(August 28, 2018) Can you say that solar pays? How does a home with solar energy compare to a home without solar energy? Here’s a hypothetical example of how that comparison looks.
John and Liz live on the same street. Joe and Laura live on the other. It’s a new subdivision and they live in identical models that the developer offered when the subdivision was first built. They both have Northern exposures. With both houses, trees were planted to the sides of the backyard leaving the Southern exposure of their roofs without obstruction for the foreseeable future.
When one couple decides to have a solar energy system installed on their roof the clock starts running on a comparison that will last until the other couple decides to follow suit. They can compare their energy costs over time and see the benefits of adding a solar energy system or not – they can see if solar pays.
Initial cost: The homeowners who choose to stick with the electricity provided by the utility company will not have the initial investment required to add solar panels to their home. This expense can be significant. However, there are also state and federal incentives to defray the costs.
Cost of energy over time: With continued dependence on ‘the grid,’ one couple’s electric bills will continue unabated and, in fact, will increase over time. That’s inevitable. With a solar energy system on the roof, the other couple will short circuit the monthly electric bill and replace it with a diminishing expense (should they finance their solar panels). Eventually, they’ll have electricity with virtually no electric bill at all.
Net metering offers electric savings account: On days when the sun shines brightly, the couple with the solar panels are liable to use less energy than their solar panels collect from the sun. With net metering, they will receive credits for the extra electricity that is contributed to the grid. They can use those credits on days when the sun doesn’t shine as brightly.
Safer and greener energy: The couple dependent on the grid and utility company for their electricity will also, most likely, depend on coal or nuclear power for their electricity. The couple with the solar energy system will reduce the need for coal and nuclear power. They’ll have the peace of mind knowing that they’ve made a difference.
Property value: The couple with the solar energy system will enjoy a greater resale value of their home when it’s time to move because they offer a home with virtually free energy. The other couple won’t have that benefit. This is another way that solar pays.
The only benefit to not installing a solar energy system is that you avoid shelling out that initial cost. But, both couples would probably agree that’s a short-term, and short-sighted approach. In the long run, it’s clear that solar pays.
(July 21, 2018) The concept was great. For those who found solar unattainable, community solar offered a way to buy into a larger community solar energy system. If a property is surrounded by trees making solar impractical, the home or business owner could purchase solar panels, as part of a community system, equal to the number of panels needed to offset their electrical usage. If that person’s solar panels represented 5% of the solar panels in the community system, they would receive 5% of the system’s electrical production to offset their electric bills.
They also received all the benefits of private-solar-energy-system ownership, including tax credits and state incentives without needing to maintain the system or provide space for the system. But, community solar has taken an unforeseen turn since the concept was introduced. Rather than marketing community solar for joint ownership, developers have pushed the systems to electrical consumers on a leased basis. Instead of selling panels, the developers are selling subscriptions to access the large energy systems.
By leasing, the developers retain ownership of the systems. They also receive all of the incentives, including federal tax credits and State Renewable Energy Credits (SREC). In return, all the lessee receives is the power equivalent of their needs at a discounted rate. That discounted rate usually works out to a reduction of 20% compared to what they normally paid.
The only advantage for the subscriber is that they avoid the initial investment to buy into the community solar system. That’s it.
Leasing solar energy may seem like a great deal but you may want to take a closer look before signing a customary 20-year contract. That’s two decades where the subscriber won’t have the advantage of federal tax credits, SRECs or writing the system off on their taxes.
When purchasing a solar energy system, once the cost of the system is recouped, the owner of the system is essentially reaping the benefits of free electricity delivered by an indiscriminate sun. The same is true when someone purchases panels in a community solar system. But, with a lease, the developer enjoys the post-installation-cost advantages.
The way to see community solar, as applied by developers today, is to Think Timeshare. There are commercials offering ways to defer a timeshare owner’s loss when they want out. In the future, the same commercials may run for those stuck in community solar leases that sounded a lot better when the subscriber first signed up.
Paul A. LaBarbera
President / CEO
Magitek Energy Solutions, Inc.
When a PV (Photovoltaic solar energy) system is installed on the roof of a home or business, it is tied into the electrical grid and monitored. The process of monitoring how much electricity is generated is called net metering. The amount generated is compared to the amount of electricity used by a home or office. If the solar panels produce less electricity than is used, the consumer is charged for the difference by the utility company. However, the PV panels can also produce more energy than is used.
Extra electricity contributed to the grid is tracked so that the customer with the solar panels can draw on those energy credits, as if from a bank, on days when their solar energy system is producing less electricity. For instance, on a stormy day, heavy cloud cover may obscure the sun and reduce the amount of energy captured by the panels.
Utility consumers will usually draw on their electric credits at night, too. When the sun goes down their PV panels idly wait for the sun to come back up in the morning. However, in the night time when the solar panels are not generating electricity, the demand for electricity from the grid is usually down and the hourly rate for electricity also falls. In other words, the PV panels generally produce electricity during the peak hours of demand potentially saving consumers from the most expensive hours of electrical usage.
Solar panels also benefit the grid
There are scorching-hot days in the summer when everyone has their air conditioning running full blast. The strain on the electric grid is intense. The demand can even tax the grid beyond its capacity. In response, the utility companies may implement rolling blackouts in an effort to keep up.
Solar energy systems help. Each solar array is contributing to the grid and enhancing the grid’s ability to keep pace. Additionally, the PV systems are reducing demand, which can help keep the cost down for all consumers.