Is solar right for me?
While members with private solar arrays often benefit from available tax benefits and incentives, they are also responsible for the system and all the up-front costs. Find out if a private solar system is right for you, and how to get started.
As prices decline and technology improves, installing a residential solar system—also called a photo-voltaic or PV system—makes sense for some consumers. However, even with these recent improvements in PV, it’s important to find out the facts before committing to a purchase. Consider these points as you explore whether solar is right for your situation.
- MAKE YOUR HOME MORE ENERGY EFFICIENT BEFORE BUYING A SOLAR SYSTEM.
Adding insulation, sealing air leaks, and completing other basic fix-it projects make sense for several reasons. You can cut your energy costs immediately, and you’ll also be able to reduce the size of PV system you purchase. PVREA offers many rebates and offers energy assessments to help get you started.
- RESEARCH, RESEARCH, RESEARCH, BEFORE INVESTING IN A SOLAR SYSTEM.
Your electric cooperative is a source of information you can trust. Experts at PVREA can answer basic questions, provide resource materials, direct you to reputable websites, and provide you with energy advice.
- UNDERSTAND HOW A SOLAR SYSTEM MESHES WITH YOUR COOPERATIVE’S SYSTEM.
Most solar systems are designed to provide you with a portion of the electricity needed, but won’t provide 100 percent of your needs. At night and on cloudy days, and possibly at other high-energy-use times, you’ll need more power than your PV system can produce. That means you’ll still be connected to PVREA’s power lines. Because these systems are grid-connected, energy can flow both ways. Each utility—including PVREA—sets appropriate policies and rates for connecting PV systems to their lines (the grid) and for possibly purchasing any excess energy your system might provide. As you begin to explore solar systems, be sure you ask PVREA about rate structures, interconnection, essential safety precautions, and any other connection-related details.
- REVIEW YOUR CURRENT ENERGY USE SO YOU CAN DETERMINE WHAT SIZE PV SYSTEM TO INSTALL.
PVREA can help you review your past energy use, and help you determine how the projects you’ve undertaken to improve energy efficiency may help lower your future energy use. One pertinent bit of information that will be useful is looking at how your energy use fluctuates throughout the day. Having that information will help you determine—with expert assistance—the size and type of system best suited to your situation.
- TALLY UPFRONT COSTS.
If you purchase a solar system, you will be the owner, and you’ll be responsible for the purchase price, as well as ongoing maintenance and repair costs. If leasing is the option you prefer, you will pay less initially, but you’ll likely have higher ongoing costs. In either case, it pays to spend time figuring out all of the expenses you’ll be responsible for during the life of the system. These may include: installation (in addition to the price of the system), interconnection costs, insurance, taxes, and possibly others, too. If you are leasing, ask contractors about the length of the term, if the contract is transferrable to a new homeowner should you sell your home, potential for price increases, as well as the same questions you’d ask if you were to purchase a PV system. In the “credit” column of your price comparisons, look at any incentives, rebates, and tax credits offered for either a purchase or a lease.
- SEARCH FOR INCENTIVES, REBATES, AND TAX CREDITS.
Any financial incentives available will help reduce your investment costs. Opportunities vary by state and locale, and many have expiration dates. One database offering details is www.dsireusa.org. This site includes a clickable, interactive map, showing federal and state incentives, credits, exemptions, grants, loans, and rebates for residential and commercial/industrial projects. Local contractors should have up-to-date details about incentives available where you live.
- ACCEPT SHORT- AND LONG-TERM RESPONSIBILITIES.
If you purchase a PV system, you’ll go through PVREA’s interconnection process. That includes paying any costs of connecting to the grid. Local and/or state officials are responsible for conducting safety inspections; it is the homeowner's responsibility to notify them in advance about your installation. After the interconnection requirements are met, and the safety and integrity of your system are approved, PVREA will take care of the connection to the grid. As the owner of the system, you will be responsible for maintenance and system repairs. If you lease a system, your responsibilities will depend on the agreement you sign. Be sure you know and understand what your responsibilities are so there are no surprises for you along the way.
- FOLLOW ALL SAFETY PRECAUTIONS.
Most solar systems are grid-connected. Because of the two-way flow of electricity, excess energy your PV system collects during the daytime flows into PVREA's lines, which is why a disconnect switch on your system will be installed. Improper connection and maintenance of your system may endanger people and the reliability of the grid.
- CHOOSE A REPUTABLE CONTRACTOR/INSTALLER.
Start with a list of options garnered from website research, your electric cooperative, local or state Better Business Bureaus, renewable energy associations, your state energy office, your state Attorney General’s office, extension service staff, and any other local experts you can call on for assistance and advice. Contact at least a few of those contractors appearing on your list, especially if recommended by multiple state and local experts. Narrow your list after asking many questions checking out other installations the contractor has completed, comparing bids (get at least three), checking references, and thoroughly examining contracts. If possible, ask a contract specialist or lawyer to review the contract before signing.
- MAINTAIN GOOD RECORDS.
Keep files on your pre-purchase research and pre-installation data as well as bids, contracts, inspection reports, maintenance records, and all other details you may need to refer to in the future. In addition, you’ll want to know about system performance, so set up a system to track and compare your actual system performance with predictions provided by the contractor/installer.
As with any major home improvement project, purchasing from the right installer/contractor is every bit as important as the product you are purchasing. Due diligence is critical to ensure you get the best system, for a fair price, and that it’s installed correctly and on time.
QUESTIONS ABOUT THE CONTRACTOR’S/COMPANY’S BACKGROUND
Ask these questions to be sure the contractor knows the business thoroughly and has satisfied other customers. Also, be sure to request copies of insurance documents, certifications and licenses, so you know that the contractor and installers have gone through required training. Be sure to call former customers and check out other installations the contractor has completed. You should query local Better Business Bureaus and your state Attorney General’s office, and check online rating services for comments about the contractor and the equipment you plan to purchase.
- How long have you been in business?
- Are you licensed to do business in my state?
- How many PV systems have you installed? Can you provide a list of consumer references in my area? Can I talk with former customers and also see successful installations?
- Who will do the installation at my site? Are they employees or subcontractors? If you involve subcontractors, do they work with a number of other employers, too? Have these subs worked on many of your installations?
- What training have you and your installers had, and what, if any, certifications do you and your installers hold? Do you have an installer with a Master Electrician license, and is there an installer on your team licensed to install solar?
- Does your company carry these types of insurance: general liability for at least $1 million, professional liability, workers compensation, other types?
- Have you ever been involved in a legal dispute involving a solar installation?
QUESTIONS ABOUT THE INSTALLATION AT YOUR HOME
Ask these questions to find specific details on what the contractor is proposing and why, as well as general information on what you can expect during and after installation.
- What size and type of system do you recommend for my site? Why?
- Are there any steps I must take before the installation - such as removing trees or replacing my roof?
- What brand(s) of systems do you install? What advantages do these brands offer over other options? Are the systems manufactured in the U.S. or elsewhere?
- What warranties do you and the manufacturer offer? Do you offer a warranty on installation? If the manufacturer is not located in the U.S., are there any difficulties with warranty work? How do I make a claim on defective or short-lived equipment?
- What tax credits, rebates and other incentives will this installation qualify for? Who files the paperwork for any/all of these incentives?
- How much of my energy usage will this system provide?
- What will the payback period be?
- Will I be able to monitor the output of my panels? What is the process for doing so?
- How and when will you involve staff from my electric cooperative in the installation? Do you have experience interconnecting with utility grids?
- Will permits be needed for this installation? Who obtains them and pays any fees?
- When will you begin the installation? How long will it take to complete?
- What is your daily schedule? (For example, is it M-F, 8:00 to 5:00, with an hour for lunch?)
- Will you be on the job site daily? If not, how will we communicate if there are questions or problems that arise? And how do I reach you after hours?
- If my energy use changes, can I increase the number of solar panels later?
- Is it possible the installation may cause my roof to leak? If so, does your company take responsibility for repairs?
QUESTIONS ABOUT THE BID/CONTRACT
Why you should ask these questions? All of this information should be included in both your bid and on the contract you sign. Check these details carefully, then compare to other bids you obtain. (Get at least three bids, all in writing.) Be wary of any really low bids. If the contractor can’t supply the information, ask why not. After checking any contract to be sure this information is included, have a contract expert or lawyer review the contract before signing it.
- Is this bid an estimate or a fixed price? What is the process you will follow if you find unexpected problems with this installation and want to charge extra to fix the problems?
- Does the bid include the total cost of the project, including components, materials and labor?
- Does the bid include a breakdown of each of the components (make and model number, size/kWh per year, as well as price of each) so I can see what each portion will cost?
- Does the bid include details about permits?
- Does the bid include the time frame for beginning and ending the installation?
- Does the bid include warranty information, as well as how to place a claim?
- Does the bid include expected operation and maintenance costs; projected monthly, annual and lifetime costs and savings; and projected energy production?
- Does the bid include payment options, as well as financing details?
- Does the bid include details about who will file paperwork for tax credits, rebates and other incentives?
- What documentation will I receive when the project is done? (This may include lien releases and other contract-related paperwork, as well as warranties, operating manuals and more.)
RENT OR BUY?
These are options you face when searching for a place to live and when you need a new vehicle. You’ll face these same choices when you invest in solar. Here are some points to consider when exploring various methods of adding solar to your home.
- You’ll be responsible for making the decisions on what system to purchase, choosing a reputable contractor, and more. It’s a big investment, so you’ll need to spend time researching, asking questions, obtaining multiple bids, and reviewing contracts.
- To cover the cost of purchasing your solar system, you can pay cash or obtain a loan. The system will be yours, and you’ll reap the benefits of all power you generate from the system.
- Because you are the owner of the system, you’ll have to pay up front for the components and all installation and connectivity costs. You’ll most likely be responsible for maintenance and repair costs, and will bear liability for the system. While some installers offer service and maintenance contracts, not all do. You may be able to negotiate that in your contract; be sure to get details in writing before signing.
- As the system’s owner, you may be able to take advantage of federal, state, and local incentives (consult your financial / tax advisor).
LEASE (THIRD-PARTY OWNERSHIP)
If this is an option for you, consider these points.
- Leasing should reduce your up-front costs to install a solar system. Some leases offer a no-money-down option, and some leasing programs are structured so that the projected savings in electricity purchases offsets the lease payments.
- You’ll notice a wide range of solar lease programs. Variables include the amount of money you’ll have to pay up front, the length and term of the lease, and responsibilities, both yours and the leasing company’s. The differences between lease offers can be enormous, so be sure you understand all terms and conditions, and that you determine which options are most advantageous to your situation.
- With most solar leases, you’ll enter into a long-term contract—usually 15 to 20 years. Although the system is installed on your home’s roof, you won’t own the system, can’t claim Renewable Energy Credits (RECs), and can’t take advantage of any state or federal incentives. That’s because those rights belong to the leasing company. You will, however, receive all power produced by the solar system, at the rate negotiated in your contract. There are two primary leasing arrangements you might encounter. In one, you would sign a long-term lease for the hardware - like leasing a car. The second involves entering into a contract to purchase the power produced by the solar system that the leasing company installs on your roof.
- Some third-party solar companies also offer the opportunity for consumers to purchase their panels, either during or at the end of the contract. If you are interested in this option, be sure it is in the contract you sign.