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1.The Truth About Solar, Getting Past the Disinformation to What is Really Important:
We have been hearing disinformation on the Radio lately about solar electric panels. Of the most misleading is the idea that one particular brand of panel is much “better” than another. It is not the panel that matters, but rather the power output of the solar system as a whole that matter.
Similar to the rules and regulations on the Automobile and Aviation industry, Solar panels are subject to very strict quality controls. All California Energy Commission approved panels will be performing well 25 or more years from now. Virtually all panels are performance warranted for 25 years, a very long time.
The things that are important with regard to the purchase of a solar electric system are:
a. The Installed Cost Per DC Watt
b. The Quality of the Installation
c. The Optimization and Monitoring of the System
d. Correctly sizing the system
a. While some panels may put out more power per square foot, their cost is MUCH higher. They are not “better” panels, and as a system, they will not give you a bit more power over time than a similarly sized but much lower cost system, they just cost more.
If a salesperson claims they have a panel that will last longer or produce more that 100% of the panels rated energy production, they are misleading you.
It is important that your solar company analyze your needs and care enough to present you with the best system and sizing for your family. A properly sized, priced and financed solar system should provide a good positive cash flow with no cash out of pocket for the average families situation in PG & E territory with SMUD areas usually being possible with average bills over $150 month, see #4 below.
b. A very important question is, “How many years has your company been in solar, are your installers in-house, or subcontracted, and are they paid by the job or by the hour?” A dedicated company with many years in solar is more likely to give you a truly quality installation and be there to serve you many years into the future. Companies with in-house and caring installers that are paid by the hour generally result in a much higher quality installation than slam in the job, paid by the job, installations.
c. Optimized systems allow you and the installing company to monitor the system’s performance right down to the individual panel. SolarEdge Inverters with “optimizers” do this and are a popular choice. “Micro-Inverters such as Chilicon and Enphase do this as individual inverters under each panel and therefore do not require a main inverter by your main electric panel. String inverters are not recommended because the “string” only works as well as the worst performing panel in the string and there is no way to know of a panel is not working at its best.
d. Oversized systems, meaning systems larger than you need for the best return on your investment, make the salesperson more money because it is a larger system. Unfortunately, some solar salespeople and companies are only interested in putting the maximum amount of panels on your roof as possible
2. Do I get paid by the Utility Company for Making Electricity?
Generally Utilities require your solar electric system to not produce more power than you use in a year. If you do, the Utility many pay you a much lower wholesale rate for your “Overproduction.” If it is possible that your system may overproduce, you may need to sign a Utility agreement to get paid for this overproduction. Overproduction is not recommended.
As solar electric system produces the most electricity during the sunlight hours, your Utility Company gives you credit for the solar production you do not use during the day. This is called “Net Energy Metering” which is a solar specific billing to provide Kilowatt hour (kWh) credit to you for the value of the electricity your system generates. So over a 12 month period, you pay only for the “net” amount of electricity used from the utility that is over the amount of electricity produced by their solar system. Because you generate all your solar power during the day, when you produce more kWhs of electricity than you consume you will receive a kWh credit to use at another time. So, for example, at night, or when you have high kWh usage, such as your air conditioner, you use those credits instead of being charged by the utility company. When you have used all the kWh credit you will pay for the kWh usage at the normal rate. You will also still pay base monthly transmission, distribution, and meter service charges.
3. Will My Meter Spin Backwards?
Yes! Although now with “Smart Meters” it is all digital. If it is not already installed, when you purchase a solar electric system, your Utility Company will install a smart “Net Energy” meter. This meter allows the Utility Company to receive solar generated energy that is not being used at your home. When you are sending energy to the Utility Company your meter is not counting forward, it is going backward and gaining credits for you to use another time. You will still receive base service fees and surcharges based on you being a customer.
While you could potentially zero out your energy usage, you need to ask yourself what your goals are for purchasing a solar system. Do you want to have the lowest bill possible or do you want the greatest return on your investment (ROI)? The solar representative has the obligation to show you the all the possibilities and different size systems to help you make an informed decision that best meets your family’s goals.
4. How Much Will I Save Per Month?
Installed solar electric systems costs have come way down and most, but not all, solar companies are passing these savings on to you. New finance options have come out recently that makes purchases in PG&E a “Positive Cash Flow” opportunity which could be $1,200 or more per year and increasing every year thereafter your payments remain the same. In some situations, for customers with higher bills in SMUD, a positive cash flow may also be a possibility. The new programs finance the 30% Tax Credit at no interest and with no payment for 12 to 18 months and the balance at a low-interest rate for 12 or 20 years. We will do a cash flow analysis to produce the best opportunity for you. Naturally, there is a cost for all these benefits but it works to your advantage. Traditionally the best way to purchase a solar electric system is to pay cash, this allows you to get the greatest ROI, potentially 15 to 20% or more in PG & E areas, and up to 10% in SMUD, this is an extraordinary and safe return compared to virtually any other investment available today. Mortgage financing options are a great form of financing allowing for the lowest interest rates and interest payments can usually be deducted from your federal taxes.
By paying cash or financing the installation of your solar system, you will receive all the savings from the production. Another, becoming much less popular, way to go solar is to enter into a Power Purchase Agreement (PPA) or a lease. The reason for the reduced popularity is simply why lease, or rent, and get a very tiny return when you can own and have all the benefits of ownership without encumbering your home and make it harder to sell?
It is important to know that at the end of a 12-month period, the Utility will have a “true-up” which takes into account the total electric usage for the year and subtracts the solar contribution which results in a totaled “true-up” bill for the year. Solar Systems are generally designed to provide a percentage of your bill and the difference will be on this bill. We advise that you pay the full amount of “A B” on your bill each month to avoid a large bill at the end of the billing year.
5. PG&E Net Metering 2.0 : California’s new net metering policy and Time of Use (TOU)
The original policy for net metering in California is very simple: for every kilowatt-hour (kWh) of solar electricity you feed into the grid, you get a bill credit for one kWh of utility-generated electricity. When your solar panels produce more than you need, you “bank” the excess to use when your panels don’t produce enough to meet your monthly use. If your system is the right size, net metering makes it possible for you to cover your electricity use for the entire year with solar.
Net Metering 2.0 makes a few minor changes to California’s original net metering policy, but it preserves the key element that makes solar economical for California residents: retail rate bill credits. Homeowners and businesses that enroll in NEM 2.0 will still receive per-kWh credits for their solar electricity that are equal to the value of a kWh of utility electricity. This means that the economics of solar are still very favorable under NEM 2.0.
In addition to preserving retail rate bill credits, the new California net metering program also prohibits many fixed charges for residential customers, including demand charges, grid access charges, installed capacity fees, and standby fees. NEM 2.0 will run until 2019, at which point the CPUC will look at establishing a new program that is designed to account for the benefits of solar in different locations and at different times.
Solar panel systems operating under NEM 2.0 can be just as economical as traditional net metering with the right system design. In general, TOU rates are highest in the afternoon and evening during the summer, and lowest during nights and weekends in the winter. Property owners with solar systems on NEM 2.0 can maximize net metering credits by locating panels on the west side of the roof so that they capture the late afternoon sun.
6. How Can I Tell If Solar Will Work On My Home?
The first consideration is how much sunlight the roof of your home receives. Your property should have clear, unobstructed access to the sun for most of the day, and throughout the year. In California, the sun is always in the southern half of the sky and is higher in the summer and lower in the winter. We recommend that you not trust a satellite shot of your house as satellite images may not be reliable. We will make a trip to your home to assess the feasibility of a solar system on your roof. The best orientation for a solar electric system is on a south facing roof, however, roofs that face East or West may also be acceptable. Particularly now with “time of use” rates being more widely used, where rates go up between 3 and 9 PM, West facing panels can be a very good opportunity for better production during hot summer afternoons when rates are high. Flat, horizontally-oriented roofs also work well for solar systems because the solar electric array can be mounted either on the roof facing the sky or on “tilt kits” toward the south at an optimal angle. If a rooftop cannot be used, a solar electric array can also be placed on the ground using a fixed “Ground Mount” to create the best orientation and tilt for your location. We will work with you to determine the best design for your situation.
7. ACR Solar Policy Items To Guide You In The Purchase Of A Solar Electric System:
Tax AdviceIt is a strict policy of ACR Solar International Corp. (ACR Solar) to not give any tax-related advice and advises you to seek the advice of a tax professional as to whether you qualify for or will benefit from the 30% Federal Tax Credit, or for any other tax-related benefits.
In regards to Zero down, 100% financing Energy Efficient Upgrade programs such as PACE, HERO, Ygrene, mPower, California First, and other programs that are tax liens or a Mello-Roos tax, that may have additional tax advantages, ACR Solar and its representatives advise you to seek the advice of a tax professional as to how they may apply to you.
In regards to the installation of solar ground mounts, pole mounts, solar awnings, and solar sheds/carports, whether all or a portion of it qualifies for the 30% FTC and or a property tax advantage, ACR Solar, and its representatives advise that you seek the advice of a tax professional.
30% Federal Rebate, Zero Interest, Zero Payment Loans
It is vital to understand that these loans need to be paid in full before the 6, 12, or 18 months, term runs out. The purpose of this special loan is to give you time to file and get your 30% tax credit back before the term runs out otherwise a higher interest loan will be your responsibility un the 30% until you pay it off. The 70% portion of the loan will have the agreed upon payments start within a month after the installation is finished. Privacy Policy ACR Solar will not share any personal information you provide to us to any other party in any way without your express permission. Express permission includes a signed contract where your information must be used to secure product or financing for the product you contracted for.
Utility Annual “True Up” for Solar PV and System Start-Up At the end of a 12-month period, the Utility will have a true up which takes into account the total electric usage for the year and subtracts the solar contribution which results in a totaled “true-up” bill for the year. Solar Systems are generally designed to provide a percentage of your bill and the difference will be on this bill. ACR Solar advises that you pay the full amount of “A B” on your bill each month to avoid a large bill at the end of the billing year. ACR Solar can take no responsibility for the amount of this “true -up.” The customer is responsible for turning on the system after interconnect. ACR Solar is happy to walk customers through this simple process, or we will do it for you.
Interconnection
It is your Legal obligation to not turn your system on until after you receive an Email from PG&E giving you permission to turn on your system or until after SMUD has installed its meter or the equivalent for other Utilities. Shading and Performance Policy ACR Solar will advise on shading issues and of any action that can be taken. In the case of tree trimming or cutting, it is the customer’s responsibility to be sure there are no legal issues related to the trimming or cutting and to consult with a professional arborist as to how the cutting may affect the tree(s). ACR Solar takes no responsibility for the trimming or cutting or any damage to trees or other effects of the trimming or cutting or for the performance of the system. System performance depends on factors including weather and other factors beyond our control and are estimates only.
Smoke and CO Detectors
To Pass any County or City Inspection, Smoke Detectors are required in all Bedrooms and the Hallway leading to the bedroom. A CO (Carbon Monoxide) Detector is required on each floor. Please assure that they are installed before the County or City Inspection. Let us know if you need help with this. Monitoring:
ACR Solar works to monitors systems it installs on a monthly basis. It is the customer’s responsibility to also monitor their system and monthly bills and alert ACR Solar if they see a problem.
Conclusion:
We hope that the above will help you know more about what to look for in the purchase of a solar electric system. For most families, this purchase represents the best possible investment they can make from an ROI standpoint and a pure investment standpoint. A solar system can significantly and immediately reduce your total Electric Utility bill, its savings are tax-free as you can’t be taxed on money you can now use for other priorities, it increases the value of your home and makes it easier to sell. We at ACR Solar sincerely want to help you make the best choice with this important step forward in your family’s financial future.
About the Author:
Al Rich’s Aviation Dad “Bud Rich” got him fascinated with solar back in 1961. Please see www.Rich-Twin.com for an interesting background. He went full time into the solar business in 1979 determined to provide the highest level of Quality, Value, and Integrity to his customers. This tradition continues today. Al is a Nationally Recognized solar expert, consultant, and DOE Award Winning Solar Inventor with 5 US Patents. He has been featured in the “Bee” Business Section, the Business Journal’s
“Streetwise” section, ABC’s Extreme Makeover – Home Edition, History Channel’s Modern Marvels, Discovery Channel’s WASTED!, ABC Channel 10 News, and others. ACR Solar International Corp. in Carmichael manufactures the award winning “Skyline” solar water heating collectors and systems, see: www.SolarRoofs.com. Al is working to fund and launch his 4th Patent, the “MegaMat,” PVT which goes under PV panels to heat a pool as well as make the panels more efficient and cool the home on hot days.
ACR Solar expertly installs solar electric, solar water heating, and pool heating systems, and was awarded as the 9th Fastest Growing Company in 2016. You can have complete confidence in ACR Solar and we look forward to serving you with the best values in the industry.
