While things have settled down, the solar industry is still recovering from the financial damage caused by the coronavirus outbreak. Frequent work stoppages and project delays have caused major damage to the industry, including solar installers. However, one positive thing in all this economic recession. This article will tell you precisely that.
The Virus And The Economy
The number of cases is reducing by the day; however, this isn’t stopping the United States from its path of an economic recession. With solar, you can turn this opportunity around, as this can be a sound financial decision in times like this. You’ll receive savings on electricity bills and protect the environment too. Let’s take a look at how a recession works. First, you need to remember two things that run an economy:
The decreasing demand for goods.
Decreasing ability to produce goods.
The supply shock was delivered by COVID-19, where many businesses and manufacturing plants were shut down. Fewer goods in the market increased their demand, which increased the prices of the goods. Plus, people were getting fired due to businesses being closed down, and many weren’t even getting paid.
Essentially, the economy’s stimulation decreased, which also caused a demand shock. The same thing is happening with the U.S. With the rise in the virus; industries have been closing with rising demand and supply shocks. Projections have shown job losses for April in the US, ranging from 500,000 to 5 million. This is why the government has started a $2 trillion economic stimulus plan.
Reasons To Invest In Solar During A Recession
You should always remember to save money during a recession. Some ways to do this are:
- Cutting back on expenses like ordering take-out.
- Saving coupons at the grocery store
- Looking for savings everywhere.
- Going solar.
You might be thinking about how going solar can help you save money. This is because going solar can decrease your electricity bill and increase your savings, which can help you survive an economic recession. We’ll look at three reasons to invest in solar during an economic recession:
Low Solar Loan Interest Rates:
Not everyone has the cash to invest in solar, and it’s completely okay to loan the system. Fortunately, banks decrease loan interest rates during economic recessions, which makes solar loans beneficial for someone who is paying off their system. More people take advantage of this incentive, so the already-low interest rates in the US will continue to get lower.
The Federal Reserve has reduced borrowing rates below 1%. A smart way to reduce electricity bills is to loan the system since the low-interest rates will be less than the electricity bill you would have to pay if you brought the system. This will save you more money, and you can enjoy free electricity once the loan has been paid off.
Electric Bill Savings:
As mentioned before, you can save a lot with just electricity bills. This is because electricity rates are so high that even saving a little can amount to a lot. Plus, you make your electricity rather than buy it from the grid.
Sometimes, you can use free electricity (after you have paid off your solar system). With net metering, you can earn on the excess electricity you generate. If you make more electricity than you need, the utility will buy it and, in exchange, let you take electricity from the grid for free when you need it.
It was evident with the virus outbreak that investing in the stock market was risky. Despite the length of these losses, losing money is never good. Solar is an investment you can count on in times of recession.
It has a payback period of 5-8 years and will continue to increase your savings as long as the sun shines. After this period, you’ll have free electricity. This period will depend on your location, incentives, state, energy consumption, and cost of electricity.
Your electricity generation doesn’t depend on the economy, so you’ll still see savings. This makes solar panels worth it. Even though the initial investment is high, having solar is a great investment, especially with multiple financing options and incentives available.
Avoid Free Solar Panels
Remember that financing options are different for a reason. Many people could go for power purchase agreements (PPAs) instead of solar loans. A PPA means that you don’t own the system. However, you don’t have to pay the upfront costs as well. The third party owning the system decides the price you have to pay for the electricity you use. Most PPAs have lower rates than normal utility rates. This doesn’t mean that you’ll see increased savings, though. Avoid installers who market free solar panels, as that isn’t the case. Research the market before you decide on anything.
Going solar may be the best economic choice of your life, especially during a recession. You can’t trust the stock market for investments since it’s always fluctuating, and recession is one of those times when it’s extremely volatile with countless risks. Solar is a choice with guaranteed savings regardless of the economy.
You’ll just need to pay the large upfront, which is worth it since it won’t be a loss but a profit. Plus, with the increasing electric rates, you’ll see increased savings too. Even if you don’t have cash, solar loans are there to help you, and interest rates are dropping fast. This is why the present is the best time to invest in solar.