Solar panel financing protect homeowners from a large upfront cash purchase and rising electrical rates.
As interest rates go up at unpredictable speeds, the cost of borrowing money is making all loan options more expensive. However, if we look at the rate at which electricity prices are increasing, we will find that financing solar panels is perhaps one of the smartest decisions a homeowner or business can make in the next six months.
Georgia electricity rates are expecting to increase at an average of 4.5% per year for three reasons. The current electrical grid we constructed during World War Two is out of date and constantly a target for hacks and damage. Power line workers are at times union workers with a pension package for retirement. As technology advances, people live longer, and more funds are needed to make those payments to individuals. Lastly, Plant Vogle located in Georgia, will be paid for by the customers and members. Plant Vogle has incurred billions of dollars in cost overruns totaling 30 billions dollars, double the original amount budgeted for. Many utilities pay Georgia Power to buy their electricity at wholesale price. Always expect the additional costs to pass on to all customers who benefit from this electricity.
What does an increase of 4.5% in electricity prices mean to a $150 bill now? An average electrical bill in 7 years compounded at 4.5% per year is $204 in 14 years, which is 278. In 21 years is $379, and in 28 years, it is $515. If you do not think this is actual, look at the numbers. If 28 years ago you paid 70$ for electricity, today you would pay $150. That was with much government deregulation and subsidies for fossil fuels, so the actual cost should be even higher.
Thinking in the long term can be hard at times and very easy to put aside. When faced with financing solar panels, most people question why they should only save $80 a month to go solar. The question is not saving $80 a month today but how much you will save over the system’s lifetime. Saving $80 monthly over 28 years at 4.5% yearly interest, a solar owner can expect to save over $53,000! These savings directly impact individuals, especially those heading into retirement. The cost of electricity may go up; however, the amount financed by solar panels with a locked-in rate will not. The predictability ensures that the rate at which some payments will not fluctuate but be steady amount. Similar to locking in the gas price decades ago.
Financing solar panels means forever paying more for electricity and never owning your power or taking control of your power. Solar panels paid in cash or financed protect homeowners from any monetary speed bump. Once an owner of solar energy, you are the owner of the solar power, and it gives the homeowner resiliency.
All in all, solar panel financing ensures that the electric bill is no longer an inconvenience but a situation where you are in control. Having the option to pay off the loan earlier is also an attractive feature and gives the owner the ability to pay for the panels at their leisure or ability. Regardless of how your solar panels are financed, getting started is the most important step. Please contact us for credit union options and zero-down solar loans with 1.99% interest rates.