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Solar Installation: Is It Worth It?

A house with solar panels for is instellation worth it article

This article explores whether or not solar installation is worth it for those who are thinking of tapping into the power of the sun.

Author: Martin Lundgren

As a financial advisor, I often encounter clients intrigued by the idea of adding solar panels to their homes. Greener futures and all, it’s understandably why many remain skeptical about the costs and benefits. The decision to go solar involves multiple factors, from financing and potential savings to environmental impact and the risk of fraud. 

Below, I’m heading to the roof and offering an overview for those considering solar installation, particularly in Seattle, Washington.

The big question: Is Solar Installation Worth It?

For many homeowners, installing solar panels is not solely about financial savings. In fact, Forbes reports that over 82% of owners would recommend solar panel installation based on their experience. 

While the potential to reduce or eliminate electricity bills is a significant incentive, environmental concerns and energy independence are equally compelling reasons. Solar panels can decrease your carbon footprint, contribute to a greener planet, and offer a sense of self-sufficiency in energy production. 

We do like living more sustainably!

How to Finance Solar Installation

There are several ways to finance a solar installation. Homeowners can choose from options such as:

  1. Cash purchase: Paying upfront offers the highest long-term savings as it eliminates financing costs.
  2. Solar loans: Loans designed for solar projects can spread costs over several years. Interest rates and terms can vary, so it’s important to compare options.
  3. Leases and power purchase agreements (PPAs): With these options, a third party owns the system, and you pay a monthly fee. This can lower upfront costs but may not offer as much savings over time.
  4. Home equity loans or lines of credit: These can be viable options if you have sufficient equity in your home, often providing favorable interest rates.

Pros and Cons of Solar Panels

If you are on the fence or still not sure if solar is worth it, may we suggest a pros and cons list? I’ll help you get started:

Pros of going solar:

  • Cost savings: Solar panels can significantly reduce electricity bills. Depending on the size of the system and energy consumption, some homeowners might even achieve net-zero energy costs.
  • Environmental impact: Solar energy is a clean, renewable source that reduces reliance on fossil fuels and lowers greenhouse gas emissions.
  • Increased home value: Homes with solar installations often sell at a premium, as buyers are attracted to the energy savings and environmental benefits.

Cons of going solar:

  • Initial cost: Despite decreasing prices, the upfront cost of solar panels can be substantial.
  • Weather dependence: Solar panels generate less energy on cloudy days and during the winter, though Seattle’s long summer days can compensate for this.
  • Maintenance and repairs: While generally low, occasional costs are associated with maintaining and repairing solar systems.

How to Watch Out for Fraudsters

Unfortunately, the growing popularity of solar installations has attracted fraudsters. To avoid scams, research contractors. Check credentials, read reviews, and verify licenses with the Washington State Department of Labor & Industries. Additionally, obtain at least three quotes to compare pricing and services. Reputable companies should give you time to make an informed decision. Finally, check warranties and maintenance services: Ensure the system has robust warranties and understand the provider’s maintenance policies.

Seattle Programs and Incentives

Seattle and the state of Washington offer several incentives to make solar installation more attractive:

Energy Storage vs. Sending Back to the Grid

Deciding between installing an energy storage system (like batteries) and sending excess energy back to the grid depends on your needs. For energy storage, batteries allow you to store energy for use during power outages or peak demand times. This can offer you greater energy independence. However, batteries can add to your initial cost. 

Another option is grid-tied systems. Here, you send excess energy back through net metering. It can offset costs by providing credits on your utility bill, often making it the more economical option for most homeowners. (Here’s a fun read on how different types of storage work).

How Long Will You Live in Your House?

The length of time you plan to stay in your home significantly impacts the decision to install solar panels. If you plan to move within a few years, you may not recoup your investment through energy savings. However, as mentioned above, solar panels can increase the resale value of your home. Which, might offset the initial costs.

Do solar panels fit into your financial plan?

If you are wondering if solar panels are worth it, it really boils down to your scenario and why you want them. Adding solar panels to your home is a decision that balances financial, environmental, and personal factors.

Hot take: We’re all about sustainability at Northern Lights Advisors. If you think you will live in your home for at least 10 years, you do your research for reliable vendors, get your incentives, and don’t sacrifice any of your other financial planning goals to get it, solar can be worth the investment. 

Always conduct thorough research to choose a reputable contractor and consider how long you plan to stay in your home to maximize the benefits of your solar investment. And if you want help incorporating solar into your financial planning, make an appointment with your financial advisor. I’d love to help you weigh the pros and cons. 

Northern Lights Advisors is a fiduciary, fee-only, Registered Investment Advisor (RIA) firm based in Seattle, Washington. The information in this article is not intended as tax, accounting, or legal advice. Read the full disclaimer here.