Residential Solar Energy FAQs

Residential Solar Energy FAQs 2017-04-03T23:00:54+00:00
Solar Energy FAQs

Installation of residential solar energy systems is becoming much more common throughout San Diego County. Our sunny climate, paired with the high price of electricity from SDG&E, gives San Diego residents the ideal opportunity to reduce their electricity costs and power their homes with renewable energy. With over 400 solar installers in San Diego County, numerous equipment options, and multiple financing choices, it can be difficult to sort through all the information and make the right decision.

Read through the solar energy FAQs below to get answers to the most common questions. If you have a question that we haven’t addressed below, give us a call at 619-743-9193 or click here to schedule a free consultation.

RESIDENTIAL SOLAR ENERGY – GENERAL QUESTIONS

Large Solar Energy System Array

Installing solar is a fantastic way to save money on utility bills. Homeowners in San Diego typically see savings of about 50% on electricity bills averaging $300/month. Installing solar on your home also allows you to lock-in lower energy rates for the next 20-25 years.

A solar panel system on your home shows your commitment to a better future by using renewable energy and generating locally produced electricity. If you choose to purchase or finance your solar panel system, you’ll get to absorb the 30% Federal Tax Credit, increasing the overall savings significantly. You’ll also add value to your home when it comes time to sell.

Solar photovoltaics (PV) is the process of converting sun light into electricity. When sun light 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 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 to be used later.

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. The best part is you’ll be able to grandfather this agreement for 20 years, ensuring the value of your residential solar energy system investment.

SOLAR FINANCING QUESTIONS

Man and Woman Reviewing Paperwork

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 San Diego 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 30% 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 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 30% 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.

Contact SolarTech for assistance in determining which solar financing option will be best for you.

In the past few years, more and more solar financing options are becoming available. These options for financing a residential solar energy system helps 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 solar tax credit — saving an additional 30% of the cost of your whole system. 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.

PACE stands for “Property Assessed Clean Energy,” and is a financing method the 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 interests 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

Monocrystalline Solar Panels

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 on 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 decline over time, to about 80% performance after 25 years. When considering the product warranty, company stability and history become 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.

SolarTech offers central inverters, optimized central inverters, and micro inverter options. Each option has its own benefits and situations in which they are the best choice.

Central inverters are the work horse 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 inverter systems 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 common choice for residential solar energy systems, 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.

Under the current Net Energy Metering agreement, solar tends to be a better value without energy storage. The cost of batteries measured against Net Metering costs doesn’t make economic sense… yet. Every solar energy system designed by SolarTech is storage-ready.

Once the cost of energy storage solutions comes down, our customers will be able to integrate home batteries into their system to better manage their energy consumption needs, while minimizing costs with the utility. Even with a battery storage system installed, most San Diego homeowners will remain connected to the grid. A truly “off-grid” solution requires a larger solar panel system and more energy storage than most homeowners are willing to pay for. However, grid-tied solar with storage for homes is in the near future.

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