How Solar Energy Can Be Affordable

Whenever you choose a solar power system, you will be slowing down the search for coal, which is causing the needless destruction of the Appalachian Mountains. You will be making this planet a better place to live in and you will be stabilizing your electric bill. However, few homeowners, even those living in sunny Southern California, consider this home improvement project. Why? It's just a monumental task.

Factors to consider: INSTALLING COMPANY

There are many different ways to approach the process. I want to share my way. The reason why I chose this factor first is that a good installer will consider the customer's thinking process. By interviewing a few installing companies, I can immediately tell how professional a company is. I learned from our cousins that one leading solar panel manufacturer is Sunpower. By signing up with Sunpower, it will refer you to a local installing company. We used Perma City in Los Angeles.

The other method is to check out www.1bog.com and learn to bargain collectively for a lower price. It's catching on in San Francisco, but I wouldn't know if solar energy would ever become trendy in Los Angeles, despite its reputation for sunshine.

What We Learned At the Home Visit/Interview

 

In addition to the basic information about the licensing and bonding of an installing company, it is important to find a patient salesman who can answer all of your questions. We learned that unlike its competitors, Sunpower considered the disposal of the cells after they are spent. They are non- toxic to dispose. Also, the salesman showed how the panel was manufactured to reduce physical inefficiency, such as thickness of the seams between the cells, etc. Our salesman went to the roof and measured it, telling us that there would be fewer solar panels than we had imagined because the installer must adhere to fire regulations. Finally and most importantly, the installer must explain all of the financial incentives to cushion the cost of the project. These incentives can come from varying levels-- federal, state, and city.

How To Determine The Number Of Panels You Need

First, the salesman asked us for a summary of a year's electricity usage before measuring the roof. A good salesman will sell you enough panels that will product as much electricity as you may need so that it can be affordable. We received a letter with the technically information, offering both Sunpower and non-Sunpower systems:

"The first solar system we've designed for you consists 20 powerful SunPower 215 modules, offsetting 72% of your daily energy usage based on the bill you provided of 1,515 kilowatt hours over a two month period. The second system is composed of 16 of those same SunPower 215 modules, providing you with a more affordable alternative and offsetting 53% of your energy consumption. Finally we have provided an alternative system composed of Sharp 175 modules, which offsets 52% of your power usage and provides with the most cost efficient way to power your home."

We ended up choosing the maximum that our roof can bear to offset the extra electricity we were planning to use because we were in the process of adding a second air conditioning system.

The Financial Factors

We heard about the rental option from another company where for only a saving of $10 per month, you would be using solar power. However, that's not the way to go since you never own the system. By owning the system, after the break even point, you just save the electricity portion of your utility bill and would only have to pay for the connection fee (currently $22 per bi-monthly billing). We were skeptical how the rebates and energy tax refunds work in Los Angeles.

Factor #1: Most solar installing companies offer some type of financing. At one point, recently, Sunpower was offering one year no-interest financing. We were able to obtain the 6-month interest-free financing through its financial partner, Enerbank. After the 6 months, the interest starts to accrue from the first day of the loan. The lender issued 2 payments to the installer, one at the beginning, and the other later on.

Factor #2: How does one get the federal tax portion on time. Since we had only a 6-month interest-free window, we decided that we would contract with Perma City in December. Once you have a contract with a company, you are eligible for the tax refund for that year. So, immediately in January, we completed the tax return forms. Before the change in the energy tax refund, there was a cap of merely $2000, which is nothing. During the year, we contracted to install a system, the incentive was 1/3 of the cost of the project. Right there was $12,000.

Factor #3: How to obtain the rebate portion of the incentive? In Los Angeles, it took longer than we expected, 2-3 months after the utility engineer swaps out the old meter for one that can access solar power and "turn back" the dials. We received a check for $13,000 from the Department of Water and Power just in time to repay the loan.

We still owed about $11,000, but we were expecting $8,000 for all of the interests we paid on the house. In our mind, we had to come up with $3000, rather than $36,000 project price. Further, it's important to find a company that is flexible enough to have the utility rebate go straight to the customer, and we were truly lucky to find one so willing to work with us.