Of all the investments you make throughout your life, few will be as personal as your home. Once you sign mortgage, you are committed to protecting your new investment. This means making decisions about the property, including the steps you will take to increase its value. One method to add value to your home is by installing solar panels. In short, solar panels convert sunlight into electricity, reducing the amount of energy you have to buy each month. Here we look at whether solar panels are worth the price you pay for them.
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Are solar panels saving money?
The short answer is yes, solar panels save money. Solar panels not only help the environment by reducing greenhouse gas emissions, but also save you more money in your home. Bank account every month. You save by using less electricity, and these savings are greater when you cut your electricity bills to recoup your installation costs. You can also make more money by selling your home.
How much do solar panels cost?
According to HomeGuide, the average cost of installing solar panels (after a 30% federal tax credit) ranges from $ 10,626 to $ 26,460. Your final price will depend on how many panels are required to meet your energy needs.
The number of kilowatts required determines the total number of panels and the final cost. The more panels, the more kilowatts. And it is kilowatts that determine the percentage of electricity replaced. A 12 kilowatt system will initially cost more than a 6 kilowatt system, but it will save you more money over time.
How long does it take to recoup your investment?
How long it takes to recoup your initial investment depends on how much you spend on your solar panel project. If you buy a system for less than $ 11,000, it will take about seven years to pay back. If your initial investment approaches $ 26,000, it will take 12 years to pay off. Once your solar panels have saved enough energy to pay for themselves, all other savings are a bonus.
Increase in home value
Besides saving energy, installing solar panels can add value to your home. Homes with solar panels cost up to 4.1% more than comparable homes without solar panels, according to Zillow. Let’s say houses similar to yours are selling for $ 400,000. With solar panels, your home is likely to cost around $ 416,000.
Financing solar panels
If you don’t plan on paying in cash, you can still purchase solar panels. Here are three options:
Most personal loans are unsecured, which means that you are not required to secure the loan. The interest rate is likely to be slightly higher than the secured loan would be, but there is no risk of losing collateral if you miss payments.
If you have a high credit rating, you will probably be offered the lowest interest rate available. If you have a bad credit rating, take a look at personal loan for bad credit history… You don’t need to worry about finding the best deal because most lenders only pull soft credit check before letting you know if you qualify. If your credit rating is very low and the interest rates that are being offered to you are high, consider taking the time to improve your credit rating before starting the project.
A PowerSaver loan, offered through the Federal Housing Administration, allows homeowners to fund energy conservation upgrades. There are two options: a second PowerSaver mortgage or a PowerSaver Energy Rehab 203 (k) loan. These loan programs usually require a minimum credit rating of 660 and debt-to-income ratio ratio 45%.
Loan secured by equity capital
BUT mortgage loan makes it possible to borrow money from home equity in your home. Typically, the bank will finance up to 85% of your home equity. For example, if your home is worth $ 300,000, but you only owe $ 200,000, you have $ 100,000 in home equity. Of that $ 100,000, the bank will probably lend you up to $ 85,000. One nice feature of home loans is that they usually come with a low interest rate. This is because your home is being used as collateral and the bank knows it will not lose its money. However, think carefully before pledging your home.
It’s not often in life that you can do something good for the planet while benefiting your bank account at the same time, but solar panels provide an easy way to achieve both goals.