Solar Panel Energy in El Paso, Texas: Everything You Need To Know To Save Money

 

An Overview of Solar Energy Opportunities in El Paso

 

El Paso, with a 2013 population of 674,433, is the county seat of El Paso County in Texas. It is located in the far western corner of Texas. It has been ranked the safest large city in the United States for four successive years and counted amongst the top three since 1998. It is situated at the intersection of three states (Texas, Chihuahua, and New Mexico) and two countries (Mexico and the United States).

 

El Paso lies in the Chihuahuan Desert. The Franklin Mountain range extends into El Paso from the north and almost splits the city into two parts: the eastern section expands into the desert and lower valley and the western section forms the beginning of the Mesilla Valley.

 

Solar Panels Price Texas Graph

 

 

El Paso has a desert climate with little humidity in summers, and dry, mild winters. It receives an average of 9.7 in (250 mm) rainfall per year, most of which takes place during the hot weather from July through September, and is chiefly caused by the North American Monsoon.

 

El Paso receives plentiful sunshine, leading it to be nicknamed as the “Sun City”. According to the National Weather Service, the sun shines about 300 days per year on average in El Paso, amounting to nearly 83% of daylight hours. This is perfect for solar panel installation El Paso.

 

Is Solar Power Really That Expensive? The Swanson Effect

 

Despite the fact that currently solar power is being only used to meet one-quarter of the world’s energy needs, the demand for solar power systems is gradually increasing.  Behind this rising demand is a phenomenon that endorsers of solar energy refer to as Swanson’s law. See graph above for details.

 

This law, named after Richard Swanson, the founder of a big American solar-cell manufacturer SunPower, proposes that the price of the photovoltaic cells required to produce solar power drops by 20% every time global manufacturing capacity doubles. The outcome is that the modules needed to make solar-power plants now have a price less than a dollar per watt of capacity. This means that in regions that receive abundant sunshine such as California, photovoltaic power is already competing without subsidy with the more costly parts of the conventional power market.

 

Solar energy is a uniquely beneficial energy resource, versatile in its advantages because of how easy it is for the government, businessmen, and even homeowners to benefit from this power source. Homeowners can use solar panels to generate heat and electricity making them less dependent on power companies. Industrialists can utilize solar panels to lower the sum they spend on electricity and power their equipment. NASA, a government funded organization, also uses solar energy on the international space station and the Mars rover.

 

Fossil fuels are also hazardous in the aspect that they damage the environment and also have adverse effects on human health and flora and fauna. Water bodies are contaminated by the fumes emitted by the use of fossil fuels causing harm to aquatic life and humans who consume that water. Solar power generation is not only gradually becoming more cost-effective but it is also environment-friendly.

 

Comparing the Return on Investment (ROI) for Solar Panels El Paso

 

 

Texas Solar Energy Comparison Graph

 

 

As the demand for solar energy systems continues to increase and manufacturing volume is on the rise, prices are further falling: from 2006 to 2016, the regular cost of a system fell from $9/watt to roughly $4/watt when installed professionally. If you live in El Paso a 5kW solar array installation would cost around $20,000.

 

Once you know the exact system price, any additional costs, and the value of the power generated, it is possible to determine an approximate payback time on your investment and know the return on investment on purchasing your solar panels. Taking in account federal and state tax incentives, a solar power system’s economic payback time is now lesser than ever before, on average within the ten-fifteen year range for most solar investments.

 

There are three routes that you can take for payment of a solar power system, you can pay with cash, get a loan or acquire a lease. Your return on investment in each scenario would vary according to your financial situation and energy requirement.

 

After investing in a solar power system, the value of your property as a homeowner increases. You would not only be making a financial investment but you would also be investing in the environment by preventing carbon emission caused by burning fossil fuels.

 

Getting Solar Panels Installed with Cash in El Paso, Texas

 

 

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Solar Panel Installation El Paso

 

Pros:

 

This mode of payment is possible if you have the money to pay for the entire solar power system outright. As mentioned before, a 5kW solar power system costs around $20,000. This sounds like a mighty big sum, but some power companies offer rebates on solar generation systems and the government provides tax redemption of 30% of the price of your system, so in effect, your solar power system actually would cost only $9,400.

 

If you save around $1000 annually in power costs, your system will essentially pay for itself in duration of fewer than ten years.

 

Cons:

 

In the beginning, you have to pay a large sum of money to purchase the system.

 

Leasing Solar Panels in El Paso

 

Texas_lease_graph

 

 

Getting a solar power system on lease has its own pros and cons:

 

Pros:

 

You are not required to pay any cash up-front. It implies that initially you are not shelling out any money of your own on the solar power system.

 

The way this payment method works is that you have to pay a monthly fee for the lease of a solar panel installation in El Paso. Usually, the sum you pay as the monthly fee is lower than the amount you have to spend on electricity bills. This way, you save money and the energy produced is green and clean.

 

Furthermore, you do not have to worry about maintenance or repairs of the system.

 

Cons:

 

The major disadvantage of this method is that you don’t benefit from rebates or federal and state tax deductions.

 

Using Loan Funds to Get Solar Panels in El Paso, Texas

 

 

Texas_loan_graph

 

 

Prior to launching into the detail of the pros and cons of using loan funds to acquire solar panels in El Paso, first take a look at the pattern of return on investment in this method.

 

At the initial stages, this method seems to be quite good and you make a profit by saving money on power consumption. But during the middle stages of owning a solar power system purchased through a loan, the pattern shows a negative trend on return and you end up spending more than receiving any return. Right in the final stages of the panel’s life, the profits start coming in again.

 

The explanation behind this odd looking pattern of return on investment is that tax reductions are applicable on the interest on home equity loans. However, they are not applicable on the principle amount of the loan. That is why in the initial years, as you are paying back the interest, the money you save on your electricity bills generally makes up for the difference and you end up receiving a profit on your investment.

 

But when you start returning the principle amount, you actually have to pay more.

 

Pros:

 

On the whole, the return is pretty good. Also, you reap all the ownership rewards. And you get the benefits of federal and state tax reductions.

 

Cons:

 

The return is not constant and displays a lot of variations.

 

Renewable Portfolio Standard (RPS) of El Paso

 

 

renewable-portfolio-standard-legislation

 

 

A RPS is a law that determines what percent of a state’s power must come from renewable sources. Companies that don’t meet the set limit have to pay fines, which gives them an incentive to encourage their clients to invest in solar power systems. Unfortunately, Texas has not adopted the RPS law.

 

In the past, Texas did have a modest RPS which was met by utilities in the state but later on the law was repealed. Still, some municipalities have their own pro-green energy programs which to some extent make up for the absence of a statewide RPS.

 

Comparison of Texas to the Other States

 

Texas Solar Report Card

 

 

In Texas, the part of your property’s value that is due to your solar panels is non-taxable. Depending on your area of residence, some state power companies will give you a rebate for every kilowatt of solar power you install. Texas lags behind in the aspect that it has no RPS law.

 

It has no statewide net metering law so you will make any profit on any surplus electricity that you generate. But still you will save a considerable amount of money on electricity cost and you will also play your part in conserving the environment.

 

Additional Considerations:

 

You get to make a profit by cutting down on power expenses. Also, you get to contribute towards the generation of green, renewable, clean energy and protecting the environment.

 

Overall Rating of El Paso Solar Panel Installation

 

The absence of RPS law, lack of rebates makes it tricky to reach a decision on investing in solar energy in El Paso, Texas. But the situation varies depending on your individual financial situation. In any case, you would be saving money by reducing the amount you spend on electric bills.