Michael’s Solar Story: We Went Solar – What We Learned
WE WENT SOLAR — WHAT WE LEARNED
By Michael
This information is intended to make it easier for other households considering putting in a solar power system. In the course of shopping for a solar power system for our roof, we learned some useful things. Of course, these are my observations as a consumer, and should not be regarded as professional advice.
This doesn’t mean that you’d need to make technical decisions about the design of the system; the solar energy installers will use their experience to propose a system that they believe makes sense for your location. But to be an informed purchaser, you may want to know about your options.
It took some time to get the system installed, the county permits signed, and for Pepco to install the two way metering. Now our electric bills have become very predictable, totaling about seven dollars each month for the customer service charge. The electricity costs nothing and the taxes on the bill are zero because they are tied to electricity usage.
Our electric meter keeps running backward whenever the sun is shining, at least until we start using the air conditioner this summer. I project that over the course of a year, our electric usage should be balanced out nearly exactly by our solar energy production.
SELECTING A CONTRACTOR
We got quotes from three solar installers. Because different installers can propose different systems, it can be a matter of comparing apples and oranges. We wanted a company that had an excellent reputation and was willing to work with us to put together a cost-effective system that had the highest energy output for our size roof balanced against a reasonable cost.
We checked projects done by the contractors, as well as asking people with some expertise in advocating for green power in Maryland. Finally, we checked with Better Business Bureau to ensure there were no areas of concern noted.
We ultimately selected Kenergy Solar near Takoma Park to install our system. They did a great job. However, our research indicated that Astrum Solar in Annapolis Junction, Maryland is also an excellent supplier. In the process of this research, we didn’t hear anything negative about any of the local solar installers, but it’s still important to get recommendations, get competitive quotes, and check out contractors before you sign up.
PURCHASE VERSUS LEASING
There are a number of options for going solar. Both purchasing and leasing have advantages. What surprised us were the options for installing solar without any significant up front cost.
Purchasing appears to offer the best payback and best rate of return over the lifespan of the system, if you run the numbers. And there is the psychological reward of eliminating most of the monthly electric bill. However, the homeowner has to pony up the cost of installation, and is responsible for maintenance and certain repairs if needed.
Loans are also available for solar installations, and can be a way to bridge the gap until the tax credit arrives, but that only makes sense if the interest rates are low (and fixed).
Some companies will foot the entire installation cost in exchange for agreeing to purchase power from them for a certain number of years. (Surprisingly, most of those companies will actually allow the homeowner to buy the depreciated system outright after several years, and the purchase cost at that time may be rather low.)
There are also in-between options, where you pay the system leasing costs up front for a number of years, but this is less than buying the system outright and you don’t inherit the maintenance risks.
Some companies offer only purchase options; others offer only leasing options; others offer both types. The important point is that up-front expense is really no longer a reason to prevent a household owner from becoming solar powered.
PAYBACK PERIOD
The time it takes for a solar array to pay for itself depends on a number of factors such as the price of electricity from the utility. Most people are looking for a short payback period, preferably less than 8 or 9 years. The question most people have is: what is the payback period? That may depend upon whether to include any needed roof and electrical repairs or upgrades in the calculations.
In general, solar residential systems can have a relatively short payback period. It is also important to remember that the addition of solar will without doubt add to the value of the house and may make the house more marketable in the future.
LOCATION LOCATION LOCATION
In order for solar panels to be practical for use on a house, the house should have a roof with southern exposure that is not blocked by tree cover.
The pitch or angle of the roof is also important — a steep pitch is not best for this purpose. The solar installers should do a site survey to check these angles to verify whether the location is suitable and to allow them to offer a proposal.
ROOF
If you decide to get solar, you might need to make a tough decision about the roof. Unless the roof is fairly recent, it may be a good idea to get it replaced before you install the solar panels. Certainly it warrants a very close inspection, both inside and outside, beforehand.
Our roof was old enough that it would have been requiring replacement in the next year or two. When the roofer opened it up there was already some slight water intrusion which would have worsened over the next couple of years — so it turned out to be fortunate that we decided on a new roof. This was also a good opportunity to replace any aging gaskets around outlet pipes on the roof.
Some solar installation companies have arrangement with a roofer and so are able to bundle the costs, which may have certain financial advantages. We arranged separately with a contractor and had the roof work finished before the solar people ever started. Since most solar installers have a backlog, that wasn’t hard to do.
We were concerned about possible damage to our roof from penetration by the addition of the solar frames. For some types of roof, this can be an issue.
But for most types of roof, there shouldn’t be a problem as long as the solar frames are added carefully and that an inspection of the underside of the roof is done afterward to check for damage. There are special non-penetrating types of solar panel brackets but may be somewhat more expensive to install.
Every solar installer told us that they can remove the solar panels for a reasonable cost in the event roof repairs become necessary, but something tells me that it is more complicated than it sounds to do that.
Does a roof last longer with solar panels shielding it? Granted, the roof is subjected to less sun and precipitation on the shielded portions, but on the other hand it may be subjected to more heat under the panel. Overall, I don’t see any clear indication that the roof lifespan will be affected negatively.
ELECTRICAL
Installation of a solar energy system means linking it to the circuit breaker box of the house. Since most breaker boxes tend to be full, this may mean adding a secondary breaker panel.
Many houses, unless they are fairly new, have had additions and other changes to the electrical system added over time, and the load rating for the house may very well be insufficient for the needs of the house. Our house already had a crowded electrical circuit breaker panel, a remote subpanel and some very complex wiring, and the house was in need of a “heavy up” from the existing 100 amps to 200 amps, to increase the electrical load capacity to modern usage, but also to make changes needed to modernize the system and bring it up to building code standards.
We decided to have a master electrician do the heavy up and replace the main breaker panel with one more suitable to our house’s wiring. In doing so, he also cleaned up the wiring junctions so that everything was neat, clean and safer. He also installed a separate subpanel just for the solar interconnection.
We also had a plumber move the hot water heater away from the electrical panels, since the inspector would not approve any installation unless the hot water heater was moved away.
The important point is that in doing the electrical clean up, the electrician found a few areas where things would benefit from correction so the electrical system would be safe and would not present any future risks. I’m going to guess that most houses that are more than 40 years old are going to have similar opportunities for safety enhancement.
Again, many solar installation companies can do the electrical work needed to install the solar, but we chose to do it beforehand, to streamline the process for the solar installers. Because of that, we were able to make some useful choices to maximize the safety and organization of our electrical system.
PANELS
Solar panels got much cheaper during 2010, 2011 and early 2012, so this is a very good time to get solar. You can check the internet to see graphs of the impressive decline in solar panel pricing during that time; the pricing has generally now leveled off. Most solar installation companies prefer to offer their own favorite panel type, but can use a different one if you have different objectives. Each panel manufacturer sells different grades of panel, and as the power output increases for a given type of panel, the price starts climbing very quickly.
Given the size and shape of a particular roof, a particular size or shape of panel may make more sense. However, it isn’t necessary to completely cover a roof with panels, as we had initially thought, in order to achieve the best possible outcome.
For one thing, it is important to leave space to goup and work around the panels when needed. Also, in Maryland, Pepco will credit you with power produced and fed into the grid, but only up to the amount of electricity you use in a year. You square up once a year. So it makes little sense to produce more electricity than the amount you’ll actually use.
Most solar panels are installed using horizontal mounting rails, the panels being installed in the portrait direction rather than landscape. While you can install panels with different orientations on the roof, it is best and easiest to run horizontal rails and install all the panels with the same orientation: the wiring will be simplest, and of course they will look nicer that way. But special needs or roof constraints may obligate you to be flexible with the panel layout.
POWER CONVERSION OPTIONS
A big decision for solar households is the choice of a power management system. In most cases, however, this decision is usually made by default by the solar power installation company rather than by the property owner.
There are three types of power management systems to convert the power from DC to AC and to regulate the power production: central inverter, micro inverter and central power optimization.
The first option is a large central inverter, which is typically a wall-mounted box 3 feet across by 4 feet tall and several inches thick. The second option is using micro inverters, which is a small device attached under each solar panel. Micro inverters allow each panel to produce the maximum amount of power at all times even if other panels are temporarily shaded. (With a central inverter, shading one solar panel can reduce the output of other panels in the system.)
Micro inverters, the second option, work with lower voltages than central inverters, which should be safer. In addition, the micro inverters allow remote monitoring of each panel separately so you can tell immediately if one panel isn’t working right and diagnose the problem without going up on the roof. Micro inverters are currently somewhat more expensive than a central inverter, but the prices seem to be dropping slowly. One of the largest makers of micro inverters has just announced a new type of low voltage devices that will likely reduce the price and size of these devices further, and reduce the heat produced by those devices on the solar panels.
There is a third option, central power optimization, which is being discussed as an alternative to micro inverters. This uses an electrical load balancing system at the central inverter to achieve the best results. This may be the best option for very large systems to avoid the need to buy many micro inverters.
We decided to use micro inverters because of the ability to detect and diagnose problems, because of the reliability of the micro inverter devices, and because the overall system would produce the most power with the same panels.
Our roof had room for fifteen 240-watt panels for a total of 3.6 kilowatts rated power. This ends up generating some 25 kilowatt-hours per day on a sunny day in May. Most of the energy is produced during mid-day hours but it is surprising that a decent amount of energy is still produced in the early morning and late afternoon, and even on cloudy and overcast days.
SRECS
Solar Renewable Energy Credits, or SRECs, are an extra benefit of operating solar energy production. You get SRECs by producing a documented amount of electricity during the course of a year, and you can either sell those credits on the open market, or else have a broker take care of that function for you. The state of Maryland has a market for SRECS, but you get less money than in certain other states with a healthier SREC market. We figure we’ll pick up a few hundred dollars each year this way, but we recognize that the market price for RECs in Maryland is likely to decline over time, so we’re not counting on much from this. The price for SRECs in DC is about four times higher than in Maryland.
TIMING
The federal government offers a 30 percent tax credit on solar installations and the state of Maryland offers up to a $1000 credit, it would seem best to get the installation done (or at least entirely paid for) by December 31st, to get the credits soonest and not have to wait for an entire year. The current federal credit ends in 2016, and the state credit has shrunk over time and could end in the near future.
Most solar installers have significant backlogs, and it is good to allow sufficient time for tasks that might be required in advance, such as roof work, electrical work, permit approval, etc. Also keep in mind that summer is when the solar panels produce the most power during the year; you don’t want to miss out on getting the power during those months.
Neither solar panels nor installation labor are likely to cost less by waiting. There are some amazing technologies in the laboratory, but they are not likely to reach the market in affordable form anytime soon. Some components such as micro inverters might get slightly cheaper in the next year, but that is a very small fraction of the total cost.
However, there is one interesting development you should know about: solar panel shingles, also called Building Integrated Photovoltaics (BIPVs). A couple of companies are selling roofing shingles with built in solar panels, to combine the functions of roof and solar panels in one. These have been available since 2005 but were costly and mostly considered specialty items for people who didn’t want solar panels to show. But they are starting to become more competitive with regular solar panels. Dow makes Powerhouse solar shingles, while CertainTeed makes Apollo solar shingles. They are quite attractive, and can provide a more flexible arrangement for solar power on certain roofs. If you plan to put on a new roof, solar shingles may be a good option to consider.
PEPCO ENERGY WISE REWARDS
Pepco has a program to reduce electric demand from air conditioners on peak electric load days. Pepco’s program is called Energy Wise Rewards. This program provides a credit on the customer’s electric bill. All you need to do is let Pepco hook up a remote air conditioning compressor switch outside the house to remotely turn off the compressor for up to a few hours at a time on the very hottest days during the summer when loads are peaking.
Pepco heavily advertises its Energy Wise Rewards program. This program provides a credit on the customer’s electric bill if you let them hook up an outside switch to remotely turn off your air conditioner compressor for up to a few hours at a time on the very hottest days during the summer when loads are peaking. They pay $80 upon installation and then another $80 at the end of each summer season, if you participate fully in the program.
Pepco isn’t adept in explaining why this is a good idea, but nevertheless the program is useful. It benefits not just for the power company but also all Pepco customers because it allows the strain on the electrical system to be reduced when it is most vulnerable to failures and outages, and to reduce the need for Pepco to buy power from expensive peak-time generators or to import power from out of state.
Given the small number of days when this is triggered, and the fact that you can adjust your participation within the program, it seems like a good deal for both customers as well as Pepco.
I asked Pepco recently if its solar power customers also sign up for the Energy Wise Rewards program and they said some solar energy customers do participate. My analysis suggests that it is worthwhile to sign up for the full participation rate in most cases, except where someone is sensitive to changes in temperature for medical reasons or otherwise requires uninterrupted air conditioning.
WHAT IS NET METERING?
Net metering means that the meter can run both forward and backward, depending upon whether you are using more electricity then you are generating. Right now, the state of Maryland permits “net metering”, in other words, you get to offset your electricity use by generating your own electricity over and above the needs of your house at any moment. Thus you get full credit for it up to your total usage over the course of a year. In Maryland, each year at the end of the year, you square up and the power company gets any extra you may have generated.
Electrical utilities like Pepco are, understandably, interested in introducing a different structure called a wholesale feed in tariff. This means you would get much less credit for the energy you produce while you would pay full freight for what you use at any particular time. The utilities say that houses producing solar power get a free ride on the costs of maintaining the transmission system and the power grid. In response, solar power advocates say that the solar power helps reduce the need for new power plants, reduces peak time energy usage, and encourages the development of renewable energy sources. This is a huge policy fight that will play itself out over the next few years.
Net metering will continue because without net metering, most people wouldn’t bother to consider installing solar panels. However, it seems plausible that the monthly customer service charge for solar equipped houses could increase. In addition, the taxes on electric service may also be altered so they are less tied to kilowatt-hour purchases.
We didn’t know this but when your system is switched on after the permit is granted, your house starts using the solar power right away, even before Pepco gives the nod to two-way net metering at your house. However, during that interim time period, you’ll only get some of the value of the system, since the meter will fall to zero during part of the day but will pick up again at night. We could see that on Pepco’s energy usage website. Because it took a while to get the two-way meter installed, our house was operating like that for a few weeks. Once the two-way meter is installed, we lost the ability to see the graph of energy use for our house, because net usage fell to zero. But Pepco says they are working on a fix for this.
OTHER THINGS WE LEARNED
Solar panel systems are required to have an automatic turn-off switch in the event of a power failure. Why? To prevent a situation called “islanding” which describes what would happen if there’s a power failure and your house continued to produce power. That would create a potentially dangerous situation for repair crews because it would leave voltage in lines that the crew might think were disconnected. This anti-islanding switching is built into the systems and is required to get the permit and to be approved by Pepco.
Usually the solar installer will submit the application for the Maryland state energy credit, but you are responsible for submitting the federal tax credit application form yourself. It is a simple form. You should check with a tax professional to determine what related costs can be claimed within the scope of the federal tax credit, but it seems that the electrical work done for the purposes of installing the solar energy system in the same year is applicable, but installing a new roof is not.
It is a good idea to notify your homeowner’s insurance company that you have installed solar panels. The insurance company expects you to let them know. The addition of solar panels probably won’t significantly affect insurance rates.
Installing solar energy is a good spur to taking other steps to reduce overall energy usage. LED lighting, attic insulation are two high payoff opportunities. We noticed a major change in electrical usage when we switched our recessed lighting to LED fixtures. Phillips, Cree and Switch make some of the best LED bulbs that resemble normal incandescent light bulbs.
CONCLUSION
We’re glad to be an electrical supplier rather than electricity consumers.