Owning Solar

Over the last 7 years, the majority of homeowners purchased their solar system. The main reason is because of tax incentives. The Federal Tax Credit (FTC) is a great way to save money when buying solar. Before 2020, people that purchased a system got a 30% tax credit from the government. The FTC is now phasing out. This year, people that buy solar are eligible to receive a 26% tax credit. Not everyone qualifies so it’s best to first consult with a tax advisor.  They’ll determine if you’ll be able to get a credit, which will be mailed to you. If you don’t qualify, that means you owe taxes and the credit will contribute to what you owe to the IRS.

Another reason why buying makes sense is the Return on Investment (ROI) you get. When you own solar, it will pay itself off between years 8-10 after purchase. Your ROI is based on the amount of money you save from not paying the utility company. Cool! The idea is to have solar power offset as much utility power as possible. Schedule an appointment to see how much utility power your home can offset with solar. When owning solar, you basically have no electric bill. The savings goes back into your wallet. By the 8th or 10th year, you’ll break even from the accumulated savings.  Every year afterward is completely free energy!

When deciding to own, you’ll either pay the full purchase price upfront or finance and make monthly payments with principal and interest. When financing, the lender will offer 5, 10, 12, 15, 20, 25 year payment terms. The interest rates (based on FICO) for the 5 year term begins at 2.99% while rates for 25 year term range between 7-10%. While some people are able to pay the solar outright, most prefer to pay monthly. Keep in mind that you’re still paying interest so at the end of the term you may have paid more than the original cost. The upside to financing is that there’s not pre-payment penalty. So if you’re able to pay it off sooner, go for it! When shopping for solar, just be sure to know who’s financing our loan. Some lenders may add a lien to your home.

Cash vs. Finance vs. PPA vs. Lease

Leasing Solar

Leasing solar has gained more attention in recent years. Today, leasing is the most popular option because it offers a $0 up front cost. When purchasing solar, either you’ll pay the full price or (if financed) you’ll pay the tax credit you received to the lender. Lenders are going to give you 18 months to pay them your tax credit in order to keep your monthly payments low. Otherwise, they’ll increase your monthly payment. When choosing a lease, you’ll only pay a super low monthly payment for the solar. The payment terms range between 20-25 years and are broken down into a monthly kilowatt (kWh) rate. In other words, the lease program is exactly like how you pay the utility company for their power. The main difference is that you’re paying at a much lower rate.

Leasing a solar is a great option if you’re not able to qualify for the tax credit or if you want the most minimal monthly payments possible for electricity. Another advantage why leasing is a great option is the warranties and protections you get. When you own solar, it’s your investment. So you’re going to want to be on top of the system’s performance. Solar companies that sell you a system usually don’t maintain the system’s performance. They just include the manufacturer’s warranties in their contract.

With a lease, the solar company has ownership. In the lease agreement, they’ve made promises on the solar system, so they have the burden to ensure it’s performing at the level that you agreed to lease it at. If for some reason, the system fails to produce the amount of energy that’s been promised by the solar company, then you’ll be reimbursed or credited for the difference you had to pay for utility power.

Most homeowners think that leasing solar means to be in debt but that’s not the case. There’s no debt or lien since it’s easily transferable. So if you happen to sell the home, it’s not required to pay off the full cost.  The new buyer will simply take over the payments just as they would with the utility company.

The Power Purchase Agreement

The Power Purchase Agreement (PPA) is another type of lease option. Rather than paying the same monthly payment over a 20-25 year period, with a PPA you just pay for the amount of power the system produces. Because solar generates electricity from the sun, a solar system’s production is seasonal. Meaning that generation is low during the winter and high during the summer. With the PPA you’ll be paying less power in the winter time and you’ll pay more for power during the summer time.

Both purchase and lease have their own benefits and features. If you’re unsure whether to lease or buy, consider the following factors:

• How long are you going to live in the home?  If you’re planning to go solar and move out in 5-7 years, then go with the lease. By that time, more homes will have solar anyway because California State Law (Renewable Energy Act) requires it!
• Maintenance Preference. If you like to be on top of your system’s performance, then purchasing is a better way to go. If you prefer another company to handle all and any issue that may arise from the system in the future, select the lease option.
• Most cost saving option. If you’re looking to pay the cheapest price for solar right from the get-go, lease. If you’re patient and want to be free and clear with any energy costs by year 8-10, buy or finance the solar system.

When I discuss options with homeowners I ask them to think about how they intend to get a new car. Solar is similar, in a way. Like a car, it depreciates value, requires maintenance, comes with warranty, and has wear and tear over the years. Regardless of which option you go with, the key is to know how much you’re going to save with solar vs. what you’ll be paying the utility in the long-term. The long-term savings will be tremendous versus the cost you’d pay the utility company over the same amount of time. If you like to get a cost-analysis or breakdown of how much you can save with solar, schedule an appointment.

The post Should I Own or Lease a Solar System? appeared first on Energy WIth Rob.

Unfortunately, many American have filed for unemployment, over six million to date. For homeowners in Los Angeles, they still have to pay their bills. For some, utility costs are the second highest monthly home expense. Here’s how you can make a difference and generating more savings that power.

Making Your Home Energy Efficient

If you haven’t received your latest electric bill yet, most likely when you do, you may find that you’re going to pay more than usual. There’s many ways to reduce energy use at home since we’re not going to stop consuming. We also need to maintain our sanity and comfort while in quarantine! Nevertheless we need to be smart with how we manage power.

 Your Thermostat

According to Department of Energy, 50% of your electric bill is from heating and cooling. Depending on how many people live in the household, different people are going to have various levels of comfort and that’s going to lead to a consistent adjustment of the thermostat.  Fidgeting with the thermostat is going to make your HVAC system work harder.  Keeping the thermostat at a consistent temperature between 68%-74% ideal.  If your home has ceiling fans, consider it as an alternative as we enter the summer months.  Also, regularly check the air filter and follow these steps to clean it.

Your Lights

Unless you love candles you’re going to be paying for power. Efficient lighting is key to any home. Do you know what type of light bulb is lighting your home? Homes typically have 4 types of light bulbs:

• Compact Florescent Lights (CFL)
• Incandescent
• Halogen
• LED

LEDs save the most power because they require a fraction of the amount of electricity to produce the same amount of light as standard incandescent bulbs. LEDs are about 75% more efficient. That means they don’t have to be replaced often.

If you’re able to check which bulb you have, then you can put a very simple strategy together in terms of how often and when you’ll want to keep those lights on.  For example, remember to turn of the lights when leaving a room. Despite some of us enjoy having a well lit home, energy costs are going to be higher than usual during the stay home order. If you know you can replace some bulbs with more efficient LEDs, consider purchasing online to avoid shopping and being out. Just be sure to sterilize the packaging before you bring it inside your home!

Outdoor lighting is usually left on for longer periods than indoor lights. If any areas around your home don’t need lighting, shut them off. Otherwise, if you haven’t done so already think about upgrading your outdoor lights with motion sensors or solar power.

 Your Devices

We all love our electronics. Computers, tablets, smartphones, televisions, electric trimmers and anything else with a rechargeable battery. Some of us that have families have a lot of these gadgets. Being home almost 24/7 means that’s we’re spending more time using them and that means more consumption.

In order to maintain your sanity while having access to technology and entertainment, think about what you can reduce in your home’s daily routine. For example, if you have both a desktop computer and/or a laptop or tablet, shutdown your desktop.

Another option is to bring the family together to watch content on a single device rather than everyone watching on different devices. Also, when your devices are not in use a good energy tip is to unplug them from the wall. Even thought electronic devices such as audio systems and televisions are off, if they’re still receiving an electrical circuit. If you have multiple devices in a single area, a power strip will make it easy to disconnect all of them together.

Your Appliances

With most appliances you save energy by using them less. Guess which appliance you’ll never use less? Your refrigerator! The best way to save money on your fridge is to use an efficiency model that’s Energy Star Certified. If you don’t know if you have and Energy Star fridge, check the back and look for a yellow label that read Energy Star. If you’ve purchased a new fridge with the last 15 years, then most likely you got one that’s Energy Star Certified.

Being energy smart to reduce the electric bill during the Coronavirus will help provide individual and families financial relief. Asking family members to be more responsible with how they use energy can go a long way in keeping your energy bills low. Utilities only have a certain amount of power they can distribute. When demand for power gradually increases, so does the utility rates. Every year, your utility company raises power rates by 5-10% per year. Back in 2015, electric rates averaged at 14 cents per kilowatt/hour. In 2020, utility customers are seeing an average rate between 22 -27 cents per kilowatt/hour. Contact me directly to learn more about how your utility charges you for electricity.

The post How To Reduce The Electric Bill During The Coronavirus Stay At Home Order appeared first on Energy WIth Rob.

How Battery Storage Works

With SGIP incentives available, there’s no better time to purchase an energy storage system.  Battery allows properties to collect energy from both a solar system and the utility which then can be stored and discharged at times when solar is no longer produce energy, such as during the night. With stored energy, a home will be protected from any high peak rates. As long as there’s stored energy, battery will be the second in line power source helping to eliminate energy typically delivered by the utility.  Charging an electric vehicle at night with stored energy from a battery is a great way to keep costs low and become more independent from the grid.

LG Chem and the Tesla Powerwall

Just like the Tesla Powerwall, LG Chem RESU is an AC energy storage system (with an internal DC converter). This means that you’ll be able to install the battery and integrate it with a pre-existing solar system. Both batteries include a 10 year manufacturer warranty and have a compact design that make it easy to install as either a floor-standing or wall-mounted system for indoor and outdoor settings.

LG Chem RESU 10H has a usable energy output of 9.3Kwh. The Tesla Powerwall offers 13.5kWh of output while both have 5kW max power.  To put this into context, average family home uses about 30 kilowatt hours of energy per day.  Average home solar system (6.6kW DC) will produce 17kwh per day with fully charged battery contributing to about a third of your energy needs.

How To Choose The Right Battery Storage System

If you’re shopping to purchase a battery storage system, consider the following factors:

• Your home’s energy consumption
• Your solar system’s production
• The capacity of the battery storage unit

When it comes to purchasing battery storage you’ll want how much energy you use in addition to how much solar you produce. Your utility bill is a great tool to determine how much energy your home needs beyond what your solar system can generate and deliver in excess to the grid. By adding up the kWh you’ve received from the grid and subtracting that number with how much solar you produced during the same time-frame, you’ll know exactly how much additional energy you’ll want to offset with battery storage. While analyzing your bill, be sure to review how much energy you consume during the high or low peak hours of the day. This will give you an idea of the type of battery capacity you’ll need when solar is not producing. By tracking your solar system’s production on a monthly, weekly, and daily basis, you’ll have a better understanding of how a battery storage unit will contribute to your energy savings and use.  This way you’ll have a idea of which battery to purchase.

If you are unsure how to analyze your energy use or need help on how to monitor  your solar production, contact us and speak one of our energy facilitators to further assist you. It’s our job to help you meet your energy goals.

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Whether you currently have a solar system or not, having a battery storage system can be your hero during an emergency or disaster event. During a heatwave, temperatures can exceed over 100 degrees forcing consumers to use more power than usual by reducing their A/C thermostats to pump cooler air. State sponsored programs like Flex Alert help bring awareness yet most people just can’t handle the heat.

Battery Storage Saves The Day

Battery storage (also known as battery backup) protects consumers from blackouts during heat waves and other disaster events. A battery storage unit will collect power, either from the grid or a solar system, then store it. The unit will only release that energy when it’s necessary. Its main function is to charge and discharge energy automatically – typically during high peak rates. When a blackout occurs the storage unit will release stored electricity to the property but to only those critical loads that are designated by the battery’s management system.

What is a Critical Load Center?

A critical load center is a separate electrical panel that’s installed with the battery. Critical loads include selected low consumption appliances such as lighting circuits, refrigerators, and a small room such as a den or office. The idea is to feed a limited amount of power supply to important areas of the property during a blackout. Because the battery storage unit has limited capacity, powering critical loads only allows the unit to be conservative by extending its energy discharge over a longer period of time.

Battery Storage and Solar – The Ultimate Energy Protection

Although it’s possible to have a battery storage unit without solar, it’s ideal to have solar along with battery storage. Why is this? During a blackout, the storage unit is going to take the utilities place as energy provider to the property. Depending on how long the blackout will be, the storage unit can only discharge energy that’s stored from the grid. If the blackout is only 30 minutes, the home or business will be protected. But if the blackout exceeds 5 hours, (depending on storage capacity) the battery will have released all it’s stored energy.

A solar system combined with battery storage allows the unit to store clean renewable energy from the solar panels as they generate electricity during the day, allowing the battery to continuously recharge itself. This results in a sustainable energy cycle where battery discharges and recharges continuously based on solar power production. The unit will then discharge the electricity to the critical loads. Whether a blackout or normal day, solar with battery storage is the most effective way to be energy independent. Keep in mind that it’s only during a blackout event that the storage will discharge to critical loads. Normal days, storage may discharge to more electric loads and appliances of the home or buildings. Lets face it, this is why battery storage can protect you from blackouts in Los Angeles!

Peace of Mind With Battery Backup

Let’s be honest, the city has an outdated power grid that is sensitive to high energy demand. resulting in blackouts. Blackouts are caused by different factors, some very dramatic and while other’s more common. Nevertheless, families and business have a smart opportunity to protect themselves during such events. Being prepared is the top priority and being sustainable brings peace of mind. In Los Angeles for example, a city that is growing in population and demand for energy, will fail to prosper as a larger community when their energy infrastructure isn’t capable to be a reliable source of power. It’s up to the homes and businesses to take responsibility and take advantage of the tools and technology that will allow their independence from grid reliability. Battery storage, with solar is the best option.

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Energy Efficiency is the Foundation of ZNE

California’s official plan, the ZNE Residential 2020 Vision Framework, states that ZNE buildings should use two-thirds or less of the energy of the typical current home. When calculating ZNE, the initial energy efficiency rating of a home is 100. Any energy efficiency improvements bring that number down. Finally, a renewable energy-fueled power source (typically solar) is added to bring the home the rest of the way down to zero.

Energy efficiency measures to get a home “ZNE-ready” include:

• Efficient envelope design strategies (e.g. insulation and double-paned windows)
• Highly energy-efficient lighting technology
• Day lighting (natural sunlight)
• Energy-efficient HVAC (heating, ventilation, and air conditioning)
• Energy controls, such as programmable thermostats and automation

Once these steps have been taken, it’s time to add the power source. Solar is most often used, and there are a few things homeowners should know when considering solar as part of ZNE.

How Zero Net Homes Affect Solar System Size & Cost

Newly-built Zero Net Energy homes in Los Angeles typically require one-third less power than similarly-sized conventional homes. So a house that might normally have required a 6kW system could get away with (at most) 4kW. Although that does not correlate directly to one-third less the price, a smaller system will cost less overall.

An increasing number of contractors also offer ZNE ready homes, which are energy efficient and wired for solar, but not yet connected to a system. Two years ago, the CPUC estimated the cost of ZNE at an additional $6-$8 per square foot of house. More recently, some contractors have begun offering the service at the same price as traditional construction, which speeds ROI on the reduced-size solar systems used by ZNE homes. Many homeowners still qualify for solar incentives in Los Angeles, too, so it has become less expensive to get solar for ZNE homes than it is for similar-sized homes that do not conform to ZNE standards.

How ZNE Retrofits Affect Solar Size

When an existing home gets a ZNE retrofit and then goes solar, how does the increased energy efficiency affect the home’s solar system power requirements? This ultimately depends on the extent of the retrofit. If a home’s energy efficiency rating is increased by 30%, the corresponding solar requirement will be 30% less than it was before the upgrade.

Solar System Monitoring is Part of ZNE

Many installers include power consumption monitoring systems when homeowners go solar. While this is a helpful feature for any home, ZNE consumption monitoring is especially useful. Since the goal of a ZNE solar system is to generate at least as much power as the house uses, you’ll want to confirm it’s performing as promised, even after you get your ZNE certification. Monitoring of both energy production and consumption will give you ongoing peace-of-mind that your rooftop solar system is doing its job.

If you’re considering buying a NZE-ready home, or retrofitting your existing home for NZE, let’s have that conversation. I have experience helping more homeowners go solar, and we’re here to answer your questions.

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