Is now a good time to be thinking about home solar?

[2HOTinPHX]

Is now a good time to be thinking about home solar?
I don't know that much about the home solar business but seems like it would be good fit for Phoenix. Every review on YouTube says this is a good time to add solar of course. Is solar the way to go now reduce our energy cost and help save the planet?
What should we be looking for in a system, cost, warranty ect?
What should we be looking for in a solar company?
Should we be looking for a company that works with our power company so we get local rebates?
What about Federal rebates this year or next?
It's a small 1400 sq home and in the past I played with a few of those online solar calculators and it wasn't very cost effective back then.
We do have a south facing roof on one side but we are between two two story homes so that might affect use a little in the winter?

Any suggestions or thoughts appreciated.

We ran into a salesperson with a company called Elevation Solar and he wants to make a presentation to use this week...checking them on BBB and seem to have a few complaints there. Is this a big red flag or normal in this type of business?

 

[njhowie]

We've considered solar a couple times over the past 20 years and every time came to the same conclusion - not worth it.

If you are looking to do your part for saving the environment, then knock yourself out.

However, if you're looking at it as a money-savings vehicle, I say stay away. If you recoup your investment, it's likely 15, 20, or more years to breakeven. But, there are a number of factors that can determine if you ever reach breakeven.

Leasing has its own set of issues.

Lastly, many utility companies have begun charging a monthly minimum fee regardless of how much electricity you use. I believe this will gain traction across the country. If you use anything under $25, you are going to have a $25 bill. Clearly this can impact solar customers in a big way.

 

[NW-Bound]

Lastly, many utility companies have begun charging a monthly minimum fee regardless of how much electricity you use. I believe this will gain traction across the country. If you use anything under $25, you are going to have a $25 bill. Clearly this can impact solar customers in a big way.

At my 2 homes in AZ, my bills include a service charge that is independent of how much electricity I use. That service charge is the minimum.

I installed a DIY solar+battery for my metropolitan home. I did not have to pay for labor, and I shopped carefully for parts. I happened to get access to good-like-new SunPower solar panels (among the best) and surplus unused lithium cells going for 1/2 to 1/3 the price of new cells.

If I had to pay retail and installation labor, I would not have done it.

 

[SecondCor521]

How likely they are to be worth it depends on a lot of factors:

1. How much sun you get where the house is. More sun makes it more likely.

2. How much electricity costs where you are. Higher costs make it more likely.

3. The federal and state tax benefits. Higher tax benefits make it more likely. They just renewed or extended the solar tax credits in the Inflation Reduction Act. They've been extending the solar credits at the federal level for a while now. Solar marketing companies will make it sound urgent, and maybe someday it will be, but probably not this year or next.

4. The roof situation. A newer roof makes it more likely, because you won't have the costs and hassle of removing/reinstalling if your roof is new enough.

5. The resale value of the solar system. An owned system makes it more likely, a leased system much less so. But this also seems to be very buyer-specific.

6. The cost of the system. A DIY is cheapest and most likely to pay off. A be-your-own-GC-but-hire-an-electrician is a middle option. Hiring a company that goes door to door to get leads then puts together a snazzy presentation costs about twice or even more of the middle option.

I personally would never go the way of the snazzy presentation - it seems to me that all they do is the marketing and the presentation, then just hand you off to the electrician anyway, and I don't find that worth 50% of the price. When I looked into it a few years ago, the state published a list of qualified solar electric installers with their phone numbers anyway. I can interview a few of them and pick a good one I think.

7. The size of the system. I personally think it's best to get all the efficiency gains you can first, so your usage drops, then put a solar system in that only covers maybe most of your bill. I think electric companies are going to be less generous over time about buying back customers' rooftop solar excess energy.

The price of solar panels has been dropping over time, too. I don't know about the pricing of the other parts of the system, or the labor, or the permits, or the inspection fees and other tests.

I'm personally going to wait until I have my roof replaced in the next year or two before I even think again about solar. In my area, electric costs are low (and mostly renewable FWIW), state tax credits are mediocre, so the payback was quite long when I did the math a long time ago. It looks like the price of electricity has gone up and the costs of panels has dropped since my last analysis, but still probably not great from a strictly financial point of view - probably on the order of a decent bond fund, so mathematically I'm probably better off not getting the system and just paying for my electricity the old fashioned way.

 

[2HOTinPHX]

Thanks for the replies.
Interesting article I just ran across on Solar in Arizona. Magic 8 ball telling me just say no....

https://www.phoenixnewtimes.com/new...r-for-aps-srp-democrat-tom-ohalleran-13037640

 

[2HOTinPHX]

How likely they are to be worth it depends on a lot of factors:

1. How much sun you get where the house is. More sun makes it more likely.

2. How much electricity costs where you are. Higher costs make it more likely.

3. The federal and state tax benefits. Higher tax benefits make it more likely. They just renewed or extended the solar tax credits in the Inflation Reduction Act. They've been extending the solar credits at the federal level for a while now. Solar marketing companies will make it sound urgent, and maybe someday it will be, but probably not this year or next.

4. The roof situation. A newer roof makes it more likely, because you won't have the costs and hassle of removing/reinstalling if your roof is new enough.

5. The resale value of the solar system. An owned system makes it more likely, a leased system much less so. But this also seems to be very buyer-specific.

6. The cost of the system. A DIY is cheapest and most likely to pay off. A be-your-own-GC-but-hire-an-electrician is a middle option. Hiring a company that goes door to door to get leads then puts together a snazzy presentation costs about twice or even more of the middle option.

I personally would never go the way of the snazzy presentation - it seems to me that all they do is the marketing and the presentation, then just hand you off to the electrician anyway, and I don't find that worth 50% of the price. When I looked into it a few years ago, the state published a list of qualified solar electric installers with their phone numbers anyway. I can interview a few of them and pick a good one I think.

7. The size of the system. I personally think it's best to get all the efficiency gains you can first, so your usage drops, then put a solar system in that only covers maybe most of your bill. I think electric companies are going to be less generous over time about buying back customers' rooftop solar excess energy.

The price of solar panels has been dropping over time, too. I don't know about the pricing of the other parts of the system, or the labor, or the permits, or the inspection fees and other tests.

I'm personally going to wait until I have my roof replaced in the next year or two before I even think again about solar. In my area, electric costs are low (and mostly renewable FWIW), state tax credits are mediocre, so the payback was quite long when I did the math a long time ago. It looks like the price of electricity has gone up and the costs of panels has dropped since my last analysis, but still probably not great from a strictly financial point of view - probably on the order of a decent bond fund, so mathematically I'm probably better off not getting the system and just paying for my electricity the old fashioned way.

Thank you for the detailed reply. Lots to think about there. Solar market feels like car shopping. Lots of dread, worry and mistrust....

 

[daylatedollarshort]

We are looking into solar panels. Checkbook.org for the Bay Area had this to say (from last Dec, 2021):

"Although the cost of panels and other equipment has come way down over the last 10 years, the biggest obstacle for most homeowners remains price: For a 4.4 kW system, which would generate all of the electricity needed for the average house in this area, you’ll have to plunk down about $11,300.

But you’ll quickly get your money’s worth. A 26 percent federal tax credit will pay for a chunk of your upfront costs and, over time, you’ll cover the rest by avoiding expensive electricity bills. When we ran the numbers for a typical Bay Area family with a roof that gets a lot of sunshine, we found a 4.4 kW system would recoup their solar project costs within six years.

After that, because their system will provide free electricity for another 15 years—or longer—they’ll realize big profits from going solar: Over 20 years, our example homeowners will come out ahead more than $28,000."
https://www.checkbook.org/san-franc...tors/articles/Thinking-About-Going-Solar-4456

Before we get panels, we are going to look into an energy audit and heat pump, so we can minimize the cost, if we decide to proceed with the panels.

 

[NW-Bound]

Thanks for the replies.
Interesting article I just ran across on Solar in Arizona. Magic 8 ball telling me just say no....

https://www.phoenixnewtimes.com/new...r-for-aps-srp-democrat-tom-ohalleran-13037640

I live in Phoenix and I was not aware of the lawsuit mentioned in the above article.

The article has some points that I don't understand.

When SRP adopted its 2014 plan, which forced solar customers to connect to the grid, prices jumped 65 percent for solar customers on average and just 4 percent for non-solar customers.

Randy Miller's own rate increased by 315 percent.

I don't believe a homeowner is forced to connect to the grid. You can have an off-grid system if you have a large enough battery to be self-sufficient. The article also acknowledges this.

Edward Youssef installed solar shingles — a system of small solar panels that cover the entire roof — on his Gilbert home just last month, and he's already seeing a *positive financial impact, he said.

That's despite the system, created by Tesla, costing him over $100,000.

He eyed solar since he moved to the *Valley in 2008, but SRP rates made it infeasible to make the leap until saved up the capital for this totally off-the-grid system, he said.

About price jump for solar home owners, I look at the 4 different solar rates provided by SRP, and don't understand it. Take for example the "Customer Generation" plan. You don't sell back power to the utility, but your summer off-peak rate is 4.88c/kWh, and the on-peak rate is 6.98c/kWh.

My Time-of-Use rate is 8.06c/kWh, and the on-peak rate is 24.85c/kWh.

Perhaps what hurts a customer with Customer Generation plan is when his solar falls short and he has to draw from the utility. He has to pay a demand surcharge which depends on the highest draw in the month. It's $9.43/kW for the first 3 kW, and $14.37/kWh for the first 7 kW. So, if you draw a max of 5 kW when your solar system is not generating, you will pay $63.31 in addition to the 4.88c/kWh and 6.98c/kWh above.

PS. I just saw something too. The above plan is only for customers with a system installed prior to 2014.

 

[Bamaman]

I'm leery of new technology as there can be so many shyster salesmen that promise far more savings than what's actually experienced. And adding solar is quite expensive on the front end.

Our electrical rates are moderate at 10.5 cents per KWH. Higher electricity costs might make solar more attractive for some locales.

Few people pay cash for adding solar, and loans for adding solar are secured by a second mortgage on the property. Before a home can be sold, the second mortgage might have to be paid out of the sale proceeds--a substantial amount.

Solar electricity is just not a good fit for our family.

 

[2HOTinPHX]

I live in Phoenix and I was not aware of the lawsuit mentioned in the above article.

The article has some points that I don't understand.




I don't believe a homeowner is forced to connect to the grid. You can have an off-grid system if you have a large enough battery to be self-sufficient. The article also acknowledges this.



About price jump for solar home owners, I look at the 4 different solar rates provided by SRP, and don't understand it. Take for example the "Customer Generation" plan. You don't sell back power to the utility, but your summer off-peak rate is 4.88c/kWh, and the on-peak rate is 6.98c/kWh.

My Time-of-Use rate is 8.06c/kWh, and the on-peak rate is 24.85c/kWh.

Perhaps what hurts a customer with Customer Generation plan is when his solar falls short and he has to draw from the utility. He has to pay a demand surcharge which depends on the highest draw in the month. It's $9.43/kW for the first 3 kW, and $14.37/kWh for the first 7 kW. So, if you draw a max of 5 kW when your solar system is not generating, you will pay $63.31 in addition to the 4.88c/kWh and 6.98c/kWh above.

PS. I just saw something too. The above plan is only for customers with a system installed prior to 2014.

Yeah its clear as mud.....why does it always seem to always be that way these days?

 

[2HOTinPHX]

I'm leery of new technology as there can be so many shyster salesmen that promise far more savings than what's actually experienced. And adding solar is quite expensive on the front end.

Our electrical rates are moderate at 10.5 cents per KWH. Higher electricity costs might make solar more attractive for some locales.

Few people pay cash for adding solar, and loans for adding solar are secured by a second mortgage on the property. Before a home can be sold, the second mortgage might have to be paid out of the sale proceeds--a substantial amount.

Solar electricity is just not a good fit for our family.

That's what I am afraid of too....shyster salesman and the nightmare stories I am reading about on BBB website. It seems it would complicate life more than I want to deal with.

 

[TripleLindy]

We recently had our roof replaced so I got a back of the napkin solar quote - nothing detailed. Estimate was just over $60k without any subsidy or rebate. That didn’t include batteries for power during an outage. Based on our usage, payback would be 20+ years. I probably would bite if 10 years or less, especially the way rates have been increasing, but not 20.

Perhaps there’s some savings by acting as GC and hiring an electrician, as suggested above, but I doubt it would have saved enough for me to pull the trigger.

 

[daylatedollarshort]

If you live in a city that checkbook.org covers, they have ratings from subscribers for solar installers as well as most other types of contractors. If we went with solar we would also check in with the neighbors, Nextdoor and Yelp. Between those different sources, the contractors we've hired for other projects have always worked out well. If we decide on solar, we would do the same checks, so I'm not worried about poor work with an installer.

There are a lot of little companies here, so I'm not sure how long they will all be in business, though. I would factor in possibly having to pay for for future repairs as there might not be any warranty coverage with an out of business company.

Our first project still is getting the energy bills down to the nubbins without the solar panels. We will see what our energy bills look like after those are implemented to see if panels are still worth it. After that, we'll be working the water bill and losing the lawn. Some of our neighbors have amazing looking alternatives, like food forests, dry gardens or Zen gardens.

 

[Out of Steam]

4. The roof situation. A newer roof makes it more likely, because you won't have the costs and hassle of removing/reinstalling if your roof is new enough.

This is the main reason I won't consider solar panels on our current house. The current shingles appear to be about 12 years old, matching other renovations to the house. With care to kill mold on the roof every year, they should last as long as we will be in the house.

Putting panels on a roof with only 10-15 years of life left would be a poor decision.

 

[Retired Expat]

I went with SunRun solar. I pay my utility $9.82 a month for the transmission lines and zero for electricity for 10 out of 12 months. And maybe $100 a month for those two months and in the dead of winter. I still have an oil furnace which I will change to a heat pump when it dies and likely need to expand the solar array

Last time I calculated it the whole lease system
Averages about $90 a month. Easily half or 1/3 of what I would pay without it.

And there is a huge satisfaction knowing I am doing something to help the planet.

Didn’t go to whole battery route because I am not sure the batteries aren’t ultimately harming the environment more

 

[NW-Bound]

Yeah its clear as mud.....why does it always seem to always be that way these days?

What happened in the old days was this: homeowners were able to pump excess solar power into the grid in the early part of the day when it was not too hot. They then got credit to draw it back out in the late evening.

The problem is this: 1 kWh is worth a lot more at 7PM when everybody got home from work, cranking up their AC and TV while cooking dinner. The same kWh is not worth that much at noon, when it is not as hot and people are still at work.

It's the same thing as 1 gallon of water is worth a lot more during a drought than while it is raining. As simple as that!

When there were not a lot of home solar systems, the net metering which was really advantageous to the homeowners did not hurt much. But when there are more people doing it, then who is going to provide the power after sunset? And yet, late afternoon and early evening is when the power demand is the highest.

I solve the problem by having my own battery to bank the excess unused power early in the day, and use it myself to run the house when the sun goes down.

Lithium batteries are expensive. Recall the guy in the article who spent $100K to be off grid.

And if you want the utility to store the excess power for you, of course they want money. And they don't have enough batteries, hence they run natural gas generators in the evening.

Ah, and then there are EV owners who also want to charge at night. But does the sun shine at night?

 

[2HOTinPHX]

I went with SunRun solar. I pay my utility $9.82 a month for the transmission lines and zero for electricity for 10 out of 12 months. And maybe $100 a month for those two months and in the dead of winter. I still have an oil furnace which I will change to a heat pump when it dies and likely need to expand the solar array

Last time I calculated it the whole lease system
Averages about $90 a month. Easily half or 1/3 of what I would pay without it.

And there is a huge satisfaction knowing I am doing something to help the planet.

Didn’t go to whole battery route because I am not sure the batteries aren’t ultimately harming the environment more

Good to hear from someone who has had a good experience with solar..

Our monthly rate averages $143.00 so not sure if its gonna pencil out for us.

 

[NW-Bound]

Didn’t go to whole battery route because I am not sure the batteries aren’t ultimately harming the environment more

You will feel less guilty if you can make use of surplus or second-hand batteries that are going to be ground up to recover the material.

And you save money too. It's not too different than going to Goodwill to shop. You may find practically unused stuff there.

 

[Aerides]

How old is your roof? If you don't need a new one for 10+ years, great. If you are ready to replace it now as well, great.

If you have less than 10 years to re-roof, factor in the cost of removing and reinstalling all your panels into your plans. Quotes we're seeing are "2 days work for a crew" - plan on $200 per panel, and then plan on getting that quote in however many years. If your solar co isn't also a roofing co, they might lowball this in your estimates. Roofing guys will be more up front on this.

Plan on getting several quotes. And then some more.

 

[djsander]

I think should I get solar is similar to when should I take SS or should I get a Medicare advantage plan or traditional with supplemental. It seems each person is different and location is a factor. From my experience, when we lived in Louisiana after a hail storm our insurance adjuster told us he just looked at a house with solar. The cost to replace the roof was almost double as the panels had to be removed by another company and put back on. Some companies will void the warranties if it isn’t their contractors. Here in New Mexico I know a fellow who had his roof replaced. His solar company had to remove the panels then the roofing company did the replacement. He then waited 6 weeks to have the panels reinstalled as they no longer mounted the same way and the solar company had to fabricate new mounts. All this was extra.
We’ve done the quick estimates and their is no pay off for us. You have to look at all the pros and cons for your situation.

 

[Samsung4321]

Final total cost of installed PV system:

Aus:
$A1 / W ($USA0.64 / W)
https://www.solarchoice.net.au/residential/solar-power-system-prices/

USA:
$USA2.86 / W (= $A4.47 / W)
https://news.energysage.com/how-much-does-the-average-solar-panel-installation-cost-in-the-u-s/

Labour costs in Aus & USA close.
So why is USA installed PV ~4 times the Aus cost?

---

My city is "100% renewable electricity".
I calculate that I would always be financially better off investing the cost of a PV system in an investment with a real return of >= 2% than investing in a PV system, even at current Aus costs.

Recently Territory government has provided 100% principal, interest free loans. That results in a 10 year payback term relative to an investment returning 2% real.

---

Why don't USA home owners replace organic roofing with longer lasting concrete roofing tiles or zinc aluminium magnesium galvanised steel?

 

[Masquernom]

I just had a local vendor give me an estimate for our home here in Louisville, Kentucky. It was something over 20 year pay back, so I said no thanks. I guess our electricity is pretty cheap compared to a lot of states.

If you can do the install yourself, and save all the labor costs, it would probably have a reasonable payback.

 

[Scuba]

OP, if I were you, I’d ask your neighbors and realtor for referrals to good solar companies. We live in the Palm Springs area and put in solar in January. We are generating more than we use except in the really hot summer months. Hoping to balance out over a year but too soon to tell. We may have over-invested in panels but we’ll see. Our projected payback period taking the tax credit into account was about 7.5 years.

Factors we considered in choosing our solar company were:
1. Customer service - we picked a local provider with an excellent reputation
2. Warranty, not only on panels, but other components
3. Manufacturer of panels and how long they’ve been in business and their track record
4. Cost
5. Lead time to installation

We decided to pay cash up front, but if we had been interested in financing, another differentiator was financing options offered. The lowest cost estimate in our case was from a company that had just picked up a huge national contract with a manufactured home builder. We did not choose them because we figured as a small retail customer, we would not get any attention.

Do your homework. I’ve read horror stories about some people waiting for many months before installation due to “supply chain issues.”

We chose to buy rather than lease. Our realtor said that in the event we sell our home, having an owned solar system would enhance the value, not dollar for dollar as newer technology will be available, but at least will add some value. Leased solar typically does not, and in fact many buyers will require the seller to pay off the lease at close of escrow.

In places like Phoenix and Palm Springs, due to the amount of solar energy generated and the extreme heat in the summer requiring heavy use of A/C, solar has a much shorter payback. I can understand in areas where power rates are much lower and the sun is not as intense, and/or the climate doesn’t require frequent use of HVAC, it may not be worth it.

 

[Masquernom]

Our average cost for electricity in 2021 was $100 per month. Takes a long time for payback at that rate. I'd still like to have solar, but hard to justify it.

 

[SecondCor521]

We recently had our roof replaced so I got a back of the napkin solar quote - nothing detailed. Estimate was just over $60k without any subsidy or rebate. That didn’t include batteries for power during an outage. Based on our usage, payback would be 20+ years. I probably would bite if 10 years or less, especially the way rates have been increasing, but not 20.

Perhaps there’s some savings by acting as GC and hiring an electrician, as suggested above, but I doubt it would have saved enough for me to pull the trigger.

It probably varies by location and over time, but when I looked at it about three years ago here in Idaho, a WeAreYourFriendsSolar marketing front quote of $60K would translate to about a $25K actual system cost with an electrician, with perhaps $12K to $15K of that being a DIY price.