April 2015 Archives

The Quest for Solar - part 1

We hear a lot of news lately about dramatic growth in solar power generation in the US, and for good reason: solar prices are the lowest they've ever been, and there's a handsome 30% tax credit available until the end of 2016 to help defray the cost of the installation.  With the tax credit going away in just over 18 months from now, and with the price of installation finally falling to levels many people can afford, it's a terrific time to drastically reduce your personal carbon footprint and ultimately save yourself a lot of money, too.

I've necessarily learned a lot about solar generation in the last few months that I'll spend the rest of this post sharing.  If you're thinking of solar, I hope this will be a helpful read for you.  As an anti-disclaimer, I am not affiliated with any solar company, don't (to my knowledge) own stock in any solar manufacturers or providers, etc.  If you should decide to use Sun Power, there's a nice referral program, but that's not why I'm sharing our experiences.  I'd rather we all saved some money and we all put less carbon into our atmosphere.


One of the most misleading figures you'll hear in news articles about solar power is the "cost per watt."  While this number is useful for describing trends in the solar industry, it's almost completely worthless when considering the cost to install a solar system at your house.  The reason for this is that not all solar systems are created equal, not all installations are equal, and the size of the system you ultimately purchase is not based on your instantaneous power consumption.  Let that last point sink in just a little bit, and I'll explain.

If you discuss solar with your friends and neighbors and Twitter followers enough, eventually some smartalec is going to point out that solar only generates power during the daytime, when the sun is up.  Usually this will be pointed out in such a way as to suggest that this is the most amazing revelation you're likely to hear, and that this fact renders the total existence of solar power completely worthless.  I recommend responding to such people with as much sarcasm as you can possibly muster.  Beat them senseless with it, because they have it coming.

It's true, of course, that you're only going to be generating electricity during certain hours of the day, and you are also not going to be generating peak wattage that entire time (the "cost per watt" is actually relative to the peak wattage of a panel under laboratory conditions).  In most cases, this means you're still going to be connected to the electrical grid so that at nighttime you're getting power the old-fashioned way.

When you sign up for solar, you will switch your billing from your utility company from the traditional metering you have today to what's called "net metering."  The idea is to size your solar system so that, on average, the amount of electricity, measured in kilowatt-hours (kWh), that you generate during the daytime is roughly equal to the amount that you use overnight, so that your net usage is roughly 0.  Or, if you want to size your system a little smaller, you get all of your net usage to fit inside of the "tier 1" rate, so you're paying the cheapest possible rate for what net power you do have to buy.

Naturally some days are sunnier than others, and days are longer in the summer than in the winter, and our power consumption patterns vary throughout the year.  So to take all of that into consideration, the utility company does a "true up" on an annual basis, because your massive amount of over-generation in June is expected to be offset by the considerably larger amount of electricity you need to buy in December.  What happens is in June you'll end the month with a massively negative power bill, or to put it another way, with a very large bill credit.  As the days get shorter, cloudier, and wetter, you'll start burning through that bill credit.

The common theme here is that we're talking about cost in terms of kilowatt-hours, not watts.  You want to size your system to generate roughly as many kWh per year as you expect to consume per year, and it is the cost of the size of the system that can do that at your house which matters, not the theoretical peak wattage of a single panel in a laboratory that matters.  So the more relevant figure when comparing bids is the "cost per kilowatt-hours-per-year".


There is tremendous choice in the market today for solar panels, and they are certainly not all created equal.  One of the numbers you'll hear discussed the most is the efficiency of a panel.  This is a measure of the amount of energy in the form of light from the sun that strikes the panel relative to the amount of electrical energy that exits the panel.  The theoretical maximum (for various physics reasons) one can practically expect to ever achieve is about 33%.  In practice, no panels come that close.  Efficiency ratings below 20% are more common, with the most efficient Sun Power panels being just above 20%.  This small difference in percentage actually matters even for small home installations, as it can make the difference between needing 12 panels or 14 panels.  More panels can translate to more cost, though the less-efficient panels are also cheaper in general.

A number you'll hear less often is actually more relevant: the total kWh a panel can be expected to generate over a given time period.  (Here we go back to kWh again.)  Again, all panels are not created equal, and all installations are not created equal.  Some of the nicer panels have a lower threshold for generating sufficient electricity from sunlight to start supplying your house and the grid, which means that for the same number of kilowatts of a system, you'll actually generate more kilowatt-hours of electricity, because the number of hours of generation is greater for a system with a lower threshold.  This factors back into your cost: perhaps with better panels, you can get away with a system of smaller size, because the greater efficiency and lower threshold mean that you're generating the same kWh of power with fewer panels.

Degradation is another value to keep in mind.  Like everything else, entropy affects solar panels.  They heat up, they cool down.  They experience weather. Many panels are rated to degrade in performance from between 0.5% to 1% per year.  Really nice panels may degrade at a rate closer to 0.25% per year.  This number will affect your total cost of ownership, and you can expect a good solar bid to include a chart showing you just how many kWh you can be expected to generate from year 1 all the way through year 25.

Other factors to consider include the warranty -- how long is it, and does it include labor-- and how your solar panels were manufactured in the first place.  This is another point where your smartalec friend will think he's discovered the most amazing flaw in your plan that has never before been discussed.  Energy is, in fact, consumed to produce your solar panels.  There will be inevitable waste products as a consequence of that manufacturing. The amount pales in comparison to the energy that you are currently using by the process of burning coal or natural gas to power your house and the waste products that produces, but if this stuff matters to you, then by all means look into how your panels are manufactured.  You might also want to look into where they are manufactured, again, if that's a thing that matters to you.

Inverters, Microinverters, Bypasses

Solar panels generate DC power, but your home and the grid use AC.  Converting from DC to AC requires at least one inverter (which is literally inverting the polarity of the current 60 times per second progressively in some approximation of a sine wave).  The simplest system is a single-inverter system, in which all the panels are wired together in series, and at the end of the chain is a single inverter box converting the total output to AC.  Some single inverter systems allow for the connection of a power outlet that still works during a power outage.

Panels are affected to varying degrees by shading, and arrays of panels are negatively affected when some panels are shaded more than others.  To put it another way, a solar system is most efficient when all of the panels in that system are receiving a uniform amount of light.  A panel which is receiving less light can actually be detrimental to the total power output of the system.

Some installers work around this problem by converting to AC not at the end of the chain, but at every panel using microinverters.  An advantage of this approach is that it also allows for the monitoring of each individual panel.  The downside to this approach is the introduction of more points of failure in the system, increased complexity, and possibly increased cost.

Another approach is to give the system the capability to completely bypass a shaded panel automatically, so that if a panel is behaving more like a resistor than a battery, it can be temporarily routed-around.

Yet another approach is building in tolerance for this situation into the panels themselves, such that their performance in this scenario is still acceptable.

There are good points and bad points to each approach, which you'll need to consider when deciding which type of system you want to buy.

Your Roof

Solar panels typically will be installed on your roof.  In a perfect world, you have a roof whose peak runs east and west such that it has a slope facing the south (in the northern hemisphere, or north in the southern hemisphere).  You can still generate some power with a roof that faces east or west, but for just about half the day instead of the entire day.    It's best if you're installing on a roof that still has 10-15 years of life left in it, because it will cost you roughly an extra $1000/kW to remove and reinstall a solar system when replacing a roof.  On the other hand, part of your roof will be shaded by the panels, extending its life underneath the panels somewhat.  A good solar installer will warrant their roof penetrations for leaks.

It's not a bad idea if you're thinking of going solar to have an experienced roofer come by and inspect your roof to get some idea of how much life it has remaining.  If it's less than 10 years, consider re-roofing, for which you may also be able to collect some tax incentives.

Tax Incentives

Currently in the United States there exists a federal tax incentive of 30% for the cost of a solar installation, with no cap on the size of the credit.  It is the opinion of many tax advisers that this 30% credit can also be applied to the cost of re-roofing, provided that re-roofing needs to be done as part of the solar installation and is done at the same time.  I am not a tax adviser, and I am merely reporting what my own research has turned up.  Do your own research and ask your own tax adviser if you plan to claim this credit.  The tax credit applies to the cost of the panels, hardware, and installation of your system, and can mean a very large discount, though you'll have to wait until you file your taxes to get the money.  Some installers are offering no-interest loans to help people defer the cost until they get their tax refund.

The solar tax credit expires at the end of 2016, so expect next year to be a very busy year for solar installers.  Take that into consideration, and remember there may be a lead time for your bid and your job.

Buy vs Lease

We opted to buy our system, because for us it made better economic sense.  If you lease, you don't get any of the tax incentives (your installer does).  You also have to worry about lease transfers if you should sell your home.  On the other hand, if the solar industry is to be believed, the ROI for a solar installation is >= 100%, meaning that $20,000 spent installing solar on a home will increase the value of a home at least $20,000, because of the desirability of solar power.  Installing solar also typically does not increase the cost basis of a home, meaning you won't be taxed on the increase to your home's property value because you installed solar.

Of course the downside to buying is the immediate capital outlay.  It is expensive.  Look into what financing options you may have at your disposal, and whether the interest may tax-deductible.


Unless you're designing for a more expensive "off the grid" solution, your solar system is tied directly to the power grid, and you will not have electricity during a power outage.  This is because your system must disconnect itself to prevent potential injury to power workers and equipment during repairs. As I mentioned above, some inverters do have the capability of providing electricity to a single outlet during a power outage, so at least you can keep your cell phones charged or power some other essential pieces of equipment.


From the time you sign your contract to the time you are enjoying the benefits of solar power could be a couple months.  Your job is likely to be subcontracted to an installer, so there's some lead time to get on their schedule.  Permits need to be pulled with your local jurisdiction.  The installation has to be inspected before it can be powered on.  The utility company has to issue a "permission to operate" for you to tie your system into the electrical grid.  Each of these activities takes time to wind its way through bureaucracy.  The actual installation itself will only take a day or three, depending on the size of the installation and any complications.

I'll have more to say about installation as ours progresses.  We opted to go with a 4kW Sun Power system for a variety of reasons, and our installation process has just begun.  The first step will be scheduled soon-- a survey of the installation site to determine where the panels will be installed, how the cabling will be routed, etc.


I hope this brain-dump of everything I've learned so far has been helpful.  Be sure you do your research, get several bids, and consider your options carefully.  It may take you several years to make back the money you spend, but you'll be cutting your carbon footprint immediately.


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This page is an archive of entries from April 2015 listed from newest to oldest.

February 2015 is the previous archive.

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