The solar panel 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 67 installed GW, 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 is a growing energy option in the United States as more homeowners turn to alternative energy. In addition, new panels appeal financially to some consumers because they can often save money on electric bills – or even make money.
Aside from financial incentives, solar panels can help homeowner reduce their overall carbon footprint. Going solar and using less traditional energy is a great way to help facilitate a home’s impact 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. For example, most of America’s electricity comes from coal and natural gas, 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. Unlike fossil fuels, solar energy is consistently available as a renewable resource. Furthermore, solar energy reliance can reduce fossil fuel dependence.
The traditional electricity production phase involves generation, transmission, and distribution. Each stage depends on fossil fuels and releases carbon dioxide, methane, and nitrous oxide into the environment. These greenhouse gasses potentially contribute to global warming, climate change, and pollution. However, 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 yearly. That sure sounds like going green!
How to Pay for New Solar Panels
While new panels can significantly reduce your carbon footprint and pollution, they are still investments. Going solar, as a result, costs too much to consider for an individual consumer, even if it will help the environment.
The average cost in the U.S. is around $12,516, ranging from $10,835 to $14,196 after applicable tax credits. So how can you cover those costs? Some financing and leasing options are 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 to pay the cash upfront; 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, so the installation cost should be covered. Furthermore, repayment terms range from 1 to 7 years or more, so you pick a payment schedule that suits your budget.
However, a loan also increases the cost of installation. In addition, interest rates may be anywhere from single digits to over 30%, depending on your credit score. 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, simply paying money upfront to keep may be worth waiting.
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 after paying back the installment costs.
Also, 4 Simple Tips To Transition To A Healthy & Green Home is a good read.
A downside of leasing is that the contracts are often very long. Aside from going green, saving and potentially making money on generated solar electricity is crucial. Unfortunately, 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. You can find Andrew hiking or hanging out with his cats, Colby & Tobi when he’s not working.
Please also read: The Environmental Impact of Solar Panels.