Time to Buy Solar Panels?
NEW YORK ( MainStreet My sister in Corona, Calif. is being dogged by solar salesmen these days. They all want her to put solar panels on her roof and pocket "thousands of dollars" in savings.
Are the savings real? In California they usually are.
According to the Institute for Local Self Reliance , most of the country has now reached "grid parity" for solar, when a 30% federal tax credit, which lasts through 2016 , is factored in. That's not the same thing as "real parity," unsubsidized parity with grid power, which has been achieved in only 9 states so far, ILSR says. The group estimates the cost of solar will continue to drop about 7% per year for the indefinite future, while grid energy prices rose 4.75% over the last year.
Panel costs fell sharply in 2012, but panels represent just 20% of the cost in a residential solar installation there's also the installation, permits, financing, and ancillary equipment to consider. Dropping installation costs can be as powerful a driver of falling costs as falling panel prices. You also need to consider how much your local power company will pay for excess power, and whether the company will take that power at all under a "net metering" scheme. These "soft costs" are why it can cost twice as much to install residential solar in the U.S. as in Germany .
Thus, your options differ from place to place. SolarReviews counts 48 installers working in my sister's home county of Riverside, California. In Atlanta, where I live, there are only five. FindSolar, an industry web site, has a clickable map of solar installers around the country.
Before you sign on any dotted line, however, make sure you consider these questions:
Own or Rent
If you buy solar panels you get all the tax benefits, and the solar renewable energy credits (SRECs) that represent your excess power. You can add the value of the installation when you sell. If you work from home, you can get corporate tax benefits from the depreciable asset. You can negotiate directly with installers for the best deal.
But you also get a lot of uncertainty, which is why most of the biggest players in residential solar are solar lease companies, like SolarCity and Sungevity . None of these companies operate everywhere industry leader B>SolarCity has nearly 20% of the market and is in just 14 states , according to GreenTechMedia .
Most leases are based on a Power Purchase Agreement (PPA, with the leasing company charging you for power at a specific rate, then using that money to pay back the cost of the installation, along with ongoing costs like monitoring, insurance and maintenance. A PPA will charge you by the kilowatt-hour (KwH), a lease will give you a fixed price per-month. The promise is that this will be less than your current power bill over time. The leasing company takes care of installation, maintenance, and the agreement with your local utility to take any excess power.