Is Solar Right For You?

Choosing a Solar Installer offers advice for customers in selecting a solar contractor, questions that customers should ask a solar contractor, and information that should be included in a solar contractor’s bid.

 

Will Solar Panels Save You Money? discusses key questions homeowners should explore when assessing whether going solar makes financial sense, including how the cost of solar compares to savings from solar, how the federal tax credit works, and how much a homeowner’s electricity bill can be offset by solar.

These videos are free, and were produced by the GW Solar Institute for CESA’s Sustainable Solar Education Project. States and municipalities and other solar stakeholders are encouraged to share the videos and to use them as resources on their websites.

 

The answers to these frequently asked questions currently relate to residential solar systems and installation, not commercial systems and installations.

If you have a question that you think we should add to this list, please let us know.

Is solar really expensive?

This is the biggest myth of all and our favorite to address.  Most home owners actually have no idea how much a solar system costs, and the fact is that the price of solar is absolutely at an all-time low.

As the prices for solar continue to drop, the utility companies’ rates will continue to rise.  Electricity is not cheap to produce, and as our communities and population continue to grow, so does the requirement to produce more energy.

How much do solar panels cost?

That depends on which solar panels you want to use.  They are more expensive when buying them in small quantities, and not all solar panels or associated equipment are available to individual consumers.

There are several companies in many countries, including the USA, and a professional installation company will provide you with information regarding the differences between the least expensive, middle of the road, and high-end solar panels.

You pay for an entire solar system, including its installation, you don’t pay for separate pieces and parts.

How many panels do I need?

That depends on how much energy you want to produce to offset your current energy usage. It also depends on how much appropriate roof space you have where solar can be installed.

What does it take to get a solar energy system installed?

We recommend you choose a professional solar installation company who has a NABCEP certified solar professional and a master electrician on their team. Some rebate programs (such as Austin Energy’s) require that the solar installation teams include NABCEP certified professional installer.

Do I have to install solar panels myself?

No – this is a solar electric system which is creating its own electricity and which will be electrically connected to the existing utility grid.  This does not qualify as a do-it-yourself weekend project, unless you are licensed to work with this equipment.  All systems that are connected with the utility grid must be officially approved with paperwork signed before the system can be commissioned.

There are National Electric Codes that must be followed, and permits that need to be pulled, so we recommend you hire a professional, qualified installation company to install your system for you.

If you are an Austin Energy customer and wish to take advantage of the solar rebate program, there are program requirements that must be completed in order to be approved for the rebates, and working with a company who has NABCEP certified installers is one of those requirements.

How much is a solar system installation?

That depends on these main points, to start:

1) How much roof space do you have that is viable for a solar system?

2) What is your budget for this long-term investment?

3)  Are there any additional expenses due to bringing your home’s current electric system up to code (distribution panels, etc.)?

4) Which technology will be used, regarding the panels and the inverters?

5) Does your utility company offer rebates or other incentives?

To give you an idea of what fairly standard solar installation inverters and no additional electric upgrade expenses looks like, a 6 kW solar system could cost approximately $18,000.

If your utility company offers rebates ($0.80 per watt, for example), that amount would be deducted: $18,000 – $4,800 = $13,200

30% of the final amount can be used as a tax credit on your taxes (see more info & links below): 30% of $13,200 = $3,960

$18,000 – $4,800 – $3,960 = $9,240

Your out-of-pocket investment could be only $9,240 for a no-to-low maintenance solar electric system that will generate its own electricity for the next 25 years!

What would a 6 kW system do for my home and my utility bill?

This is specific information your solar installation company will be happy to provide you with.  This information is determined by the location of your home, and the direction of your roofing that is viable for solar. This is also dependent on how much energy you use in your home.  This is one reason why energy efficiency is crucial: the less energy used, the more benefits you will reap from the energy your solar system will produce.

For example:  A 6 kW system in Austin, TX on a 30° roof with a direction of 180° (azimuth) will produce a conservative average of approximately 8,700 kWh per year.  An average single family home in Austin uses 10,740 kWh per year, so this 6 kW system will produce about half of the energy that is being used in an average home. Austin Energy will credit you based on the Value of Solar (VoS) rate. If the VoS rate is $0.09 per kWh, you would receive bill credits throughout the year totaling about $783, and the payback would be about 11 years and 10 months. These credits roll over from year to year, as long as you are an Austin Energy customer. Your solar installation company should provide you with a report in advance that denotes a conservative approximation of how much your solar system will produce for you on a monthly basis, with respect to your monthly bills and usage.

What about financing a solar system?

Austin Energy partners with Velocity Credit union to offer loans for solar and energy efficiency upgrades. Many solar installers now work with lenders and can give you information about financing options when you get a quote. Your credit union or bank may also offer solar loans.

How long before they pay for themselves? 

Prices have dropped so much in the last few years that the average 6 kW system now has a pay back period of less than 9 years. Return on investment (ROI) is not the only money math to consider. You immediately begin to save money on your utility bill, and if you were to buy the energy from your solar system, the cost is less than 7 cents per kilowatt-hour, which is well below today’s current utility rate.

 Is there a tax credit available?

When you purchase a solar system for a residence between now and December 31, 2019, you will be eligible for a tax credit equal to 30% of the cost of your solar system, including installation, and after any rebates and other incentives. For systems installed between January 1, 2020 and December 31, 2021, the tax credit will be 26%. For systems installed between January 1, 2021 and December 31, 2022, the tax credit will be 22%.

Please note that this tax credit is not available if you lease the system or participate in a Solar Power Purchase Agreement (PPA)This is a credit  – not a deduction – and is applied to what you may owe the IRS.  For example, if you owe the IRS $5,000 in taxes and your solar system costs $14,000 (after rebates and incentives), your tax credit of $4,200 would reduce your tax liability to $800. Please contact your accountant for specific advice.  Use IRS Form 5695 to claim the solar energy investment tax credit.

How do I get the solar rebate from Austin Energy?

First, find a qualified, approved solar installation contractor (listed on this webpage) to make sure your home can have solar installed, find out how much can be installed, and have them answer all other pertinent questions specific to you. If your house is 10 years or older, you will be required to get an energy audit from an approved energy efficiency contractor (listed on this webpage) in order to qualify you for the solar rebates. Although you won’t be required to make any energy efficiency upgrades, doing so is often cost-effective, because reducing your energy use will either reduce the size of the solar system you need or will allow your system to meet more of your needs. Austin Energy also offers rebates for energy efficiency measures for your home. As your home is being approved, your chosen solar installation company will be working with you to schedule your solar installation and answer all remaining questions for you.

What considerations need to be made regarding my roof?

Your roof optimally should be less than 10 years old.  Your solar system will last for 25 years and needs to be installed on a roof that is structurally sound and does not need replacing within the next 10 years.Things happen (like hail), so if your roof needs to be replaced due to such storms or other events, make sure you tell your insurance agent when you contact them about the damages so they include the removal and re-installation on your claim.

Do I need to worry about storms and hail?

This technology was developed for use on satellites, in which there are no expectations for a service call and/or maintenance, so we reap the benefits that under the standard test conditions, the solar panels will withstand hail up to one inch in diameter, traveling at 50 miles per hour.  Since your panels are not positioned in a way that the hail will hit them directly, the tempered glass will further protect itself – and your roof.If a storm is bad enough to destroy your solar system, your roof will also be destroyed – which is why we carry home owner’s insurance, yes? The solar panels used in your solar system should last for 25 years – your installer should provide you with all warranty paperwork for your personal records.  You can also find this information in the specification sheets for the solar panels.

9 Comments

  1. Jeff Stuecheli

    Hi,

    I am looking for a little feedback on using solar for our new home. I think things are pretty easy as it is a new home.

    The current plan has a rather large roof area (32′,40′) facing mostly south (maybe 10 degrees to the west). Roof pitch is rather low at 1.5″ per foot (facing in the southward direction). It seems like we could put a rather large system in this area.

    What would be the largest logical size system to put in? House is around 4200 sq ft, but built with high efficiency systems. CIty of Austin location (Austin Energy).

    I think I would roll the system cost into the home loan, so finance costs would be low.

    Thanks,
    Jeff

  2. Mansha Brothers

    Solar energy is indeed the best alternative solution for homes and offices. Very useful article. Thanks

  3. jresquival

    That’s interesting that solar panels are more expensive in smaller quantities. I guess it’s more efficient to buy a lot of them at once. I bet you can really lower your electric bill with panels.

  4. Sheryl

    What are the companies that lease panels to residential here in Austin? I have a friend in Arizona who is leasing her panels, and she says it’s cheaper that way. Also because when she has problems with hers, the company she leases from comes and repairs things for her. But then she says she also got grandfathered early before they made their arrangements anti-solar, and they have LOADS of sun in her part of Arizona.

    Also, are we able to feed electricity onto the grid? She also told me that she is not paying anything because she is feeding electricity back onto the grid, which covers her rental costs. At least that is how I understood what she told me.

    I think this new community solar project might be good as well, but my family is not as excited as I am about paying between $120-240 more per year. Not that I want to pay that either, but I also think it would be nice if there was a planet around in 40 years time.

  5. Ridley Fitzgerald

    There is some great info about solar panels here! I had no idea that an average solar system has a pay back period of only nine years. I always thought it would take decades to get my money back, but I guess not. I should really get some solar panels.

  6. Jay Jorgenson

    I have been thinking about getting solar power for some time now and I think it’s a great idea to save money. This article mentions that when you hire a solar power company the best thing to do is make sure they are certified and have a good electrician. This makes a lot of sense to me because electricians probably understand the mechanics of solar panels better than most people.

  7. Paul

    I am a student/rideshare driver and dropped off someone at their home and noticed they had a PV system and since that is my course of study at Texas State, asked to be shown the system and they also informed me that the initial investment of $16,000 was recouped in the value of the home increasing by $35,000 and since installation Jan 2018 not having any electric bill from Austin Energy. The home typically had a monthly bill of $165, immediate and increasing savings given soaring energy prices. Given this evidence, objectively this makes sense for every homeowner in Austin. We need to conserve our precious resources and not fritter them on having to wash oil from stone, that is a bad business model in every way.

  8. Adam Keeling

    Hello. I am seriously considering adding solar to my home and have gotten 5 proposals. I’m looking for technical assistance in making a decision. I understand most everything, but have questions regarding panel manufacturers (e.g. LG vs. Panasonic) and inverters (Enphase micro-inverters vs. SolarEdge). All the installers say theirs is the best and I was wondering if there’s someone who could give some impartial, unbiased answers to my questions. Thanks!

  9. Jason

    Hello,

    My name is Jason Small and I am interested in getting into the solar and other alternative energy source arena. I am interested in coming into the installation side more than anything else and was wondering if you had any electricians you use in the Austin area who are more alternative energy based.

    Thank you,

    Jason Small

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