Who hasn’t been at a wedding where no one is dancing and then suddenly, because one brave soul got up and got out on the dance floor, an entire party erupted? There’s a lot of truth to the age old adage that it only takes one person to get the ball rolling. Continue reading
No one wants to make a major purchase, only to find out that if they waited just a little while longer to buy, they would have been better off. Unfortunately, the fear of jumping in too soon is keeping some people from maximizing the benefits they could be receiving from a solar power system. It’s true that the price of solar panel systems is declining 5-10% each year. That’s great news and one of the main reasons some people are waiting, but system price isn’t the only variable that drives the financial returns you will receive. Other factors such as the price of electricity, available tax incentives and rebates, and the availability of Solar Renewable Energy Credit (SREC) programs also play key roles. Your decision should also factor in the opportunity cost of waiting—how much you would have saved during the “waiting” period; how much you might have earned in SRECs; and the interest you would have earned on each.
Some things to keep in mind when you are evaluating the timing of your purchase:
- Solar panel system prices are decreasing 5-10% annually. The typical residential system costs $15,000 after tax credits and rebates. So in rough terms, if you wait one year, you’ll save a maximum of $1,500 on the price of your system; if you wait two years you’ll save $2,850, etc.
- Electricity prices are rising 5% annually. The typical U.S. home spends about $1,200/year on electricity. That means if you buy a system that meets 100% of your electricity needs today, you will have an extra $1,200 in your pocket a year from now. The following year, when prices go up, you’ll save $1,260, the year after that you’ll save $1,323 etc. for the life of your panels (25-40 years). If you don’t buy, these numbers represent the opportunity cost of waiting (lost savings).
- Rebates, tax credits and other incentives are in place to encourage certain buying behaviors. As those behaviors catch on, the need to incent consumers decreases and these programs are gradually phased out. The current federal renewable energy tax credit is 30% and is in place through 2016. Additionally, some state and local governments currently offer similar programs and they may or may not phase them out over time. Likewise, some that don’t yet have them may add them soon. Understanding the ins and outs of the situation in your area will help guide your timing decision. Just to give you a general feel for the rebate landscape, the following are examples of just a few rebate programs that are being reduced or eliminated:
- California used to have rebates up to $15,000. Today, they are $0.
- In Rhode Island, only the first 5,000 or so people who purchase a solar panel system will receive rebates which are somewhere in the $7,500 range.
- Massachusetts used to have rebates in the $9,000 range. Now, they are around $2,000.
- In some states, there are SREC programs in place that allow you to earn money for the clean energy you are producing. These programs also fluctuate. For example, in Massachusetts, a homeowner might earn $2,000 in annual revenue generated through SREC sales. If you purchase a system now, you are eligible to participate in this program for the next 10 years. If you purchase a system next year, you are only able to participate for 8 years which represents a $ 6,000 loss ($4,000 for the 2 year reduction and $2,000 for the year you waited.).
- Finally, the typical solar panel installation avoids 90 tons of carbon emissions in one year. While there isn’t a specific dollar figure associated with the carbon you would avoid, you should consider what value you would assign to that personally and factor it into your analysis.
Using the points above, you should evaluate a number of different scenarios to determine when would be the best time for you to buy your solar panels system.
A recent Gallup poll determined that 2 out of 3 Americans want the U.S to put more emphasis on generating domestic energy through renewable sources—And that desire was reflected across political parties. We weren’t really surprised by these findings. When you think about it, clean energy has its perks for almost everyone regardless of their political leanings.
For conservatives who tend to be concerned about fiscal outcomes, clean energy systems are a sound investment. Take solar photovoltaic (PV) systems (also referred to as solar panel systems or solar power systems) for instance. Increases in property value, decreases or elimination of electricity bills, and the financial rewards of Solar Renewable Energy Certificates (SRECs) are just a few ways that solar panels can deliver sound economic benefits. In many instances, the returns on investment rival those of traditional investments such as stocks and bonds. It’s an attractive option for folks who are focused on the bottom line.
For the more liberal, environmentalism is a pulling factor. Renewable energy is a viable solution to the increasingly palpable problem of climate change. By reducing greenhouse emissions and the harmful practices associated with extracting energy from other sources, clean energy represents an important pathway to a healthier planet.
For those focused on the economy, renewables make significant contributions to the financial health of our country. The clean energy sector represents a strong source of job growth. Clean energy is also a way for businesses to save money, better manage operating expenses, and become more competitive which contributes to job retention across multiple industry sectors. The environmental aspects of renewables also contribute economically, preserving the well being of many industries such as farming, fishing, and tourism that require a healthy environment in order to thrive.
Finally, those who crave less governmental interference in their day-to-day lives connect with the independence that clean energy provides. Property owners who adopt clean energy from renewable sources are far less dependent on traditional energy sources and no longer at the mercy of volatile and increasing energy prices. They become empowered as they make the move from energy consumers to independent energy producers. Likewise, people who support energy independence on the national level understand the global value of adopting renewables locally.
The wide variety of benefits that clean energy provides, whether economic, environmental, or personal, all contribute to the mass appeal of these systems. In a political environment that is often extremely polarized, we love the idea that clean energy could be a pathway to reaching common ground.
When shopping for airline tickets or other big-ticket items, people generally shop around. For airline tickets you might compare: How much will it cost? When are the flights? What are the baggage charges? What’s the airline’s safety record? What’s their “on-time” percentage? How much leg-room will there be? Etc. People use a comparison shopping approach because it gives them all the information needed to make the right choice. The same is true when shopping for solar power systems for your home or business. If you take the first offer that comes your way, how will you ever know if you got the right system or the best price or terms for your property?
Like every other purchase, comparison shopping for solar will yield the best results. EnergySage recommends that you engage 3-4 solar installation and financing providers to get quotes and system design plans to ensure that you maximize your investment. Take the time to review each option, ask questions about key differences between the proposals, and tease out the differentiators.
Here are some key points of comparison when reviewing solar power proposals:
- Solar Panel Brands and Models: There are more than 100 different solar panel brands and many models within each brand. These different panel options include variations in size, design, color, efficiency, country of origin and warranty, to name just a few. Different installers will provide you with different options, but all of them will stand by their choices. You will want to evaluate each option objectively. (Read more about solar panels)
- Inverter Types and Brands: This is the technology that converts the solar energy (direct current or DC) into usable household electricity (alternating current or AC). Depending on your particular property and the amount of shading it receives throughout the day, different inverter technologies (e.g., string vs. micro inverters) or even different brands of inverters may be better for you. Again, many solar providers will offer you what they have and they will be loyal to their options, so you will need to investigate these options yourself and ask each provider about the key differences in the technology that he or she has quoted.
- Financing Options: Financing options can be very important, especially if you don’t have the appetite to write a fairly large check to purchase your system outright. Some options include (1) leasing where you would pay a fixed monthly payment to “rent” your system; (2) power purchase agreements (PPA) where you would pay a lower rate for the electricity produced by the system (but the system would be owned by the PPA provider); or (3) Low cost loans to finance a purchase. Understanding all of your options and the underlying economics is essential to getting the right deal for your particular situation. (Read more about financing options)
- System Design: The configuration of solar panels on your roof determines the amount of solar power you can generate and also how your system will look from the ground. Each installer will design your system differently, taking into account variations in your roof. Again, each installer will be confident in their design, but more likely than not, they all will be at least slightly different. Compare each design and ask your installers about the reasons for any variations. Make sure you are comfortable with both the amount of power your system will generate and how it will look on your property.
- Other Things to Consider: Some other details to consider include: When is the proposed installation date? How are they with customer service and responsiveness? What are the available warranties? Are they local companies or large regional players? What kind of experience / expertise do they have? (Read more about how to choose an installer).
Comparing multiple quotes provides you with multiple options so you can find the option that’s best suited to your needs. In addition to more choices, it also introduces competition into the process which always helps if you want to make sure you are getting a fair price and the best terms for your project! Having choice is important to many people and making a decision to go solar is one that you will enjoy for many years to come. It’s worth it to take the time to connect with multiple high quality providers and to evaluate the various options they provide so you can be confident that you are choosing the right option for your project. EnergySage makes this process very easy. (To get started, click here).]
When shopping for solar photovoltaic (also known as solar panel, solar electric) systems, many businesses and homeowners focus mainly on price. To that end, dollars per watt is a key metric when comparing quotes because it allows the consumer to adjust for differences in system size. While price is certainly an important factor, maximizing the value of your investment both financially and environmentally, involves consideration of several other, equally important factors. Here are some that we think are vital to making the right decision.
- Workmanship Warranties – These warranties often ensure that there is no additional out-of-pocket risk in the first few years of system ownership.
- Technology Choices – All panels, inverters, monitoring systems and racking / mounting equipment are not created equal. Some are better than others and the choice you make will impact your system production and reliability, which are critical to generating solid financing returns.
- Installation Quality – Just like equipment, installers can vary in quality, too. You should ask questions about your installer’s approach to quality assurance. Your system’s performance is dependent on the quality of your installer’s workmanship.
- Installer Reputation – Ask your installer for references. Happy customers are a good barometer for a successful installation at your property. Even better, check third-party ratings and reviews like the ones we provide on EnergySage.com. Reviews can tell you a lot about the company’s customer service and quality performance.
- Solar Electricity Production Estimates – Ask how much solar power your new system is expected to generate in the first 12 months (in kWhs). When you divide that number by the system size (in W), the result will be your production ratio. Do this calculation for each proposal you receive, compare the results, and inquire about any differences.
- Shade Mitigation –Intermittent shade due to trees or other obstructions will impact the amount of electricity your system produces (less sun equals less energy!). Ask your installers how they will address this—would they suggest using micro-inverters to help keep the system producing at a high rate despite some shading? If they don’t know what this technology is, you may want to look elsewhere.
- Installation date – Most property owners want their systems completed and interconnected yesterday. Make sure you understand and agree upon a timeline. If the installer has a large backlog of installations to complete before yours, this may be an important factor in your decision.
- Attention to Aesthetics – Make sure your installer pays special attention to how your installation will look. For example, are the panels positioned in the same direction? Will conduit and wiring be hidden or visible? Some installers will go the extra mile and hide conduit in fake downspouts, paint it to match the roof shingles or siding or make other adjustments. Aesthetics are important to most property owners so ask how these issues will be handled.
- Experience and Commitment – You want a provider who has the experience needed to design and install a system that produces pure solar joy, no headaches. Ask how long he or she has been installing systems—how many systems similar to the one you are considering have they installed? Equally as important, you will want an installer who will be here in the long term so they can honor their warrantees. Make sure this is not in doubt before proceeding.
- Customer Service – Does the installer follow-up with you quickly when you have questions, do you get periodic updates on the status of the system design or quote preparation? These are indicators of what your experience will be with the company after you have signed on the line and definitely something to consider when evaluating your options.
Going solar is an important financial decision and price isn’t the only factor in determining the success of your investment. In fact, a more expensive system often can deliver better financial returns for your family or business. As you can see, there are a lot of factors to consider. By automating this process and providing information that is key to the decision-making process, our EnergySage Solar Marketplace makes shopping for solar easy for the consumer. If you’re ready to start the shopping process, you can access the Solar Marketplace here.
Are there other things you think should be considered that we didn’t include? Feel free to chime in below in the comments section.
As people begin the process of researching a potential solar PV system, one of the first questions they ask is “Is my roof even suitable for solar?” Here are a few key considerations that can help you to answer that question. Continue reading
EnergySage (www.energysage.com) is pleased to announce the development of a formal relationship with the Massachusetts Sierra Club (www.sierraclubmass.org) to accelerate the adoption of clean energy technologies, such as solar photovoltaic (electric), solar thermal (hot water) and geothermal-heat pump (space cooling and heating) systems. The joint effort will focus on proactive outreach, education and free advocacy services for owners and decision-makers at commercial properties, including businesses, religious institutions, government buildings, schools and non-profits. The details of this partnership will be announced in February.
Historically, clean energy technologies were perceived as an option only for diehard environmentalists as it would take decades to recoup these costs, if ever. Today, the rapid decline in technology prices, increased government incentives and the high cost of grid-produced electricity have transformed the financial rationale for these technologies with near-term paybacks and long-term financial returns. In addition, the positive environmental impact of these systems and efficiencies in clean energy production offset more fossil fuel produced electricity than ever before.
Although many property owners and decision-makers have strong interest in clean energy technologies, the process of evaluating these options can be quite daunting. Where do you turn? Who can be trusted to provide you with objective advice? Certainly, anyone selling a particular technology will have some bias toward the type of technology they offer (e.g., solar PV) and the specific brands of panels or other related technologies that they carry. The partnership between EnergySage and the Sierra Club Massachusetts is focused on helping these property owners and decision-makers navigate this complex and confusing process with objective education and advocacy services.
EnergySage has chosen to join with the Sierra Club because it is the oldest and most effective grass roots-oriented environmental group in the world. The organization has a loyal base of members who trust the Club as a partner in promoting environmental initiatives throughout the world. EnergySage believes firmly that this trusted relationship will bring more parties to the table to consider these financially and environmentally attractive clean energy investments and help to accelerate adoption of these technologies with the right resources and tools.
For more information about this program, please contact EnergySage at John@EnergySage.com or call 617-453-8924.
EnergySage, the authoritative resource on solar panel systems and other clean energy solutions for residential and commercial properties is hosting a Free local event for residential property owners. The event, located at EnergySage Headquarters in Cambridge MA, will be lead by Chris Williams, a veteran installer in a broad range of clean energy technologies and thought leader in clean energy technology installation quality and public policy development. Mr. Williams will provide homeowners with practical insight into several common clean energy technologies, including Solar Photovoltaic PV systems, Solar Hot Water and Geothermal Ground Source Heat Pump technologies used to heat and cool your home. For more information about this October 25th event and to register, Continue reading
10:30 AM – the doorbell rings on Martin Luther King day. It’s 12 degrees out and the guy at the door – in blue coveralls with the NStar logo – is from the electric utility company. Carmine – that’s his name – is here to install two “net-meters” to prep for our upcoming PhotoVoltaic installation. He explains that normal electric meters go only one direction, but net-meters go forwards and backwards as well. Continue reading
Hello to new EnergySagers -
I’m located in Massachusetts and I thought my recent experiences looking into solar PV for my house might be helpful for folks.
First off, I should say that I’m pretty lucky to have an unobstructed south-facing roof. I’ve been thinking about solar for a while, and watching prices go down, so a couple of months ago I started asking people who had installed solar PV panels Continue reading