Should I invest in solar panels for my home?

 



You’ve seen all the hype about saving saving money (and the planet) with solar energy,  but before you sign that contract to purchase and install solar panels, here are some things to consider:

 How much does it cost? 

The cost of a solar panel system varies, based on where you live and how many panels are installed. If your electrical panel is outdated, there may be additional costs to update it before installation of solar panels. There are tax incentives, so if you have a big enough tax bill to take advantage of the solar tax credit, the tax benefits will help offset the cost of your solar investment. Most solar companies have financing available for equipment and installation, and some also have lease options.

 Do solar panels add value to my home?

This is a subject of much debate.  Spending $30,000 on solar panel installation (or on an inground swimming pool) does not necessarily add $30,000 to the value of your home.  It does, however, add to the cost of re-building your home if you have a total loss and intend to replace the solar panels.

 The “value” is in the eye of the beholder.  For example, if you’ve installed solar panels, and you’ve enrolled in a solar buyback plan, you may receive credits or payments for producing excess energy. If you have your home on the market to sell it, this might be an incentive for a buyer to purchase your home over a similar home without solar panels. On the other hand, if you just recently installed solar panels, a buyer may not want to take over a long-term solar finance agreement. In that case, you would have to increase the sales price of your home to recover the cost of the solar panels. 

The average American lives in their home 10-13 years. The solar payback period (the estimated time it takes for your solar energy system to offset your initial investment) is 6-10 years. If your solar panels are paid for and you’re past your solar payback period, the incentive to buy your home would be greater.

Does my homeowner's insurance cover my solar panels?

Some insurance companies will not cover a home with solar panels at all. Others will cover the home and contents, but will not cover the solar panels themselves.   If covered, the homeowner’s policy should be adjusted to include the cost of the solar panels in the “Dwelling” limit (for roof panels) or “Separate Structures” (for panels placed on the property and not attached to the home).  Let your insurance agent know if you are considering installing solar panels (or putting in a pool -- or adding on to your home), to make sure your homeowners package includes the right coverage.


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