The solar panels industry is going strong in the United States. For example, according to the Solar Energy Industries Association (SEIA), the U.S. installed 2.7 gigawatts of solar capacity in the first part of 2019. That brings it to a total of 67 installed GW which is enough to power 12.7 million homes in America – a 10% year-over-year increase.
In other words, there were more than two million solar installs in Q1 2019, and the industry is on pace for three million solar installs by 2021 and four million installs by 2023.
Looking at those stats, it’s clear that it’s is a growing energy option in the United States as more homeowners turn to alternative energy. New panels are appealing financially to some consumers because they can often save money on electric bills – or even make money.
Aside from financial incentives, solar panels can also help a homeowner with reducing their overall carbon footprint. Going solar and using less traditional energy is a great way to help reduce the impact a home has on the environment, energy infrastructure, and more.
How Do Solar Panels Reduce Your Carbon Footprint?
There are certain benefits in terms of reducing your carbon footprint. Currently, the majority of America’s electricity comes from coal and natural gas which are non-renewable fossil fuels.
Fossil fuels are expensive to extract and use, and they cause harm to the environment and atmosphere during several different industrial stages. As opposed to fossil fuels, solar energy is consistent and abundantly available as a renewable energy resource. Furthermore, solar energy reliance can reduce fossil fuel dependence.
The traditional electricity production phase involves three stages: generation, transmission, and distribution. Each stage depends on fossil fuels and releases carbon dioxide, methane, and nitrous oxide to the environment. These are considered greenhouse gasses which potentially contribute to global warming, climate change, and pollution. However, the use of solar energy reduces greenhouse gas emissions by circumventing traditional electricity production and releasing minimal air pollutants.
To put it in perspective, the U.S. Energy Information Administration claims that moving from fossil fuels to solar panels can have the same impact as planting 150 trees a year. That sure sounds like going green!
How to Pay for New Solar Panels
While new panels can significantly reduce your carbon footprint and reduce pollution, they are still an investment. For an individual consumer, going solar might cost too much to consider – even if it will help the environment.
After-tax credits, the average cost in the U.S. is around $12,516, and cost ranges from $10,835 to $14,196 after applicable tax credits. So how can you cover those costs? There are some financing and leasing options available that can make them more attainable.
Solar Panel Loans
You may consider opting for a personal loan or solar panel loan. In short, you would apply for a loan from a private bank or lender and use the funds to cover installation costs. Afterward, you must make monthly installment payments plus interest.
Using a loan offers a few benefits. For starters, consumers don’t need the pay the cash up front, and they can pay the cost over time in monthly installments. Funds may be received quickly, leading to faster installation. Banks and lenders offer flexible funding amounts, so the cost of installation should be covered. Furthermore, repayment terms range from 1 to 7 years or more, so you pick out a payment schedule that suits your budget.
However, a loan also increases the cost of installation. Depending on your credit score, interest rates may be anywhere from single digits to over 30%. If you have poor credit, then you may pay high interest. Furthermore, missing payments on a loan can adversely impact your credit down the road.
Before taking out a loan, consider saving up the necessary cash. If you can save enough within a few years, it may be worth waiting to simply pay cash upfront to save.
Solar Panel Leasing
Another option is solar panel leasing. With this option, a company covers the installation costs and leases the equipment to the consumer. In return, you sign an agreement and pay a fixed monthly payment based on electricity generation at your home.
This can be a good option if you’re short on cash, want to reduce your footprint immediately, and don’t mind ceding ownership to another company. You may also have the chance to own the panels down the road after paying back the installment costs.
Also a good read: 4 Simple Tips To Transition To A Healthy & Green Home
A downside of leasing is that the contracts are often very long. Aside from going green, a key benefit is saving money and potentially making money on generated solar electricity. This benefit is ceded to another company for an extended time.
Andrew is a Content Associate for LendEDU – a website that helps consumers with their finances. When he’s not working, you can find Andrew hiking or hanging with his cats Colby & Tobi.