I started researching solar over a year ago and got really excited about the opportunities. I started getting quotes from installers in May, put a deposit on a system in September and the installation was completed and we started producing electricity on January 26 , 2011. I hope this Guide will help you with your solar choices.
Steps in the process:
- Get a general understanding and overview of solar PV systems for the home. (Detailed in Part 1 post)
- Determine a rough estimate for your solar PV system. (Detailed in Part 1 post)
- Find installers and request quotes. (Detailed in Part 1 post)
- Standardize your quotes so you can compare and evaluate them on an apples-to-apples basis. (Detailed in Part 2 post)
- Evaluate your quotes and your options. (Detailed in Part 2 post)
- Evaluate your financials.
- I created a Solar Financial Model (that's what I do all day at work - build models) that you can use to evaluate your savings/returns. You'll need to use the estimates you calculated from Steps 4 and 5 and enter them into the GREEN cells in this model. Note - I changed the link because Google Docs tends to distort spreadsheets making it a little difficult to read. If you Save the file to your computer, you can see it in plain Excel.
- One of the key drivers of the financial returns is the energy price increase assumption. I received a quote that showed my returns based on a 7.6% annual price increase. I should find a study to get a validated figure (another thing on my list to do), but it's a safe bet that energy prices will rise at a faster rate than inflation. You can change this assumption in my model. Also at the bottom of the model are sensitivities for your returns based on different annual price increase assumptions.
- If you are buying the system with "cash", then you will want to look at the ROI section. If you are financing the purchase through your mortgage (refinance or home equity loan), then you will want to look at the ROE section. Even if you can not time your purchase with your mortgage, it still makes a lot of sense to buy your solar PV system now because of the rebates and tax credits currently available which will phase out over time (I purchased my system at a 43% discount). Then when you do eventually refinance your mortgage you can roll up the cost and you'll start seeing the better ROE returns.
- Note on the Annual Return calculation. If the Annual Return shows #NUM! or DIV/0! errors, it's OK. Actually, it's great because it likely means that your annual savings exceed your annual payments from the beginning so a return can not be calculated (i.e., you have an astronomical return on your investment). Interest rates were so good that I was able to maintain the same monthly payment even though I refinanced my new mortgage from a 30-year loan to a 15-year loan. The annual return for my solar system is 81%. If I assumed a 30-year mortgage with an interest rate of 6% in the model, I would get one of those errors because I would save more money than it cost me from Day 1 and have no net out of pocket costs at all.
- Solar Leasing. I did a cursory look into leasing (another item to add to my list that I will try to update in the future), but it didn't make sense in my situation because I was going to finance my purchase through my mortgage.
- Select an installer.
- Your installer will be your primary resource, so you should choose one that you trust and feel comfortable working.
- Your installer will typically warranty their installation and repairs for 10 years, so you might also consider the longevity of your provider.
- I didn't find a good review site for installers - but, then again, I didn't search very hard for one. I think this is something that I will look into further and add some links.
- I mostly relied on contacting references provided to me by the installers. 1 Block Off the Grid, Cooler Planet and others have good questions and things to consider. Some of the questions I asked were the following:
- What is the size of your system and when did you have it installed?
- Has the performance of your system met your expectations? Have you noticed a drop off?
- Have you had any issues with the system (inverter failure, problems with the panels, monitoring, etc.)? How were they resolved?
- Have you had any roof leaks? How were they resolved? Was the Installer at fault?
- Does Installer provide any ongoing services to you?
- How satisfied are you with your PV system?
- How satisfied are you with Installer?
- What would you do differently if you had to do it all over again?
- Other factors to consider.
- What is the condition of your roof? If it needs replacing, then it is better to have it replaced before or in coordination with the installation of the solar. Our roof had a few more years of life left, but we would need to replace it unless we moved so we had the roof redone in coordination with the solar installation (now it's good for another 40+ years). The solar installers installed the standoffs in the middle of the roofing process so that they would not need to make any penetrations in our newly shingled roof.
- What kind of shingles are on your roof? Installers have no problems with composite shingle roofs but they may have issues with wood shake and tile roofs. Many installers do not like installing solar on wood shake roofs since they have to replace all of the shingles that they crack and break during installation of the PV system. With tile roofs, installations are also more difficult. Some installers will not work on these roofs or will charge you more for the installation.
- What is your shading and tree situation like? We considered a South-facing configuration for our home, but our neighbors to the west of us have some big oak trees that would create significant shading in the late afternoons and in the winter months. While we get along with our neighbors, we did not want to inconvenience them to trim their trees every few years. Instead, we decided on an East-facing orientation because there would be no shade issues. To minimize the hassle and additional maintenance, we felt it was well worth sacrificing the 200 KWH per year of production (6.8% lower) of the South-facing configuration.
- Aesthetics. My wife only had one stipulation when I bought our PV system. She told me, "just make sure it doesn't look ugly." Fortunately, I was able to accommodate her on her request quite easily. However, if you have a high-pitched roof that faces the street, you may want specialized panels that are flush with your roof.
- Go solar and enjoy the sunshine.
- At some point you have to take a leap of faith that your system will be reliable and produce the electricity you expect. I will be posting my solar production so you can have at least one live data point.
- Upsides. They say that solar adds $20 for every $1 you save in electricity per year to the value of your home.
System Size DC (STC): 2.28KW
System Size AC: 1.93KW
System Size AC (California CSI rating): 1.63KW
Panels: 10 Sunpower Serengeti 228 Watt
Inverter: 1 Sunpower 3000M (SMA Sunny Boy 3000 rebranded under Sunpower)
Estimated Annual Production: 2,781 KWH
Direction: East facing
Cost of System Before California Utility Rebate (Installed Cost): $13K
Cost of System After California Utility Rebate: $10.5K
Cost of System After Federal Tax Credit: $7.4K
Cost per DC (STC) Watt: $5.73
Cost per AC Watt: $6.77
Cost per AC CSI Watt: $8.01
Installer: Martifer Solar (Matt Rakocija)
Mortgage Electric Bill Total Mo. Pmt
With Solar $1,050 + $ 54 = $1,104
Without Solar $1,000 + $100 = $1,100
Difference $50 $(46) = $ 4
It costs me only $4 more per month to have clean energy.
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