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Ivica Bilich and Jennifer Twiggs, of Charlotte, North Carolina, love their house’s solar panels.

“When I pull up to my house on a sunny day and see the panels, they look like a slot machine dropping money on my front porch,” Bilich said.

The couple had been thinking about going solar for years, but in the fall of 2018, the numbers — a combination of falling costs and incentives — finally made sense.

A local solar installer proposed a system that cost $20,000 before any incentives. The couple learned they would get a federal tax credit of $6,000 — 30% of the cost of the system — and a $4,320 rebate from Duke Energy. The incentives reduced their total cost to $9,680.

“It was a no-brainer for us,” Twiggs said.

The case for going solar

Homeowners have been installing solar panels at a record pace, taking advantage of falling prices and the federal tax credit, which is slated to be phased out by 2022.

Solar panels are getting more powerful, more efficient and cheaper every year, according to industry experts. The average household will recoup the cost of their system in just over seven years.

Consider your house’s site

If you pay a high electric rate and live in a sunny location, there’s a compelling case for going solar.

For an estimate of the cost and benefit of adding solar panels to your home, use the EnergySage Solar Calculator. It uses a combination of satellite imagery (to see your roof, its size and orientation to the sun), data you provide about your electricity bill, real-time cost data from solar firms in your area, and its own proprietary formulas.

EnergySage recently launched the EnergySage Buyer’s Guide, which allows consumers to easily search, filter and compare solar equipment (panels, inverters and solar batteries) based on quality rating, aesthetics, performance and pricing.

In most states, homeowners whose systems produce more electricity than they use can send the excess to the utility’s electric grid and receive credit on their electric bill. (To see what incentives your state offers, visit dsireusa.org.)

Ways to pay

A decade ago, a residential system cost $40,000 to $60,000, according to Vikram Aggarwal, CEO of EnergySage.com, and solar financing wasn’t available. Today, with the cost of a typical system running $18,300 before the tax credit and incentives, two-thirds of homeowners have purchased their systems outright.

Buying your system will maximize the financial benefit, but third-party ownership [where the installer owns the panels and you pay them monthly for using them or for the energy they generate] can still reduce your electric bills. With third-party ownership, the solar firm benefits directly from the tax credit, not you — though it may pass along a lower cost to you.

If you don’t own your panels, you’ll see 15% to 30% lower utility bills, Aggarwal said. But if you pay for a system with cash, you’ll enjoy 100% of the savings — after you recoup the cost of the system.

If you want to finance your system, tapping a home-equity line of credit is a good way to do it. The debt is deductible because it’s secured by your home and the panels are a substantial home improvement.

In 2020, the tax credit drops from 30% down to 26%; in 2021, it falls to 22%. After that, it disappears.

© 2019 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC.