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Solar as an investment
Oct01

Solar as an investment

By now everyone knows that solar can save you money on your electric bill, but let’s take a deeper look at solar as an investment. On average, a 6kW system that costs about $15,000 after the federal tax credit generates about 9,000 kWh in a year. If your current cost of electricity is $0.20/kWh, you would save about $1,800 per year on electricity and even if the electricity company never raises your rate, the system pays for itself in about 8 years. After the system has paid for itself you will continue to profit over the 25+ year lifespan of the system. With no electric rate increase, the system you bought for $15,000 will generate $45,000+ of electricity. But, electric rates aren’t going to stay the same and looking at the last two decades, they have risen an average of about 3% per year and as high as 7% per year in some areas. Just going with the average 3% annual increase in electric rates bumps up the return to $65,600 over the 25 year warrantied life of the solar panels. That results in a 14% Internal Rate of Return (IRR). Realistically, that IRR will be even higher because the solar won’t automatically turn off after 25 years. It will likely keep producing for quite a while after that. We are just being conservative and sticking with the length of the warranty. For the sake of argument, we should compare this to other investments like the stock market. The S&P 500 has an average IRR of about 7-8% over the last few decades. That means you can expect twice the return from solar. It is a shame that your investment in solar is capped by the amount of electricity you use. Still not convinced? Let’s look at it another way. How happy would you be right now if you had bought all the gasoline you have been using for the last 25 years back in 1993 when the average price was only $1.11/gallon? You’d be grinning from ear to ear every time you thought about all that money you saved. With solar, you have that opportunity right now. When you install solar on your home, you are purchasing the next 25 years of electricity at even lower price than the current rate. Going back to our 6kW system example, the cost of electricity comes out to just under $0.07/kWh. You would be locking in that low rate for the life of the system. Every time electricity rate hikes were mentioned in the news you could pat yourself on the back for making such a smart investment. This investment also...

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How Solar Affects Selling Your Home
Aug28

How Solar Affects Selling Your Home

A common question people ask when making the decision to go solar is how will having solar affect selling the house? The first thing to note is that according to a few independent studies, solar definitely increases a home’s value. The National Bureau of Economic Research did a study in 2011 comparing statistics for home sales in Both the San Diego and Sacramento areas and concluded that solar panels typically increase a home’s value by 3.5%. It even went as high as 4.5% in communities with higher percentages of college graduates and Toyota Prius owners. Another Study done by US Department of Energy’s Lawrence Berkeley National Laboratory in 2011 concluded that homes with solar sold for more across California. The amounts ranged from $3.90 to $6.40 per watt more with the average amount being $5.50 per watt. A follow up study in 2015 by the same Berkeley Lab in partnership with Sandia National Laboratories looked at home sales across many states and found that the solar increased the homes’ values by an average of $4 per watt. According to these studies, it appears that in most cases, installing solar will increase a home’s value by more than the cost of the install. On top of the increased values, NREL has also released statistics showing that homes with solar sell 17% faster on average than homes without solar. So, not only will you get more money, but your solar home is likely to sit on the market for less time. What these studies don’t account for is homes with a solar lease or PPA agreement. In these cases, either the home buyer must take over the lease or PPA agreement or the buyer or seller must “buy out” of the lease agreement. There is a general perception that these types of solar agreements would cause problems with selling the home, but Berkley Lab worked on this too. They conducted interviews and online surveys of home buyers, sellers and real estate agents that were involved in the sales of home with solar lease and PPA agreements between 2010 and 2013. The evidence collected suggests that the solar lease or PPA had no negative effect on the sale. Both buyers and sellers were satisfied with their experiences. If you are planning to lease solar or enter into a PPA agreement, you should look at the contract and what it stipulates for the sale of the home. Keep in mind that while you think you will stay in your home forever, life happens and things change. You should always be aware of what you getting into before signing a contract that could affect...

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What Upfront Rebates for Residential Solar Are Left Around the States?
Jul21

What Upfront Rebates for Residential Solar Are Left Around the States?

It used to be that homeowners could receive some very generous upfront rebates that could offset 30% or more of the cost of installing a solar system. But as the price of installing solar PV has dramatically dropped over the last three years, so has the upfront rebates offered by states and utilities. In addition to the wide spread decrease in rebate funding and amounts, many programs have switched from upfront payments that defer the cost of installing to performance based incentives that pay you a certain amount for every kilowatt-hour (kWh) produced by your solar system. But that doesn’t mean there aren’t any upfront rebate programs left. In fact, there are many, but they’re just not as generous as they used to be, but then again, installed prices have significantly fallen too. (Also, keep in mind that all solar owners are eligible to receive the 30% solar investment tax credit until 2016 for even more savings and ROI!) With the above in mind, the following is a random sampling of upfront solar rebates that we found on the Database of State Incentives for Renewables and Efficiencies (DSIRE). The links for each program are to the updated information from the actual utility or state authority, so we assume that this information is accurate as of this writing in mid July, 2014. California Upfront Solar Rebates Most of California has exhausted the funds for the state’s California Solar Initiative (CSI) program for home solar, but the good news is that many of California’s municipal utilities are still offering some type of upfront cash rebate. City of Santa Clara’s Silicon Valley Power utility is offering $1.75/W AC for up to 10 kW. For a 5 kW system, that’s $8,750 off the price of installation. However, the amount is actively stepping down as systems go online, so the sooner you install, the higher your rebate. City of Palo Alto’s electric utility is on its last rebate step, so get it while it lasts. Its program gives solar homeowners $.80/Watt AC for solar systems as large as 30 kW. For a 5 kW average system size, that’s $4000 off the price of solar. City of Pasadena has its own Pasadena Solar Initiative (PSI) program that’s now offering an upfront residential solar rebate of $.85/Watt AC up to a 30 kW system size, which pencils out to $4250 in decreased solar install costs for a typical 5 kW home system. Los Angeles’ LADWP municipal utility is offering just $.40/Watt AC for its solar rebate, up to the average 5 kW system size. So, the maximum rebate amount is now just $2,000 and continues to...

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The U.S.-China Trade Case Determination and What It Means for Solar Installers and Consumers
Jun19

The U.S.-China Trade Case Determination and What It Means for Solar Installers and Consumers

A few months back, we published a post on All You Need to Know About the US-China Solar Trade Dispute and how it might affect solar installers and consumers if the case isn’t settled. Well, a preliminary decision is in. The Department of Commerce (DOC) has made a preliminary determination on June 10th in favor of SolarWorld, the German/U.S. solar panel manufacturer who filed the suit. Before we get into the penalties being proposed and finalized, we should remind readers that there are two parts to this case: Part 1: The DOC Decision The first part, now in the preliminary determination stage, has to do with SolarWorld accusing China of illegally subsidizing its solar panel manufacturers with low interest loans and other cash-related subsidies that allowed Chinese manufacturers to manufacture solar panels and export them to the U.S. (and the rest of the world) at below their actual cost. The 2012 DOC decision determined that was the case and imposed over 23% to 254% in countervailing duties (CVD) on various solar cells made in China. However, Chinese manufacturers got around these tariffs by manufacturing their solar cells in Taiwan and other nearby countries, then assembling the rest of the panel in China. Consequently, this new 2014 DOC preliminary determination now includes solar cells and other basic solar panel materials being made in Taiwan and shipped back to China for assembly and export. So, how much in duties will be tacked on to the price of imported Chinese solar panels? The preliminary CVD varies and depends on the brand: For Suntech solar panels, the tariff is 35.21%. For Trina SolarEnergy, the tariff is 18.56%. For all other Chinese brands, the tariff is 26.89%. That means that the wholesale price of all Chinese-made solar panels coming into the U.S. may be increased by as much as 35.21%, and at the very least, by 26.89%! The DOC will make its final determination by August 18, 2014. But wait, there’s more: Part II: The ITC Decision Remember, we said that there were two parts. Now that the DOC has ruled, their evidence has been handed over to the International Trade Commission (ITC). The ITC is deciding whether China is intentionally overproducing (“dumping”) their artificially inexpensive Chinese solar panels on the U.S. market in order to flood the U.S. solar market, forcing SolarWorld to lower their prices to compete. The ITC previously said this was the case in the earlier 2012 decision, so most industry analysts think they’ll do so again, but now include solar panels and cells from Taiwan. Should the ITC rule in favor of SolarWorld again, then additional antidumping duties may...

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What’s wrong with solar permitting?  Q&A with Deep Patel, CEO of GoGreenSolar.com
Mar04

What’s wrong with solar permitting? Q&A with Deep Patel, CEO of GoGreenSolar.com

Experience any roadblocks while trying to pull a permit for a photovoltaic (PV) system in your city?   Paying too much?  You’re not alone.  Getting your PV system a permit can be a daunting task for both customers and installers. According to report by Clean Power Finance, about 23% of PV installations cost more than expected.   More than a third of solar installers actually avoid working with certain Authorities Having Jurisdiction (AHJs) because of their solar permitting processes. What’s wrong with these permitting processes and what can we do to fix it?  What’s being done right now? No standardized permitting process or fees have been set among AHJs, or the entities that have the power to determine and enforce code requirements for PV systems.  I’m catching up with GoGreensolar.com CEO Deep Patel to touch on some of these issues. From a solar contractor’s perspective, how do varying permitting procedures affect your business? It makes it more difficult to generate a proposal.  There really is not a cookie cutter solution, so unfortunately we can’t just generate proposal on the spot.  It often takes weeks because we have to call the Authority Having Jurisdiction (AHJ), leave messages, and wait for them to call us back. So when you’re trying to get a proposal out, it often takes up your time.  This increases the wait-time for customers and often drives up the soft costs of solar.  Would you say that this cost is passed along to consumers? Yes, proposals currently have to account for this unpredictability. When you’re running a business with that kind of uncertainty, you have to pad the proposal in case of any unexpected fees or codes changes. In an attempt to bring down the time and soft-costs that come with this inconsistent permitting process, the DOE’s Sunshot supported Clean Power Finance’s efforts to develop a National Solar Permitting Database.  The goal is to provide solar professionals a platform to give testimonials about different AHJs and coach each other through these permitting processes.  I guess you could say it’s like Yelp for solar contractors to review AHJs. A National Database can help solar contractors work more efficiently, but is it not placing a Band-Aid on a bullet wound?  Given that the DOE already has a standardized set of permitting policies known (solar ABCs), is it even fair that the burden of navigating these arduous permitting processes is imposed on those who are installing solar electric systems?  The problem is that the DOE doesn’t have the jurisdiction here.  The DOE can’t force the cities to follow a standardized permitting process, but they can make recommendations and city governments can choose to adopt them.  Meanwhile,...

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Texas $2 per Watt Rebate?
Nov27

Texas $2 per Watt Rebate?

Coserv’s per Watt Rebate If you’re one of the 141,000 member-owners of the  Coserv Electric Cooperative in Texas and you’re thinking about going solar, you’re smart. You might have heard that this co-op utility offers a $2 per DC Watt rebate on solar generation. $2 per Watt? This rebate means homeowners in Texas can get $2 per DC Watt installed.  Many solar rebates are based on the size of the solar system in AC Watts,  which is a measurement of the system after the electricity has been converted from DC to grid-quality AC power.  A $2/ AC Watt rebate would already be a very strong incentive, but this rebate is in DC, which means more money in your pocket. $2/W DC  >  $2/W AC For example:  you’re installing a 2kW (or 2,000W) grid-tied solar system.  That number “2kW” is based on the sum total of watts in your solar system – we’ll call it eight 250W solar panels. In this case, you would qualify for a rebate of $4,000, given that the funds allocated towards this rebate program haven’t yet been exhausted. Depending on the size of your system, this  rebate your 2 kW (or 2000 Watt) solar system will yield a couple hundred dollars more. This utility rebate program caps off at $5,000 for each system, which is equal to a 2.5kW solar system.  Contact us today for solar design help and while you’re at it, fill out the Coserv solar rebate application form.  All 2013 funds were reserved in early 2013.   Check their website at the beginning of 2014 for any changes to this rebate and get on the list so they can reserve funds for your project.   Rebates are paid out after your solar system is installed and inspected by a Coserv Auditor. On top of this rebate from Coserv, you’ll also qualify for the Federal Tax Credit.   After any state/local/utility rebates have been subtracted (including Coserv’s solar rebate), 30% of this net cost is returned to you in the form of a tax credit that directly reduces the dollar amount you pay on your taxes....

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