Making the decision to “Go Solar” may seem – and, without a good background, is – daunting to many people. What are the factors to consider, their importance, and their risk levels? For many of our customers that decided to “Go Solar,” the following were their major decision factors and concerns and how LA Solar Group helps address them:
Are you interested in lowering your monthly bills, having predictable bills, hedging against increasing electric rates, saving money in the long run, helping the environment, increasing the value of your home, planning on consuming more electricity (e.g. purchasing an electric vehicle), or all of these? LA Solar Group starts with understanding your goals to ensure that our recommendations and solutions help you achieve them.
Ideally, you should be planning on living in, or keeping your home for at least as many years as it will take to recoup your investment in the solar system from the savings realized. After you recoup your investment, you can view your subsequent savings as “income” or “profit.” Even if you are planning to live in your home for a shorter period or need to relocate, you may be able to recoup the cost based on the potential increase in home value based on your solar system (since the new homeowner will be paying a reduced electric bill). LA Solar Group will help you analyze your current situation and plans to determine if and how best you should “Go Solar.”
Current consumption and payments
Generally, the higher your consumption or electric bills, the more it makes sense to “Go Solar.” You should also consider “Going Solar” if your consumption may increase(e.g. addition to your family or if you are considering installing a swimming pool or purchasing an electric vehicle) and/or expect your rates to rise in the future. Keep in mind that there is no magic “threshold” that your current monthly electric bill has to be above or below to automatically determine if you should “Go Solar” or not. LA Solar Group will help you analyze your current and future consumption, electric rates, and Net-Metering rules to determine if and how “Going Solar” will benefit you.
Rate plans and consumption pattern
Some customers found that just by learning about and switching to another rate plan (e.g. from tiered to time-of-use) and changing their energy use patterns (e.g. doing laundry during evenings or weekends), they could save enough money to not even consider Going Solar – and that is OK. We, at LA Solar Group, want to do what is right for you and we will help you look at “Going Solar” as part of an overall energy plan, including consumption monitoring, efficiency, and conservation, while maintaining or improving your lifestyle.
Roof space and orientation
To generate the most electricity from solar, you should have sufficient usable roof space that faces southward – preferably south and/or southwest. If that is not the case, LA Solar Group can provide options such as reverse-tilt mounting or high efficiency panels to maximize energy production from the available roof space and orientation. If no such roof space is available, mounting panels on your garage, carport, awning, or the ground could be other options that LA Solar Group will help you to consider.
Shading from adjacent buildings, chimneys, roofs, trees, and other obstructions will prevent sunlight from reaching the solar panels. Many times, the shading is temporary within a day (e.g. shading from a tree during morning hours) or within a year (shading from an obstruction during the winter months). The shading may be permanent (e.g. building) or removable (e.g. trimming a tree). Depending on your situation, LA Solar Group will design the best solution to maximize the energy output, recommend ways to remove or reduce shading, or even suggest that Going Solar is not viable.
Electric Main Panel
Going Solar will require that your electric main panel can handle the extra load from the solar system and the additional breakers . If it cannot, then the electric main panel will need to be upgraded. LA Solar Group is a C-10 certified electrical contractor that can upgrade your electric main panel as part of the solar installation.
For quickest payback and to take most advantage of available incentive programs, it is best to own your solar system – either cash or financed. If you finance, then your payback period will increase due to the interest payment, but you will have a very low upfront payment. In either case, owning your solar system allows you to take advantage of the rebates and tax credits and places no encumbrances when selling your home.
As an alternative to owning your system, you could lease it. Compared to purchasing, your benefits will be less and there will be some conditions, but leasing may allow you to enjoy the benefits at possibly no effective cost to you.
LA Solar Group provides many financing and leasing options to meet your needs and provide you with the best return.
Incentives and Rebates
Most, if not all utility and/or government incentives decrease over time or as they are claimed. So, if you are considering “Going Solar,” the earlier you decide, the more you can benefit from the higher incentive levels.
The benefits of “Going Solar” is directly proportional to the amount of energy generated by the system. The longer it is in production, the more energy it will generate. So, if you are considering “Going Solar,” the earlier you decide, the more days your system will be generating electricity and contributing to your savings.
LA Solar Group will inform you of the currently available incentives, their current levels, and their planned reductions so you can make an informed decision.
Warranties and guarantees
The quality of a company’s warranties and guarantees signifies the company’s confidence, willingness, and ability to stand behind its work.
The details of the Warranties and Guarantees are very important – the terms, the support process, inclusion of replacement parts and labor, and other specifics should be known up front and be included in the total system offering and price considerations.
The guarantees and warranties a company offers is relatively less important than a company’s ability to honor them until the end of their terms; after all, what good is the “best” warranty if the company is not there to honor it? Warranties and Guarantees from a stable reputable company will provide you peace of mind and, from a financial perspective, allow for determining the “carrying cost” of the system. This “carrying cost” should ideally be zero. The higher this “carrying cost,” the longer the payback period becomes since each repair bill will eat away at the savings generated by your solar system.
LA Solar Group’s Warranties and Guarantees are one of the best of in the industry and from a growing and reputable company. Additionally, our competitive prices results in shorter payback periods and reducing your risk reliance on company longevity.
Once satisfied that Going Solar is the right choice, most our customer’s next biggest consideration was choosing the installer. These are the traits most often sought: integrity, reputation, quality, price, choice, warranty, in-house expertise, support, and relationship. We, at LA Solar Group, have built our business from the customer’s viewpoint and needs. We are not interested in “selling” you a solar system – we want to provide you with a solution that meets your goals and needs.
In addition to considerations, our customers, naturally, had “what if” questions and concerns about Going Solar.
Future Price Decline
Although the cost of solar systems has been dropping, and may continue to drop, the question is how much will the price drop and how quickly. Since the total system cost is comprised primarily of material and labor, it is possible that the material cost may see future price declines but the cost of labor will probably not see much decline going forward unless more efficient means are developed to reduce installation labor (and this is actively being worked on by LA Solar Group and the industry at-large).
If prices decline but incentives decline at similar rates, the net cost will remain essentially the same.
If prices decline or remain the same, but the utility electric rates increase, then the “effective” system cost declines since the energy generated has increased in value.
The sooner the system is in operation and is generating energy, the quicker the savings will start to offset the costs.
Considering the above points, unless the future anticipated cost decline will be greater than the savings realized from a producing system at current cost during the same “waiting period,” then waiting for a future price decline may not be beneficial.
Today, almost all technology and products are constantly advancing and being upgraded. The most relevant technology advance related to Solar is the conversion efficiency from sunlight to electricity.
Currently, the most efficient mass produced residential solar cells have efficiency ratios in the low 20% range; the highest efficiency recently obtained from silicon based cells is about 26%; the maximum theoretical efficiency of silicon based cells is about 29%; and the most efficient solar cells, of any technology, is about 46% efficient. [source: NREL] Although the range between the low 20’s to the high 20’s (theoretical high for silicon based cells) is not much, the price difference between the two is relatively high, especially for residential applications. Therefore, at a high level, current technology and products will not be “obsolesced” in the near future when higher prices of the “newer” products are considered.
Aside from efficiency, other advances could be in the areas of form factor (e.g. solar roof tiles, flexible solar panels), or aesthetics (e.g. all black or frame-less panels). But, as is usual for any new product, there is a time lag between introduction and the design, installation, and support expertise to develop in the field resulting in increased prices and risk.
Ultimately, deciding not to “Go Solar” since something better may come out tomorrow is a personal choice. In practicality, though, waiting may not be warranted based on the same reasoning as that described in the “Future Price Decline” section, above. The longer you wait for an uncertain future, the less time your current system has to generate electricity and provide benefits.
Expiration/Decrease of Federal Tax Credit
As of 2017, The Federal solar tax credit (Investment Tax Credit – ITC) allows the homeowner to claim a federal tax credit of up to 30% of the cost of an installed solar system. This is a tremendous benefit. For residential homeowners, the credit will reduce from the current level of 30%, to 26% in 2020, and to 22% in 2021. So, although the credit, and one of the biggest incentives to Go Solar, will decrease over time, the timetable is known – allowing you to make an informed decision. Choosing to wait is hedging that prices will drop more than the combination of the reduction of ITC and the loss of value of energy generation if the system was installed today.
Net-Metering is the key that translates the electricity generated by the solar system to tangible financial benefits. So, if the Net-Metering rules change, your financial benefits will change, possibly affecting your payback period and Return-on-Investment. But, if the Net-Metering rules do change (as they most recently did in going from Net-Metering 1.0 to 2.0 (for IOUs in California; non-IOU such as LADWP, are not affected), there is forewarning and existing customers are usually grandfathered in for a long enough period so they are not adversely affected.
No Production at night
Solar panels require light to generate electricity; therefore, a solar system does not generate electricity at night and generation is reduced in low light conditions such as during cloudy weather. Based on historical data, the average amount of annual useable sunlight for a given geographical location is well known and these are the data that are used to properly design and size the solar system – i.e. non-production at night and adverse weather are already factored into the projected production of your system.
Since the solar system will not generate electricity in low light conditions, electricity will be consumed from the utility company when more electricity is needed than is generated, at the moment of usage, and you will be charged at the rate in effect of your usage. This is not an issue since overall, your usage from the utility is reduced by the amount of electricity that you do produce. Additionally, depending on your rate plan the utility’s charge is lower at night when the solar system is not producing.
If desired, you can install storage batteries to store any additional electricity that you produce and use that stored energy, when needed, instead of consuming from the electric company