Despite powerful incentives like historically low mortgage interest rates, a surplus of home inventory, and bargain home prices, the Louisville real estate market remains sluggish. Without a great push in these final three months, there will be fewer homes sold in 2011 than there were in 2010.
A by-product of this is that more and more homeowners are spending their money with Louisville home improvement companies. Everything from updating bathroom faucets on the low end, all the way up to newer, more energy-efficient HVAC systems. Even high-tech products like geothermal and solar that have been a previously rare sight to behold are now catching on with Louisville homeowners.
Installing a Solar Solution in Your Louisville Home
I sat down with Dan Hofmann, president of RegenEn Solar to learn more about today’s solar systems.
There’s a great deal of specific information about today’s solar products, far too much to cover in this piece. I’ll outline a few of the factors involved in today’s solar solutions below.
- Panel Types: Many homeowners may reject solar solutions outright simply because of aesthetics. The most powerful solar products are bulkier and less attractive but there are also slimmer products available that are less powerful but more visually appealing. You have options!
- Energy Management Systems: Today’s solar systems include monitoring software systems that are more user-friendly than those in the past. They communicate a great deal of information on the status of the system, as well as, how much energy the solar system has generated today, last week or last month.
- Property Attributes: When dealing with complicated systems, it pays to have someone like Mr. Hofmann explain the variables in a way that you can make an informed and strategic decision. Solar solutions require you to consider the home’s direction placement, size of the roof, current and expected energy use, and many more factors. There’s definitely no “one size fits all” when it comes to solar; each installation is truly custom.
- Green Considerations: For some, the reason for choosing solar is a desire to Go Green. This is completely valid! For others, it’s simply a return on investment decision. In my opinion, both should be considered when evaluating whether solar makes sense for your Louisville home.
- Predicting the Future: Of course, it’s impossible to accurately predict the future but certain guesses are fairly safe. Even though the cost of energy here in Louisville is very low compared to other cities in our nation, we can assume energy costs will continue to rise over time. Once the solar installation is complete, maintenance costs are very low, so the benefit over time increases.
Test Case Data for Solar
I asked Mr. Hofmann if he could quote my home as a test case for this article. After simply sending him my address and an easily obtained report of my energy usage downloaded from the LG&E website, he quickly sent me a very detailed quote.
In this quote, he calculated the style and number of panels that would be the best for my home’s size, setting, and energy usage. Here is a portion of that quote:
Contract Price $29,981 Federal Tax Credit (30%) $8,994 Net Cost $20,987 System Size in watts 8,640 Number of solar panels 36 Wattage of each solar panel (DC) 240 Estimated Payback in years with Home Value Increase*, **1 Estimated Payback in years with SRECs** (w/o Home Value) 11 Estimated Payback in years w/o SRECs** and w/o Home Value 15 Annual kWh Production 11,605 kWh Usage Offset 50% Life Expectancy of Product 40 yrs Solar Cost per kWh $0.072 Current Utility Cost per kWh $0.079 Total $ ROI (after 25 yrs)*, ** $81,907 Total % ROI (after 25 yrs)*, ** 390.3% Annualized Rate of Return (over 25 yrs)*, ** 15.6%
It’s a given that installing a solar system will improve your home value. It’s also easily calculated that solar will reduce energy bills and eventually pay for the system. This quote shows that with Solar Renewable Energy Certificates (SREC) the system will be paid off in 11 years.
In an understandably simplified equation, homeowners planning to remain in their current home for only a few years should likely pass on solar, in my opinion. Five to ten years is a tougher call. A stay of ten years or longer translates into solar making strong financial sense.