There are a lot of great reasons to install solar panels. We’re not going to cover all the pros and cons in this article, but if you have decided to go forward or are looking for tools to help you make that decision, we offer some hard-earned lessons from our own experiences, and those of many others over the years, that can help make your project a success.
Doing Your Own Financial Analysis
Based on extensive experience I can pretty much guarantee that when you contact a solar company to get an estimate, it will include a pitch to zero out your electric bill and a fancy, graphically enhanced, analysis showing that you will save a zillion dollars over some future period. My first problem with that is there is no reason to believe zeroing out your electric bill is the right amount of solar to install. Sure, it is an obvious goal, and the way net metering works may give you the most savings. But you might also want to start with a cash budget, or an area of your roof you’re willing to deploy, or some other project size you’d prefer. So you may have to push back a bit and get a quote for the size of the system you want.
Similarly, while the payback projections often look awesome, they come with lot of assumptions. First, they assume a certain annual productivity for your panels. If the company hasn’t been on your roof (or on your site if you have a solar field planned) to evaluate shading, take their initial analysis with a grain of salt. Google Earth is amazing, but as the most common tool used by solar sales teams, it is only an approximation.
Each solar company has its own assumptions about both productivity and the projected rate of electric utility cost increases. One of them might even be right, but you can easily be comparing apples and oranges if different bidders on your project have different assumptions. I highly recommend building your own simple spreadsheet based on the kilowatts each vendor bids and the total cost, along with federal and other tax credits you might qualify for, as well as your average cost of electricity. If you are really gung-ho, you can try to adjust for time of day and accommodate the effects of Time Of Use (TOU) metering that you’ll probably get with solar, but that can be a daunting task.
Similarly, I’d be skeptical of the estimates for increases in electric rates. Especially since many bids don’t allow for the interest you could earn on the money you put into solar if you were just paying your electric bill and banking the rest of the money. So I simply use our current electric bill and get a simple payback period by dividing the net cost (after tax credit) of the system by the cost of the electricity it generates (KW installed times an efficiency number we’ll discuss further down, divided by a blended utility cost per KWH).
Figuring out your Solar Efficiency Using Project Sunroof
Fortunately, there’s an easy-to-use, free, tool for estimating your potential solar output — Google’s Project Sunroof. It uses a model of your roof and the height of surrounding trees from Google’s Earth dataset and combines it with typical annual weather to spit out an expected number of KWH per year. It is definitely not perfect, as roof size and tree height estimates aren’t always spot on, but it gives you a great sense of what you might expect. Even better, it will do a quick cost calculation that takes into account the likely retail cost, Federal Tax Credit, potential state and local credits, and other benefits. Project Sunroof uses a reasonable 2.2 percent estimated inflation rate for your utility bill, and 4 percent discounting for calculating Net Present Value, both of which are nicely conservative.
In our particular situation, we’re pretty lucky as we get lots of sun and have an unshaded roof. Project Sunroof estimates that we get just over 1,800 hours of “peak solar” (times when 1000 watts per square meter of solar radiation are hitting our roof) each year. So each KW installed will generate close to 1800 KWH per year. There are inefficiencies in the system, of course, but they are quite a bit smaller than when we installed our initial solar array 15 years ago. As far as calculating savings, the next step is to model your utility rates. Our utility rates are massive, something like $.30 blended per KWH (even with TOU metering). So overall, each KW installed is worth between $500 and $600 per year
Project Sunroof does a fairly good job of estimating your electric rates, based on public databases. Once you’ve given it all the facts, it will spit out an average cost for a solar install of the size you specify in your area, along with estimated savings on your electric bill. My one gripe with Project Sunroof is that these numbers are hidden, and I don’t see any way you can supply your actual electric rates or bids from contractors.
In our case we’re in a high-cost area (Northern California) with a large demand for solar, so bids tend to be premium priced — between $3 and $4 per watt, depending on the roof, installation size, etc. That means that using my simple spreadsheet, and the data from a number of quotes for houses in our area, payback is between 5 and 7 years, with some very-high-end installers bids coming in with paybacks as long as 9 years. My numbers were a pretty good match with the simple estimates provided by Project Sunroof. Here again, it’s up to you whether the result is a good investment financially for you, or simply something you want to do, or too much of a hassle. That’s your call.
Keep in mind that unusual roof configurations or specialty roof surfaces like tile can also cost more. Speaking of roofs, in many cases installers won’t put panels on wood shake roofs, and it doesn’t make too much sense to put a large array of panels on a roof you’ll be replacing soon. So you may want to look for a company that can take full responsibility for both your solar and your roofing work.
Going Solar May Cost Less Than You Think
Some others on the wfoojjaec staff live back East and are skeptical that solar would pay off for them. However, it is absolutely worth checking, as some states, and some utilities, have fairly large credits available — in some cases as large as the nationwide 30 percent Federal Tax Credit — while here in California, most of the credit money has dried up.
For example, fortunately for the late Thomas Alva Edison, he would be in an area (Northern New Jersey) that has additional credits available for solar installs:
Placing and Selecting Panels
One of the biggest surprises for me when working out where to put panels is that the exact angle on which they are placed isn’t extremely critical. If your roof is inclined at all, having them flat on the roof is a low-profile way to go. Similarly, if your roof is somewhere between Southeast and Southwest, it is probably close enough so that trying to angle the roof-top panels some other direction is probably not worth it.
While we’re on the subject, there are a couple of solar roof options slowly emerging. Tesla is horribly behind schedule and much more expensive than the company lets on, but at some point might be competitive. Similarly, DuPont has licensed v3 of its solar roof shingles to Real Goods, as RGS Powerhouse. They look really promising and if you can wait a year might be a good option. But they are still in such an early stage that they haven’t even responded to my emails to get on their early interest list.
As to selecting panels, the good news is there are a lot of great options. Even the tariffs haven’t slowed things down, as they don’t increase the total project price too much and there are plenty of panels made other places than mainland China. If you’re worried about looks, get panels that are all black. If you have limited roof space, paying more for maximum efficiency panels might be worth it. Other than that, make sure it is a reputable vendor with a great warranty.
Fortunately, there are loads of sites with detailed information on all the various products. Friends of mine who are cost sensitive but have lots of space on their roof are currently partial to the Canadian Solar panels. Panasonic, LG and especially SunPower are top-rated brands for most residential projects, with SunPower being the most efficient. The company we used 15-years ago, Astropower, became part of GE, that shut down their solar panel unit shortly thereafter. For our current project, we’re going with G5 Hanwha Q.Cell panels. We got a good price on them and Hanwha is a well-respected panel vendor worldwide, and are an up and comer in the US market. The G5 panels, in particular, have good efficiency. Length of warranty may also be important to you, so that is something else to add into your comparison.
Two of my own favorites are EnergySage and Real Goods Solar. Energy Sage can tie you into quotes from installers, and Real Goods will sell you entire DIY systems, but separate from that they both provide a wealth of information (which is all I’ve used them for, and I don’t have any connection to them).
A Short Course on Inverters and Batteries
You won’t learn most of this from your solar sales rep, so here it is as a public service. There are basically three ways to architect your residential solar. The first, and trendiest, is using panels with integrated micro-inverters. Each panel in these systems converts sunlight all the way to AC, ready to power your house or push back onto the grid. They have the advantage that every cell is separate, so losing one panel leaves the rest intact. Enphase seems to be the leader in this segment. The downsides can be the cost (not cheap) and they don’t integrate with backup batteries.
The second option is something like Solar Edge, which has power optimizers on each panel, giving you the benefit of having each panel isolated — so a shaded panel doesn’t mess up the system — but the system can also be used with a backup battery like the Powerwall from Tesla or the LG Residential.
Finally, you can use a traditional string inverter. That is the lowest cost, but if one panel is shaded or defective, the whole string can be compromised. To be honest, no one in our area even wants to talk about those, but there are plenty around in more remote locations. In our case, we have a 15-year-old Trace/Xantrex string inverter on our older solar install that is still chugging along. As part of our current project, it will get re-purposed to a remote location where it can be re-used.
On batteries, unless you can find someone who will work with a classic inverter like an Outback or a battery system add-on like offered by Schneider, you may not be able to use traditional cost-effective solutions like AGM lead-acid batteries. All the installers I’ve contacted recently only want to use the newer, and much more expensive, Lithium-Ion batteries. None wanted to even look at our existing AGM battery bank. The new batteries are a much better product once you buy them, and can be used for time-shifting power to arbitrage TOU metering, but they tend to start at $10K and up installed price. I suspect that will start to change fairly soon, as higher-volumes help reduce prices, but right now even at the current prices, all the whole home batteries are hard to find or back ordered. Note that LG makes units smaller than the 10KWH version you can currently buy here, but they aren’t sold in the US yet.
Pick a Reputable Solar Company That Can Do What You Need
If you are in an area that gets a lot of sun or has great rebates on solar, you’re probably deluged with ads for solar companies. They are absolutely, definitely, not created equal. Do your own research on them. Yelp is an obvious place to start, as is the Better Business Bureau website. If your town has some type of community mailing list or forum, reach out and ask. Compare notes with others going through the process. There are sites like solarreviews.com where you can see a variety of installers and their ratings, but I’d never trust a single site, as it is hard to know what their bias is, how they treat companies depending on sponsorship, etc. Every company will have a few 1-star reviews, but if you read them and they have a disturbing theme or seem to apply to your situation, you may want to steer clear.
You’ll also want to make sure that your choice can do that work you need. Do they have a reputation for taking care of expensive tile roofs? Can they work within tight deadlines? Are their output estimates accurate? Can they also do whatever re-roofing you need and project manage the entire effort? Are they likely to be in business when you need to look them up in 10 or 20 years to fix something? Everyone’s priorities are different, so think about your own as you evaluate.
Locally, we found three companies that met our needs: Cobalt Power, Semper Solaris, and Ilum Solar. Our choice between them is an example of how each project is different. Cobalt doesn’t have its own roofers and we needed roofing. They also tend to be quite pricey. Semper gave us a solid estimate, but from our initial contact, we just didn’t have confidence that they really understood our overall project and needs. Ilum Solar offered roofing, solar, and some pretty-serious technical project staff that have been available to sort through issues on panel placement, inverter choice, and overall system design while we work with their sales team.
Stay Tuned for Part 2 as We Roll Out Our Project
Having done solar projects myself previously, documented how similar projects went for friends, and researched results of many neighbors’ and colleagues’ efforts, the advice we have provided here has definitely been tested in the real world. But we’ve got another test coming up. Deployment of our current 7.5 KW system. It’ll be unfolding over the next couple months, and we’ll be back with an update on how it works out. Stay tuned. In the meantime, since experiences vary wildly based on where you are in the country and your budget and priorities, please let us know about your experiences in the comments.
Top image credit: Getty Images
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