Solar School


5 Myths of Solar Energy

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The United States currently has enough solar installations to power 4.3 million homes.  Earlier this month, President Obama announced the Clean Power Plan which will incentivize solar installations even further in an attempt to reduce carbon emissions. With solar energy rising like… well, you know… let’s take a look at some common misconceptions that get in the way of GOING SOLAR!

Myths

charles_fritts21. Solar is an Unproven Technology

The photovoltaic effect, the creation of electric current from exposure to light, is not new. It was first observed in 1839, and the first solar cell was developed by Charles Fritts in 1883.  Things have changed to a degree, as efficiencies and aesthetics have improved, but the underlying technology hasn’t changed. The modern silicon cell was first introduced in 1954 and solar energy has since powered everything from cellular networks to space exploration. At TerraSol Energies, we’ve inspected systems installed in the 1980s that are still producing 90% of their rated power over 30 years later!

2. Solar Only Works in Warm Climates

While the “sunny states” like California receive the most attention, solar makes sense across the United States. In 2014, the top ten states for solar included northeastern states as well like New York, Massachusetts, and New Jersey. Germany, which has the most installed solar capacity in the world, receives sunshine comparable to Seattle.

3. All Solar Panels Are Created Equal

While solar panel efficiency and raw materials have improved, not all companies aim to put out the best product. Beware the cheap, foreign-manufactured panels with which the market has been flooded. Instead, look for a reputable company like SunPower with a long history of quality and industry-best warranties on both product and power production for 25 years!

4. Solar Panels Are UnattractiveSPRDS-GR-025

Some companies have accommodated for a frequent complaint regarding solar energy- curb appeal! SunPower offers all black panels and a new racking system that makes the panels appear to float on your roof without visible rails.  Combined with a sensible design, these systems are often described as appearing like a large skylight rather than a solar installation.

5. Solar is Too Expensive

From 2011 to 2014 the price of solar panels decreased 60% and is expected to drop a further 40% over the next 2 years. With a 30% Federal Tax Credit  and state incentives  available it has never been more affordable to GO SOLAR! 

 

Back to Basics: Net Metering

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SOLAR POWER is on the rise! In 2014, a new solar project was installed every 2.5 minutes!  As more people look to GO SOLAR, the most commonly asked questions are usually:

  1.  What happens when I produce more power during the day than I need?
  2.  How can I use the electricity generated during the day at night?

Both of these questions are addressed with the concept of net metering.

Daytime

Power generated by your solar system during the day is first used by your home.  Any excess electricity generated is sent back to the utility grid for use later.  This is called a “grid-tied” system and is only feasible through the practice of net metering.

Nighttime

While battery storage remains expensive, despite the excitement over Tesla’s PowerWall, net metering allows for effective storage of your over-generated electricity during the day.  The excess electricity produced during the day gets sent back to the grid and “stored” for use in the evening or on cloudy days.  This is seen on your bill in the form of credits which can roll over month-to-month until the end of the energy year (determined by your utility company), at which time you will be paid out for your unused credits.

Benefits

Net metering is a clever way for solar energy customers to avoid the high storage costs of battery systems which can often double the cost of a project.  The benefit is clear to homeowners- who can effectively store their excess energy for times when they can’t produce it- but even utilities are seeing benefits.  While some claim that net metering passes on cost to non-solar utility customers, cost-benefit studies in New York, Vermont, Missouri, Texas, and Nevada  have shown that everyone can benefit from net metering.  Using electricity produced on-site to power your home reduces strain on an already heavily burdened and aged utility grid.

Currently 44 states have adopted net metering. Visit the Database of State Incentives for Renewables & Efficiency to see what incentives and programs are available in your state.

 

Back to Basics: How Solar Works

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The True Cost of “Free Solar”— Leasing versus Ownership

When I was growing up my father used to say “If it is too good to be true – it probably isn’t.”

To many people, the upfront cost of a solar system is the initial barrier that is difficult to overcome when considering making the switch to producing your own energy with a residential solar power system. Solar companies compete not only to give customers the most cost effective solution for a solar power system, but also to provide customers with the least financial impact in the immediate future. Zero-money-down options provide homeowners with the opportunity to obtain a solar system for virtually no upfront cost, essentially “Free Solar”. This is a very powerful concept when considering whether a solar power system is right for your home, but it is important for homeowners to understand the fundamental differences between “Free Solar” with a lease agreement versus ownership through a solar loan.chartfreesolar2

“Free Solar”

“Free Solar” is becoming an increasingly popular way to describe solar power installations that require no money down.  The concept of “Free Solar” gives homeowners a fantastic opportunity to take immediate actions to improve our world and gain financial benefit with little to no risk on their own part. This term is generally associated with solar-leasing agreements, but there are other factors when considering a solar installation that provide homeowners with zero down solar power installations.

Solar-Lease

A residential lease provider allows you to have a solar system installed at your home without paying up front for installation.  The lease provider will charge you a monthly rental fee that escalates annually. Solar leases allow homeowners to go green with a solar system that will generate clean and renewable energy throughout the years, while also keeping monthly payments lower than or equal to the market utility rate.  While this may seem attractive to potential homeowners who balk at the initial investment in ownership, “free solar” lease programs end up costing you more and undermining the true value of a solar system— Energy Independence. The escalating monthly payment of a leased solar system, typically 3%, means that you end up paying more over the life of the system than you would have purchasing the system at a static interest rate.  While avoiding the upfront costs may be enticing, this will be more costly over time and denies you the financial benefits to ownership.  Lessees forfeit the 30% federal tax credit, any state incentives available, as well as SREC (Solar Renewable Energy Credit) sales to the solar lease provider.

Solar-Loan (Ownership)

Whether you purchase a solar power system outright, add the cost of a system to a home equity loan, or obtain a loan from a third party solar-loan provider the outcome is the same – Ownership. Solar ownership may come in all shapes and sizes, but ownership through a solar loan allows the homeowner to retain the idea of “Free Solar”, while still preserving all of the benefits that come along with a solar power installation.  These benefits include a 30% Federal Tax Credit on the total cost of the system, SREC sales (roughly $350-$1700 annually, varies by state and system size), and any state incentives available to you (check your state here).  In a solar lease scenario, all of these financial bonuses that increase the value of the investment and reduce payback time will be recouped by the lease-provider instead of the homeowner.  A recent study also determined that ownership of a solar system increases the value of a home by an average of $15,000. Rather than being rewarded for the extra value added to your home through ownership, lessees will face early cancellation fees or negotiating a lease transfer agreement with the new owners should you sell your home within the lifetime of the solar system. Financing a solar system gives homeowners the ability to maintain a fixed payment schedule and term of loan. Solar loans offer similar monthly payments to a solar lease program, but the difference is those payments eventually end (with plenty of life left in the system).

True Value of Solar

The true value of a solar system— aside from clean, renewable energy— is energy independence.  Owning your own solar system allows you control over how much energy is purchased from your utility company.  While a lease will avoid an initial upfront cost, you do not gain energy independence on a personal level.  There are many ways to lower an electric bill that don’t involve solar, such as installing energy efficient lighting and appliances or simply limiting your existing energy usage.  Solar ownership, however, means you are no longer at the mercy of your utility company.  You are your own power plant and have essentially pre-purchased 25 years of energy!  Ownership effectively hedges against rising utility costs, while lease payments increase annually to keep up with rising utility costs.  Instead of breaking the utility company chains, lessees are beholden to both the utility company as well as their lease provider.

“Free solar” may seem like a cheap way to go solar, but will end up costing you in the long run. As my dad would say – “There is no such thing as a free lunch.”

Electricity Costs at All Time High- Why Solar Makes Sense

ELECTRICITY PRICE INDEX JANUARY 2015

According to the Bureau of Labor Statistics, 2014 was the most expensive year for electricity to date. In January of this year, the price for electricity hit an all time high.  With electricity costs on the rise, a solar system for your home is an excellent investment and can allow you to “lock-in” a much lower rate through the life of your system.

How does it work?

When installing a solar system on your home, you are essentially pre-purchasing 25 years of guaranteed power at a fixed rate.  By determining how much power your system will generate over its lifetime and comparing this to your cost of electricity and the expected continued rise of electricity costs, the fixed rate of electricity can be calculated.  Take a look at a recent customer of our’s as an example:

 

The levelized cost of electricity (LCOE) is calculated by dividing the total project cost after incentives (i.e. the 30% federal tax credit and the estimated SREC revenue) by the total amount of energy the system is estimated to produce over 25 years based on the solar module manufacturer’s 25 year power production guarantee.  The proposed solar system’s levelized cost of electricity can be calculated as follows:

lcoe equation

Therefore, with the solar system you essentially lock in the cost for this portion of your electricity needs at the very low price of $0.068/kWh!  The graph below shows this levelized cost for each system compared to the utility electric rate which was estimated to increase 3% annually.

 

levelized cost of electricity chart

 

Contact us for a FREE SITE ASSESSMENT to lock in your lower rate for the next 25 years!

 

Solar Panels Could Add Up to $15,000 to the Value of Your Home

solar panelsFor many, one of the main hesitations before investing in solar panel installation is a worry over how the panels will affect the value of a home. We’ve always assured our clients that installations actually tend to boost your home’s value, and now the U.S. Department of Energy’s Lawrence Berkeley Laboratory is backing us up.

The Berkeley Lab studied home sales in eight states between 1999 and 2013. They found that to home buyers, a solar panel system is worth $4 per watt — or roughly $15,000. This information combined with lower utility bills and current solar energy tax incentives makes right now a great time to consider a home solar system. Thanks to grid-tied solar panels, using power at night or on cloudy days isn’t a problem. Extra energy generated by your panels but not used is credited on the grid and becomes available to you when you need it. Not only will the system pay for itself in just a few years, but it will also increase your home’s worth when it comes time to sell.

Owning a Home Solar System

The report goes further to state that this value isn’t always true for homeowners who lease the panels. In fact, leased solar panels are considered a liability and could actually take value away from your home. That being said, it may not be worth it to take on a 20 year lease for a home solar system. Instead, talk with the company and do some research into local tax incentives to better understand your options for owning the solar panels. Everyday solar panels become more affordable.

For more information, read the full article at Daily Finance.