In the last few years, there have been great strides made in panel and manufacturing efficiencies. Major decreases in cost, along with increases in panel output, have made residential solar a no-brainer for countless Arizona homeowners who desire a cleaner and more affordable energy solution. As panel prices continue to decrease, it’s common to think that waiting until they’ve bottomed out will ensure the best ROI, but panel price alone is not the only factor contributing to the financial return from a residential solar investment.
Other factors, such as temporary federal and state tax credits, have a much greater impact on the final equation and, in most cases, greatly outweigh the financial benefits of waiting. Here are four ways that not waiting will dramatically improve the ROI of your solar investment.
1. Reduction of net metering: Taking advantage of net metering and other energy buyback programs is a great way to speed up the ROI of your solar energy investment. These programs credit solar owners for any surplus electricity their panels generate and send back to the grid. Net metering rates have been decreasing with recent utility rate changes, and we anticipate that trend will continue over the next few years until these buyback programs are virtually gone. Fortunately, people who go solar are able to lock-in their buyback rates for an average of ten years (depending on utility). Going solar now will allow you to take advantage of this significant financial incentive before it's gone.
2. Install in fall and winter to have energy credits available by summer: When you push back more energy to the grid than you consume, you have the potential to earn energy credits that can help offset your high-usage months during the summer. How credits are calculated and offered differs by utility, but in general, the earlier you install your solar energy system, the more time you’ll have to bank energy credits for use when the temperature increases. With March quickly coming to a close, we can already feel the temperatures starting to rise. If you want to ensure your system is up and running in time to deliver maximum offset of your expensive summer electricity bills, going solar now is crucial.
3. Utility rate changes:
- New APS plans - APS is in the process of moving all non-solar customers to new rate plans (existing solar customers were the only group allowed to be grandfathered into their old plans). If you don’t pick a new plan, APS will pick one for you. Going solar is a great way to avoid the financial impact of these new rate changes. As always, the calculation is unique to each family, so the best approach is to consult a solar expert for a customized quote.
- SRP $250 demand manager rebate - Currently, SRP offers a $250 rebate to qualifying parties who install a demand management system and switch to the Customer Generation Price Plan. The combination of a demand manager and solar together is a great way to dramatically reduce electricity costs in SRP territory. Combine the demand manager/solar package with federal and state tax incentives for even more savings.
4. Importance of multi-month timeline: Just as Rome wasn’t built in one day, a residential solar energy system isn’t installed overnight. If you wait until the weather is hot to start your solar journey, by the time your system is installed and commissioned, the worst of the Arizona summer will, most likely, be over. Going solar now ensures that you’ll be offsetting your highest energy consumption by summer, saving you money while keeping your house cool.
If you're thinking about going solar, we invite you to take advantage of our "friends and family" promotion and save up to $3,000 on a solar energy system! Contact one of our solar experts for a custom solar quote. If you aren't quite ready for a quote, you can download our complimentary whitepaper: Is Solar Right for You?