Solar hot water and solar electric systems can save you money on your utility bill and decrease your greenhouse gas emissions. Depending on your energy needs, a solar system can pay itself back in less than 10 years. With technologies lasting 25 years or longer, you can more than double your investment! A solar installation can increase your property values and demonstrate a commitment to protecting the environment.
About Solar Energy
Solar Photovoltaic (PV) Modules generate an electrical current when a solar cell is exposed to sunlight. Inverters convert the direct current (DC) produced by the solar modules into an alternating current (AC) for use. This energy is measured in kilowatts (kW), so the size of a solar electric system is indicated by its generating capacity in kW. Each kW of system capacity typically requires 100 square feet of modules to be installed. In the Bay Area, each kW of system capacity may generate up to 1,425 kW hours (kWh) / year.
About Solar Hot Water
Solar water heating can be a reliable and cost-effective way to reduce your utility bill and greenhouse gas emissions. Solar Collectors use the sun’s energy to heat water or a heat-transfer fluid. Active systems use pumps and controls to circulate water or a heat-transfer fluid, while passive systems rely on gravity and thermal dynamics to drive circulation.
Flat Plate Collectors use an insulated box with a transparent cover (called the glazing) to house fluid tubes on a dark colored absorber plate. These are the most commonly used collectors and can heat the collector fluid to 180°F. Evacuated-Tube Collectors use parallel rows of transparent, airless glass tubes, each of which contain an absorber fin attached to a fluid tube. New designs have reduced the cost of this technology and they can achieve temperatures up to 350°F.
Storage Tanks store heated water for later use. Insulation assures efficient use of stored fluids. A Conventional Hot Water Heater is needed to supplement your hot water supply for those instances when your demand exceeds the amount your solar hot water system can provide.
Solar for Your Home
Is solar the right energy option for you? As you begin to plan for your solar project, consider the following questions.
- What Does Your Energy Usage Look Like? Review your PG&E energy use history for a period of at least one year, paying close attention to whether your monthly usage is primarily electric or natural gas. Do your bills fluctuate significantly month to month, or seasonally? If you do not have a paper record of your bills, you can easily access your information at www.pge.com by setting up an online account.
- What Opportunities Do You Have for Energy Efficiency? Think about where the majority of your energy usage may occur. Is your water heater insulated and efficient? Is your building well insulated and weather-sealed? Have you upgraded your lighting to energy saving technologies? Do you have old appliances that could be upgraded to ENERGY STAR models? Refer to SmartSolar’s guidelines for potential improvements in each of these end use areas – space conditioning, water heating, lighting, and appliances and electronics – and consider talking to a building performance contractor.
- What Are Your Solar Options? Consider your current and future energy needs when determining whether solar will be right for you. Do you have a large electric load that cannot be significantly reduced by energy efficiency upgrades? If so, a solar electric (or PV) system might be your best option. Solar hot water could also be right for you if you use a lot of natural gas usage for water heating. Other major considerations for solar include assessing the age and condition of your roof and determining whether you have a sunny south, west, or east facing roof exposure for solar.
- Do You Anticipate Changes in Your Future Energy Use? If you anticipate a major change in your life or your building use (adding a major appliance or an electric vehicle, increasing the number of building occupants, etc.), this might change your overall energy usage and impact your projected solar system size.
- What is Your Project Budget? Decide what your project budget is, and prioritize projects accordingly. Changes in project costs can be difficult to predict as they are based on a number of market factors. Incentive programs, however, generally have very specific conditions, including their dates of availability and rates. It is important to be aware of these conditions, as incentives can have a significant impact on final project cost. If financing will be pursued for a project, begin researching the available options so you can include financing costs (down payments, interest, etc.) into planning.
Financing your Solar Project
- Solar Loans: Whenever you get a solar quote for your business, the quote will include a “Gross Cost” and a “Net with Rebate” cost. The Net with Rebate cost is the amount you will have to come up with to pay for your solar system after the California Solar Initiative rebate and other incentives have been subtracted from the Gross. (Please note that any federal tax credits will be applied after you purchase your system.)
- Energy Efficient Mortgages: If you intend on refinancing your property, you may consider an energy efficient mortgage. EEMs enable you to bundle your solar purchase with your loan; the energy savings from solar will increase your buying power, enabling you to get a larger loan. Interest payments on such mortgages are tax deductible and this helps the overall solar project cost less. Visit the Energy Star, DSIRE, or RESNET websites for more information on EEMs.
- Solar Leasing: The increasingly popular solar lease requires a very low up-front payment (from $0 down to <$1000), and guarantees a monthly payment lower than your current electric bill. Under a lease option, the leasing company owns the solar system on your building, and you make monthly payments to them for your electricity. You are also accountable for paying your local utility for any additional electric needs not accounted for by the solar system. Because you do not own the system under a lease, the leasing company is the recipient of any applicable state and federal rebates and tax incentives. At the end of your 10 to 15 year contract, you are usually offered the option to purchase the system outright, to renew your lease, or to end your contract. Leases can be good options for those who may not be able to make the down payment for an outright purchase or cannot get a reasonable loan rate.
- Power Purchase Agreements (PPA): Similar to a solar lease, Power Purchase Agreements have mostly been used for commercial solar purchases, but are now beginning to gain traction in the residential sector. Under a PPA, you pay a low up front cost (+/- $1,000 or more) to a PPA company and a monthly set electrical rate for electricity generated from your panels. As with a lease, the PPA company takes care of maintenance and repairs, and because you do not own the system, you are not eligible to receive the tax benefits or renewable energy credits associated with the system. Under a PPA, you are still tied to the electrical grid, so any electricity you need beyond that generated by your solar array is supplied by your utility.
- Group Purchasing: Solar community (or group) purchasing is a growing phenomenon whereby neighborhoods or assembled groups of people have banded together to leverage their strength in numbers. The idea of scale plays in the group purchase idea: the bigger the purchase the lower the price per watt installed, and the greater your savings. Such group purchase ideas can be tricky to manage and arrange, since each property will have its own specifics, each buyer will have their own financing and other preferences, and finding a lending institution can be difficult. A PPA may be a good option for a group purchase. City or neighborhood environmental groups usually have some information about local group projects that may helpful, and notable solar group purchases like those in Portland, OR and San Jose, CA can help serve as examples.
Solar Assistance You Can Trust
Are you interested in making your home more energy efficient and self-sufficient? Would you like more information about solar technologies before talking to a contractor?
SmartSolar offers independent, site-specific analysis of solar and energy efficiency opportunities for local residents and businesses. This free service demystifies solar and energy efficiency investments with unbiased, consumer-friendly information and advice.
A SmartSolar audit assesses a property’s potential for installations of solar technologies and energy efficiency measures, including cost-benefit analyses, information about local contractors, building codes and ordinances, financing options, rebates, and incentives. SmartSolar can also help clients navigate the management of solar projects at their properties.
For more information, visit the SmartSolar website or call (510) 981-7750.