Why does everyone say solar is expensive?
You guys have no idea how many times I hear that solar is too expensive.
“ I can’t afford solar."
“Solar is too expensive"
“It doesn’t make sense financially"
These are home owners who have sat with the wrong company or the last time they sat with a solar rep was when Reagan was president.
Most of the time solar will make sense. Now, I did say most of the time. That’s because if you are paying $20-$50 for power, then no, it doesn’t make sense. That is because you need a certain size system for a company to even consider doing the deal. 2kw is the size for most. If you have a $40 bill then you won’t qualify due to system size.
For everyone else who pays to the grid, it’ll make sense. Myth is that you’ll need to pay over $150 for it to make sense. A lot of people have heard that. A lot of companies will say that because they are small and can’t make money on small deals. They rely on large systems over 5kw for it to makes sense to them. Again, only small companies. Large companies will work with bills closer to average of $70+ dollars.
Why would I go solar if my average bill is only $70. Cause you’re smart and thinking long term instead of short. A lot of people miss out on great opportunities because they only think short term and never plan ahead. With a $70 bill you might break even with solar. But! And this is a big but. If you buy the system, you will own it in 10, 15, 20 years.... The length of payoff depends on which option you choose and how soon you want to pay it off.
What’s the benefit of that? You won’t have an electric bill in 10+ years. If you stay on Edison, or whichever utility you’re on, you will never own them. You have been paying them for 40+ years and you are zero days closer to owning them and not having a bill. That to me is crazy.
We have been looking at small bills. Now lets compare to larger bills. Average of $175 which still isn’t huge bit I’d say closer to average. You could own the system for less than $150/month. So you are saving $25 a year while on the path to ownership. Again, $25 is conservative number. Most likely you will save more than $25 but I am trying to be conservative.
Finance options are far more affordable today than they were even 5 years ago. You can get a loan on your system with low interested rates with an option to pay it off anytime you want. There are multiple options on going solar when talking finance. You can use your home equity to pay for it, get a loan and pay for it or rent them for 20 years and pay it off then. Check out my finance post where I go over the different finance options.
So pricing to look for. Most companies should price your system around $4.25/watt. There are many companies where you can get lower than that. Some won’t disclose how much they are charging which means it’s most likely too much. Some are still charging over $5.00/watt which is insane. Don’t pay that price. They are selling “value” which they give zero more value than those selling closer to $4.00/watt.
Confused yet? Let’s break it down through system size. Average system size in California is 5kw. That’ll cover roughly $175 electric bill.
5kw = 5,000watts. 5,000watts x $5.10/watt = $25,500
Now let’s take the same system size with current pricing.
5kw = 5,000watts. 5,000watts x $4.10/watt = $20,500
Thats a $5,000 difference in system price. This is why I said at the top of this post that some people feel it is too expensive because of companies. Some companies are still trying to sell high when most are dropping.
There is no better time to go solar than right now. PACE programs have dropped their qualifications and interested. Loan companies are funding more with low interest rates. Most companies are raising their PPA(Lease) pricing so that way more will purchase over lease. Check out my article on whether you will qualify for the Federal Tax Credit or not. That is very important when considering purchasing and your ROI time frame.
This is a lot of information. Remember, reach out to me and I will answer everything that I can in an unbiased way. Info@JustinOsmer.com I will assist you in any way that I can when considering solar. Sign up for my Webinar to learn the basics of solar if you haven’t sat with a rep yet or it’s been awhile since doing so.