10 questions homeowners should consider before deciding to install a home solar energy system.
If you decide that a home solar energy system is a good option for you, make sure to do your due diligence to ensure that your investment is installed properly. Look for NABCEP certified professionals and research reviews of installation companies on review sites like SolarReviews and the BBB. DIY is an option for some homeowners, but not for all. Here are 10 primary considerations you should think about before signing a contract:
- Trees (shade) reduce solar output
Solar panels need direct sunlight, so homes heavily shaded by trees are not good candidates. Although some homeowners opt to cut down trees to accommodate solar panels, homeowners should consider whether the cooling shade the trees provide outweighs the benefits of solar panels.In some cases in which a home is only partially shaded, the panels can be installed to avoid the shadows, or a few extra panels can be added to make up for the lost production. Micro-inverters can minimize the effect of shading.
- Is the home efficient?
It makes little sense to add solar panels to a home that uses a lot of energy because of leaky air ducts, poor insulation, incandescent lighting, energy hog appliances. Often repairs and upgrades are less expensive and more cost-effective than adding solar.Once a home is energy-efficient it will require fewer solar panels to offset a significant portion of its energy needs.
- What is the condition of the roof?
If the roof is near the end of its useful life, new shingles should be placed before or during the installation of solar panels.If the roof will need to be replaced in a few years, it can cost $2,000 or more to remove the solar panels to make way for that work. So, waiting to install the panels, or proceeding with the new shingles, is prudent.There is no problem installing solar on homes that have recently been reshingled, as solar equipment properly installed will not cause problems on a good roof. And once the solar panels are installed they actually protect the roof.
- Get multiple estimates
This is solid advice whether buying new countertops, solar, or any other home improvement.Hearing how different companies would install the equipment, what they estimate in utility-cost savings, and what they offer in their warranties, can save homeowners thousands of dollars. But be sure to compare apples to apples, because not all solar equipment or warranty is the same. Upfront cost should not be the deciding factor, rather long-term value.Estimates from installation companies also will let consumers see whether the companies understand the homeowners’ needs. Installation companies should base the size of a rooftop system on how much electricity a particular family uses, not simply install the most solar panels as can fit on a roof. A custom solar solution is the best option of the homeowner, because not all solar is created equal, and one size does not fit all.
- Can your HOA stop you?
Homeowners associations can restrict some visual aspects of solar installations, but they can’t prevent homeowners from installing panels altogether. We have had several customers who have succesfully challenged their HOA’s and now have solar on their roof.Many HOAs will allow Black SunPower solar panels as they find them the most aesthetically pleasing due to the sleek design of the solar panels and the racking system.
- To lease or purchase?
Leases come with the benefit that another company owns and maintains the panels. The drawback is that customers will save less money over time making monthly lease payments. Solar leases can also create a complication when selling the home.Also, homeowners should carefully consider leases that escalate over time. Installation companies can often offer loans with little or no money down that mimic lease products. Comparing multiple offers can help homeowners find the best deal.
- Will the home be sold soon?
Leased panels don’t add value to a home resale, because they are not part of the home. Anyone buying that home will have to qualify to take over the lease, or the family selling the home could have to pay a penalty to end the lease prematurely.Some home buyers are looking for homes that have solar and those homes therefor sell more quickly. Panels that are owned add some value to the resale. But It’s not a straight calculation. We have found that most real estate agents in the midwest do not have the experience to advise an accurate dollar amount for the solar. A recent customer sold their home for a substantial amount more than the real estate agent originally suggested due to the value of solar.If a homeowner paid $18,000 for solar, those panels don’t necessarily add $18,000 to the resale. The panels add value in proportion to the amount of money they are expected to save on utilities through the remainder of their warranty.For example, if there are 15 years left on the warranty and the panels save $80 a month in electricity, the system could add $14,000 to a home appraisal.
- Understand the rate plans
The vast majority of people who install solar are still connected to the utility grid. That means they still rely on a traditional electric company to provide power at night and when their panels aren’t making enough electricity to serve all the home’s appliances.How an electric company charges customers makes a huge difference in how much they can save with solar. Some utilities are “Solar Friendly” and offer incentives for customers to go solar, others are not friendly and add punitive charges.Companies installing solar on homes should understand utility rate plans and help homeowners choose the appropriate plan from their utility based on how much power the solar panels will generate and how much electricity homeowners use.For example, some utilities have created a “demand rate” structure that sets one portion of the bill based on the highest use of electricity during the month. (similar to commercial rate structures) Even if customers generate a lot of their electricity themselves with solar panels, they can pay a high bill if they set high demand during certain hours of the month. Solar customers should use a monitoring system to monitor the instantaneous demand of their home, allowing them to avoid setting a high demand fee for the month. Load controllers prevent air conditioning, electric water heater and other large devices like pool pumps from running concurrently, limiting demand fees for customers.
- Understand that rates can change
Utilities across the nation have increased their rates continuously over the last 10 years, and will continue to increase rates. But those pending increase in charges are not worth rushing a purchase without reviewing multiple bids. Many homeowners are fed up and want to “cut the cord” by using batteries and going off-grid. However batteries are still somewhat expensive and going off-grid is truly a lifestyle change.
Utilities have also changed the rates on solar customers even after they have installed their systems. If a utility decides to add new fees for solar customers, it could affect the savings in the future. However, if a homeowner decides to wait to see if utility rates stabilize they could miss out on the Federal Tax credits.
- Federal tax credits still available
Finally, consumers should understand the federal investment tax credit for solar. Homeowners can apply the federal tax credit to their personal income taxes, reducing their taxes.The credit today is 30 percent of the cost of the solar equipment.It is scheduled to decline over time. After 2019, the investment tax credit steps down to 26 percent for projects that begin construction in 2020, and 22 percent for projects that begin in 2021, the Solar Energy Industries Association reports.After 2021, the residential credit will drop to zero.