Have you considered solar energy for your home or business? If a company’s given you an estimate for solar then you may have had a common experience for solar enthusiasts… sticker shock. One of the main things slowing the spread of solar is the high upfront cost. It’s hard to come up with the money to get started, and hard to make the payback pencil out on purely financial terms. But we have great clients, and one of them told us about a program his company has to plug you into the sun absolutely free!
We met Omri Franco when we adapted his Subaru Outback to run on alcohol. One conversation led to another and we soon found out that he worked for Solar City. In January 2011 we ran a Popcorn article about their then-new leasing program to eliminate the upfront costs of solar panel systems. We didn’t have much detail on it at the time, but Omri had the whole story and was glad to share. We thought you’d appreciate this presentation he created explaining their innovative program, so buckle up as Omri takes you on a tour of your solar future…
5 things to understand when going solar by Omri Franco
This narrative is derived from my experience helping over 400 people (including my own family) go solar. This short essay describes 5 things: why go solar, how solar works, what equipment is involved, how you can save money with solar power, and flexible ways to go solar. This should provide you with the background information you need for determining if solar is right for you. At the end, I have also provided a short description of what to expect if you schedule a complimentary site visit from Solar City.
Why go solar?
Why do you want to go solar? In my experience, there are two ends of the spectrum in answering this question. At one end, people want to be as “green” as possible – “Put up as many panels as you can, I don’t care about the cost or savings!” There are a lot of great reasons for this, but that starts getting political, debatable and very opinionated. At the other end of the spectrum, people want to install the most cost effective system – “I’ll go solar, but it should save me MONEY!”
For most people, their objectives fall somewhere between the two extremes. Folks want to save money and if they’re helping the planet, well fine. Importantly, the reality is that we rarely have enough roof space for enough solar panels to offset all of a home’s usage. So, by design, most systems will show very good savings over time.
How it Works
In a photovoltaic (PV) system, the sun’s photons hit the solar panels up on the roof and electrons are peeled off in the form of DC (direct current) electricity and fly along conductors (wires) to an inverter. The inverter (about the size of a bread box) converts the DC electricity into AC (alternating current) electricity. AC is the electricity that powers our homes.
Solar power systems are almost always “grid tied.” This means that when more power is being produced by the solar panels than is being used in the home, the extra electricity goes back to the utility grid. This is where you hear the expression “my meter spins backwards.” Most of the time the meters don’t actually spin backwards – most of the meters now are digital, but they have two arrows that light up. One arrow points to the left when more power is being produced by the solar and the other arrow points to the right when the home is using more power.
Being grid-tied also means that when the power goes out with the utility, the power goes out in the home. This is a mandatory protective safety measure required by the power companies, when grid power is restored the system will automatically come back online. It is a common misconception that PV systems will power a home if there is a grid power loss, to do this you need some type of power storage like a battery system along with the PV, SolarCity does not currently install battery systems as they are not economically viable for most clients.
The two main components in a solar power system are the panels and the inverter/s. Panels (also called “modules”) are all fairly similar. They are silicon-based and have similar efficiencies. There are a couple of brands of panels that have slightly higher efficiencies, but the added cost is not usually worth it (unless roof space is an issue and money is not).
The technology of solar panels has not (and is not) advancing too rapidly – fortunately, what we have available today is quite effective. Solar is not like computers that get twice as fast every 18 months at the same or lower cost (i.e. Moore’s Law). The technology started growing during the start of the space program in the 1950’s – six decades ago. In that time, the efficiencies have gone from about 4% to around 15% now. There’s a theoretical limit on how much energy can be captured in solar panels (around 40%). The highest efficiency (and highest cost) panels available now are about 19% to 22% (although there are some premium, custom panels used in the space program now with around 28% efficiency).
Panels are expected to last 30, 40 or even 50 years. They degrade at about 0.5% per year. Manufacturers typically provide a 20 or 25 year performance warranty at about a 1% per year degradation rate. Inverters also last a long time, but are more efficient. They typically have 93% to 96% conversion efficiency ratings. Most inverters are warranted for 10 years.
Saving Money with Solar Power
In Oregon we are very fortunate to have some of the lowest utility rates in the nation. With that being said we have also experienced some of the largest increases in our energy costs over the last few years. Industry analysts predict double digit annual increases over the next 10-15 years.
First, you should have an understanding of how you pay for electricity. Take a look at the “Average kW/day” section of your electric bill. Traditional Oregon residences without air conditioning can see a predictable valley pattern of their electrical usage i.e. high in the winter and low in the summer. The utility charges you per kilowatt-hour (kWh) of energy that you consume each month. Winter months have increased usage while in summer months we enjoy smaller electric usage and hence lower electric bills.
Inversely to your electrical consumption, solar in Oregon produces a tremendous amount of energy in the summer time with 12-13hrs of sunlight. Over the course of the year Oregon has more solar access then the national average! In Oregon we benefit from this solar production pattern by taking advantage of net metering. In essence when you produce more energy then you consume on a monthly bases the utility will provide you a credit, 1kWh produced=1kWh credit. In the summer months you may be able to “bank” these credits on your utility bill, and in the winter months the utility will use your credits first before you are charged for energy used from the electric grid.
The example below represents the information I have just outlined. In Oregon the average home electric bill is $100/month and for this example I used a system size of 4.70 kW. Each system is designed specifically for the location where it will be installed. In Oregon shading is the nemesis of solar and in most cases over 50% of the homes that want solar are not eligible due to shading and orientation.
Solar Power Purchase Agreement (PPA)
Prior to January 1st 2011, purchasing a system outright was the only option when going solar, typically at a cost of $20-$40,000. With the SolarPPA (power purchase agreement) this upfront barrier has been removed and homeowners can have a system installed at no cost and simply pay for the renewable energy they use from the system. From a cost perspective, this energy is usually the same cost or lower than what is available from your current utility provider.
Various SolarPPA options exist, including:
- Pay as you go plan, GO SOLAR FOR FREE and save! May qualify for the $6,000 State of OR tax credit.
- Custom plan/Pay as you go ($4,000 and up) qualifies for $6,000 State of OR tax credit
- Full Prepay (~$7,000-15,000) qualifies for $6,000 State of OR tax credit
All systems are designed specifically for your home and pricing varies pending on the installation factors and system size.
- SolarCity pays for ALL service & warranty for 20years (including inverter replacement)
- System is transferable to new home owners if you sell the house
- SolarCity covers ALL insurance on the system
- Lock in the cost of your solar electricity!
- Money Back performance guarantee
- Solar Guard Monitoring included at no additional cost
- You may be eligible for up to a $6,000 Oregon state tax credits that go directly to YOU.
What’s the next step?
- Email or fax a copy of 1 month’s full electric bill. (You can get a copy of your bill online at your utility website if you don’t have a hard copy)
- Contact Omri Franco to schedule your free solar consultation.
- It is important to send your utility bill prior to your consultation to make our meeting as efficient and effective as possible
Thank you for taking a few minutes to read this. I hope this has given you an understanding of how solar works, the equipment, the savings, and ways to go solar. I look forward to walking you through the process of going solar on your home.
Solar City Senior Energy Consultant Pac NW
…and now back to Your Car Matters…
Omri’s presentation gives you the general outlines, but you’ll probably want to know how this would work for you. Solar City’s website on solar power is something you’ll definitely want to check out.