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Assessing My Home's Solar Potential: Step-by-Step

Congratulations, you've decided to look into going solar! Regardless of your reasons...be it economic, environmental, energy independence, or otherwise...it is a sad reality that not everyone can go solar. So how do you know if your property is even a good candidate? Of course, it is important to select a few different installers to do a professional assessment, but even someone with zero solar knowledge can learn how to do a quick preliminary assessment. Here are some simple steps to determining if your home may have a great solar powered future.

(Also: check out our 3-part series Explaining Solar Terminology.)

1. My electric bills are killing me!

If your electric bills average $100 or under each month, solar probably won't be more cost-effective than paying the utility. The costs for permitting, design and engineering all stay the same whether you buy a 3kW system or a 10kW system. Indeed, the labor required to install 5 panels and 10 panels is not very different since installers still have the same amount of electrical ground work. The installation of the actual panels is only a fraction of the total labor. Even the costs of products improves in bulk, so the bigger the system, often the better price per Watt you can get.

Beyond this, there are many other things to consider such as whether you plan to increase your usage significantly in the future. But since utilities don't want you to be an energy producer they won't actually allow for more solar than your historical needs indicate... unless you plan to buy an electric vehicle. These are things you should discuss more in detail with your qualified installer.

2. My roof is perfect for solar...right?

In my blog piece "Roofing Reality Check", I outlined the main things to consider when you examine your roof's potential. Here are the highlights:

You could put solar here, but it will cost you!

Space: First and foremost, to be a good solar candidate you must have adequate obstruction-free space for rows or columns of solar panels facing South, West, or East. The solar array must be three feet from any roof ridge or rake, and 18 inches from valleys to satisfy Fire Marshall guidelines. In addition, most panels are about the same size...roughly 65 inches by 40 inches. An average home in SoCal needs between 15-20 panels to offset their energy needs. This means that triangular spaces and roofs with many small faces are not going to work well for solar, but big open spaces with right angles are perfect. Pitch and Height: Labor costs go up when installing on more difficult-to-reach roof spaces. Second story and steeply pitched roofs both increase the overall cost due to the time and effort required to keep crews safe. If you have a very steep roof solar isn't necessarily impossible, but it will affect the bottom line, and some installers may not feel comfortable at all depending on just how steep. If it looks like an Appalachian incline more than a Rocky Mountain then you should be safe. But if we're talking summit of Mount Everest, you may have a harder time finding a competent installer who doesn't run when he sees the pitch.

Roofing Materials: The best roofing material for solar is composite shingles. Developments have been made to safely attach solar panels to metal and tile roofs but the cost for the racking attachments and labor are frequently higher. Run on Sun prefers to remove tile where the array will go, re-roof with composite shingles, install the solar, and backfill with remaining tiles. This incurs a re-roofing cost but is the safest way to avoid roof leaks and ensure safe attachment of the array to the rafters.

3. Solar's arch nemesis...shade.

One of the first things an installer will do is take a quick look at a satellite image of your property to check for shade elements as well as the layout of your roof. A useful tool in the Los Angeles area is the LA Solar Map. This takes into account shading throughout the year and provides a handy report on your property's viability for solar. It isn't a perfect tool, however, so take a look around your property and note if there are any trees shading the roof spaces that you've identified as ideal for solar. Trees to the north would not pose a threat since solar will never be placed on a north-facing roof. But tall foliage to the south could negate any energy production value of a solar array. All may not be lost as microinverters, like the ones from Enphase that we feature on our projects, can do a lot to salvage a site plagued with shade. But even with this technology, 100% shaded areas are a non-starter. In addition to trees, note tall parapets on a flat roof, chimneys, satellite dishes, HVAC units, and second story walls which directly shade your ideal roof spaces.

4. Can my electrical system handle it?

This is something many people are uncomfortable with, but a quick glance at your main electrical service you can be very informative. First, find your main service. This should be located on an outside wall of your home with circular enclosed meter protruding out. Open up the main panel where you'll find a column of breakers. The main breaker, the one with the largest number stamped on it, is either at the top or sometimes in the middle of the column of breakers. If it is in the middle, this is called a center-fed panel and you may need to upgrade your electrical service before going solar. If you find yourself tripping breakers every time you turn on a hair dryer, that is also a sign you should upgrade your service. Even if you aren't tripping, depending on the size of your home, if the main breaker is stamped with anything under 200 you may need a higher electrical service before going solar to avoid tripping in the future. Next, take a look at the rest of the breakers. Does it look like the entire column is full? Sometimes there are rectangles in the metal face plate which can be punched out to add breakers when needed. If there is no space at all for a new breaker for solar, then you may need to upgrade your service.

Center-fed panels, like this one, can be a problem for going solar.

Unfortunately upgrading your service will add some cost. Ask your solar installer for their opinion but if any of the above rings true be prepared for this additional hurdle to sunshine power.

5. It's all about the money...

The reality is, solar is an investment. While some companies may insist you can go solar for free, I would never count on getting something for nothing. We have outlined some of the myriad reasons we recommend avoiding zero-down solar leases in other posts like "Top 5 Reasons to Stay Away from that Solar Lease" and "The Perils of Solar Salesmen". Frankly, the costs can more than double over time when you lease instead of purchase your system.

So the last step to assess if you are a good candidate for solar is to assess your financial position. There are many low-interest solar loan options out there as well as property-assessed PACE financing, but in order to get the economic value of solar you need to be prepared to own the system outright. This way you can take the 30% federal tax credit and any additional rebates if available from your utility.

To give you a ball-park idea of the cost for going solar in Run on Sun's service area (LA Metro area) today, including design, labor, permit fees and the whole shebang, is roughly $4 to $5 per Watt. This means that an average house with a 5kW system will cost between $20,000 and $25,000 before rebates and incentives. Obviously the cost will be on the low end if you have a composite-shingle, single-story, low-pitched roof with no need for a service panel upgrade. Depending on your electric bills pre-solar, this investment can pencil out with a return in as early as year 5 or as late as year 10+. But deciding if the financial outlay is worth the long term investment is something you must assess before signing on the dotted line.

After going through the above steps you should have a solid idea of whether solar is right for your home or not. If you've determined its a go, the next step is to call your local installer and make sure they check all the same qualifiers and more. Now that you're an expert on solar assessment 101 you can even suggest solar to any neighbors with homes that beg to be powered by the sun!

3 Rules to Avoid Shady Solar Contracts

So you've decided to go solar (congratulations!) and you are about to sign on the dotted line. Before you do, please take a moment and follow these three simple rules to avoid getting burned.

Rule #1 - Read the Contract! It goes without saying that for a project as elaborate as a solar installation, a written contract is required. But a written contract will do you no good, and could do you a great deal of harm, if you don't take the time to read it! I know, I know, contracts are boring. But lawsuits are not, and the best way to avoid such excitement is to spend a little tedious time now laboring over the fine print.

We see examples of solar contracts all the time, and some of them are pretty appalling. Written in tiny fonts, they just beg you to give up and simply ask, "Where do I sign?" Resist that temptation at all costs, less you discover the hard way that some unscrupulous contractor (or even worse, his unscrupulous lawyer) has snuck some awful prevision into your contract. Think I'm exaggerating? Take this beaut for example, from a section on Change Orders:

The change in the Contract Price caused by such Contract Change Order shall be as agreed to in writing, or if the parties are not in agreement as to the change in Contract Price, the Contractor's actual cost of all labor, equipment, subcontracts and materials, plus a Contractors fee of 12% shall be the change in Contract Price...

Holy smokes! According to this, if the parties disagree as to the cost of a Change Order (more on this in a moment), then the cost is whatever the contractor says he has spent, plus 12%! What thinking person would agree to sign such a contract - or choose to do business with someone who is presenting it? Someone who didn't take the time to read it, that's who!

Rule #2 - Be Sure the Essential Terms are There!

A contract is formed when someone - a contractor in our example - offers to do something - in this case install solar on someone's home - and a second person - the homeowner here - accepts the offer and agrees to pay to have the work done. In order for a contract to be binding, the parties must actually agree on all of this, which is to say that the homeowner must know certain essential terms. For example:

• Products - what products does the contractor intend to put on your home? At the very least, this should call out the specific solar panels and inverters (down to the model number) that will be used. I cannot tell you how many contracts we have seen (to say nothing of bids) that omit these terms. But you wouldn't buy a generic "car," would you?
• Price - how much is this going to cost you? If the system is financed (you aren't really going to lease this, are you?), what are the total payments over the life of the financing. What about additional costs, say for outside structural engineering - who pays for that? Is it included in the quoted price? If it is to be billed separately, is the cost simply passed through, or can the contractor take a markup on someone else's work? (We have seen contractor's markup such services by 200% or more, never disclosing that fact to the homeowner.)
• Start date - when will all of this happen? What contingencies are there that might delay things?
• Duration - how long will this take? Are there any obstacles or conditions that need to be changed before the project can be completed? For example, some projects require trenching (say from a detached garage where the solar will be installed back to the house where the service panel is located), and it is not uncommon for the homeowner to have that done by someone else. But such a contingency should be called out in the contract so the responsibility for that work is clearly understood.

Rule #3 - When in Doubt, Wait!

Finally, if you are feeling rushed by the contractor (or his sales agent) to "just go ahead and sign already!" - then it is time to take a break. A legitimate contractor wants you to be comfortable with what you are signing. After all, a legit contractor doesn't want there to be any confusion about what is going to be done or how much it will cost. So the legit contractor will be happy to answer your questions before you sign, knowing that creating understanding now, will help eliminate disputes later on. But the shady contractor just wants you to sign now - and give them a check! (Oh, and a word about initial payments - for a residential project, California law prohibits a solar contractor from asking for more than $1,000. A contractor who asks for more before work is done is violating the law.)

Worst case, go full stop and tell the contractor you want more time to review the deal before you sign. If you have doubts, consult a lawyer - yeah, yeah, I know all about lawyers (I used to be one!) but a little time spent now may save you major aggravation down the road. And you don't want to end up on the wrong end of a bad deal.

Preparing for the End - of the Solar Tax Credit

One of the chief economic benefits of going solar is the 30% Investment Tax Credit (the "ITC"), but it is scheduled to go away at the end of next year. Here is what you need to know now if you hope to save yourself some serious coin on your solar system.

There are three economic benefits from going solar: rebates from the utility, savings on your utility bill, and the ITC. For clients in the Run on Sun service area, only PWP and LADWP are presently offering rebates (sorry SCE folks) but at 40¢ and 30¢ per AC Watt installed, these rebates top out at roughly 10% of your cost. Monthly savings from solar will vary depending on how big a user you are and what rate structure you are under. Typically, SCE customers save more with solar because their rates are that much higher.

But the one dominant factor that has helped to make solar more affordable, particularly as rebates have gone away, is the ITC. A true tax credit (as opposed to an income deduction), the ITC is valued at 30% of the total cost of the system (less any rebate that might have been available). For example, a 5 kW solar system in SCE territory that costs $4.00/Watt will see $1.20/Watt coming back as a credit on the system owner's taxes. (Oh, yeah, you have to own the system to capture the ITC - part of our #1 Reason to avoid a Solar Lease!) That's a $6,000 credit - pretty sweet!

On top of that, commercial clients not only get the ITC, they also get accelerated depreciation, making the tax advantages of solar even more attractive.

And yet, unless Congress acts (and really, does anyone have confidence in the ability of this Congress to do much of anything?), this will all end come December 31, 2016. (Ok, small caveat - commercial projects will continue to get 10%, but for residential clients it will be nada, nothing, zilch.)

I can hear you already saying, come on, that's over a year away - why are you raising this issue now? Well aside from the old warning: "Caution - dates on the calendar are closer than they appear!" -- it is important to understand what is likely to happen next year. Every solar company out there will start advertising about the need to "act now" only this time they will be right. As more and more people realize that they are about to leave a whole bunch of money on the table, the crush to get projects in the pipeline and completed before the deadline will mean more demands on already understaffed city building departments (many of whom routinely take six weeks or more now to approve even the simplest solar project), inspectors, and utility staff to process an unprecedented flood of applications.

As we move through next Spring, many solar companies will already be booked so completely that homeowners who are just waking up to the problem, might find themselves in a pipeline with no guarantee that their project will be completed in time to qualify for the ITC.

So what to do?

Well, for the good of the solar industry as a whole you should contact your Member of Congress and urge him/her to support the extension of the ITC. If you have friends and family who live in more conservative areas, be sure to urge them to do the same.

But as for your own solar project, the time to get started is now! Don't be the sad-sack who gets shut out of affordable solar because they waited too long.