The longer, warm, sunny days of spring may get Coloradans thinking about solar energy. The good news is, there’s never been a better time to buy solar, and our current financial market offers some unique opportunities that are too good to pass up.
Home refinances are up 80 percent. It’s no wonder why, with rates hovering at or below 5 percent for a 30-year fixed mortgage. Refinancing is also a perfect mechanism for financing a solar system. By packaging the costs of a solar photovoltaic (PV) system with your home refinance, you can spread out its cost and come out ahead every month when you compare the change in your mortgage to the drop in your utility bill.
I did this a few years ago and my monthly costs are lower with a solar PV system than what they were without one. When I refinanced and added the cost of my PV system, my monthly mortgage bill went up by $20 but my utility bill dropped $30.
You pay for electricity based on a cost per kilowatt hour. So, your system has paid itself back when your cost per kilowatt hour is the same or lower than what you would have paid for power from your utility.
My system is already saving me money and contributing to a cleaner environment at the same time.
As an example, if your system produces 500 kilowatt hours in a month and your monthly cost is $45, then your cost per kilowatt hour is about 9 cents. That’s also about what you pay for power from your utility. So, if you can get a system that will produce that amount of power for that monthly cost (or less), your system has paid for itself the first month.
Of course, there are numerous other benefits to installing solar power: your property values go up; your home is more competitive to sell in the market; your price of electricity won’t increase; you are reducing your carbon footprint while becoming a part of the global solution to climate change.
Our legislative leaders, together with Gov. Bill Ritter, have put together a regulatory structure that makes incorporating solar on your home or business easy and hassle-free. You don’t need expensive batteries to store the power when you’re not using it anymore. With a policy called “net metering,” you only pay for the net power you use. When you are not using as much power as you’re producing (maybe while you’re at work during the day), excess power goes through your meter, making it run backwards. You are credited for the energy that you put onto the grid for other utility customers to use.
Colorado’s legislation also provides incentives for solar power that reduce the costs to the consumer. The Governor’s Energy Office has partnered with numerous utilities and local governments throughout the state to provide incentives to lower costs. Finally, the federal government just passed legislation that allows a homeowner or business to receive 30 percent of the cost of a solar PV system back through a tax credit. Cumulatively, these incentives can reduce the basic costs of a system by more than 50 percent.
The Governor’s Energy Office has a tool to help you calculate the benefits of incorporating a solar PV system in with the refinancing of your home. Try out some calculations at and see if this approach might be right for you.
In Colorado, we all know the joys of sunny days, and now I enjoy the sunshine in a whole new way.
Tom Plant is director of the Governor’s Energy Office (www.colorado. gov/energy).
