This question came to me from a recently closed buyer of mine in Colorado. They moved into a new build neighborhood into a great house [mountain views, backs to neighborhood open space] Thanks for the question!
Recently, they have had many door-to-door salespeople drop by to talk to them about solar. So I drilled down and did some research...
It may be on your 2023 resolution list to be make efforts to be more green this year & solar could be a great return on investment. Let's take a look at the future of residential solar.
I have read many articles to compile my opinion of the advantages and disadvantages of solar; the articles are sited and linked below The decision to install solar is a personal and circumstantial choice. I hope this research helps you with your individual choice. If you have any questions or want to talk through the option, feel free to reach out to me on my contact me page.
In this blog post, we will be taking a look at solely the solar panel purchase in the state of Colorado.
The average price of $20,175 for solar panels — or $14,122 after the federal tax credit. Some cities offer additional grants and tax incentives. See your city's website for info or contact me to help.
What you need to know to analyze your home
The current market value of your home. Contact me for a complimentary Real Estate Review and Evaluation.
How many kilowatts of electricity do you use on average/month? The average CO household uses 711 kw/mo. However, I downloaded our homes usage and discovered that we average 1178 kw/mo.; thus, it is worth looking at your homes usage.
Determine what you want your payoff period to be or if you want to pay cash. Average range for CO is 10-16 yrs.
Check your roof's solar potential with Google's Project Sunroof
Advantages
Federal Tax Credit: Whether you use cash or a solar loan to buy your panels, you will receive a one time federal solar investment tax credit (ITC), of 30% of your total system expense. That’s an average credit of ~$6,053.
City Tax Credit: Check with your city for current rebate information. Cities of Boulder & Ft. Collins are sited below. [6-9]
Net Metering: Offset electricity rates and/or eliminate electrical bills
Property Tax Exemption: Prevents your property taxes from going up when solar panels boost your home value
Sales Tax Exemption: No sales tax on your solar equipment
SREC Program: Provides a cash incentive for producing grid energy with your solar panel system. Check out Xcel Energy has an energy buy back program [5]
Clean Energy: great especially if you have an EV or are considering purchasing an EV or plug in Hybrid.
Home Value Increase: 1.4% is the national average as of April 2022 [3] on a $750,000 home, that is an increase of $10,500.
Disadvantages
Leasing or PPA's: highly do not recommend. If you are considering, consider only purchasing solar panels.
Long break even point: the Google Project Sunroof has my breakeven point of my investment at 19 years. I don't see that Project Sunroof incorporates any city or federal tax credits so do take time to do a deeper analysis to find a true breakeven.
If purchased with a loan, the remainder of the loan will be paid off by the seller from the proceeds of the sale of the home.
Future Considerations
Electricity cost hike in the near future: as we have recently seen Xcel drive up natural gas pricing in 2022, it is possible that we will see future electricity cost rise as well. While I don't have a crystal ball, hedging on investing in solar may have a faster break even point due to this.
Most likely, solar will only continue to become more prevalent, affordable, accessible and valuable in Colorado in the coming years. The Federal Tax Credit is in effect through 2032 per the Inflation Reduction Act - Aug 2022, so you have time to do a deeper analysis.
What is the age of roof? Many solar panels have a 25 year warranty.
Watch for my next blog post where I walk through the process of evaluating if solar is the right choice for my home with Namaste Solar.
Links to Articles
Is Solar Worth It in Colorado? (2022 Homeowner's Guide)
Xcel Login Page - login to find your electricity usage
Listings Highlighting Eco-Friendly Features Sell up to 10 Days Faster
Xcel Solar Rewards Program - energy buy back
City of Fort Collins - Tax Rebate Info
Solar Energy Industries Association - Tax Incentive Info
Colorado Solar & Storage Association Directory - list of contractors
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