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

[EastWest Gal]

We installed solar in 2018. We were due for a new roof, so that was done first. The cost was about $18K if I remember correctly. Paid it from the HELOC. We have 22 years to finish paying off the HELOC. We save probably $400/mo 6 months out of the year on AC costs. We do not have a storage battery system, however.

I was working at the time, and the 30% tax credit was very nice. BTW, the solar tax credit was bumped back up to 30% until 2035. The tax credit should probably be figured into the cost as well.

 

[NW-Bound]

... We save probably $400/mo 6 months out of the year on AC costs...

Holy Mackerel!

My highest electric bill before I had solar power was around $400/month in August, and I am in the SW where the record high was 122F.

What is your highest electric bill in PA, before and after having solar power? How hot does it get in PA?

 

[Romer]

I installed Solar and a Backup battery system (32kWh). I consider the battery backup a capability that I wanted and was not looking at payback. With hackers and outages now more frequent, I wanted to be able to keep power through what may come.

The Solar system payback on its own didn't seem worth it at 12-16 years when I installed it last year.

However, Electricity rates have gone up and another way to look at it is protection from inflation. My Electrical bill has been $6 (fee's) a month due to Net Credits.

I have two HVACs that are 18 years old and will need to be replaced soon. With AC seer ratings of 10 being improved by more efficient AC or Heat Pumps, I will create more surplus to then cover EVs. We intent to get EV Vehicles or at least the plug in Hybrids that you can drive 40 miles on battery.

Since I own my own home, having solar is a way for me to further hedge the Home and utilities portion of inflation. Being able to cover EV power (instead of gas for cars) is another facet of that. Also, being only 61, I intend to live in this house long after it has paid for itself.

It is a personal decision as to where you want to spend your money based on how much cushion you have. If we were tight financially, we wouldn't have done it.

The Tax credit now at 30% does make it more worthwhile than when I did it last year at 26%

 

[2HOTinPHX]

So we did a Solar consultation today over zoom. About an hour long, nice enough guy. Definitely some red flags though.
He did start off right with suggestions like doing an energy audit and check for updates that could make the house more energy efficient. Replace insulation in the attic and make sure ducts are sealed.
Supposedly using quality parts?Hanwa Q Peak Duo panels and Enphase Micro inverters?
19 panels 7.6 KW system cash price about 30k.
Now some sketchy stuff. Lots of figures and info in the presentation but not able to email the info so we could read through the stuff. Used free zoom so at 30 minutes we had to reconnect.
So the 30K was before tax credits but we don't have that much income tax liability that we could claim the credits. they really push these tax credits to make it seem cost effective. I don't think the numbers pencil out for us. Our average bill is 150.00 a month for electric. We have gas for heat and water heater. Just the two of us here.
Real weird stuff when he started talking about financing....big pass on that as others have suggested here.
Some how he projected we would save like 118,000 over 25 years? That's around 400 a month....that seems next to impossible? Fuzzy new math? Am I missing something there or did he slip a decimal point?
So more research is needed but seems probably more trouble than it's worth?

 

[daylatedollarshort]

He did start off right with suggestions like doing an energy audit and check for updates that could make the house more energy efficient. Replace insulation in the attic and make sure ducts are sealed.

I bought a book years ago on how to put your home on an energy diet. We cut our energy use around half, but because we have tiered rates, it went down by more than half. And that was without even doing anything major like insulation, energy audit or heat pump, just a bunch of small stuff like going around with a Kill a Watt, buying a tabletop pizza oven, cooking with thermal cookers, installing LED bulbs inside and solar outside, and using drying racks.

 

[SecondCor521]

So we did a Solar consultation today over zoom. About an hour long, nice enough guy. Definitely some red flags though.
He did start off right with suggestions like doing an energy audit and check for updates that could make the house more energy efficient. Replace insulation in the attic and make sure ducts are sealed.
Supposedly using quality parts?Hanwa Q Peak Duo panels and Enphase Micro inverters?
19 panels 7.6 KW system cash price about 30k.
Now some sketchy stuff. Lots of figures and info in the presentation but not able to email the info so we could read through the stuff. Used free zoom so at 30 minutes we had to reconnect.
So the 30K was before tax credits but we don't have that much income tax liability that we could claim the credits. they really push these tax credits to make it seem cost effective. I don't think the numbers pencil out for us. Our average bill is 150.00 a month for electric. We have gas for heat and water heater. Just the two of us here.
Real weird stuff when he started talking about financing....big pass on that as others have suggested here.
Some how he projected we would save like 118,000 over 25 years? That's around 400 a month....that seems next to impossible? Fuzzy new math? Am I missing something there or did he slip a decimal point?
So more research is needed but seems probably more trouble than it's worth?

You have to guess on all sorts of things to do a projection. These solar marketing companies are just incented to err on all the numbers in a way that makes it seem like a good deal.

They typically don't know or don't understand that the tax credit is nonrefundable. (I think it carries forward, but don't quote me on that.)

They typically will assume zero maintenance and zero failures and zero roof replacement costs.

They typically will assume that your electric costs will go up at X% per year where X% is on the high side.

They probably assume that your electricity company will continue to buy back power at whatever current favorable deal exists. (Sometimes they'll say that you'll get grandfathered in to the current great deal and the electric company will be phasing that out soon...just a trick to instill a sense of urgency.)

If it suits, they might calculate you getting a big system and selling lots of power back to the power company at ever increasing prices (see X% above).

With optimistic numbers, I can probably calculate a payback in 5 years. With pessimistic numbers, it probably is 20 years to never.

...

I dug out my papers from my presentation a few years ago from a local solar marketing company. Interestingly, similar size system to yours, similar hardware, similar price. Some notes about a loan, and "go solar for less than your current electricity bill" (not accurate). But also no paper quote from them with a price - just cool pictures of my house with solar panels CGI'ed on top of them, with a bunch of numbers and panels and calculations. Also no paper statement with payback period or IRR.

 

[Koolau]

I'd be concerned about solar contractors going out of business and leaving you without a warrantee or anyone to even work on your system. The other thing is that Electric companies have in many cases been hostile to home solar. They change the rules once you get installed and there's not much you can do . I'd get stuff in writing and really check out the contractor (ask for list of satisfied customers - and try to find some not-so-satisfied customers.)

By the way, I hear folks talking about paybacks of 10 to 20 years but I think solar has a life-time of around 20 years (about like a roof.) Also, are you certain you'll stay put for 20 years?

No expert and I think solar is an interesting technology which is coming into its own. I just think you really need to be careful on such a big investment. YMMV

 

[Aerides]

He did start off right with suggestions like doing an energy audit and check for updates that could make the house more energy efficient. Replace insulation in the attic and make sure ducts are sealed.
Supposedly using quality parts?Hanwa Q Peak Duo panels and Enphase Micro inverters?
19 panels 7.6 KW system cash price about 30k.
...
So the 30K was before tax credits but we don't have that much income tax liability that we could claim the credits. they really push these tax credits to make it seem cost effective. I don't think the numbers pencil out for us. Our average bill is 150.00 a month for electric.

Yes, efficiency is key. This could drop your panel requirement easily by 25% - important, especially if you need the roof space for optimal setup. Those are things you could be doing anyway though (probably should).

The tax credits can be applied over several years. But even so, for many, just going for the dollars might not prove "worth it" with today's costs.

 

[zinger1457]

My utility recently raised the basic fees for solar users to be connected to the grid, believe it's around $30/mo, they requested $50/mo from the state commission. It's definitely having an impact on new solar installs.

 

[ImThinkin2019]

We're in CT. We put in rooftop grid-tied solar in 2021 with no batteries. Our electricity goes direct to Eversource and they build up a "green bank" which we draw down when our generation is less than our use. After a full year with the system we think it will generate all the electricity we use. We are happy with the decision.

The cost for the solar equipment, after tax credits and subsidies, was just under $30,000. Our usage at the time we got the system was about $3,000 per year. We have geothermal HVAC plus electric water heat, dryer, etc. No other fuel source except a wood stove.

The way we looked at this, we would pay the cash now to almost or completely eliminate a recurring expense going forward. We are happy with this.

Eversource, our electricity provider, just floated a press release saying they probably would have to increase electricity rates "40%" to cover the cost of fuel plus the maintenance they've been doing to prevent storm-related outages. This improves the ROI for us.

We did have some aborist work done which reduces the ROI but we wanted that work done anyway.

Our daughter did a similar thing with similar results.

The ROI was greatly improved by the subsidies in place at the time.

The installer was a local company - there are many to choose from. Our SIL did the company selection. Since they were happy with the firm, we used them as well.

 

[Koolau]

Yes, efficiency is key. This could drop your panel requirement easily by 25% - important, especially if you need the roof space for optimal setup. Those are things you could be doing anyway though (probably should).

The tax credits can be applied over several years. But even so, for many, just going for the dollars might not prove "worth it" with today's costs.

Yeah, this is probably an "iffy" time for solar if for no other reasons than the current inflation, supply chain issues and flakey empl*yment situation.

I think I would wait a year or two and see what settles out. Also, there may be more credits coming (heh, heh, I kinda hope NOT but you gotta do what's right for you.) Waiting would give more time for research as well. Of course, I know very little about solar, so YMMV.

 

[teetee]

The state I live in has 47% electric bill increase this winter. I bet lots of families think about getting solar panel on their roofs.

I am so sick of the ads from those scummy solar lease companies on YouTube. The free lunch pitch is just not true.

 

[Samsung4321]

Our electricity goes direct to Eversource and they build up a "green bank" which we draw down when our generation is less than our use.

The cost for the solar equipment, after tax credits and subsidies, was just under $30,000. Our usage at the time we got the system was about $3,000 per year.

"low-interest financing to help you upgrade your home’s energy performance with no money down. Loan Terms* 5 years 7 years 10 years 12 years APR 4.49% 4.99% 5.99% 6.99%
*15 and 20 year terms are available. Lender participation varies"

https://www.ctgreenbank.com/programs/smart-e-loans-low-interest/

What are the electricity export & import rates $/kWh?

 

[Scuba]

So we did a Solar consultation today over zoom. About an hour long, nice enough guy. Definitely some red flags though.
He did start off right with suggestions like doing an energy audit and check for updates that could make the house more energy efficient. Replace insulation in the attic and make sure ducts are sealed.
Supposedly using quality parts?Hanwa Q Peak Duo panels and Enphase Micro inverters?
19 panels 7.6 KW system cash price about 30k.
Now some sketchy stuff. Lots of figures and info in the presentation but not able to email the info so we could read through the stuff. Used free zoom so at 30 minutes we had to reconnect.
So the 30K was before tax credits but we don't have that much income tax liability that we could claim the credits. they really push these tax credits to make it seem cost effective. I don't think the numbers pencil out for us. Our average bill is 150.00 a month for electric. We have gas for heat and water heater. Just the two of us here.
Real weird stuff when he started talking about financing....big pass on that as others have suggested here.
Some how he projected we would save like 118,000 over 25 years? That's around 400 a month....that seems next to impossible? Fuzzy new math? Am I missing something there or did he slip a decimal point?
So more research is needed but seems probably more trouble than it's worth?

I would be very surprised if you can’t get a reasonable payback period and ROI on a solar installation in Phoenix.

 

[Samsung4321]

I would be very surprised if you can’t get a reasonable payback period and ROI on a solar installation in Phoenix.

Pay-Back is when capital is recovered after accounting for depreciation and future replacement cost.

Pay-Off is when capital is recovered and returns exceed that of a competing investment such as a compounding bank deposit.

7 kW System Cost (after ITC) is $12,173:
https://www.energysage.com/local-data/solar-panel-cost/az/

Pay-Off would be longer than system 'life'.

Most clear when investment yield is greater than inflation rate.

 

[ERD50]

Originally Posted by EastWest Gal View Post
... We save probably $400/mo 6 months out of the year on AC costs...

Holy Mackerel!

My highest electric bill before I had solar power was around $400/month in August, and I am in the SW where the record high was 122F.

What is your highest electric bill in PA, before and after having solar power? How hot does it get in PA?

+1!

$400/month for 6 months for AC in PA? That just does not sound right. I don't think N IL is much different from PA in climate, and I don't think I've ever had a bill much more than $200 for a largish house with little shade, medium insulation, and certainly not for 6 months straight.

What's up?

-ERD50

 

[Scuba]

Pay-Back is when capital is recovered after accounting for depreciation and future replacement cost.

Pay-Off is when capital is recovered and returns exceed that of a competing investment such as a compounding bank deposit.

7 kW System Cost (after ITC) is $12,173:
https://www.energysage.com/local-data/solar-panel-cost/az/

Pay-Off would be longer than system 'life'.

Most clear when investment yield is greater than inflation rate.

In our case, given the very high electricity rates in Palm Springs and high usage for several months per year with temperatures over 100, the energy savings should be significant enough to recover the initial investment net of tax credit and panel maintenance costs within 7-8 years. I would think Phoenix would be similar.

This doesn’t account for opportunity cost of alternative investments. One could argue that the payback is much longer if you assume you can get a guaranteed ROI in the financial markets. However, there are also intangible benefits of solar. It’s nice being able to run our A/C where we need to be comfortable without worrying about cost. And from a resale perspective, homes with relatively recent solar installations will command a premium, all other things being equal. Lots of variables to think about.

Bottom line - in a coastal area or an area with a lot of cloudy days, solar is a questionable investment, but in a desert area with extreme temperatures and 300+ sunny days a year, the business case is much more robust.

 

[Samsung4321]

doesn’t account for opportunity cost of alternative investments. One could argue that the payback is much longer if you assume you can get a guaranteed ROI in the financial markets.

The Pay-Back time is the same, the Pay-Off time is always longer presuming the alternative investment does not make a loss.

nice being able to run our A/C where we need to be comfortable without worrying about cost.

The alternative investment would pay for the non-PV electricity cost.

homes with relatively recent solar installations will command a premium

Not discernible in the market price noise.

Bottom line - in a coastal area or an area with a lot of cloudy days, solar is a questionable investment, but in a desert area with extreme temperatures and 300+ sunny days a year, the business case is much more robust.

No doubt that weather and shading have large effects on PV system viability.

Latitude: Palm Springs 33.8303° N; Mildura 34.2069° S. Similar climate, cost of electricity, PV Palm Springs ~ twice cost.

People in both places have PV systems because the Pay-Back time is roughly 10 years or less, and they do not consider the Pay-Off time.

 

[zinger1457]

In our case, given the very high electricity rates in Palm Springs and high usage for several months per year with temperatures over 100, the energy savings should be significant enough to recover the initial investment net of tax credit and panel maintenance costs within 7-8 years. I would think Phoenix would be similar.

Usually visit Palm Springs once a year, just arrive today for a week's stay. I've always wondered why there isn't more use of solar panels on homes in Palm Springs, just observational from driving around and playing at many of the local golf courses but it just doesn't seem like many homes have them.

 

[aja8888]

Usually visit Palm Springs once a year, just arrive today for a week's stay. I've always wondered why there isn't more use of solar panels on homes in Palm Springs, just observational from driving around and playing at many of the local golf courses but it just doesn't seem like many homes have them.

Like many old people that live in Palm Springs, my sister-in-law only cares to go out for dinner each evening in a nice outfit and in a fancy place and lay around by her pool during the day. Electricity? Her accountant handles that.

 

[youbet]

+1!

$400/month for 6 months for AC in PA? That just does not sound right. I don't think N IL is much different from PA in climate, and I don't think I've ever had a bill much more than $200 for a largish house with little shade, medium insulation, and certainly not for 6 months straight.

$400 does seem really high. Here within sight of the Chicago skyscrapers, I can't remember ever having a bill like that. 1,500 sq ft, single story, brick veneer, original 45 year old insulation, modern HVAC system. We don't skimp on temp control. We're geezers who like to be comfortable!

DW just handed me the folder........

May $75
June $76
July $103
Aug $84
Sept $73
Oct $47

I can't imagine having a solar system that would accomodate 4X our current usage. I'd have to put panels on the neighbors' roofs!

 

[catii]

We've had ours since 2010, back when it set us back $60K. But it paid for itself in 47 months (Hawaii kWh rates are HIGH!) & I have no regrets. Today, it's a no-brainer, especially if your state offers tax credits, or no state tax. Don't hesitate, do it!

 

[FIREarly]

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?

Federal discount of:
-26% if installed in 2022
-22% in 2023
-20% in 2024 (?)
-Expires

https://www.solarunitedneighbors.org
Provides "Costco" style discount and buys in bulk. They're available in Arizona and a few other states. It takes longer because they have to get X number of people to make a larger order. 2023 will be the earliest for this option unless there is a group already almost ready to go.

 

[SecondCor521]

Federal discount of:
-26% if installed in 2022
-22% in 2023
-20% in 2024 (?)
-Expires

The above may have been true before the Inflation Reduction Act. Now it's 30% through 2024. It's also extended for 10 years, although I don't know what the rate will be in 2025 onward.

(They'll probably change it again. The energy tax credits have been extended and modified a number of times already.)

 

[FIREarly]

Federal discount of:
-26% if installed in 2022
-22% in 2023
-20% in 2024 (?)
-Expires

The above may have been true before the Inflation Reduction Act. Now it's 30% through 2024. It's also extended for 10 years, although I don't know what the rate will be in 2025 onward.

(They'll probably change it again. The energy tax credits have been extended and modified a number of times already.)

Those % are not related to inflation. The federal government is offering "money back" OR end of year tax credits when solar panels are purchased AND installed/working during those years.