Is your home good for solar PV?

If you are considering purchasing a grid-tied photovoltaic solar system (GTPV) for your home or business, this post will provide the basic information that you need to know.

More and more people are starting to show an increased interest in grid-tied PV (GTPV) systems as they offer reliable, pollution-free energy from a renewable energy source, the sun.

In the United States, more utility companies are offering net metering to make grid-connected photovoltaic solar system systems more affordable. Net metering means you can sell excess electricity from your system to the company for the same price as you paid for it.

This is advantageous because it allows an electric meter to run backward when not using all of the energy generated by a home-based PV system.

What is a solar electric, or photovoltaic, system?

Photovoltaic (PV) technology converts sunlight into electricity. It works whenever the sun shines, but it generates more energy on sunny days when direct rays hit the PV modules and supply them with intense light.

Solar panels are devices that produce electricity directly from the sun's rays. Unlike solar water heaters, they do not use sunlight to make energy instead it is produced by electrons freed in semiconductor materials.

The appeal of PV is that it allows you to produce your own electricity without noise, air pollution, or moving parts with a clean and renewable resource.

The basic building block of PV technology is the solar “cell”. A cell consists of a small, solid piece made from a semiconductor material that can capture sunlight and turn it into energy.

Cells are wired together to produce modules that range in power output from about 10 watts to 300 watts.

A PV system that is connected to the utility grid, also known as a “grid-tied” or GTPV system, consists of one or more PV modules connected to an inverter.

An inverter converts direct current (DC) electricity into alternating current (AC), making it compatible with the utility grid and powering devices such as lights, appliances, and so on.

You can install batteries in the system to provide backup power for your home during a utility outage.

Before purchasing a GTPV system, you should be aware of the current state of the technology:

PV systems are a source of renewable energy that produces intermittent power.

But this is not an issue when they're connected to the grid because your utility automatically delivers extra electricity if you need it.

Electricity generated by a GTPV system is more expensive than electricity supplied by a traditional utility. Improved manufacturing has reduced the cost to less than 1% of what it was in the 1970s, but when amortized over a 25-year lifespan, that works out to about 25 cents per kilowatt-hour.

This is roughly double the average electricity price in the United States. Although net metering can help make GTPV more affordable, it cannot match the current price of electricity from your utility.

Because of the upfront cost of installation, PV systems are typically more expensive than obtaining electricity from a utility.

However, if you finance it over time with an electric company through something called ‘solar leasing', your initial investment can be spread out so that it is not such a burden on yourself.

Why should you get a grid-tied photovoltaic solar system?

Some people are motivated to buy a GTPV system out of environmental concern, in order to preserve the earth's finite fossil-fuel resources and reduce air pollution.

Others see it as an investment spending their money on an energy-producing improvement for themselves rather than sending it off into nothingness with utilities.

But most people are turning to the safety of reducing their electricity usage. Because they want less reliance on their utility company that can raise prices at any moment. Finally, some people dislike paying utility bills and value the independence provided by a GTPV system.

Solar energy is quickly becoming the preferred source of clean energy as more cities adopt it. It's not just about doing your part to help the environment; it also saves you money on your monthly bills.

If you want to switch to solar power, you should start by looking into state-sponsored programs in your state.

How to know if your home is good for a for a solar system?

Orient your system for the optimum performance

PV systems require unobstructed access to the sun's rays for the majority of all of the day, all year.

You can do an initial assessment yourself, and if it looks promising, your PV provider has tools to trace the sun's path at your location and determine whether you'll be able to use a PV solar system.

When it comes to solar panels, picking the right position is just as important. For example, a south-facing roof will provide you with more energy for your home or business in comparison to an east-west facing one and produce 30% more electricity on average per day.

Flat roofs will also provide an optimal surface for solar panels because they can be tilted at the perfect angle to generate more electricity, or mounted flat on the roof facing upwards.

Rooftop solar is great, but not the only place you can install a system. Solar modules are also placed on ground-based structures and platforms.

One of these options includes mounting your panels to track the sun so that they're always pointed in its direction, which maximizes their potential performance each day.

Are your site free obstructions (trees, nearby buildings etc.)?

PV modules work best when they have a clear view of the sun for most or all of the day. Make sure you identify any features that could obstruct this, such as trees, roof gables, chimneys, and buildings around your home.

Even though you may have an area where your solar panels are mounted that has full sun for the entire day, it's important to remember that maybe not all parts of the day will be sunshine.

This is because some areas during each particular time period might experience shade from other objects or buildings nearby and this shading can affect how much electricity your system produces.

Do you have enough space on your rooftop or property?

The amount of space required by a PV system is determined by the physical size of your desired solar panel.

Smaller systems require as little as 50 square feet to get started, while larger systems can take up to 1,000 square feet. If your location limits the physical size of your system, you may want to install a more efficient PV module.

PV modules are available today in many different types, and some offer better efficiency for the amount of surface area used to generate electricity.

A more efficient module means that they provide a higher electric output per square foot than others.

While the cost per kilowatt to purchase higher-efficiency modules is about the same as the low- efficiency modules, this may not add much (if anything) to your system's price.

What kind of roof you have, and how its condition?

PV systems can be installed on any type of roof, but some types are easier to work with than others.

Composition shingles are the simplest for installers because they come in a standard size and shape; slate is more difficult because it comes as individual pieces that need to fit together perfectly without gaps or overlaps.

In any case, an experienced solar installer will be familiar with all roof types and will be able to use roofing techniques that eliminate the possibility of leaks.

Ask your PV provider about what they do with warranties for roofs affected by their installation.

If your roof is older and needs to be replaced in the very near future, then it may make sense for you to replace both items at the same time. You'll save on labor costs by having everything done all at once.

Panels are often integrated into the roof and some modules can be made of shingles or raised metal seams that help reduce costs.

What size PV system should you get and with what features?

Typically, a GTPV system is used to meet a portion of your electricity needs. Some people, for example, are considering using their GTPV systems to generate 50% of the power they require on an annual basis.

You may be able to work with your PV provider to get more information on how much you would have needed if that had gone into effect this year, as well as what size solar panel installation would have been necessary to support those goals.

You can reach your utility company and ask about the total electricity usage in kilowatt-hours for any time period you want. This information is also accessible if you have saved your electric bills.

Get an idea of how much you could save on your energy bills by asking the solar panel provider about their annual production and comparing that number to your total electricity demand.

For example, if you use 1 kWh a day but produce 2 kilowatts hours in one year from panels installed at home, then half of what you consume is coming from renewable sources.

Qualifying for net metering in your territory you will be asked the size of your GTPV system. Different utilities may have different restrictions but to qualify for this program, most systems should not exceed 10 kilowatts capacity (10,000 watts).

The qualification process varies depending on where you live so make sure to contact a local utility provider before applying.

You may be able to sell excess electricity your system produces on an annual basis if you have a utility that supports it.

Different utilities offer different terms for this, so make sure to look into the specifics before signing with them. One optional feature you might consider is a battery system to provide backup power in case of a utility power outage. Batteries add value, but at an increased price.

Sizing your system is a crucial part of deciding how much you will spend on energy. The ‘economies of scale' that come with bigger systems can decrease the cost per kilowatt-hour as they become more expensive to maintain and run, so it's important to consider this factor when determining what size solar panel would best suit your needs.

Many inverters, for example, are sized for systems up to 5 kilowatts. Even if your PV array is smaller (say, 3 kW), you may end up purchasing the same inverter.

PV providers are more likely to offer you a lower price if you install a 2-kilowatt system all at once rather than ordering 1 kilowatt of PV this year and another similar power supply next year.

If you choose the latter, it will take more time and effort to get everything set up, which may cost you labor costs as well as money spent on travel expenses if your provider covers them.

How much money you plan to save from your GTPV system?

The value of your solar panel system will be determined by how much you pay for electricity and how much your system will generate. If your utility offers net metering, it is often a fairly straightforward calculation as you and the company will both pay the same amount.

Keep in mind that the actual energy production from your GTPV system will vary by up to 20% depending on geography, angle, and orientation of solar panels, quality of components used for installation.

In the event that you produce more electricity than your household consumes annually, even if net metering is an option on offer by your utility company, it may be difficult to get a full price return for excess power.

Make sure to discuss these subjects with your solar provider. Consider requesting a written estimate of the GTPV system's average annual energy production and what that means in terms of electricity bill savings, as well as how long it will take to pay off this investment.

However, keep in mind that even if an estimate is correct for the average year. Because of natural variations in weather and climate, actual electricity production will vary from year to year.

PV systems generate the majority of their electricity during the day when residential electric loads are typically low.

If your utility does not provide net metering, you may want to size your system to avoid generating electricity that is significantly more than what is required for a given household or business.

How much does a GTPV system cost?

A GTPV price will depend on a number of factors, such as whether the home is under construction or not and if it's integrated into the roof. The price of a PV system can vary greatly depending on the size, manufacturer, and installer.

The most significant factor in determining your cost-to-benefit ratio is the capacity rating which determines how much power you generate per year from your solar panels.

Small PV-panel systems with built-in inverters that produce approximately 75 watts may cost around $900 installed or $12 per watt.

These small systems will only offset a fraction of your electricity bill and are not recommended for people who live in states with less than 8 hours of sunlight per day.

A 2-kilowatt system that will meet the needs of a very energy-efficient home could cost $16,000 to $20,000 to install, or $8 to $10 per watt. A 5-kilowatt system that will completely offset the energy needs of many standard homes may cost $40,000 to $50,000 installed at the upper end.

These are, of course, only rough estimates; your costs will vary depending on the configuration of your system, the equipment you choose, and other factors such as state or local incentives. Estimates or bids can be obtained from your local PV providers.

Are there any cost-cutting incentives in place?

The United States government provides financial assistance for PV technology in the form of a tax credit for commercial solar energy uses.

This energy investment credit offers businesses (but not individuals or utilities) a 10% tax credit and 5-year accelerated depreciation for the cost of solar-powered equipment.

How could you finance the cost of your PV system?

Financing your PV system is not as complicated or mysterious of a process as you may think. If anything, it's an investment in the future with familiar lending options available to most people.

The best way to finance solar energy systems for homes is through a mortgage loan. You can take out your primary mortgage, add on with a second mortgage such as the U.S Department of Housing and Urban Development (HUD) Title 1 loan, or get what's called an “equity loan” that will be secured by your property in order to power up those lights.

You might think that the benefits of a mortgage loan are limited to providing you with more time and lower interest rates. However, it also provides important tax benefits.

Mortgage loans usually qualify as being deductible on your federal taxes (subject to certain conditions) while other forms of alternative financing do not provide any such benefit for taxpayers like yourself.

If you purchase a PV system at the same time you build, buy, or refinance the home on which the solar panels will be installed, adding this cost to your mortgage loan will most likely make everything easier.

It is not only possible, but in some cases, it may even be possible to avoid additional requirements such as filling out additional forms and paying fees.

If mortgage financing is not available, look for other options such as conventional bank loans. Always try to find the best possible combination of low rates and long terms in order to amortize your PV system at a lower cost than you would have paid otherwise.

PV systems are a long-term investment, so the terms and conditions of your PV financing will likely be the most important factor in determining how much you pay for power.

PV systems purchased for business applications should be best-financed through a company’s existing sources of funds.

The most common types are SBA loans and conventional bank loans, but these options have their own pros and cons that make them not always the right choice.