Go Solar and Wrap the Cost into Your Mortgage
Tom Plant recently installed a solar-power system on his home, and he didn’t have to shell out a dime. In fact, he ultimately shaved about $10 off his monthly living expenses. How did he do it? Plant, who heads the Governor’s Energy Office in Colorado, refinanced his home at today’s super-low mortgage interest rates, and folded the cost of his new solar unit into his monthly mortgage payment. Additionally, Plant took advantage of beefy government incentives available to homeowners who install photo voltaic solar electric systems.
“Tom’s monthly house payment went up slightly – around $20 a month — but by switching to solar, he’s cut his monthly utility bill by $30, for a net gain of about $10,” said Todd Hartman, Governor’s Energy Office spokesman.
“In Colorado, a homeowner can knock down the cost of a solar unit by half with state rebates and federal investment tax credits” said Hartman. “Combined with mortgage rates at the historic low levels we have today, installing a solar electric system becomes almost a no-brainer,” he said.
The GEO wants other Colorado homeowners to follow Plant’s example.
The office is pushing the slogan “Refinancing? Go solar!” and offers a Solar Mortgage Calculator.
There, homeowners can plug in a few numbers — the balance on their house, the years they have left to pay, their current interest rate, and their refinance rate -and hit the “submit” button and instantly see what their estimated new monthly payment would be if they added a new solar system amortized over the length of the loan.
In many cases, the calculator shows that monthly mortgage payments will drop, even with the solar system included.
For example, the calculator shows that a homeowner with 20-year mortgage of $171,709 at 5.75 percent interest rate currently pays about $1,206 a month (without taxes and insurance). But by refinancing at 4.75 percent, that homeowner can install a 3kW solar system and still see his monthly payments drop by $9 to $1,197 (excluding tax and insurance).
Additionally, according to the calculator, that same homeowner would see a $30-a-month average drop in utility bills, for a net savings of $39 a month.
Figuring out what size solar system you need begins with an energy audit of your home to help you identify how much energy you use and how to make your home as energy efficient as possible, by adding insulation, for example. The GEO then recommends getting bids from several solar companies, followed by a meeting with your mortgage broker to talk about adding the cost of solar to your new mortgage.
The GEO recommends findsolar.com to find an installer near you.
The Solar Mortgage Calculator is just one of the dozens of ways Colorado is urging residents to go green.
In Colorado, renewable energy technology is everywhere you look, from the huge National Renewable Energy Laboratory in Golden saturate to fledgling wind farms in Windsor. Gov. Bill Ritter has made clean energy his No. 1 priority for Colorado, creating the Governor’s Energy Office on April 16, 2007, and relentlessly promoting wind, solar and geothermal power as the bedrock of Colorado’s economic future.
In 2004, Colorado voters passed Amendment 37, which commits the state to develop renewable energy, financed by a small fee tacked on to each utility customer’s monthly utility bill. The fee funds the state’s cash rebates for people like Plant who install solar PV systems.
Xcel Energy, which administers the state rebates in the form of a $3.50-per-watt refund, called a renewable energy credit, has paid out about $70 million to owners of home solar systems, said Xcel’s Tom Henley.
Additionally, the federal government provides a 30 percent federal tax credit, which means your yearly tax liability is reduced by 30 percent.
Home PV systems run from $10,000 to $26,000, but with the federal and state rebates and credits, the bottom-line cost to Colorado homeowner is $5,000 to $13,000.
“Solar companies like Namaste (Colorado’s largest privately owned home solar installer) will float the difference so you don’t have to wait for the rebates,” said Hartman.
Home solar units make sense for so many reasons, Hartman adds. Besides increasing your home’s value and making it easier to sell, a home solar system reduces your carbon footprint and “leaves the planet in just a little better shape for your grandkids.”
On its website, Namaste Solar list ten reasons to go solar, including these:
n Producing your own power is like growing your own vegetables: you know how your power is produced and where it comes from, which is supremely satisfying, just like eating a home-grown tomato
n Buying a solar electric system is like buying 30 years of electricity at a fixed, upfront cost, thereby reducing your exposure to rising energy prices.
n Solar electricity is produced locally and reduces the need for new transmission infrastructure, huge mining operations, nuclear waste storage and fossil fuel resources from abroad. In addition, no wars are fought over the sun!
Read more about Solar Photovoltaic Market Potential
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