Increasing energy costs are spurring more homeowners to go solar, but all the choices in the market can make the decision daunting.
Solar power on residential homes has been heating up over the last 10 years, with a 50% average annual growth rate in the U.S., according to the Solar Energy Industries Association. This is due, in part, to the Solar Investment Tax Credit put in place in 2006 that now reimburses 26% of the cost for solar systems on residential and commercial properties.
As the market for solar power is increasing the field grows crowded with manufacturers and installers touting longer-lasting solar systems with greater efficiency and less cost, deciding which one to choose requires research. “The promises some companies make are wildly flowing,” cautions Madison, Conn.-based architect Duo Dickinson. Another caveat is the cost fluctuation of panels due to tariffs on imports, now at 18%. Though these are set to expire next February.
Here are some things home owners and buyers should consider when choosing components from various providers to make solar work.
1. Roof and house orientation. How much surface solar modules cover on a roof makes a difference in the amount of energy produced. Generally, they are placed facing south or west to be exposed to the most sunlight, optimizing power. Frequently, companies will try to cover 88% to 92% of a roof surface. Covering 100% may produce more power than occupants can use.
2. Panels. In recent years, panels have become more efficient, thinner, and better looking, thanks to monocrystalline designs that use a single photovoltaic cell rather than several cells that the older polycrystalline designs relied on. As a result, the updated panels can occupy less roof space because they pack in more power.
The number of panels installed is generally based on the amount of electricity occupants use, which is why an installer often asks for 12 months of electric bills.
What this means for a homeowner who chooses a newer 400W panel, for example, versus older 370W panel, is that they may only need to install 38 panels instead of 41 and save about 33 square feet of roof space. And because the 400W panel is more efficient, it will generate more electricity.
Installers also need to know local ordinances. For example, Evanston, Ill., doesn’t allow panels to stick up past a roof’s ridge line or be visible from the street if the roof is flat. They also need to know local utility rules since some will buy back excess power. Rocky Mountain Power, which services most Utah customers, gives credit for excess energy.
3. Batteries. Extra energy can be stored in batteries. Different solar panel manufacturers prefer different battery companies. For example, Solaria buys batteries from Sonnen while many other companies use batteries from Tesla.
4. Installers. Installation costs have dropped as more installers have entered the niche and become more experienced. Besides the modules and batteries, homeowners who go solar need an inverter to hold panels, wiring in place, and a meter. Experts suggest homeowners ask installers which modules they use, the price of each panel, number needed, what they look like, how much shipping to the site will be, if permits are needed and if so, whose responsibility it is to obtain them.
5. Costs and return on investment. A typical panel system might run between $15,000 and $25,000, which includes ancillary equipment and labor. Yearly savings vary greatly depending on the utility and if it offers incentives. How much money is saved also depends on how a purchase is made. If someone pays out of pocket, it may take seven to 10 years for a payback, but if someone leases the system, the savings will be less per month, but the homeowner has no upfront investment.
One caveat relates to whether a solar system will increase a home’s value. One study from the U.S. Department of Energy’s Lawrence Berkeley National Laboratory found that the panels are viewed as upgrades and home buyers have been willing to pay a premium of about $15,000 for an average-sized solar system. Additionally, the homes sell faster than those without solar.