Almost every American citizen is worried about inflation these days. Everything from gas to groceries to rent has gone up. Taking charge of your electricity bills is one of the best ways to protect your finances from constant price increases.
Energy-related costs are expected to continue to rise due to factors such as inflation, international relations, and climate change, and already eat up a significant portion of our monthly budget. But you can protect yourself from skyrocketing energy prices by locking in electricity prices for the next two decades.
How can you do this? Through solar. This article will show you how to save money with solar power, and why you shouldn’t wait any longer.
A brief history of inflation
Inflation has averaged around 2% per year over the past few years, with prices rising by more than 8% in 2022. Inflation rates are tracked by the Bureau of Labor Statistics, which also provides a case-by-case breakdown of these inflation rates.
Annual inflation has ranged between 0.1 percent and 2.4 percent between 2012 and 2020, with the highest rate recorded in 2018 at 2.4 percent, according to the bureau. However, due to the COVID-19 pandemic, inflation soared to 4.7 percent in 2021, and by 2022, it hit a staggering 10.7 percent.
In other words, the cost of almost all goods and services, including the electricity generated by power plants, has gradually risen over the past few years – greatly reducing the purchasing power of money.
A Brief History of Solar Prices
Ten years ago, installing solar panels on your home was very expensive. However, the cost of solar power has dropped dramatically over the past few years, making it economically feasible for more people to install solar panels.
Contrary to the general trend of inflation, solar prices are falling every year (and there is a good reason why the 2022 Inflation Reduction Act places such a strong emphasis on renewables).
Another benefit of switching to solar is that the electricity your panels produce always costs the same.
According to a study conducted by NREL (National Renewable Energy Laboratory), the price of one watt of solar power in 2010 was $7.53. By comparison, a watt of solar power will cost just $2.71 in 2022—the lowest cost ever.
Portable Solar Panels as an Investment Tool
Using it in your home can save a lot of money (possibly tens of thousands of dollars) over the life of a solar system over its 25+ year life. Electricity costs are expected to rise in the future; however, if you install a solar system now, you may lock in the current price. Thanks to the different types of solar loans that exist, the vast majority of households can switch to solar with zero upfront costs and start saving money right away.
Here are a few reasons why portable solar panel systems are one of the best investment options:
Excellent ROI (return on investment): While most investments are either high risk or low return, solar energy is low risk (often with long warranties) and high return.
Guaranteed Returns: As long as the sun is shining, solar profits are guaranteed to increase, protecting your investment from external factors such as global pandemics or wildly volatile stock markets.
Tax-free: Solar power typically comes from monthly savings rather than profits and is therefore exempt from income tax.
Hedge against inflation: Over the 10-year period from 2012 to 2022, household electricity costs are expected to increase by about 24%. Installing solar panels can protect you from fluctuations in electricity prices caused by fossil fuels such as coal, oil, and natural gas.
Increased home value: If you purchase portable solar panels with cash or a loan, you can increase the value of your home by an average of 4.1%.
Financing Options for Portable Solar Panels
We know that solar panels, even portable ones, can feel like a great investment. However, you have to remember that over the course of their lifetime, solar systems help save far more than what you paid for them in the first place.
Installing solar panels on your home and paying directly in cash will save you the most money in the long run because you won’t have to worry about paying fees or interest on your loan.
But even if that’s not possible for you, there are plenty of other ways to start saving money with solar without spending thousands of dollars.
$0 Down Payment Loan
By getting a loan for your portable solar panel, you can own your system immediately and benefit from tax credits and rebates at the federal, state, and local levels, including solar which allows you to deduct $26 off the cost of your portable solar panel Tax credit %. Many lenders today offer zero-down-payment loans with reasonable interest rates and terms of 15, 10, or 5 years. Your loan payment could be less than your monthly electricity bill, allowing you to start saving right away. Once your debt is paid off, you may not have to pay your electric bill for years.
PPA or Solar Lease
PPAs (power purchase agreements) and solar leases were crucial in the early days of the solar industry, but they have fallen out of favor a bit in recent years. It’s easy to confuse a solar lease with a PPA because they both involve a third-party owner installing solar panels on your property and then selling you the electricity those panels generate for a predetermined cost. Leases and PPAs work slightly differently but are close enough that they can be merged together for convenience.
Power purchase agreements (PPAs) and leases can help you lock in lower electricity bills for the next 25 years, typically 10-30% less than what you pay today. In the past, a common feature of solar leases and PPAs has been annual payment increases known as “escalators,” but more recently, it has become more common for leases and PPAs to lock in a single rate for the term of the contract. Additionally, a lease/PPA arrangement ensures that the third-party company keeps an eye on your solar panels by monitoring their performance and carrying out any necessary maintenance.
In a lease/PPA arrangement, the company that owns the solar panel system will be eligible to receive any financial rebates or other incentives related to solar energy, not the individual who leases or signs the PPA for the system. Also, a lease/PPA may not increase the value of your home as much as a solar system without a lease/PPA because you (the homeowner) are not the legal owner of the solar system.
Analyze Your Solar Savings
After the payback period for the solar panels, the money you save goes to your pocket, not the utility companies. Keep in mind that if inflation increases electricity prices, your payback period may be shortened. Your ability to realize net savings with a solar panel system is inversely proportional to the money you save by reducing or eliminating electricity usage from the utility grid.
Plus, when the cost of conventional electricity increases, your savings from solar panels should increase. If your solar panels can cover the majority of your energy needs, there won’t be any significant increase in your monthly bill. So investing money in solar panels can take the stress out of whether or not you can keep up with future increases in your electricity bill.
Homeowners can also sign up for net metering when solar panels produce more energy than the residents needs. In a net metering arrangement, the utility company credits your account for any electricity you supply to the grid, which can be used to reduce your future costs.
Portable Solar Panels as an Inflation Hedge
The many ways that portable solar panels can help you save money can go a long way in mitigating the effects of inflation on every aspect of your life.
Depending on the type of mortgage on your home, solar savings can be an important factor in offsetting rising mortgage rates.
If installing solar panels helps you save on energy bills, you can put the extra cash toward reducing your mortgage balance.
Inflation often has a big impact on groceries. If you use less energy, you’ll have more cash for groceries. That includes bulk buying frozen foods that can be stored in freezers, which now run on cheap electricity from portable solar panels.
Your “entertainment money” is usually what’s left over each month after you’ve paid your basic expenses.
With solar panels, your monthly electricity bill will be lower, leaving you with more disposable income to enjoy movies or travel.
Bedding and furniture are two of the more overlooked yet important household items that are highly affected by inflation. You can buy a brand new sofa and bed linen with the money you save by switching to solar.
Investing in better-quality items can increase your happiness and satisfaction with life—not to mention their longevity compared to cheaper alternatives.
By installing portable solar panels and reducing your electricity bill, you can now speed up the process of saving enough money for your favorite car. The value of both new and used cars has risen since the pandemic, so having some extra cash on hand can go a long way toward buying a new car.
Soften the blow of inflation with portable solar panels
Although electricity prices have risen over the years, you can protect yourself from future increases by switching to solar panels. With initial spending on solar power systems falling over the past decade, renewable energy has emerged as one of the most promising hedges against inflation.
Once you see the payback period for your solar panels (the payback period for portable solar panels is significantly lower than for traditional roof mount solar panels), you can start saving money every month. You can then use the surplus money to offset the effects of inflation in other areas, such as food, mortgage interest, furniture, transportation, and entertainment.
If you are interested in purchasing portable solar panels to protect yourself from inflation, we invite you to check out our extensive selection. We offer many different types of portable solar panels, generators, and kits and can help you choose based on your location, energy needs, budget, and savings goals.