Also See: 6 Heat-Wave Extremes to Slash Your Energy Costs This Summer
Over the past 30 years, the price of solar has fallen by 5% each year while the cost of electricity has risen by 5% annually, Birch said.
Installing solar panels at your home is now much simpler and can be done online compared to five years ago when installers had to come to your home first to give you an estimate and then design a system, he said. Buying solar panels gives homeowners a better return on their investment.
"It's really a decision for the customer whether they want a return on their capital." Birch said. "Some consumers have a preference to have their capital invested in other assets in the market and they just want to pay for a monthly service and have a hands-free solution."
Greg Wright, who had solar panels installed by SolarCity on his 1,100 square foot row house in Baltimore almost a year ago, said the company's software allows him to monitor online how much solar power the panels are generating. Using clean, renewable energy to power his home was an incentive for him to choose solar.
"I have always been interested in renewable energy and a cleaner environment, even as a teenager," he said. "It makes no sense that we have all this energy pouring down from the sun every day but don't harness it. If more people turn to solar power, our cities could generate huge amounts of power and rely much less on fossil fuels."
Wright, who is a senior communications and public relations associate for the National Association of Social Workers in Washington, D.C., has been able to cut his energy bill immensely, depending on the weather. He pays SolarCity $34 a month to lease the panels and receives a credit for the energy that the panels generate.
"The savings are tremendous, even during the winter months," he said. "During some winter months, even when there was less sunlight, I would have a monthly gas and electric bill of around $40. Other months my bill would be higher at around $180. Still, this was far less than my neighbors who were paying $300 a month to heat their homes."
Although the residential solar market is still young and highly fragmented, technology coupled with the plummeting cost of equipment, has made switching to solar easier, said David Field, CEO of OneRoof Energy, a San Diego solar services provider. Leasing is a good option when you are a first time home buyer and lack the equity to tap into financing a solar purchase, he said. Their leasing program allows homeowners in Arizona, California, Hawaii and Massachusetts to install panels without having to pay a down payment.
"Mobile applications help us monitor our system usage and software helps us streamline the solar paperwork process," he said. "These tools and an increase in innovative financing options are helping homeowners fix their monthly energy costs and save money."
Carol Boraiko, who teaches environmental classes at Middle Tennessee State University in Murfreesboro, bought solar panels 1.5 years ago to reduce the amount of electricity used.
"It fit in with our goals and our roof is steep and faces south," she said. "We are pleased to have them and we look forward to getting our electric bill because usually it is zero or a very small amount. Last year we only paid around $100 for the year, but it was a mild winter."
Brian Ruby, a senior vice president for ICR in Norwalk, Conn., switched to solar panels last October to save on energy costs and opted to pre-pay to lease the panels for 20 years for his 1,700 square foot colonial home in Stratford, Conn. He pays his electric company a minimum distribution basic service fee of $16.50 to be connected and pays them for any power that the panels do not produce. In 2013, he paid a total of $188.52 and this year so far he has only paid $16.50.
"I leased from SolarCity instead of buying because it seemed like it had slightly better economics and I simply did not want to deal with ownership or going after incentives myself," he said. "If you have the right exposure, I think it is a no brainer. At the end of 20 years I can either extend the lease, get rid of the panels, upgrade the technology or pay fair market value to keep them. I just got my mid-April electric bill and used 0 kWh."
--Written by Ellen Chang for MainStreet