When the topic of “going green” comes up, people usually think about buying eco-friendly products or eating organic food. But what about the energy you use in your home? Is it eco-friendly to buy energy produced by solar panels, wind turbines or hydroelectric dams? If so, then why do you pay for it?
Let’s take a look—and it starts with the most obvious one: solar energy. Photovoltaic solar panels use sunlight to produce electricity. They are eco-friendly because they are environmentally responsible and don’t produce any harmful by-products during their lifetimes. Not only that, but you can also rest assured that the electricity they produce will stay put and won’t be wasted (which is often the case with traditional energy sources).
Next, consider wind turbine generators. You might know that wind turbines use wind energy to produce electricity, which we all use every day. However, did you know that wind turbines are considered to be one of the most eco-friendly forms of alternative energy? Not only are they eco-friendly and don’t contribute to climate change, but they also don’t produce any hazardous waste and operate without relying on any fossil fuels. In fact, they can even improve the environment by helping to clean up the air!
Hydroelectric dams are also considered to be among the most eco-friendly forms of alternative energy. The water they produce is often used for agricultural purposes or to generate electricity. However, when compared to fossil fuels or nuclear energy, hydroelectric dams tend to be safer and more sustainable. Plus, you might already have one in your area that you didn’t even know about! If you live near a dam, check with the local government to see how you can help contribute to maintain and clean it up (along with everything else they do in the area).
Now, that you know the basics of going green with solar energy and wind turbines, let’s discuss why you pay for it. As we’ve established, solar energy is a safe, environmentally friendly and sustainable source of energy. But that doesn’t mean that you have to throw away your money. In fact, there are several alternative financing options available to help you fund your solar energy venture. Here are just a few:
Pay-As-You-Go:
This is the simplest and often the most practical option for people who want to go green. With this type of financing, you only pay for what you use. So if you have a 20-watt solar panel system that generates enough electricity for your needs, you might only need to pay for the 20 watts that you used. The rest of the time, you don’t have to worry about paying for extra electricity. This is also called “usage based” finance, or “pay-as-you-go solar.”
The advantage of this type of system is that it requires the least amount of up-front cash. The disadvantages are that you have to be extremely careful about how much electricity you use, and you can’t get any refunds for electricity that you don’t use. However, you can always choose to sell back any surplus energy at a discount to those who need it more than you do.
30-Year Fixed-Rate Mortgage:
This type of mortgage is the typical “offered” when people want to buy a new home or refinance an existing one. Essentially, it’s a 30-year fixed-rate mortgage that doesn’t change throughout the course of the loan. So if you are planning on staying in your home for a while, you can take out a 30-year fixed-rate mortgage without worrying about whether or not the cost of electricity will increase or decrease during those 30 years.
The advantage of this type of mortgage is that, provided your energy consumption stays the same, you know that your monthly payments will remain the same throughout the entire loan term. The disadvantage is that, since this type of loan doesn’t change, it doesn’t offer much in the way of flexibility should your energy costs unexpectedly increase or decrease. Furthermore, if you decide to sell your home after just a few years, you’ll likely lose your savings because you’ll have to pay off the home loan plus the remaining balance on your energy bill (if it’s not all been offset by your sale price).
15-Year Fixed-Rate Mortgage:
The 15-year fixed-rate mortgage is similar to the 30-year fixed-rate mortgage, but it only has a 15-year term rather than the typical 30-year term. So if you are looking for a new home or are in the process of refinancing your existing home, consider the 15-year fixed-rate mortgage as an alternative.
This type of mortgage has two advantages over the 30-year fixed-rate mortgage. First, because it only has a 15-year term, it is somewhat flexible. For instance, should your electricity costs unexpectedly increase during the course of the loan, you can always choose to renegotiate the terms of your mortgage (although you’ll likely have to pay a little more at first). Second, this type of mortgage allows for a larger loan amount since it has a shorter term. So if you are looking for a large mortgage to invest in a new home or to refinance an existing one, consider the 15-year fixed-rate mortgage as an option.
The disadvantage of the 15-year fixed-rate mortgage is that it requires more up-front cash than the typical 30-year fixed-rate mortgage, and it doesn’t offer much in the way of flexibility in case your energy costs unexpectedly increase or decrease. Furthermore, you are fully obligated to make your monthly payments even if you temporarily stop paying your mortgage (although you can always choose to resume payments once you’ve sold your home).
Fully Amortized 30-Year Fixed-Rate Mortgage:
This type of mortgage has a 30-year amortization period. This means that, as long as you make your monthly payments as they come due, your total cost of ownership (including principal, interest, and taxes) will be fully amortized over the course of the loan term. In other words, your costs will be spread out evenly over the entire period rather than being concentrated in the first few months as with most other mortgages.
The advantage of this type of mortgage is that it offers the greatest amount of flexibility when it comes to paying for your electricity. You can decide at any time (within the terms of the mortgage) if you want to increase or decrease your electricity consumption. Furthermore, if your finances are able to withstand an increase in your electricity bills, you might actually end up making a profit from selling your excess electricity to those who need it more than you do (provided you sell it at a discounted rate to encourage purchases).
The disadvantage of this type of mortgage is that it requires the largest initial cash outlay. This is mostly due to the fact that it has the longest term (30 years) of any of the residential mortgages discussed above. So you’ll need to have a large amount of money in the bank to be able to cover your costs throughout the entire loan term. Plus, you will always be paying more in interest than you are saving in electricity costs because it has the longest amortization period. So if you are looking for a residential mortgage with the least amount of up-front cash outlay, consider the fully amortized 30-year fixed-rate mortgage as an option.
Hybrid Mortgage:
A hybrid mortgage is a residential mortgage that combines the flexibility of an adjustable-rate mortgage (arm) with the benefits of a fixed-rate mortgage. This type of mortgage has a start rate that is adjustable, but it also has a final rate that is locked in for the life of the loan. So if you are looking for a way to finance your home, consider the hybrid mortgage as an option.
This type of mortgage combines the benefits of an adjustable-rate mortgage with the security of a fixed-rate mortgage. This makes it a great option for people who want to have the peace of mind of knowing exactly what their mortgage will cost them at any given time during the loan term. This is especially useful if you decide to re-adjust your mortgage rate at any time during the course of the loan (and you have a clause in your contract that allows you to do so). Additionally, this type of mortgage requires the least amount of up-front cash outlay of any of the residential mortgages discussed above because it has the shortest amortization period (only five years).