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5 Ways to Save Money on Solar Energy

Solar Panels, Solar Energy
Man installing alternative energy photovoltaic solar panels on roof (Credit: Greens MPs/Flickr)

By Jennifer Lubell

A solar system doesn’t just run on panels alone, and the initial cost of switching to solar energy can leave many homeowners feeling overwhelmed. But in reality, the investment is a bit more complicated than that.

To get the best value and price for your system, Ruben Ugarte, senior director of business development at Horizon Solar Power in Temecula, Calif., recommends the following tips:

Educate yourself on the product

Some people think they can buy two dozen panels at a certain price and then determine the value of those panels combined, says Ugarte. But homeowners should be aware that solar involves an entire system of panels, inverters, and the BOS (balance of systems), which includes all other elements such as wiring, the mounting and or racking, monitoring and charge controllers. When purchasing a system, Ugarte suggests homeowners select a trustworthy name brand they’re already familiar with or have used before.

Research the installer

Homeowners that hire the wrong person for the job could end up losing lots of money. Ugarte recommends that people do their homework on contractors. Research the company’s track record online. SolarStory can help you get started: we have gathered data on installation rates and average pricing for top installers all around the country, and we can connect you to a solar energy provider who has the experience that matches your needs.

Get multiple quotes 

This will offer perspective on pricing range and which companies are using top tier brands. A solar contractor worth their salt will use high-end solar energy brands. You want to get value for your dollar, but you also don’t want to hire a contractor that uses low end brands, which won’t give you a good return on investment.

Know the different types of financing options

Buying versus leasing a system are the two most common arrangements with solar energy. These are very different transactions and homeowners should do a cost benefit analysis of each, Ugarte advises. Many homeowners see the value of ownership, which replaces their relationship with a utility for a generator. “Many people purchase solar systems with a loan, which allows you to come to table with not a lot of money,” Ugarte explained. “You get on a payment plan, just like you would a car.”

Others looking to save money and minimize their risk choose may want to consider a lease instead. If you choose this route, your solar panels will be owned by a third party, which means you won’t be responsible for maintenance. However, you will not be able to benefit from the sale of extra energy back to the grid.

A power purchase agreement is another option that’s gained popularity as the price of going solar has come down. With a PPA, you can purchase solar power from a developer at a price lower than what a utility would offer without having to own the system or worry about its upkeep. Everything is fully covered and insured. “Wall Street understands that solar’s not going away, so numerous financial lenders have come to market and are supporting this verticals growth,” Ugarte said.

Find out what tax breaks/incentives are available

Purchasers of solar systems may qualify for a federal tax credit worth 30 percent of the cost of the system (not counting any cash rebates) through 2019. The investment tax credit, or ITC, does diminish in value over time, falling to 26 percent in 2020 and to 22 percent in 2021. For residential systems, the incentive ends in 2022. You should also find out if your state offers a tax credit, incentive or rebate program for solar ownership.

“The great thing about solar is the cost has really gone down over the last decade,” Ugarte said. No matter how you invest to pay for your system, you’ll still be paying less for electricity than what you’ve been paying to your utility. You’ll also generate and support clean energy, adds Ugarte.

4 Questions to Ask Potential Solar Panel Installers

solar energy, solar panels
Finding the right solar panel installer isn't always easy (Credit: Oregon Department of Transportation)

By Jennifer Lubell

Micah Breeden, chief financial officer with Allterra Solar in Santa Cruz, Calif., walks through the basic questions any potential solar owner should ask an installation company about their credentials and the job itself.

What’s your experience?

Homeowners should find how long the installer has been in business, how many installations they have performed and how much of their work comes from referrals. If this is 50 percent or higher, and the company been around a long time, that’s a sign that it treats customers well and performs good work. “A low referral rate will mean poor customer experience,” Breeden advised.

Details about employees are key: how long have the project supervisor and installers been with the company and does it subcontract any of the project’s work scopes? “Companies that do not subcontract, and have long-tenured employees will most likely have employees that are taken care of and treated well, and thus take pride in their work and do quality work,” he said.

What should I know about the installation process?

Any good contractor should tell you about the make and model of the equipment. This includes information about solar panels, inverters and roof mounts. Installers should always use a trusted industry brand like Quick Mount for the roof. All of this information should be clearly outlined on the contract.

Ask about the time frame of the job – it usually takes anywhere from six to 10 weeks from sign up to installation. Beware of jobs that get done too quickly; according to Breeden, if a company quotes a very short time frame to installation, it may mean that it doesn’t get much work.

Lastly, find out if the company is installing a monitoring system. This is a way for you to track system performance via an app or online.

What will take place after installation?

Find out how the contractor will handle the end of the project and what its service plan is after installation. “If one offers a free site visit to determine the issue versus another charging $150, that is definitely worth knowing,” Breeden advised.

Will the installer leave you with any instructions on how the solar system operates or how billing works with the utility company? Many contractors just give you a folder of documents and walk away. “Solar is complicated and it is in the best interests of the homeowner to have a full understanding of everything involved,” he said.

Should something go wrong with the solar system post installation, any contractor worth hiring will handle the manufacturer’s warranty claim.

What does the warranty cover?

Homeowners should get all of the details about the warranty, including what it says about roof damage or leaks incurred during installation.

“Some panels have 10-year product and 25-year performance warranties [referred to as 10/25], while some have 15/25, or 25/25. Same thing with the inverters,” Breeden explained. The product warranty covers any defects in parts and/or manufacturing. “So, if the soldering on the cell connections within the panel fail, this would be covered for example,” he said.

The performance warranty covers the performance of the solar panel. At a minimum, an installer should have a 10-year warranty on the penetrations it performs. Some manufacturers include replacement labor and others do not. Always compare the equipment that different contractors offer, and their respective warranties.

Extra tip:

To choose the best contractor for the job, homeowners can compare the “price per watt” from contractor to contractor. (e.g. $20,000/5,000 watts = $4.00/watt). Factors such as big box brands and type of equipment all play into this number, so lower is not always better. However, this can be a good tool when comparing proposals for different-sized systems.

SolarStory has analyzed the installation rates and prices offered by providers in your area to help you find the right installer for your solar system. Get started by entering your location here.

The Pros and Cons of Solar Energy

By Jennifer Jubell

Solar energy draws from the sun’s limitless resources, making it an environmentally friendly, sustainable alternative to fossil fuels. However, installing solar panels involves a serious financial commitment, and the technology itself isn’t perfect. Before you invest in solar energy, it’s important to weigh the pros and cons and how these variables measure up to your budget:

The Pros:

A steadfast resource: Unlike fossil fuels, the sun’s energy isn’t likely to expire soon. The Earth receives more than 70,000 terawatts of solar energy daily, surpassing global energy use by about 10,000-fold. As long as the sun shines, solar energy exists.

Environmental advantages: Energy from the sun has been linked to environmental benefits, Dr. Becca Jones-Albertus deputy director of the U.S. Department of Energy’s Solar Energy Technologies Office, explains. “Unlike other power sources, there’s nothing to mine or ship so the input needed to create electricity – sunlight in this case – is naturally abundant and free,” she said. By choosing solar power over fossil fuels, users are helping to reduce carbon and other emissions.

It saves money: Homeowners who install solar energy systems become less reliant on the communal power grid. As a result, their electricity bills go down significantly. Additionally, utility companies pay solar owners the retail price for any excess energy the system uses each month. Given that solar photovoltaic prices have dropped by 80 percent over the last 10 years, it’s a prime time to go solar. Another financial plus: you can get federal and state tax breaks for investing in a solar energy system.

Your home will increase in value: Installing solar is just as good as renovating your basement or kitchen: many homebuyers view solar energy systems as an upgrade and are willing to pay high premiums for this home feature.

The Cons:

Energy source is intermittent: Unlike electricity, solar power waxes and wanes depending on the sun’s strength, which can vary day by day and throughout the year. Solar panels are not 100-percent efficient, either: at maximum, they can only convert about 20 percent of the sun’s light into energy. For these reasons, many solar system owners remain somewhat dependent on conventional energy sources as a backup.

It takes up space: Homeowners typically use rooftop solar photovoltaic panels, and this equipment requires a lot of space to install. Depending on what type of roof you have and the materials it’s made of, installing solar panels can pose a challenge. Cedar and slate tile roofs aren’t ideal for mounting solar panels, and roof skylights can obstruct installation, which can add costs to this type of project.

The upfront cost is high: Solar energy panels pay off over time, but the upfront costs of mounting panels on your home requires some capital. Even with recent declines in the price of solar, a homeowner on average can spend up to $20,000 to install a solar system.

It’s not entirely pollution free: Transport and installation of the panels do generate some contamination, and solar panel production has been known to emit nitrogen trifluoride and sulfur hexafluoride, which are greenhouse gases. Still, solar systems compare favorably to other energy sources as far as having a minimal impact on the environment.

The bottom line

Homeowners will need to weigh the upfront costs with other factors such as the roof capacity of their homes to determine if this is a worthwhile investment. However, in general, the environmental and financial returns of installing a solar system pay off over time.

How Solar Energy Works

Solar Panels, solar energy
A home with black-on-black panels will likely sell faster than a home with blue-on-silver panels (Credit: Kevin Baird)

By Jennifer Lubell

If you’re looking to invest in a solar energy system, here’s some basics on how this technology works.

Solar panel systems are quite resourceful in how they draw energy from the sun to bring electricity into people’s homes. The systems differ from conventional fossil fuels such as coal, natural gas and petroleum in that they produce no emissions or waste and are self sustaining.

A solar panel’s semiconductor material is made up of several layers of crystallized silicon to which manufacturers introduce impurities such as phosphorus and boron – a procedure called “doping” – to help create an electrical current. This material captures photons from the sun (a process known as photovoltaics), converting them into direct current (DC) electricity. The panel’s inverter then transforms DC into alternating current (AC) electricity, sending power to a home’s appliances and lights.

Even on overcast days, solar panels can absorb sunlight reflected off surfaces such as clouds. The panels are built to work in all climates. However, areas with more sunshine will get more energy from the same panels, says Dr. Becca Jones-Albertus deputy director of the U.S. Department of Energy’s Solar Energy Technologies Office. “To put this into perspective, Germany is a global leader in solar energy installations but has roughly the same solar resources as Alaska, showing that solar still works and can make sense in cool and rainy climates.”

All panels have an efficiency threshold: an estimate of how much sunlight actually hits the panel and gets converted in ideal temperature settings. Higher efficiency systems – those that can produce more power – are pricier, but call for fewer panels and are a good investment in homes with smaller roofs or less yard space. As an example, a premium panel’s efficiency may rate at 20 percent and above, compared with the rate of a typical panel, which ranges from 15 percent to 17 percent efficiency.

A grid-connected solar system usually works in tandem with conventional energy sources to ensure that a home produces enough electricity. A utility meter, which measures how much energy a home takes in, connects the residence to a local power grid supplied by the utility company. The meter will supply a home with electricity on days when the solar system doesn’t produce enough energy, and deliver any excess energy into the grid.

Another option is to install a battery for backup power when the sun isn’t shining and panels aren’t producing electricity, says Jones-Albertus.

“Depending on the size of the system and the amount of electricity that can be stored, it’s possible for these homeowners to power their homes solely on the solar power they produce and without any backup power assistance from a utility or electric cooperative,” she explained.

Homeowners can get credits to their monthly electricity bill for any excess energy their solar system produces, although compensation varies from state to state. Your utility company will bill you for the amount of kiloWattHours (kWh) or energy that you use each month; a Watt represents a unit of power, and a kiloWatt (kW) equals 1,000 Watts of power. It takes about 200 Watts daily to power a plasma television, for example.

On average, home solar systems can produce between 4 kW to 10 kW, and electric bills range from 500 kWh to 1,500 kWh. According to some estimates, a 5kW system that produces 7,100 kWh per year could reduce carbon dioxide emissions by 4.9 metric tons annually.

And the savings are significant: installing a solar energy system can save anywhere from $7,000 to $30,000 over a 20-year period.

The Best Solar Panels for You

Solar panels, solar energy, house
Before switching to solar energy, be sure to evaluate the pros and cons (Credit: Jon Callas/Flickr)

By Jennifer Lubell

Shopping around for solar panels? Panel quality is an important factor to consider in choosing a solar panel system. There are many brands and grades to choose from, and it’s up to you to decide whether you want to invest in a low-range, mid-range or high-end panel.

Keep in mind that premium options may deliver higher quality, more cost-efficient results and operate more effectively in extreme weather conditions than other panels, but their initial cost will be much higher than other grades. Low-end panels tend to cost less but often have limited warranties and lower efficiency ratings. On average, a high-end panel may cost up to $475, compared with a low-end panel, whose prices range from $200 to $300.

Mid-range panels, whose efficiency is usually around 15 percent, represent the majority of installations in the United States. As with any solar system, the prices for mid-range panels will vary depending on usage and system size. As an example, for an average homeowner with a 5 kilowatt (kW) system, a mid-range system may cost around $7,000 (after rebate). These panels often durable and efficient, but with so many mid-range panel types to choose from, homeowners should consult with their installer to see which panel is the best choice.

Some experts recommend that prospective buyers evaluate panels on three criteria: manufacturer quality, production and durability. Solar panels lose their efficiency with age and are susceptible to weather. When shopping for panels, be sure to consider whether the materials can withstand the climate where you live, especially if your home is susceptible to extreme weather, such as powerful winds or heavy snow. You should also consider the system’s power tolerance, which measures how much electricity a solar panel can produce in real-world conditions in relation to its rated capacity.

Crystalline silicon is the chief ingredient in most solar panels, but it is featured differently depending on the panel. Monocrystalline silicon, a material that yields the highest efficiency (particularly in warm weather) and the longest warranties, is the most space-efficient material. Polycrystalline silicon is less expensive – the cost per watt for a polycrystalline solar panel is 80 to 90 cents, compared with up to $1.40 for monocrystalline silicon – but it ranks lower than monocrystalline silicon in terms of overall efficiency. The good news is the difference in heat tolerance between the two types of panel materials is very small.

From an aesthetic standpoint, the type of panel material you choose will affect the appearance of your home. Panels made from monocrystalline silicon usually have a more rounded shape and a blackish hue, whereas polycrystalline silicon panels are sky-blue in color and square in shape.

When selecting a solar system, you’ll also have to consider the placement of your panels. Solar systems either have ground or roof panels. They’re usually made from the same materials and have similar efficiency levels, from 15 to 20 percent. However, some key differences exist.

Rooftop panels usually have 60 cells in each solar panel, compared with ground mount panels, which have 72. Ground mount panels are most often reserved for the bigger projects: utility-scale installations greater than 1 megawatt (MW). Ground panels might have additional tracking features and are installed in locations with more solar resources, enabling them to maximize the amount of electricity produced. For these reasons, businesses and utilities are more likely to use ground mount panels than homeowners unless the homeowner owns a lot of land.

From size, to type, to location, you want to get the solar system that best serves your individual needs as a homeowner.