The expected ROI for your home solar panels depends on factors such as the efficiency of your system and the quality of the installation. A well-informed consumer who makes smart choices stands to gain a tremendous return on their investment in solar energy. We’re here to help keep you up to speed on what options are available to you and what factors to take into consideration to ensure going solar is a deeply satisfying experience!
How to Pay for Solar: Cash vs. Financing
If you pay cash upfront for your solar installation, you can expect to see a complete return on your investment in five to seven years on average. However, financing offers a variety of options which might allow you to recoup your investment much more quickly. With some of the more affordable systems, partial financing will allow you to reduce your payments and experience full ROI in as little as half the time.
For a more expensive system with higher output potential, full financing may be the way to go. Such a system is more likely to generate optimum energy savings and produce enough free energy to outpace your monthly payments. Factors that affect the speed of ROI include:
- Quality: Life’s general rule of “you get what you pay for” rings true for home solar panels. Solar is a terrific way to save energy, but the more expensive systems are usually the most efficient. This, coupled with geographical and climate factors, can have a powerful impact on the rate at which you earn your money back.
- Efficiency & Productivity: This refers to the actual level of energy savings (as well as resale to the electric companies) you experience through your new system. High output panels that are properly installed and positioned relative to the sun will generate the most power. More power results in fewer dollars sent to your electric company every month.
- Method of Payment: If you pay for your panels outright, then you may see the fastest ROI. However, it is often much wiser to choose a financing option that allows you to hold on to your cash and pay over time. When done correctly (based on your individual circumstances), you can experience a positive monthly cash flow your very first month. The value of the free electricity your new panels are generating can be greater than your monthly payment for the panels and electric bill combined.
Full vs. Partial Financing
With full financing from green energy financing options like PACE (Property Assessed Clean Energy), it is possible to experience a return on your investment from the day that your system is turned on. We recommend you speak with an experienced solar energy company with additional expertise in solar financing. They can help you determine what size and quality of panels are right for your situation. Having the right professional advice is the most important step in ensuring you choose the best possible solar setup and realizing your goal for a fast ROI.
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