Buying Solar Is Complicated: Solved!
Buying Solar Is Complicated: Solved! will help give comfort to anybody considering going solar. This article will provide the information you need to know about going solar for wholesale. Even better is you don’t need any expert knowledge of home solar.
The main reason home solar is a bit complicated is because it’s so new. Home solar in Florida became a thing in 2017 when the voters defeated the power companies in November 2016. See Florida Statute 163.04.
Florida Statue 163.04 set into motion the home solar revolution in the state of Florida. Actually, it’s more like set into slow motion the solar revolution.
The advantages of home solar are quite numerous, with very little downside. So why hasn’t the solar industry flourished like so many other revolutionary Ideas in the past?
Working inside the solar industry for a company that installed over 500 solar systems in one year revealed one single flaw? That single flaw is without question is the cost of a home solar system. Companies have been marketing home solar using high-pressure sales techniques and taking advantage of people’s lack of knowledge and misunderstandings of home solar.
Home Solar Is An Excellent Investment
Home Solar as an investment into a small power plant that you own. So the key to home solar is to buy low and sell high, the same as you would investing in a companies stock. Do investors want to know what their return on investment will be? and it’s no different with solar, the lower price you pay the better the ROI is.
What makes investing in home solar unique from all other investments is your using the power companies money not your own.
The Following Are The Pitfalls You Want To Avoid
A lot of people have made millions of dollars using slick sales methods. Here’s a list of the type of methods used by solar companies.
1. The Federal Tax Credit Abuse
Many of the solar companies use the Federal Tax Credit in your deal as a down payment. The slick parts are as follows, they say no money out of pocket, not no money down. They structure the deals as if you’re going to get the tax credit in the full amount when you may not qualify for the tax credit. This is very important to understand because they use your tax credit as a down-payment so your payments are lower.
Qualifying for the tax credit requires that you owe or prepay income taxes to offset the amount of the tax credit.
Example: You owe or prepaid $10,000 income taxes and you have an ITC credit for $10,000. In this example, you owe $10,000 income taxes the tax credit would mean you don’t have to pay the $10,000 in taxes. If you prepaid your taxes then you receive a $10,000 refund.
Example: You owe or prepaid $4,800 in Income taxes. Your tax credit is $10,000 you do not qualify for the entire $10,000. You only qualify for $4800. You can carry forward the tax credit for up to five years until you reach the amount of the tax credit.
Know The Facts Before You Buy
Many people who have bought solar didn’t understand these examples of the tax credit. They didn’t put any money out of there pocket and had solar on the roof so they think there wasn’t a down payment in the deal.
But then the reality hits them in the face 12 to 15 months later. That reality is they may not be getting a tax credit at all or they get a very small tax credit. Unfortunately, you may have agreed to pay that money to your finance company whether you realized it or not.
If you do not pay the tax credit money to the finance company your solar payment will be $70 to $100 higher than what you may have thought previously. In essence, the solar system is 100% financed. When you remove the tax credit money from the deal your solar payment is higher than your power bill.
Leave The Tax Credit Out of The Deal
The tax credit is your money to do what you want with it. The Investment Tax Credit ) (ITC) should not be included in a solar deal because not everybody qualifies for it due to low tax liabilities. It’s separate from the cost of a solar system which has to be paid in full, the tax credit is a rebate only if you already have a tax liability, so you get credit for it when you file your taxes. If someone tells you that you’ll get the money they have to be lying because they don’t do your taxes. Those taxes during the year of purchase are based on that calendar year which is not over yet and income is subject to change from the previous year.
The way these companies disguise this abuse of the tax credit is interest-only for the first 12 to 15 months. Your payments start out below the quoted solar payment and the tax credit is buried in there to quote an even lower payment. But when that 12 to 15 months is up the reality hits them and they have a solar payment substantially higher than their power bill was.
These are unsuspecting folks who have excellent credit so they bite the bullet and make the payment to protect their credit. These abused customers became the spokespersons for the home solar industry.
Now we know why the growth and popularity of home solar has been so slow, with only 2% of all homes in Florida having solar in 2020.
2. 20 Year Low-Interest Financing Doubles The Cost of Solar
The 20-year term financing is used as a way of getting your solar payment at or less than your power bill.
This 20 Year loan creates several dramatic cost increases. The most obvious being the interest over 20 years at roughly 5% doubles the total cost of a solar system. So if $30,000 is financed then with interest it will be $60,000 at the end of twenty years.
One more big issue with financing that’s not so obvious, companies pay $2,500 closing costs and hide it in the deal. They pay high closing costs to get lower interest rates but they don’t tell the customers about any of this. But we are all smart enough to know the customer is paying all additional overhead costs, not the solar companies.
The bottom line is to get your own financing and pay off your system ASAP. Banks don’t do loans for solar systems so it’s best to do a refinance, a home equity loan, or even a credit card purchase. All these methods can either lower the cost of the loan and or lower your mortgage payment because of record-low interest rates. Although the interest is high using a credit card there aren’t any closing points involved. Each situation is unique to itself and that’s why it’s best for the customer to be in control of financing.
3. All The Other Additional Costs That You Want To Avoid
The Cost of Salesperson averages $3000 a Deal, Sales Manager $1500, Proposal Builders and Permitting Department $1000 a Deal, Overhead: Rent, Auto Insurance, Vehicles, and Utilities $1000 a Deal, Cost of Leads and Marketing $1000 a Deal.
That’s a total of $9500 Per Deal and that’s in addition to the cost of equipment and installation.
The majority of these companies are using the same business model and has led to inflated costs. But now there’s a better way to go solar.
“Your Solar Advocate”
“Your Solar Advocate” is a step by step expert consulting firm and is a Free Service.
What we do is assist you with expert knowledge of the laws and rules and all the contacts. We arrange for the very best installation and the purchase of solar panels and equipment at wholesale that are licensed and insured contractors. The optimal system is going to cost you an absolute minimum of $6000 Less in overhead costs! See “Your Solar Advocate“.
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