Is your electric company’s “solar subscription” a good deal?
That depends on your goals.
Goal #1: Do you want to reduce your carbon footprint? Great! Solar is an excellent choice.
Goal #2: Do you want to save money, add to your home value, and power your home for free? Instead of “renting” the use of solar panels owned by corporations through a “solar subscription,” you should consider installing your own system.
Solar through your electric company?
Your electric companies may be offering you the option to use renewable energy for an extra charge, promising they’ll “save” you the cost of installing a solar array. This may sound like a good way to reduce your carbon footprint at just a small cost, but before you jump on this “offer,” you should evaluate if it’s really in your financial best interest.
Companies including Kansas City Power and Light (KCP&L) and Ameren are planning to build solar farms to leverage sustainable energy sources and appeal to environmentally-conscious customers. Customers are given the choice to opt-in, but they are warned that they will pay a premium for making the choice.
If you’re familiar with current residential solar options, this will probably sound an alarm, because, you know, solar energy is free.
GREEN FACT: What does a kWh of solar energy cost? Zip. Nada. Zero. (If you have the right equipment.)
Paying for the equipment.
You’re probably thinking, “Installing solar is expensive. Of course there will be extra costs, they have to build a solar farm! Right?” Not exactly.
Yes, installing solar energy systems has costs associated. Equipment, labor, a place to install – those all come with a price tag. But the energy generated is free and unlimited. Paying a surcharge for your electric company to build a solar farm is helping the electric company build a cash cow. Solar panels are low-maintenance, and generate power for decades – so once that solar farm is paid for, they’ll keep selling you energy that they’re getting for free.
Instead of paying the power company to build a renewable energy source so they can keep selling you power, why not invest in your very own solar power source?
FINANCIAL FACT: If you purchase solar energy from an electric company that owns a solar farm, their profit on reselling that power is 100%.
Should you rent or buy your power source?
Think about deciding whether to rent or buy a home.
You can buy a home with a $1,000, 20-year mortgage payment. The payment is the same for the life of your loan. When you’ve paid off the mortgage, you own your home, and now you can live there for free. Plus, at any time, you can sell the home and make back the money you’ve put into it.
You could also rent the same home. Your rent might be $1,000 this year, but will increase every year with inflation. At the end of 20 years, your payment may be triple or more what you’re paying now. And guess what, you’ll have to keep paying whatever rent your landlord decides to charge as long as you want to live there! And what if you move? You get nothing back. You don’t own a thing.
The same logic applies when deciding to purchase a solar system versus buying your power from the electric company. When you buy a system and install solar panels at your home, instead of paying for your electricity, you make a payment toward your solar system. You use free energy delivered straight to your home from the sun. Your solar payment remains the same until the system is paid off, and then guess what, you get free energy after that. For how long? Solar panels are tough and will continue producing free energy for you for decades.
Plus, when buying solar, you’ve added value to your home. If you sell your home, your home will be worth more because of the addition of the solar system! So the money you’re paying in is an investment, not a payment to a huge corporation profiting off your payments.
But isn’t solar expensive?
Solar systems vary in price, and range from $25,000 up. That may sound like a lot, but the payment is usually about the same as your electric bill – and since you’ll be using power produced by your solar system, you’ll no longer have an electric bill. With solar, you don’t pay for the system AND the electricity, your solar payment replaces your payment for power to the electric company.
Here are some factors to determine whether the solar subscription or purchasing your own solar system is a better financial choice for you:
KCP&L Solar
|
Owning a Residential
|
|
| Reduces carbon footprint |
Yes |
Yes |
| An option if you don’t own property |
Yes |
No |
| Good for landlords |
No |
Yes |
| $0 required to get started |
Possibly |
Yes |
| Average monthly cost to get started |
Current electric bill plus $10-$30 |
SAVINGS of |
| Fixed monthly payment |
No – prices will rise with inflation |
Yes – your monthly cost stays the |
| How soon do you start saving? |
No Savings – EVER! |
The majority of solar owners |
| Increases your home value |
No |
Yes |
| Projected average 25-year savings |
$0 |
$50,000+ |
| Cost of electricity after system is paid off | Market price |
FREE |
Get your free, no-obligation solar proposal today!
Want to know more about going solar? Find more helpful information in our Solar 101 series!
