Thoughts on Solar

Those of us involved in solar in sunny Southern California generally think that we have it pretty good.  The climate is just about perfect for solar - and by that I mean the political climate, every bit as much as our abundant sunshine.  From the Governor, to the legislature, to the CPUC and the CEC, generally those forces support the growth of not just solar power in general, but distributed, on your own rooftop solar in particular.  But we become complacent at our peril - both to the jobs of those in the industry as well as the investment value of all of those solar installations out there.

A recent story from Columbia, South Carolina brought this peril to mind.  As portions of the state edged closer to the existing 2% cap on net metering installations, the legislature was working on a compromise to lift the cap,  allowing more residents the opportunity to install solar and take advantage of net metering.  The utilities had other ideas - from the Greenville News:

Deep-pocketed power companies outspent the solar industry nearly $3 to $1 as part of an intensive lobbying effort during an S.C. legislative session that included efforts to curb rooftop solar’s expansion in the state.
Electric utilities spent nearly $523,000 from January through May to hire more than three dozen lobbyists to advocate for them at the State House as lawmakers decided what to do about solar incentives.

Yikes.

The result of all that lobbying?  The effort to lift the net metering cap was defeated - and local solar companies are going to be laying off employees (if not closing altogether) while affected residents will either have to forego solar, or find it far less financially viable.

We delude ourselves if we think that it can’t happen here.  Utility lobbyists are in Sacramento just as they are in Columbia, and the recent forced change to net metering 2.0 in SCE territory is a reminder that our progress is not guaranteed.

Which brings me to the Solar Rights Alliance.  We have written about this important organization before, and will do so in the future.  But I wanted to use this post to show how we are putting our money where our mouth is.  Starting today, we are modifying our solar installation contracts to provide an opt-in checkbox for new clients to be signed up for the Solar Rights Alliance, with Run on Sun making a donation in their name to help support the important work of organizing solar clients statewide.

We are never going to be able to match the money coming from the utilities and their allies.  But what we do have is tens of thousands of happy solar owners all across the state.  If we can organize even a fraction of them, we will be able to speak directly to policy makers and let them know that the value of installed solar power systems must be protected.  That is a fight that we need to take on, and the Solar Rights Alliance (along with our wonderful trade association, CALSSA) is key to winning that fight.

Click here if you missed Solar Terminology 101: The Wonderful Magic of Electricity or Solar Terminology 102: What Exactly is a Solar Power System?

Show Me the Money!!

Lastly, let’s talk about the money! For most, when considering going solar, it all comes down to dollars and cents. If solar just doesn’t pencil out, an ethical contractor like Run on Sun will tell you so. But if you undersand the following financial terms that solar sales-people throw your way, you will be in a better position to make that call on your own.

Levelized Cost of Energy (LCoE) — The cost of energy from a solar power system, over the lifetime of that system, measured in $/kWh. LCoE is calculated by taking the total cost of the system minus incentives but plus any equipment replacement or other maintenance expenses, and divided by the total energy produced by the system over its lifetime.

Return on Investment (ROI) – Return on Investment is a calculation that determines how soon a particular investment will be paid back (the “payback period") based on a series of anticipated cash flows, specifically, the initial expense, any maintenance expense, rebates, tax incentives, and savings from the energy produced by the solar system.

Internal Rate of Return (IRR) – A common measure of the relative value of competing investments. Technically it is the interest rate for which the present value of all of the future cash flows associated with a given project is equal to the cost of the project. The higher the IRR the more desirable the investment. 

Payback –  This is the time when you “break even". Meaning it is the point when the total cost of the solar system (including any maintenance costs) is paid back from savings on avoided energy purchases, rebates, and tax incentives.

Annual Solar Savings — The annual solar savings is the energy savings attributable to a solar system relative to the energy requirements of the same building without solar.

Solar Investment Tax Credit (ITC) – The ITC is a federal tax credit for solar systems commissioned on residential and commercial properties before December 31, 2016. The ITC is a dollar-for-dollar credit worth 30% of the cost of a solar power system applied to the system owner’s income taxes. The ITC will reduce to 10% for commercial and ZERO for residential solar come January 2017 unless Congress extends this deadline.

Solar Lease – A contractual agreement by which the property owner agrees to let a third party install and own a solar electrical system on your property and you pay rent for this privilege. If you’ve been paying attention at all, you are aware that this is a horrible idea. We even wrote an entire blog about why you should avoid solar leases. 

Solar PPA – A power purchase agreement (PPA) is a long term contract to purchase energy from a third-party owner of a solar power system at a defined cost which may rise over time. In a PPA, the homeowner pays a fee per kWh of energy produced as opposed to a flat monthly fee in a lease agreement. Here’s the kicker, if the system produces more energy than you consume…and is going back to the grid…you get a credit from the utility for this excess energy but you also are paying for this excess energy to the third party owner of the system. Whether those fees cancel each other out or not varies.

Congratulations! You’ve passed Solar Terminology 101,102, and 103! You’re officially an expert on solar concepts! Hopefully the “Greek” terms you’ve been reading as you do your research into going solar will make a lot more sense. If you do decide solar is right for you you’ll have a better understanding of how the big electronic system you purchased and installed on your property really works. Lastly, we hope that this information will help prevent homeowners from being taken advantage of by unethical solar salesmen who really don’t know the first thing about solar! After all, knowledge is power!  

 Click here if you missed Solar Terminology 101: The Wonderful Magic of Electricity.

What Exactly is a Solar Power System? 

Now that you have the electrical basics down, let’s talk solar. The following are common terms a solar contractor may use when discussing your solar system. By understanding the “Greek” you will be in a better position to make sure your contractor knows what they’re talking about…and its kindof fun to understand the miracle that is solar power!

Solar Energy — Electromagnetic energy transmitted from the sun (solar radiation). 

Photovoltaic (PV) – The direct conversion of light into electricity. Photo means “light”, and voltaic means “electric”.

Solar (PV) Cell — The smallest semiconductor element within a PV module which converts light (photons) into electricity. Also called a solar cell.

Solar (PV) Module — Also referred to as a solar panel, an integrated electronic device consisting of multiple Solar Cells, arranged in an interconnected grid, encapsulated against moisture and other environmental agents,and held together by a rigid frame for mounting. A typical PV module that we use is roughly 65 inches by 40 inches and contains 60 cells. 

Solar (PV) Array — An interconnected collection of PV modules that function as a single electricity-producing unit. The modules are assembled with common support or mounting, common pitch and azimuth (direction). 

Solar (PV) System — A complete set of components for converting sunlight into electricity by the photovoltaic process, including the array and balance of system components (e.g., switches, subpanels, etc.).

Grid-Tied - A grid-connected solar electric system generates its own electricity and feeds its excess power into the utility grid for later use. Grid-tied solar electric systems are eligible for incentives and rebates as opposed to “off-grid” systems which are not.

Net-Metering - Net metering is a billing arrangement between a solar customer and their utility which allows the solar system to send excess electricity back to the grid through the customer’s electric meter. The meter actually runs backwards! Your utility then bills you for the net (kWh used – kWh generated). While most utilities will pay you a small rate if you generate more than you use, many opt to carry forward a credit toward your next bill.

 Solar Power to Run your Life

The next set of terms describe the way we convert the energy coming into the solar cell from the sun into a form that you can use to power your everyday electronics…

Direct current (DC) — Direct current refers to power that never changes polarity. DC power flows in one direction through the conductor. To be used for typical 120 volt or 220 volt household appliances, DC output such as from a solar panel or battery must be converted to alternating current.

Alternating current (AC) — Alternating current refers to power that constantly changes polarity between positive and negative over time. Power produced in the United States moves in current that changes polarity at a rate of 60 times per second. Electricity transmission networks use AC because voltage can be “stepped-up” to high voltage (for long-distance transmission) or “stepped-down” to low voltage (for local distribution) with relative ease. This is the current that your household devices use.

Inverter- An electronic device that converts DC power from solar modules into AC power for using in your home and feeding back to the grid.

String Inverters – A string inverter is designed to handle multiple strings of solar  modules wired together in series. These are the oldest type of inverter for residential and small commercial PV systems.  

Microinverters- A Microinverter (like the Enphase inverter to the right) is an inverter designed to handle small amounts of power and is paired with each solar module. They provide many advantages over string inverters such as eliminating a single point of failure, individual module monitoring, and avoiding string degradation from minor shading.

Central Inverters – These are only used to handle very large PV systems, 1 MegaWatt or more, often only in the largest utility-owned solar power systems.

Click here to continue to Solar Terminology 103: Show Me the Money! 

So… you want to be an informed buyer but every time you try to research going solar you feel like you’re reading Greek? Well I’m here to tell you, you don’t have to be a licensed electrician to understand the basics of a solar-powered electrical system. While operating your HVAC unit from the sun may seem a bit like a miracle, the concept is actually quite simple. The first step is to dust off those terms that have been collecting cobwebs in your brain since you passed tenth grade science. 

The Wonderful Magic of Electricity

When we’re talking about electricity it all comes down to this simple calculation:

Watts = Volts x Amps      Or      Power = Voltage x Current

Totally confused? Ok, let’s define our terms:

Power — The ability to do work, measured in Watts.

Watt — The rate of energy transfer equivalent to one ampere under an electrical pressure of one volt. One watt equals 1/746 horsepower, or one joule per second. It is the product of voltage and current (amperage).

KiloWatt (kW) — A standard unit of electrical power equal to 1000 watts. Ten 100-watt light bulbs use one kilowatt of electrical power. This is the term we use to describe the system size needed to provide the power to suit your energy needs. A typical home in SoCal needs around a 5kW solar system.

Voltage — The amount of electrical potential, measured in volts, that exists between two points.

Current — The flow of electrical energy (electrons) in a conductor, measured in amperes.

Energy — Energy is simply power consumed over time.

KiloWatt Hour (kWh)— One kilowatt of power consumed over one hour of time equals one kiloWatt hour. The kWh is the most common measure of electrical energy. Electricity rates are commonly expressed in cents per kilowatt hour. One kilowatt of power (say from lighting ten, 100-Watt light bulbs) used for an hour equals one kilowatt-hour of energy. An average home in SoCal uses around 25kWh of energy per day. This is the measure we use to determine your usage needs to offset with solar.

Peak Demand — The maximum power demand (in kW) in a specified time period. Commercial clients will often have high charges on their electric bills associated with peak demand.  As a general rule, solar by itself does little to offset peak demands, but if you can determine the cause you can often make changes in your usage habits to reduce peak charges.

Usage - The most common component of electric utility bills, based on the total amount of grid-provided energy consumed during a billing cycle. When a solar provider asks for your usage they are looking for a full year (i.e., the latest 12 months) of data showing the kWh used and how many days in each billing cycle. The easiest way to share this information is by providing the most recent 12 months of electric utility bills for the meter you want to offset with solar. 

 Click here to continue to Solar Terminology 102: What exactly makes a Solar Power System?

So, you are considering a solar power system for your home or business… and why not, given the myriad of social, environmental and economic benefits! But how do you know if your roof is a good candidate? This is one of the top questions to consider carefully before investing in solar. 

1. Do I have enough space?

The size of your solar system is dependent on your usage needs and the amount you want to offset. However, it is not uncommon to find homes and businesses which are “footprint-constrained” - meaning their system size is limited by the space available.

A few things to keep in mind as you look at your roof and ponder how big is big enough… First, while there are many different solar panels they are typically the same size. Run on Sun uses LG panels which are about 65 x 40 inches and can be placed in either a portrait or landscape layout. Panel energy ratings vary, 285-315 watt panels are currently available from LG. For an average home (5 kW) that means you would need around 16-18 panels to offset the bulk of your electricity.

Another limitation is that fire code requires three feet of clear space from all ridges. If you have an irregular shaped roof with many valleys and peaks it may make the layout very challenging. Given that the panels are rectangular and racking is mounted parallel to the roof, rectangular spaces are ideal. However, the 3-foot rule does not apply to uninhabited spaces such as garages and carports making them good options if your home lacks the perfect solar roof. 

2. What if my roof is shaded?

Shading from trees, tall buildings, chimneys, or even parapets on flat roofs can significantly degrade the energy output from solar panels. Sometimes all that needs to be done is a generous trimming of that tree that’s gotten a little out of control over the years. Other times it means you really won’t get your money’s worth out of a solar system. But, if the shade elements are few and only during a short time each day, your roof may still be a viable candidate.

If this is the case be sure to talk to your solar contractor about inverters. We have written a great deal about the advantages of “microinverters” in handling shaded roofs, particularly those made by Enphase Energy.  “String inverters” on the other hand would be a bad choice as the entire system would degrade when any single panel is shaded. 

3. Should I re-roof my house before adding a solar system?

This may be the most important and frequently overlooked question to consider when researching if solar is right for you. Part of what makes solar a great investment is the 25+ year lifetime of the system. But if you have to re-roof during that time there are added costs to remove and re-install the system. If you are planning to re-roof during the lifetime of your solar array be sure you select components, such as the racking system, from companies that…A. will still be around 15-25 years later, and B. will be able to provide compatible replacement parts when pieces are lost during removal and re-installation. Avoid newer companies testing out “state-of-the-art” racking systems and cheap companies banking on the solar boom alone.

For this reason we always ask owners the age of their roof. In southern California, a roof over ten years old should get a makeover before installing solar. If you are unsure of the condition, it is a good idea to have a professional roofer take a look and give you an expert opinion. Sometimes solar contractors can offer this as part of their free assessment. (Run on Sun works with a very reliable roofer who is happy to take a look at any roof in question!) If the roof still has some life left in it but not enough to outlast the solar system you could re-roof only the area where the solar array will cover and plan to do the rest later. An added benefit is that the solar panels will actually protect your roof from the elements, helping it to last longer.

Unfortunately, you will likely be able to find someone willing to put solar on your roof even if it isn’t a good candidate. But if they aren’t discussing the above issues with you, then red flags should be flying! To ensure you get the best investment possible, do your research, take a good long look at your roof, and discuss all of your concerns with your solar contractor.