Adding Solar Panels on a House
Is there anyone in the BP universe that has added solar panels to a house to decrease utility costs?
I assume there would be potentially significant upfront costs, but that the panels would pay for themselves and more overtime.
The other obvious benefit is clean living and sustainability :) Let me know your thoughts!
@Pope Lake, I looked extensively into this a couple years ago. I went so far as to discuss options with different providers in the NYC area. NYC flat roofs, the locale, and the lack of trees(sadly) make NYC a great option for solar.
I looked into multiple scenarios, but the one that seemed most interesting was to size the roof panels large enough to cover the load of an entire 2 family. With this, I could essentially charge a flat rate for electric to the units. This would help accelerate the pay off period. Essentially once the panels are paid, you are looking at another source of income due to the fact that you are now essentially the power company for your own house.
Back a couple of years ago, there were financial government incentives to install the panels as well as very low (or possible no interest) loans. The solar companies would help set all this up for you. They will run the calcs and financials to show you the upfront costs and payback periods.
In the end I didn't end up going this route due to other commitments. However, when I design my own house in the future, I plan to accomplish this in addition to other green energy features.
Clean living and sustainability is a great fresh approach to our business. It can also be a great selling/renting point.
Feel free to reach out if you have more questions.
Best of Luck,
Alex Furini, RA
@Alex Furini this is great information! And awesome to know that you had already looked into this!
With this in mind, I think I share the same goal as you of having a solar panel on one of my properties - be it on my personal residence or an investment property.
I also resonate with your comment that sustainability is good perspective for our industry. Good luck to you as well!
Hi @Pope Lake
I am in the solar industry and work in NY. Solar has financing that is zero down and mostly results in a lower monthly payment than you were paying your utility. Zillow showed in a recent survey an average of a 4.1% home value increase across the Country by going solar.
Check with your utility company see if they offer incentives. In CA there is a tax deduction. Owned solar 11kw virtually pay no electricity year around after 4.5K investment and a tax credit.
#3 1031 Exchanges Contributor
- Investor
- Las Vegas, NV
It’s usually a relatively bad deal, you do it because to makes you feel good not because it’s a good financial decision. In 4 months the 30% tax break goes away and it gets even worse. So do it today if you want to feel good. (Permits and installation take at least 30-60 days in Vegas, so you have about 2 months to act in an area like mine.)
Originally posted by @Bill Brandt:It’s usually a relatively bad deal, you do it because to makes you feel good not because it’s a good financial decision. In 4 months the 30% tax break goes away and it gets even worse. So do it today if you want to feel good. (Permits and installation take at least 30-60 days in Vegas, so you have about 2 months to act in an area like mine.)
The tax break is not going away in 4 months, it is decreasing from 30% to 26%. Whether solar is a good financial decision depends on current usage and available roof or ground space to build a system that offsets the usage. There are reasons that people choose not to go solar, but financials are typically not one of those. Even if the bill is a wash with current utility spending, it is a fixed cost so savings increase with time. With zero down, that's a pretty good ROI in most people's eyes.
For the most part, a current bill of at least $100/month, a credit score of 650+ and enough unshaded roof will result in solar being a great financial decision notwithstanding the surveys such as Zillow's that shows a home value increase with solar. https://www.zillow.com/research/solar-panels-house-sell-more-23798/
#3 1031 Exchanges Contributor
- Investor
- Las Vegas, NV
Then that’s a horribly deceptive practice by local solar companies.
I guarantee that I can show you 5 ads from different Nevada companies that say it’s going away at the end of the year.
Thanks for clearing it up for me...
@Andrew Smith - I appreciate your insight! Outside of the potential cash flow benefits, it's awesome to know that solar could increase the value of my property as well! Also thanks for the connection, talk soon.
I'm also in the industry (Ohio) and I can tell you, before or after any tax benefit, it's a good call. Really the only assumption on that statement is that the roof has relatively good solar access (room and not terrible shade). Oh, and for investment property, it's a business expense and you get bonus depreciation.
How you finance anything affects your ROI, so consider cash flow and also cash left into the deal. Typically, these "zero down" programs take a HUGE fee upfront (12-15%), and then you hold the 5-6% interest for 20 years. That's because the bank is making the whole investment for you, so they get the return. If you have the cash, you get the full return. Don't fall victim to doubling your project cost through unnecessary financing. A good middle ground may be the Clean Energy Credit Union, which I've had a few customers use and plan to use myself to fund part of the deal.
Good luck!
@Kurt Dieringer thank you this is helpful!
Hello solar panelists,
I am very curious to see an update. Did you get the solar panels? I am in NY with a flat roof as well and now considering the pro's and cons as i look for companies that can install on a flat roof.