How do people afford the upfront cost of solar?

Did you just learn that some people have more money than you?

Did you know, some people pay cash for cars, or even homes?
- I knew a guy that had a boat, that crazy mfer
Even having the money, most people that install solar panels, and don't do it just for idealistic reasons (fighting climate change, etc), expect to save more money than they spend in the long run. Well, depends of the specifics of course, but it might take years, even decades to recoup that initial expense. Even if you have the cash, it might not be worth it.

You'd have to consider also long-term maintenance and repair costs to that ...

Typically if you can afford a $25k upfront cost, the long term costs are pretty negligible.

If you're paying cash, then your monthly expenses are only going down due to your reduced electricity bill, so your savings potential is going up further.

Additionally the panels are warrantied for at least a decade, with a performance guarantee for 20+ years. If they're installed on your roof, many also include a guarantee on the roof work.

Proactive solar maintenance is really just keeping things clean, which costs very little.

These small costs do add up if you're barely making ends meet and on a lease plan that costs roughly the same as your old utility bill, but for the group paying upfront, ¯⁠\⁠_⁠(⁠ツ⁠)⁠_⁠/⁠¯
And also nobody talks about the manufacturing costs which are huge!

Home equity loans are used by a lot of people for this sort of stuff.

Make sure to do the math if solar is even worth it for you. Electricity is relatively cheap in my area. When I did the math, it would take me at least 20 years to break even (that's if I paid cash, even longer if I finance). Considering 25 years is an average panels lifespan, it would not save me any money.

Being independent of the grid is the only selling point, but I haven't done enough research if that's even true with solar. If it's still connected to the grid, will I even be able to utilize my panels if there's an outage in the grid?

Yes, your power will primarily come from your batteries. When your batteries are full, extra power generated is either sold back to the grid if you live in a nice place, or credited on your bill with some limited roll over system. When your batteries are empty, you buy power from the grid. If your batteries are empty when the grid is down, then you would indeed also experience the outage.

But you can get alerts when the grid is down and choose whether you want to conserve power to make sure you don't drain your batteries at that time. You can still gain panel power during a grid outage, you just won't have a back-up source of power or the ability to sell excess.
Piggybacking to also recommend realistically assessing if you might move prior to that breakeven point. I don't know if solar panels have good ROI for house selling or not.

Federal, state, and local rebates.

You should get another quote, we have a decent sized 8kw array with a fronius inverter and smart meter that we had installed for $8000AUD.

Unless you're getting an insanely large array, I don't see this price being worth it. You're likely not gonna save $25K over the lifespan of the array. Unless you live in a country with extraordinarily expensive power

Idk if you own property 10-20k $ should really not be an issue to come up with, most houses cost at least one order of magnitude more than that, maybe even two.

It also really doesn't matter because with a property as collateral and the bank seeing investment in home solar you should probably be able to get a loan.

The important thing in this calculation is usually more along the lines of, how long does it take to get a return on that investment, and how long can I expect my panels to last afterwards, what kind of ROI can I expect lifetime. Lifetime ROI for solar should be 2-5 while being low ish risk. If your lifetime ROI isn't at least 2, either your government does Energy subsides pretty last century, or your quote is inflated or misconfigured, or it might just not make sense otherwise where you are, this last point only makes sense if installation or grid connection are very expensive compared to normal because of the shape or location of the specific house.

Solar really isn't for the masses quite yet. If you do they math you will realise that it's only a gimmick to get the 0 dollar electricity bills. The only reason I can see is to be able to go off the grid

And doing at least something little for the climate.
- That depends on whether your local electricity generating method outweighs the environmental impact of manufacturing the panels. If your local generator is coal, probably. If your local generator is already wind, solar, hydro, or nuclear, probably not.

Sarcasm aside, you're right that solar can be a hefty upfront cost. Going DIY can save you on install costs, but often you're getting the panels at a less favorable rate than a contractor buying in bulk, and you've generally gotta do it all in cash.

Most halfway decent solar vendors will be happy to walk you through options free of charge. You can get quotes, alongside real savings estimates based on your roof orientation. They should be able to provide you with a quote, incentive breakdown, and payback estimates for:

Owned solar, where you pay everything upfront and recoup over time

Leased solar, where you pay only a small portion down, with monthly lease payments

Power purchase agreement, where depending on your location they essentially can act as the middleman with your utility. The savings here are usually near zero, but you get to run solar at home.

Whether solar is worth it in your area currently largely depends on the size of the government subsidies. Without subsidies it is only about a break even proposal on average, worse some places, better others.

The upfront cost is the biggest barrier, once you have a system in place, you'll likely never replace the whole thing at once again. You'll do the batteries, or the panels, or the wiring, or individual pieces of each if you prefer. But rarely will you do all of it in the same year again.

So if you don't have any subsidies in your local area, it might just not be a good idea yet. It could still be, but you'd have to work out for your specific house if it is. And you'd have to take out a loan, assuming your credit/leverage is where it would need to be for that to be possible, and you can afford the repayments.

I can't say it's common for people to have savings when the data clearly shows such a high percentage of people live paycheck to paycheck. But in my family we were raised to abhor living paycheck to paycheck, so we've all taken to having savings instead. It's much harder, and a completely different mindset. Basically you have to ignore the thought that money sitting in the bank "isn't doing anything". It is providing peace of mind and reducing stress.

Stress is one of the most expensive things in life. Not having whatever nice stuff you could have with that money, newer phone, better car, bigger house, doesn't make your life anywhere near as bad as always being stressed. Live below your means. It's very much worth it. The cost of stuff tends to rise exponentially compared to it's value. The more you get, the more it costed to get more. Something half the price is usually still 80% as good.

It's so nice to be able to buy stuff out of pocket with a fraction of your savings. Or to have money on-hand when an unexpected expense crops up.

Having said all that, some people don't have anywhere to go down, they already drive a car that costed less than 5k, or better yet don't own a car. And they live in a house that meets their needs but doesn't exceed them. They only upgrade their electronics when they need to, and update them to last year's midrange. If doing all that, and still living paycheck to paycheck, then you might consider if where you are living is worth it. There might be better overall options. It's getting much easier to socialise with long distance friends and family on the cheap. Your skills might pay relatively better to the cost of living somewhere else.

I take some issue with the first point, because the only real competition in $/W is fossil with subsides and maybe wind. If you price carbon so that the externalities are even slightly priced in fossil is much more expensive than PV without PV requiring any subsides. 0.08$/kWh is not a reasonable electricity price to assume for much of the world, even though it might be pretty normal in your country. And along those lines it's shortsighted to assume the US will be at that price forever.

And no plans are in place for the disposal of panels, batteries, etc after their 25 year useful life...

Lithium batteries are highly recyclable... The current rate is something like 60% recovery, and that is bound to increase over time.
- Everything I’ve seen gives it a range between 25% and 96% depending on several factors. It seems like we’re still getting this all figured out and it’s early but if we can get closer to that upper limit it will make a huge difference when considering the impact of these batteries.
The crazy thing is that 25 years after installing the system still works, its just not as efficent. Also you are just wrong about batteries, we already recycle lithium its just that once a battery pack is no longer useful for its application its better NOT to grind it down and sort out the materials, but first to reuse it in another application.

This is the area where we are still working on improving, current tech is looking at doing 2nd lifecycle applications for EV batteries in grid scale storage for example.

Clean energy credit union does modest rate loans. That allows you to get the panels, they foot the up front cost, you get the fed/state/utility incentives and put those towards the loan. That's pretty much your only option other than footing with cash.

Outright purchase, finance, or lease are the 3 options for getting solar. Many people prioritize this on their wish list, save up, and eventually can afford to do so. There may also be subsidies, rebates, and tax credits (federal and/or state) that may apply. New York, for example, is eligible for a max federal credit of -$5700 and a state credit of 25% of your system value to your income taxes. So that would shave off a lot.

Does that mean you receive that much as a refund on your taxes, or is that much a write-off? Write-offs are worthless if you don't itemize and have enough write-offs to surpass the standard deduction.

They get less solar. If you only have 10k buy a 10k system. Systems can be expanded later on.

Otherwise people get loans.

I bought a smaller house than I could afford in 2018. I could realistically afford around $1.1m but instead bought a $850k house. We just save the rest of the money for investing instead of what would have gone into a mortgage.

Some people are wealthy, some people are frugal, some people are house poor and finance everything is how people afford solar.