We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free – so that you can make financial decisions with confidence. The offers that appear on this site are from companies from which TheSimpleDollar.com receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. The Simple Dollar does not include all card/financial services companies or all card/financial services offers available in the marketplace. The Simple Dollar has partnerships with issuers including, but not limited to, Capital One, Chase & Discover. View our full advertiser disclosure to learn more.
Is It Time for You to Go Solar?
The U.S. solar industry now employs nearly 174,000 Americans, according to a recent study from The Solar Foundation. That represents a jump of nearly 22% in a single year. And it means solar employment grew nearly 20 times faster than the national average employment growth rate.
Similarly staggering growth is predicted for 2015, with more than half of all solar jobs in installation. All of which begs the question: Is residential solar power usage finally becoming more mainstream in the United States?
The current world leader in solar power installation and usage is Germany, a country with about as much sunlight as Cleveland during a good year.
But Steve Pope, a New York-based green-energy consultant, says the U.S. is making great strides and that 2015 will be big year for clean energy.
“It is becoming more and more popular. Incentives play a big part. But even without incentives there is ROI, or return on investment,” Pope says.
In 2013 alone, there was 60% growth in the residential solar market, with 792 megawatts of installations, according to Solar Power World magazine.
So perhaps, as Pope mentions, incentives are helping things along. The primary incentive he is referring to is a 30% federal tax credit offered by the EPA and Department of Energy to encourage Americans to use solar power.
If you install Energy Star-approved solar power systems, the credit allows you to claim 30% of the cost as a tax credit for the year you installed it. That amount is taken directly off your tax payment, rather than as a deduction from your taxable income. Not a bad deal, right?
The credit, however, is set to expire in 2016. Whether it will be renewed or reduced remains unclear.
The return on investment Pope mentions is the increased value of your home.
“From what we’ve seen about homes that go green, installing these assets increases the value of a house by 13%,” says Pope. “It does make a difference when you’re trying to sell a home. When you’re adding solar power you’re adding long-term value to your home.”
And then there’s the other obvious benefit – that using solar power costs less then typical utility bills, according to Pope and others.
Some other key facts to know if you are interested in investing in solar:
- Financing: There are various homeowner-financing options widely available including leases, loans, and power purchase agreements (PPAs).
- Purchase your system: Many solar companies offer low-interest loans for the purchase of a residential solar-energy system or solar panels, which you pay off based on your monthly solar production.
- Solar leasing: Instead of paying thousands to buy a solar power system, homeowners can lease a system, often for little or no money down.
- Solar PPAs: A power purchase agreement is a contract to buy solar power. This means you only pay for solar power, not the equipment or installation. Instead, the solar products company owns the system that is on your roof or property.
Clean Energy Collective, one of the top residential solar contractors in the country, also offers a very manageable option for those seeking to get into solar. The Colorado-based company builds community solar arrays, sometimes referred to as solar farms. Customers purchase a panel within these centralized solar facilities and receive credit on their electric bill for the power produced by their personal solar panel.
The cost to buy a panel varies by market, ranging from $650 to $900 per panel, says Todd Davidson, director of marketing for Clean Energy Collective.
“In doing it this way, we don’t put the solar panels on your home or property, which opens the door to solar to people who might rent, or who are in a historic home. It explodes the market opportunity,” says Davidson.
What’s more, if you move across town, your solar power account goes with you under this scenario, Davidson says. If you move out of state or to somewhere outside the service area, you can also choose to sell the solar panel back.
“There is usually a waiting list of people who want panels in a given market. It is a real asset you can buy and sell,” he says.
Another option offered by Clean Energy Collective involves subscription service, but this is only available in Massachusetts currently. Subscription to solar power involves receiving a net metering credit. Customers subscribe to enough solar power to offset their home 100%, explained Davidson. This approach doesn’t require putting any money down.
Clean Energy Collective is just one example of the residential solar companies in this booming market. According to a January 2015 article in Solar Power World, some of the other top players in the U.S. solar residential market include SolarCity, Vivint Solar, RGS Energy, Verengo, and Trinity Solar.
The Solar Foundation report says the solar installation industry is already larger than well-established sectors of fossil-fuel generation, such as coal mining.
Still, with all the good news and the incentives, solar only produces about 1% of the electricity in this country. But both Pope and Davidson remain optimistic about the future.
Davidson points out that Community Energy Collective is working in eight states with 19 utilities. And the company is on track to do more business this year than in the past five years combined.
“Right now we have 22 projects online, that equates 10.4 megawatts of power. What we anticipate doing in 2015 is over 30 megawatts of power,” says Davidson.
“We are coming of age — into the solar generation. … If you looked at the profile of our customers, they are not what you would expect. It’s not just early adopters. It’s people who look at it from an environmental perspective and those who look at it from a financial perspective. People are buying solar because it saves them money.”