Financial Incentives to help you Invest in Solar
To kick off this week’s blog series, we are starting with an exciting theme:
Solar - A Bright Future for Your Wallet and the Planet
Nice theme, huh?
It seems like every day the sun rises, a new incentive for homeowners and business owners to invest in a solar system is released. The frequency of the release of such incentives creates an incredible financial potential for investing in solar energy.
At Infinite Energy Advisors, we are thrilled to share with you the current financial incentives that make solar a powerful investment. Our goal is to be your main touchpoint and/or source of information to learn all things solar + renewables. The number one question we are asked is “Can I actually save money by getting solar?'“ The answer to this is not as straightforward as you might think. In fact, the answer might not even be what you think. As Energy Advisors our top priority is providing every person we speak to a guide on how to save on their energy bills. It might surprise you to learn that we don’t advise every person we speak with to invest in a solar system. Let me elaborate more on this.
If a client reaches out to us, wanting to learn about how they can decrease their energy bills, we first ask for their address. Using our software (and simple software like Google Maps), we can gauge the “solar availability” of the client’s roof. Sometimes, we see that our client lives in a heavily wooded area, where no considerable amount of sun gets to hit the roof. Solar is not an optimal option for such customers, and could only become an optimal option if the trees blocking the sunlight from casting onto the roof are cut down/trimmed. In these cases, we dig in deeper with our clients. What time of the day do they use the most energy? What types of things are they powering in their home (deep freezers, more than 1 AC unit, etc)? What kinds of appliances do they have in their home? These are all questions we ask to learn more about the client’s energy profile. More often than not, for these clients, we guide them through the process of purchasing energy-efficient appliances/lights. If that doesn’t do the trick, we dig even deeper to determine if the client is under the best billing structure from their power company. You’d be surprised how much we can save our clients by advocating for them in our conversations with power companies! Such changes can make a huge impact on decreasing a power bill, and at the end of the day, our goal is always to help our clients save money.
Let’s think about clients who are a great fit for adding solar to their home/business. The pressing question now becomes, “How does solar stack up against the traditional stock market?”
Investing in solar power isn't just about reducing your carbon footprint; it's also about increasing your financial prosperity. Over the years, solar energy has emerged as a highly lucrative investment, offering a range of financial benefits that make it an attractive alternative to conventional markets.
The 2 Most Popular Financial Incentives for Solar available in GA:
Federal Investment Tax Credit (ITC): The Federal ITC is a game-changer for anyone looking to get a solar system. In 2021, the ITC provided a 26% tax credit for systems installed between 2020 through 2022. The ITC will now provide 30% for systems installed in tax years 2022 through 2032. This incentive provides significant savings right off the bat, making solar very cost-effective for purchasers. Because of this program, consumers can now factor in a 30% “discount” to the cost of the solar system.
Many solar companies will tell their clients about the 30% tax credit you can get by purchasing solar, and provide no other context. As Energy Advisors, it is essential to us that we help you navigate the benefits and limitations of any financial incentive. With this in mind, it’s important to note that you can only claim the ITC credit once. If the taxes you owe are less than the credit you earned, your credit can roll over to the following year. The credit is a deduction, not a refund. Note that we are not tax professionals, so to ensure that all of the information above pertains to you, we encourage you to consult with a CPA/tax professional.
Net Metering/Energy Buyback Programs: Net metering/Energy Buyback programs allow solar owners to sell excess electricity back to the grid, effectively offsetting their electricity bills. Depending on your location and energy usage, net metering can result in substantial savings over time. At Infinite Energy Advisors, we will help you navigate the net metering/buyback program, and apply for these programs on your behalf.
Solar vs. Stock Market: A Financial Showdown
You might be wondering how solar investment compares to the traditional stock market. Let's shed some light on this comparison with some statistics:
Steady and Predictable Returns: Solar energy investments offer stable and predictable returns. Solar panels have a lifespan of at least 25 years, and with minimal maintenance costs, you can enjoy consistent savings on your electricity bills throughout their lifetime.
Diversification of Portfolio: While the stock market is susceptible to market volatility, investing in solar provides an opportunity to diversify your investment portfolio. By hedging against rising energy costs and reducing your reliance on traditional utility providers, you're safeguarding your finances.
Protection Against Inflation: As energy costs continue to rise, your solar investment becomes even more valuable. By producing your own clean energy, you shield yourself from the impact of inflation on electricity prices.
Return on Investment (ROI): According to sources such as Solar Review, a residential solar system will deliver an Internal Rate of Return (IRR) of 10-13%, and a commercial solar system will deliver an IRR of 12-16% throughout its lifetime. Sources such as the Motley Fool report that the S&P500 30-year annualized rate of return is 9.4%. When comparing this to a solar system, the rate of return for purchasing a solar system is actually better!
Final Thoughts:
The sun has always been a source of light and life, but with solar, it has also become a beacon of financial growth. With attractive financial incentives, solar energy stands tall as a wise and rewarding investment.
At Infinite Energy Advisors, we're committed to making solar accessible and profitable for you. Our team of experts is ready to guide you through the process, from evaluating your solar potential to maximizing your returns. We do the price shopping, power company applications, and research for you.
Illuminate your life with solar - call us today so we can guide you through the process.
Sincerely,
Infinite Energy Advisors
