Residential Solar Energy FAQs
Frequently Asked Questions
Residential solar energy is becoming much more common throughout California and Arizona. The sunny climate, paired with the high price of electricity, gives the ideal opportunity to reduce electricity costs and power homes with renewable energy.
With hundreds of new solar installers, numerous equipment options, and multiple financing choices, it can be difficult to sort through all the information. So we have made this FAQ section to help you get answers to the most common questions when considering a residential solar system.
If you have a question that we haven’t addressed, you can call us at 619-743-9193.
Why Install Solar On My Home?
Installing solar is a fantastic way to save money on utility bills. Homeowners in California and Arizona typically see savings of about 50% on electricity bills averaging $300/month. While also adding value to the home when it comes time to sell. Besides being a smart financial decision, having a residential solar system allows you to become partially independent from the grid, meaning you won’t have to worry about blackouts or increasing energy prices.
There are several Federal and State incentives that make acquiring a residential solar system easier than ever, such as the Federal Solar Tax Credit.
How Does Solar Photovoltaics Work?
Solar photovoltaics (PV) is the process of converting sunlight into electricity. When sunlight hits the solar panels, it energizes charged particles that pass from one layer of the solar cells to another. For most residential solar PV systems, this is done using silicon cells.
The energy produced via solar PV is direct current (DC), which is then converted to an alternating current (AC) — which powers our homes — by the solar inverter. That energy is then fed into the main electrical panel to be consumed by your home — consumed by appliances, lights, etc. — or sent to the electric company through the grid for Net Metering credits.
What is Net Metering?
Net Energy Metering is an arrangement with the utility company that compensates a homeowner for producing more energy than they utilize. Instead of disconnecting from the utility grid (which would require significant on-site energy storage capabilities), most homeowners opt to remain as a customer of the utility, then install enough solar panels to offset all or most of the electricity they consume.
About half of the energy your solar panel system produces is consumed immediately by the home, but the rest is sent to the utility company to generate credit at rates close to, or equal to, retail rates for electricity. These credits are then used later at night when the solar panels aren’t producing electricity.
You can learn more about the current Net Metering and how it affects solar homeowners here.
Residential Solar Financing Questions
Should I Buy or Lease Solar Panels?
The most common question asked about solar financing is whether to buy or lease a solar energy system. The answer depends on your financial situation, plans for the future in the home, and desired savings. Most California homeowners are choosing to own their solar panel systems with a cash purchase or one of several zero-down loan options. Choosing to own the system allows you to take advantage of the Federal Tax Credit and provides the opportunity to continue saving long after the loan has been paid off.
Leasing a solar energy system for your home will save you money on your monthly utility costs as well. While the savings are usually a little less attractive than owning solar panels, you’ll still save significantly over the traditional costs of electricity from the utility. Leasing carries several other advantages, including worry-free system performance for the length of the contract. That means any equipment maintenance or replacement, even after the product warranty expires, is the responsibility of the leasing companies.
Lease terms tend to be 20-25 years and often come with a production guarantee. For homeowners who cannot absorb the Federal Tax Credit, leases are an attractive option. A solar lease allows the third-party owner (TPO) to absorb the solar tax credit, then pass some of the savings on to the homeowner.
What Finance-To-Own Options Are Available?
In the past few years, more and more solar financing options are becoming available. These options for financing a residential solar energy system help homeowners capture the value of installing solar panels. Acquiring a home equity line of credit has always been an option, but now many banks and credit unions are offering special unsecured solar loans to finance your home solar installation with no out-of-pocket costs.
These are great options that carry competitive interest rates as low as 1.99%. Financing options still allow you to take the Federal Solar Tax Credit — PACE programs, such as HERO and YGRENE, are also available to fund your residential solar installation and other energy-efficient home improvements through your property taxes.
What Is a PACE Program?
PACE stands for “Property-Assessed Clean Energy,” and is a financing method that includes the HERO Program, YGRENE, and California First. These programs utilize the property taxes associated with your home to finance improvements, such as installing a residential solar energy system. Typically, these programs offer zero-down financing for 5, 10, 20, or 25-year terms.
By attaching the loan to the property instead of the individual, these programs have lower qualification standards and don’t include credit scores as a deciding factor. Though interest rates tend to be higher than other loan options, they also carry some added tax-deductible benefits (consult your tax professional for more information).
Solar Energy Equipment Questions
Which Solar Panels Should I Install?
There are as many manufacturers of solar equipment as there are solar installers in San Diego County — over 400! There are several factors that can make the decision easier when choosing solar panels for your home; pricing, wattage, product warranty, and company stability. Ultimately, installing a solar energy system in your home is about saving money on your electricity costs. Even though choosing a less expensive panel may seem like the obvious answer, you should look at the warranty provided by the manufacturer.
Most solar panel warranties include a 25-year performance guarantee in their product warranty, with degradation of less than 1% per year. Performance of all solar panels gradually declines over time, to about 80% performance after 25 years. When considering the product warranty, company stability, and history becomes another piece in the equation. You’ll want to be confident that the company will be around to honor the warranty in the future.
Industry leaders that produce the best-performing products and hold significant market share, such as SunPower, are a great example of a healthy company.
At SolarTech, we offer several solar panel options to achieve your solar goal, whether it’s getting the most cost savings or owning a best-in-class renewable energy system.
What’s the Difference Between Central & Micro Inverters?
Central inverters are the workhorse of the industry, with the longest history in operation. Central inverters are most often used for commercial/utility applications. System costs tend to be lower, however, there are some limitations. All solar panels on a central inverter or string system will operate to the lowest common denominator of production. Meaning that if one panel experiences shade from a tree or chimney, the whole system’s production will decrease to the level of performance of the least productive panel.
Optimized central inverters are string systems with panel-level performance optimizers. This allows each solar panel to produce electricity independent of typical string system limitations.
Micro inverters, the most common choice for residential solar energy installs, convert the electricity from DC to AC at the source, allowing each solar panel to achieve the best individual performance possible. Micro inverters are especially effective for multiple-array systems, such as those with panel systems facing East and West.
Is a Home Energy Storage Unit a Good Investment?
Under the current Net Energy Metering agreement: Yes.
As the cost of credits provided by the grid under the new NEM 3.0 was greatly reduced, the smartest decision for solar homeowners is to store their excess energy, and use it during peak hours, thus saving more money at the end of the month in their utility bill.
A variety of new energy storage unit models are being produced today, each with its features and efficiency. SolarTech designs every system to be storage-ready and provides the best options in the market that will fit your energy goals and budget.
Learn more about what energy storage units we recommend here.