED interior lighting system. The new homeowner will never have to change a bulb again, which will make for an eye catcher on the real estate listings. The next top three yielding home renovations according to Money.usnews.com’s “The 5 Best—and 5 Worst—Home Improvement Projects for Your Money” – adding a steel entry door, an attic bedroom or a wooden deck — don’t even come close to the dollar payout that adding a solar system does.
Tapping Into Your Home Equity During Retirement
Even if you don’t actually want to move you can still access the value added to your home. Home equity loans let you slowly sell your home — with its new $48,500 in equity — back to a bank or other financial institution. You usually (but not always, so read the contract carefully) retain at least 55-60% ownership, and don’t have to move or sell. When you are done with your home, and the estate is dissolved, the property gets sold by the bank. But you’ve actually profited on the transaction, freeing up funds to travel and take it easy in your golden years. Investing in a solar power system adds future value, as opposed to the one time value addition made by most renovations, making it a particularly smart option for increasing your home’s value as retirement equity.
If you’re looking for a simpler perspective on how solar can help your retirement plans, imagine not having to pay a power bill for the duration of your retirement. Not only does it save you money, but it’s one less problem to face month after month, freeing up your time to focus on the important things like family, travel and having fun not fussing over your checkbook. Assuming you have enough space, a total conversion is possible, or you could even add to the grid and earn money. Not all jurisdictions have a program that allows for individuals to contribute to the grid and earn money but those that do make for an interesting idea to be sure. To think your house could be carrying part of its own weight for a change, and without having to rent out a room.
If current world population trends and the shift in the economy of Asian markets towards higher standards of living hold, energy, building materials and housing will become quite a bit more expensive in the decades to come. We’re all going to have to become more efficient and self-sufficient to stay competitive. Early adopters are going to be the ones that reap the greatest rewards. Don’t put off for tomorrow what you can and should do today. Invest in solar and invest in a bright future for you and yours!