What’s in Your Solar System

The key components of any Solar System are dependent on whether it’s mounted on your roof or on the ground.  For roof mounted systems, there are 3 parts:

1)      The mounting system – this includes the foot jacks that attach to the roof and the racking systems that support the solar panels

2)      The panels – this includes the attachments to the racking system and the wiring necessary to move the DC current to the inverter(s)

3)      Inverters – this part converts the DC current generated by each panel into usable AC current.  Some systems have a single inverter, where each panel is connected to a central wire and fed into the inverter, and the current is converted to DC.  Some systems have micro-inverters on each panel, which means that every panel is sending AC current to the electrical box

4)      Wiring to and from the Electrical Box – this includes all wiring from the box to the meter and the shut off switch, connecting through conduits to the inverter or the panels on the roof

For ground-mounted systems, the parts are similar except for the addition of several support poles that hold the panels above ground.  Additionally, most ground mount systems require an underground trench so that wiring from the panels can be connected to the Electrical Box without being exposed to potential damage. 

These components can usually be installed in 2-3 days, but the system is not fully operational until all inspections (state, local, utility) are complete. 

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Why is now such a good time for Solar?

Despite some of the bad publicity about a few Solar companies, specifically Solyndra, the industry overall is very healthy and provides significant financial and environmental benefits to homeowners and businesses. 

There are 3 good reasons why going Solar now is an ideal option – it’s all about saving on your utility bills.

1)      You can save immediately on your electric rate, and lock these rates in for 20 years with a Power Purchase Agreement!  This is very attractive when utility rates continue to climb at 3-5% per year

2)      Current Lease and Power Purchase Agreements do not require an upfront investment – a huge hurdle for many

3)      Panel prices have come down significantly and Financing companies can pass this on to homeowners

The two most common ways for homeowners to go Solar are through a standard Lease or a Power Purchase agreement.  A Solar lease means a homeowner will have the system installed on their roof, or in their yard, and a pay a flat monthly rental fee for the use of the electricity generated by the system.  A Power Purchase Agreement means the homeowner agrees to purchase the power generated from their roof at a lower cost (per KWh) than the utility provides, and lock in these rates for 20 years or more.  This ensures the homeowner will have a hedge against utility price increases for many years. 

So, there’s never been a better time.  If you and your home qualify, it makes perfect sense to go Solar!  Why do you want to go Solar?

For more information on residential solar, click here:  http://www.1stlightenergy.com/solar-services/residential-introduction/

Solar Financing or Purchase Options

With all the options available today for designing and installing the right Solar System for your home, there are really only 3 considerations for financing or purchasing the system.  These are:

1)      Purchase – depending on your tax and cash flow status, this may the best option.  The average cost of a system is $25-30K, so be prepared.  You will immediately receive a 30% Federal tax credit, and will also see the most significant reduction in your utility bill.  Depending on the size and configuration of your system, the payback period is usually between 5-7 years.  However, after that you will have free electricity for as long as the system is in operation, usually 20-25 years or more.

2)      Lease – this is a standard agreement where the homeowner pays a flat monthly fee for having the ability to use power generated from the system.  There will be immediate savings on your utility bill, and those savings will increase in future years because the of the typical utility company rate increases of 3-5% per year.  Also, the homeowner usually has the option to purchase the system at a fair market value, if it makes financial sense to do so. 

3)      Power Purchase Agreement – this is a relatively new option, and is similar to a lease.  The difference is that the homeowner agrees to purchase electricity generated from the solar panels at a reduced rate, instead of from the utility.  The PPA also allows homeowners to lock in their rates for the length of the agreement (typically 20 years or more), so they have a hedge against the typical utility company rate increases of 3-5%.

With each of these options, the home must qualify by (1) being relatively free of shadows to allow the maximum amount of the sun’s rays at all times of the year, and (2) having few obstacles on the surface of the roof so there can be an optimal number of panels.  Either way, it’s a great time to install Solar, so you can generate a lifetime of savings!

I See a Sunrise

So we have a couple of businesses that worked more like a government than a business and an installer or two who perhaps got a little too close to their politicians. Quite frankly, this is the exception and not the rule. I think that solar energy is still a vibrant and wonderful business. Here are a couple of facts taken from SEIA (www.seia.org):

• The solar industry employs more than 100,000 Americans, more than twice as many as in 2009. They work at more than 5,000 companies, the vast majority being small businesses, in all 50 states.
• The U.S. solar industry grew by 69% in the past year, making it one of the fastest growing sectors in the U.S. economy.
• Since the beginning of 2010, the price of solar panels has dropped by 30%, and costs continue to fall making solar an even more viable choice for residential and business customers.
• The U.S. was a net exporter of solar products in 2010 by $2 billion. We were even a net exporter to China.
• Solar power in the U.S. now exceeds 3,100 megawatts (MW), enough to power more than 630,000 homes.
• Continued industry growth enhances our energy security and diversifies our domestic energy portfolio.

It is almost impossible to keep up with the changes occurring in technology, financing instruments, and available markets. Although some companies came into solar energy with an over-excited wallet, most investors have come in with reasonable expectations and have stayed in the business because those expectations have been met and surpassed. Over 600,000 homes have solar because it made sense to do so. In California and other states where the cost of energy increases the more you use it, solar has reduced home utility expenditures by shaving the higher rates with supplemental solar energy. In New Jersey, Massachusetts, Maryland, New York, and other states, solar energy often is used to completely eliminate the majority of the electricity bill where rates are up over $0.15 per kw. These numbers don’t even include the new installations that are done to remove homes from the power grid.

With news sources constantly looking for new stories and the reporters look for the big break to make a name for themselves, it seems they always turn to people, companies or industries where there has been success stories and try to break them down. The smart money is still pushing into solar projects and smart people are still trying to keep some control over their energy expenses and who is being enriched by their expenditures. More and more, people don’t want their money going into Middle Eastern bank accounts. The best way to get away from participation in that terrible cycle is to have energy independence. The best way to individually gain that independence is through solar energy. No other source of power is available to the individual home owner or business owner the way solar power is. No other energy source can provide the level of energy solar power can without major disruptions in the environment. This industry has a long way to go before it becomes “saturated”. If you haven’t considered solar power for your business or home, do it. The times have never been better!!

Are we a Business?

In a world where the generations are taught to try and get something for nothing, it is not shocking to see that subsidized solar panel manufacturers are having a hard time making their business work. In the past month, three manufacturers have announced that they are closing their doors. Unless you are very strict in your adherence to business standards and practices, companies can become complacent in how they price out jobs and go to market. The solar industry is going to have some attrition because of the maturing of the market and reduction of government programs that redistribute taxpayer monies. It is imperative that we run businesses that will adjust to the changing landscape and remain profitable and purposeful in bringing renewable energy into the marketplace. You don’t need to look any further than into New Jersey’s PPA programs which were often financed by “get rich quick” investors intent on maximizing their fortunes on the SREC market available at that time. The investors who continued to use the PPA programs for tax shelters are still around. The others have scattered to other markets of the moment.

As a member of the solar power community, I want companies to do everything necessary to be competitive and profitable for a long time. This industry can make a significant impact on individual and corporate energy usage if we keep the business front and center in our advocating of the industry.

What are your thoughts?

Environmental impact

Solar electric systems provide a sustainable source of clean energy. By installing a PV system you will significantly reduce the carbon emissions caused by burning fossil fuels.

A typical 3kW Solar Electric System will offset the following:

• 180,000 lbs of CO2 (greenhouse gas)

• 300,000 miles driven in an average car (at 12,000 Miles a Year)

• Protects our air quality, equal to planting 1.5 acres of trees

• Prevents more than 90,000 lbs of fossil fuel from being burned

Who is leasing solar arrays?

It seems to me that many of the residential customers I am coming in contact with are moving more to a purchased system instead of leased option.  The interest here is whether there is sufficient savings to be made with a lease over the cost avoidance offered by purchasing a system.  Many of the leases are for 15-20 years and offer advantage to the home-owner over purchasing the system outright.  The advantages include warranties, maintenance, and SREC transfer.  But will potential users sign up for solar with only a 10% savings offered?

The homeowner needs to recognize the hidden costs associated with purchasing the arrays and the stability of cost associated with leasing.  If these variables are not well articulated to the potential user, I think it is hard to justify a lease today … with the SREC market in free-fall.