Inflation is top of mind for most people these days. When the government reported last Friday that consumer prices climbed 8.6 percent over the year through May— the fastest rate of increase in four decades— it surely raised alarm bells in many households. As we all have noticed price increases in our daily lives, from gasoline to groceries, we’re wondering what action we can take to manage the rapidly rising cost of living. Let’s take a look at the many ways going solar now can inflation-proof your home, and if you have an EV—a large part of your life.
How can inflation affect the cost of purchasing a solar system?
Even at the first step of the solar journey--purchasing and installing the system--you can mitigate the impact of inflation. The pricing for solar can be affected by a lot of factors, including rising panel prices due to supply chain issues, labor costs, and rising inflation and interest rates.
The sooner you lock in the pricing for your system, the better you’ll fare on the front end because you'll avoid possible problems with solar panel procurement and rising interest rates. Add in the federal tax credit dropping from 26% to 22% at the end of the year and you’ve got another reason to consider solar sooner rather than later.
Supply Chain: At Ipsun, we’re proud to have been able to stock our warehouse with the high-quality Qcells panels we trust and have always offered, as well as Enphase IQ batteries. So we’re lucky not to be affected by supply chain issues as of yet, but once our stores wear down it could be less predictable, and prices could rise.
Inflation and interest rates: If you're interested in financing your solar, we proudly work with Clean Energy Credit Union to help you get the best rates available in the DMV. There are no dealer fees or closing costs associated with these loans and they come with a fixed interest rate. Locking in these rates as soon as possible is a good idea as we anticipate that the Fed will raise rates again in the upcoming months.
Once it's installed, how does switching to solar immediately affect my household expenses?
Once your solar is turned on, the immediate effect is a lower, more predictable monthly payment on electricity bills. For the same reason that you’re feeling the pinch at the pump—because of rising oil and gas prices due mainly to the war—your utility bill is also rising rapidly. Take a look at this blog post we recently published that shows why natural gas prices rise alongside oil and gas prices.
A great way to control that escalation is to invest in solar. If you decided to take that same chunk of money you pay your utility and direct it toward ownership of solar panels, you’d be making a solid financial decision that will lock in a lower, more predictable payment for the length of the payback period and a great ROI over the life of the system. (Not to mention the investment you’d be making toward a healthier, more livable future for our kids).
Especially if paired with battery storage, this investment gives you reliable power and peace of mind in changing times — and a return on your investment currently averaging at about 7.5%.
Check out the chart below to see the factors that play into your solar ROI, and how those factors are impacted by inflation using a theoretical 10kW system size.
In the longer term, how does going solar inflation-proof my home?
The more you electrify your home over time, with an EV, a heat pump HVAC system, an induction stove, and other electrical appliances, your solar energy system will power those items with the sun. The cost of sunlight never changes, and the sun reliably works—every day for the rest of your life.
Once you reach that magical day when your system breaks even, all of your electrical appliances and vehicles run for free on solar energy every day afterward. With prices at the pump through the roof, and when we see in real-time the damage that reliance on oil and gas causes, that value is immeasurable— to our families, our wallets, and our planet.
If you’ve been thinking about solar, now’s your time
Give us a call at 866-484-7786 or click below to talk through the ways all of these current issues may affect your specific situation. We’re happy to walk you through the various options and show you the predicted difference in price between making the decision now or later. We love to nerd out about the Consumer Price Index and interest rates with you!