Still reeling from Halloween and even before Turkey day, it is soon the season to celebrate the birth of Jesus by engaging in mass consumerism and gluttony, but it is also the season to reflect on the previous year and to plan for the next one.
The last quarter of this year has been exciting. A whole bunch of procrastinators waited until the last minute then called us and demanded we design, sell, presite, arrange financing, engineering, permitting, order equipment, install equipment, pass inspection, and interconnect with their power company by December 31st. We did our best for all of them but promised none of them that signed after October 1st. We are still in the throes and hope we are able to snatch victory from the jaws of defeat for the few stragglers left. (Pray for us.)
For those of you that don’t know, the Solar Tax Credit ends this year. That is why so many people are scrambling to get solar at the last minute. In defense of the procrastinators, the tax credit was ended way ahead of schedule and without much warning. Still, they, and you too, should have gone solar years ago. See, the tax credit is cool, a nice little bonus, but these customers that are panicking last minute are stepping over quarters to snatch up nickels.
Of course we’ll explain. The real financial windfall of solar is not the measly 30% of the purchase price the government might not make you pay if you go solar. It isn’t even all the trees it saves or the barrels of oil it avoids, though environmental concerns may indeed be a formidable reason to go solar. The most profitable reason to go solar is that our current source for electricity is raising their prices.
They always have, you say? You are correct. Power companies have raised their rates about 5% every year for the entirety of our lifetimes. 5%, on yearly basis, is hardly noticeable. If your bill is the Florida average of $164/month, next year it will be $172.20. That’s a difference of $8.20/month or $98.40/year. Most budgets won’t even notice it. When you start adding that 5% every year over decades, you realize it is a concerning chunk of change. www.costtodonothing.com can show you the alarming numbers, but taking the average of $164/month and adding 5%/year over the next 30 years and the average Floridian will spend almost $80,000 on just increases. (See why a 30% tax credit is small potatoes?)
BTW, that’s if rates only increase 5%. Word is we are in for some surprises in the next few years regarding power company rate increases.
What we wish everyone realized is that solar, enough to compensate for a $164/month of consumption, is so much less than $80,000. Not only that, but if rates didn’t go up at all, the average Floridian is going to pay almost $60,000 over the next 30 years to power their homes. Solar electricity is less than that too. Much less.
So much less that buying solar, enough to eradicate $164/month of consumption, adding batteries to keep your home lit up even when the grid is down, maintenance and panel cleaning a couple times a year, a repair once or twice a decade, is still less than what paying your electric at today’s rates will cost you over the next thirty years.
So, 30% of the purchase price for your solar, discounted from what one might owe on their taxes, can be a substantial chunk of change. It is (was) an important benefit of solar that many sales organizations based their entire sales presentations around. Less than 20% of solar purchasers qualified to take advantage of the full 30% as there are a lot of rules that solar salespeople failed to mention or didn’t know. Still, if you are (were) part of that 20%, it means thousands of dollars off your tax bill and we don’t mean to minimize that. But it is gone.
On one hand, this is bad for that 20% that could fully benefit from it. On the other hand, it is good because those sales organizations that got into people’s doors saying the government would pay them to go solar (lying) are going away. Now, finally, solar can be promoted on the honest merits of solar. The honest merits of solar dwarf that 30% tax credit.
Historically we have stumbled into ten to fifteen new solar electric sales a year for most of our existence. We looked at them as a nice little bonus when they came and added it to the revenue we pay our bills with which comes from servicing all brands, adopting orphaned solar customers, correcting problems other solar contractors can’t handle, and doing removals and resets for roofing contractors. In the last few months of this year, we will probably install twenty new solar electric sales.
Next year, we expect the new sales to slow, even stop. It’s not like we aggressively market for new sales, so it’s fine, but it is a shame. We should have new sales every day. All good and honest solar contractors should. With or without the tax credit, solar is less expensive than buying electricity from our power companies.
Maybe your new years resolution is energy independence. Maybe you want to eradicate an ever-increasing bill from your family’s budget. Maybe you want to save trees, oil, and baby turtles. Whatever your reason, count on us to tell you the good, bad, and the ugly of solar as it applies to you so you can make a fully informed decision based on facts. We don’t charge for this. Call us.
