extending the amount of time it takes for consumers to see a positive return on their solar investment, making solar energy a much less attractive option for many homeowners. In fact, according to trade publication PV magazine, “Utility interconnection request data shows that solar sales (in California) have fallen between 66% and 83% year-over-year following NEM 3.0.” All about home batteries Home batteries have become a central feature of many newer solar installations. With home batteries in place, excess energy produced by the solar panels is captured and stored instead of being sent back to the grid. This offers homeowners many advantages. Batteries can supply energy at night when the per kWh rates are often higher. They can also step in and power homes during grid outages. The downside to home batteries is the price tag, which can add an additional
installation (unless you’re installing solar-electric collecting roofing). Fortunately, this credit is still available. It provides a 30% tax credit for systems placed in service through 2032. Barring an extension, this credit will end in 2035. There are other credits though, like the one requiring American-made PV panels, that can be hard to qualify for (over 90% of all PV panels are currently manufactured in China). Does solar make sense for you? Between today’s regulatory changes, high cost and longer ROI timeline, newcomers to solar energy face a much more complex decision than that faced by early adopters. Here are some pros and cons for you to consider:
PROS
• Ability to power your home with clean, renewable energy
• Smaller carbon footprint • Ability to live off the grid • Tax credits can lower cost • Adds to home’s resale value
CONS
• Already expensive cost to purchase climbs even higher with addition of home batteries • Financing purchase can drive cost even higher • Batteries mean longer time required to achieve positive ROI • Some tax credits are hard to qualify for
$15,000 to $25,000 to the price of the system. This significantly increases the time it will take for the system to pay for itself. These systems are generally better suited to homeowners with the resources to pay the upfront cost in whole, since financing will add more to the cost and, therefore, make it even harder to realize a positive return. Tax credits still available Consumers have long enjoyed using federal tax credits to help offset the high cost of buying and installing solar energy systems. The most frequently used tax credit is the Residential Clean Credit, a tax credit that can help cover up to 30% of the system’s cost. Make note, however, that the tax credit doesn’t apply to new roofing, which is often required for
Bottom line Ultimately, the decision to purchase solar panels for your California home will likely come down to two key factors: 1) your commitment to clean energy (and/or your desire for energy independence) and 2) your available financial resources. If, after weighing the pros and cons, you feel solar is the right choice for your property, acting sooner rather than later can help ensure you’re able to take advantage of available federal tax credits.
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