Removing the Confusion

Solar energy definitely costs less than power from the utility firm. Your particular energy use and the size of your system will determine the actual savings amount. When you compare the cost of utility electricity with home solar, you should keep in mind that you can expect electricity rates to increase annually. Over the past decade, national electricity costs have increased at a rate of approximately 2.2% per year. Utility rate inflation is an added incentive for solar: when you generate your own energy with a rooftop PV system, you’re locking in energy costs at a constant rate so that you no longer have to consider variable utility rates. Because of the nature of solar as an up-front investment, the only costs associated with a solar system will be the cost of your installation and any added electricity costs in the event that your panels do not completely offset 100% of your electricity use.

The real cost of your solar power system is the difference between your savings and your investment. Energy usage patterns, sun exposure, available footprint, and choice of equipment are other variables that affect system costs.

Something to consider, is whether you plan to offset your entire electrical use or simply reduce it. Many customers install smaller systems that offset the highest, most expensive billing tiers, saving money in up-front costs as well as on their utility bills. Other customers realize the cost savings of solar by utilizing time-of-use (TOU) rates from their local utility because peak solar generation (typically summer afternoon hours) offsets the highest cost of electricity. We can custom design a system that meets your individual needs.

Solar panel systems have a long lifespan. The solar panel manufacturer’s warranty covers energy production for 25 years, though they have been known to perform for in excess of 45 years. Inverters typically last for about 12–15 years, with a 5- to 10 year factory warranty. Extended warranties are available.

Because your solar energy system will produce more power than you need at some times and less than you need at others, solar system owners need a way to store the power they generate so they can use it at night and other times when they need more juice than their system is making. California's Net Energy Metering law allows owners of solar panels to use the electricity grid as a battery to store power from their panels when they are not using it and then reclaim that power later when they need it.

Under the Net Energy Metering law (Public Utilities Code 2827), the total amount of energy produced over one year is credited against the total amount of energy consumed. If your solar system produced exactly as much power in a year as you consume, your bill for that year will be zero, even if there are times when you are consuming more than you produce. Your utility may still charge you a minimum service connection fee, sometimes on the order of $5, regardless of your net metering bill credits.

If you produce more power over a one-year period than you consume, however, you will not be paid for the excess power, nor will your credits for the power you generate be carried over into the next year. For this reason, it is important to make sure your system is sized properly so that it offsets the power you consume but does not produce a net surplus of power in the long run.

Solar generation systems connect directly to your electrical panel or circuit breaker box and interface seamlessly with your utility power. The utility meter records the net amount of energy generated through the PV system. When you are creating more electricity than you are using, your meter will spin backward and the excess electricity is sent to the electric grid. This helps offset the cost of your electricity usage at night or on cloudy days when your system cannot produce electricity.

Solar-plus-storage systems include a battery that captures and stores the excess solar energy generated by the PV system, opening up the possibility of going “off the grid” – a tempting proposition for homeowners who want to sever their connection with utility companies by using renewable energy.

Owning your solar system may require an investment compared to the seemingly appealing 0% Down Leasing, but over the long term, the benefits are unsurmountable. People who lease their solar systems save far less than those who buy them outright, or with a loan, and they also miss out on federal tax credits. At the end of the lease, the solar company could remove the system—and your savings along with it.