When buying a home it’s important to consider that home’s energy consumption. After all, that utility bill isn’t going to pay itself.
Unfortunately, most home buyers don’t even consider installing a solar panel system. Solar energy is the most abundant energy on the planet, as the sun continuously produces 173,000 terrawatts of energy. Solar panels reduce your energy bill, provide energy without the use of fossil fuels and are becoming cheaper to produce and install. The future of solar energy is bright — and you can be a part of it.
Now’s the time to get moving on your VA home loan application.
The Solar Power Industry Is Booming
The residential market has seen continual growth, as residential installations grew 53 percent in the first quarter of 2013 over 2012’s Q1. These residential installations are primarily located in California and the southwest, given these areas’ constant exposure to sunlight. A recent Forbes article stated, “GTM projects 4,400 MW (Megawatts) of new capacity by year’s end (equal to 50 percent of current installed capacity), more than doubling to 9,200 MW by 2016.”
The renewable energy market is also providing jobs for U.S. workers — over 119,000 jobs have been created, according to the Solar Energy Industries Association (SEIA). These statistics speak to the saturation and growth of solar energy in the market.
PV Systems Are Becoming Cheaper
Photovoltaic (PV) systems, the most common solar panel system for residential areas, have become increasingly popular among U.S. homeowners. Solar panels are becoming inexpensive to produce, and the cost of a completed PV system dropped 24 percent in the past year.
The government strongly supports energy efficiency and provides terrific incentives for homebuyers at federal, state and local levels. Better than that, the Energy Efficient Mortgage (EEM) can be added to a VA loan and provides up to an additional $6,000 for energy improvements. Current homeowners can also refinance into an EEM.
When considering an EEM, it’s important to make energy improvements that will reduce your utility bill to cover the extra monthly cost of the EEM, and solar panels are a viable option to reduce energy consumption.
PV System Pros and Cons
Like any home buying decision, there are pros and cons to installing a solar panel system. Here are some of the advantages:
- Your monthly utility bill will decrease dramatically
- You can sell utility companies electricity through net metering.
- Solar panels provide clean energy.
- Your dependence upon energy companies will be reduced.
- There are federal, state, and local rebates for renewable energy products.
However, there’s certain disadvantages:
- There’s a high upfront cost. The costs will vary depending on the government incentives offered, location, size of the system, and amount of preparation required.
- Soft costs (i.e. services, installation fees, permits, and inspections) are costly in the current market.
- Solar energy can be inconsistent. No sun, no energy.
- Maintenance is your responsibility and you’ll need to find qualified professionals in your area.
The Bottom Line
Solar power energy is a green way of producing energy that will cut future utility costs and reduce your dependence on energy companies. Determine if you live in an area where solar panels will retain a sufficient amount of energy. A sunny house in Arizona will produce more electricity than one in Maine. There are online calculators that help prospective buyers estimate the size and cost of an energy system installation.
Coming up with the money for a PV system may be difficult, and you’ll want to make sure an investment of this magnitude will pay off. Determine if you can muster the upfront costs and calculate your monthly savings.
If the costs are too weighty for you right now, consider refinancing into an EEM later. As PV systems become more common costs will continue to fall, so stay updated and informed on the solar energy market.