Q. What's the best way to pay for solar power system and save on utility cost?
A. There are 3 ways a family can pay for solar power installation and use solar power to save on electric bills, which way works for your family depends on many factors, though.
1. Purchase Solar Power System Outright
Cost
In this option, you will invest upfront on a solar power system that could cost $10,000 to $30,000 after Federal tax credit (actual amount varies with size of the system required).
Return
For most families, the solar power system can save your monthly utility bill from $100 to $200.
Conclusion
The payback time will be 5-10 years. If you will stay at the house for a long time and have the money to invest, this gives you the best ROI.
2. Lease Solar Power System
Cost
You lease the solar power system from the provider, which means you won't be able to claim any Federal credit, but you don't have to pay anything upfront. You pay the solar company a monthly fee or preset discount price for the power generated.
Return
You will be able to lower your monthly utility bill by 10% to 20% ($10-$40 a month).
Conclusion
This option is great for people who don't have the cash and/or don't play to stay at the house for too long.
3. Financing a Solar Power System
Cost
You don't have to pay your own cash upfront, instead, you finance the solar power system through a loan (10-20 years loan with interest rates similar to mortgage rates), and you pay the lender with interest.
Return
You will be able to achieve higher monthly utility savings - after loan payment. Typically, you can cut your electric bill by 40-60% (or $40-$120 a month).
Conclusion
This option providers greater savings over option 2, but not as good as option 1.
A. There are 3 ways a family can pay for solar power installation and use solar power to save on electric bills, which way works for your family depends on many factors, though.
1. Purchase Solar Power System Outright
Cost
In this option, you will invest upfront on a solar power system that could cost $10,000 to $30,000 after Federal tax credit (actual amount varies with size of the system required).
Return
For most families, the solar power system can save your monthly utility bill from $100 to $200.
Conclusion
The payback time will be 5-10 years. If you will stay at the house for a long time and have the money to invest, this gives you the best ROI.
2. Lease Solar Power System
Cost
You lease the solar power system from the provider, which means you won't be able to claim any Federal credit, but you don't have to pay anything upfront. You pay the solar company a monthly fee or preset discount price for the power generated.
Return
You will be able to lower your monthly utility bill by 10% to 20% ($10-$40 a month).
Conclusion
This option is great for people who don't have the cash and/or don't play to stay at the house for too long.
3. Financing a Solar Power System
Cost
You don't have to pay your own cash upfront, instead, you finance the solar power system through a loan (10-20 years loan with interest rates similar to mortgage rates), and you pay the lender with interest.
Return
You will be able to achieve higher monthly utility savings - after loan payment. Typically, you can cut your electric bill by 40-60% (or $40-$120 a month).
Conclusion
This option providers greater savings over option 2, but not as good as option 1.
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