July 28, 2011 by Steven Castle
You’ve got whopping electricity bills. You’ve heard about all of these photovoltaic (PV) solar systems that can produce electricity for your home. And lo and behold, you can’t help but notice that sun shines on your baking hot roof several hours of the day.
Can a solar PV system help you save significant money on your electric bills? And what about those prohibitive $30,000 or so up-front costs? Double ugh fooey.
“Anybody with electric bill of $150 to $200 and higher is a good candidate for a solar electric system,” says Joe Bono, CEO of Solar Universe, a California-based solar installation company with 22 franchise locations in seven states. “We often see bills in the $300 to $400 a month range,” and a good solar electric system can cut those in half—or more. Those who are investing in electric vehicles (EVs) and EV charging systems are also good candidates for solar arrays, because those home-based chargers can use a lot of electricity.
Tax credits and rebates exist at the state and federal levels. In addition, some smaller and municipally owned utilities offer good rebates for homes producing solar electricity. SRECs (Solar Renewable Energy Credits) that pay homeowners and businesses for producing energy to help offset their system costs are available in some states. Feed-in Tariffs, which pay producers a cost-based price per the energy produced, have been instituted in Ontario. Power Purchase Agreements (PPAs) and solar leasing programs with little to no up-front costs are also available, though there are pros and cons to leasing. (Read on.)
Here are some planning tips for considering solar electric systems.
- Look at incentive programs. Check the dsire.org web site for federal, and state tax credits and rebates. The U.S. government offers a 30 percent tax credit on solar and other renewable energy systems, with no ceiling, through 2016.
- Check locally. See if there are any rebate or other programs offered by your municipality or local utility. Some cities and companies offer loan programs and other incentives to get people to invest in solar arrays.
- Look at your roof. Which direction does it face? What’s the tilt, orientation and shading? If it faces south and isn’t shadowed during the day, you’re a good candidate to produce solar. Productive arrays can also be put on west facing roofs. A good solar installer can calculate your roof’s potential for producing electricity from solar panels.
- Check the age of roof. If you only have a few years left on your shingle warranty—many are for 20 years—replace the roof first. You do not want to be pulling up expensive solar panels to replace shingles.
- Consider financing options. Do you want to pay cash or lease the panels or re-finance your home? “Buy it with cash and you’re buying twenty-five years of power,” Bono says. Some banks also offer green loans. Having good credit is critical. Some companies like SunRun do solar PPAs (Power Purchase Agreements), in which someone else owns and maintains the system and you pay a fixed or variable cost for the power produced. If that’s less that what you pay from your utility, it could be a good deal. Leasing is an option if you have little or no money to put down, but it may restrict your ability to sell your house, and you won’t receive any rebates, tax credits or energy credits. The leasing company gets those. So a good rule of thumb is that if you can swing the upfront payment, do so. After rebates and tax credits, moderately sized systems often cost around $15,000.
- What aesthetics do you want? Some framed solar panel modules use blank panels to blend in nicely with a roof. (And when you’re saving money, solar panels always look better.) There are also more expensive BIPV (Built-in Photovoltaic) products that mimic the look of a shingle, for example.
- Look at architectural standards in your neighborhood and local building codes. There could be restrictions on some additions by local homeowner associations. State and federal laws are changing to allow for residents to install renewable energy devices without the approval of homeowners’ associations, though the associations may still dictate the placement of the device.
- Check on net metering. Net metering allows you to “sell” extra electricity that your produce, say during those sunny hours in the day when no one is home, back to the utility. Most states have net metering. In some areas the excess the power you sell back to the utility is at wholesale instead of retail rates, so check on the rules in your area and with your utility.
- Insulate your house first! Yeah, we know it’s a drag, but if you use a lot of electricity on cooling, having a tighter thermal envelope will keep that cool air in, and you won’t need as large a solar array to offset your costs. Swapping out incandescent bulbs for energy-efficient CFLs and LEDs, wrapping ductwork, sealing doors and windows can shave 10 percent to 15 percent off your electric or heating bills. Do this, and you’ll save even more money once you have solar panels.
- Consider monitoring options. Many solar systems come with web-based monitoring so you can log into a secure web site and see your system’s production. Some home-based monitors like the eMonitor and EcoDog can monitor both your electricity usage and the production of the solar arrays. Many people rely on a tiny readout on the inverter, which converts the DC power from the solar array to AC power used by your house, but many inverters only record the incoming power and may not be working properly, thereby squandering your five-figure investment in a solar array. A good monitoring solution will monitor both incoming and outgoing power.
- Inverters are important. The solar panels may be the visible and sexy part of the system, but the inverter is the heart and soul of a solar array. Don’t cheap out on these. Check the manufacturer and how long they’ve been around, the warranty and how your solar installer will service and check its performance. “Inverters have gotten a lot better. They help with harvesting power and getting the most out of the solar system.
- Check all manufacturers. Many cool solar technologies are emerging today, from thin-film CIGS (Copper Indium Gallium Selenide) and CdTe (Cadmium Telluride) products. But these are not as efficient as the rigid crystalline silicon panels that abound today, and some of the crystalline silicon manufacturers like Sharp and Panasonic (Sanyo) have been around and aren’t going anywhere.
Bonus tip: Look to the future.
Making your house more energy efficient and adding a solar PV system can be just the start. If you want free hot water, think of a solar thermal system that can cost about $8,000 or more. And look to tie your home systems together at some time with home automation. You no longer have to be a millionaire to have these systems. There are many more affordable options out there that can help you turn on and off lights and regulate your thermostats automatically. Systems are available from ADT, Comcast/Xfinity and soon Verizon and perhaps AT&T. One company, EcoFactor, will connect to a smart thermostat to regulate it a degree of two via a variety of weather and other data, enabling you to save automatically without sacrificing your comfort. When smart grid services from your local utility come, you can run smart appliances like dishwashers at low-cost times, via time-of-use pricing that varies hourly. “Today with products like EcoFactor, you can save 10 to 20 percent,” says Bono. “In the future when appliances interact with the grid—and that’s coming—we’ll see a lot more home automation. I think there’s real serious savings to be had.”
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Steven Castle is Electronic House's managing editor. he has been writing about consumer electronics, homes and energy efficiency topics for two decades. He is also the co-founder of GreenTech Advocates
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