While enjoying a cup of coffee with some friends this morning I found myself being peppered with questions concerning installing photovoltaic (PV) solar on homes. It seemed that everyone had a similar set of questions, and after spending most of an hour answering them it was suggested that I try to summarize them on my blog - so that is the purpose of this blog. However, each of the topics that I cover are much more complex and have more details than I can cover here. Please just consider this a "primer" based upon some basic considerations. If you decide to install a solar system you will may want to dive a little deeper into some of the topics.
- Don't solarize your inefficiencies. The first thing to consider when considering a PV solar system is reducing your energy footprint before sizing the solar system. The reasons for this are two-fold. The first and most obvious is that solar panels are expensive. The more the load associated with inefficiencies is reduced, the fewer panels that are needed. Right now solar panels are around $800 to $1000 each, installed. Making a change such as switching to LED lighting might be able to save a panel, freeing up $1000 for the lights. Heating systems and building insulation are two other areas that almost always are extremely inefficient, but can readily be improved - reducing the total energy use of the home and thus reducing the required investment in solar panels. The second reason to improve efficiencies is that doing so almost always dramatically improves the comfort of the home. You get reduced costs while getting better performance and more comfort by fixing inefficiencies before sizing the solar system.
- How much does a solar system cost? The cost of a PV solar system depends upon how much electricity you use. I live in Sacramento with mild winters, hot summers and six to seven months of sunny summer days every year. The systems that I have installed to achieve "net zero" (zero electrical use averaged of a year) range in size from 14 to 30 panels. For example, my house in the country is a 1986, 2200 square foot "ranch style" house with a well, swimming pool, hot tub, electric heat and cooling (using a heat pump), electric dryer. We use propane for water heating and the kitchen stove. I have 30 panels, which brings us very close to net zero. On the other hand, I have a "town" friend that has an 1970ish, 1800 square foot house that uses 14 solar panels for the same outcome. The difference is in my swimming pool, electrically heated hot tub, water well and probably some lifestyle differences. I find that twenty 260 watt panels is a good starting point for talking, it is enough for a "normal" house with normal use preferences.
Assuming $800 a panel installed cost ($3.10 a watt, which is about what I charge), a 20 panel array will cost about $16,000. However, I have been researching installed costs in the area and find that others in the area charge from $4.50 to $6.50 a watt ($23,400 to $33,800) or more, sometimes significantly more. Obviously there is a large difference in installed costs using similar equipment. I recommend checking this out carefully.
There is currently a Federal tax credit of 30% for solar installations (set to expire at the end of 2016). For my costs, that results in a total installed cost of about $11,200. The exact cost depends upon a number of variables such as roofing, difficulty of connecting to the electrical service, mounting and racking details, and other items. Based upon these considerations, a 20 panel system should have an after-tax cost of between about $11,000 to $24,000 - depending upon installation specifics and the installer costs.
- What kind of financing is available? This is a rapidly changing topic. Cash is obviously an option. Another great option might be a standard loan, or a second mortgage. These options are likely to incur the least overall cost. The problem with loans is that they come with financing fees and might have relatively high interest rates.
There are no-up-front fee leases that provide a certain amount of power each year for a fixed monthly or annual fee. The leasing company owns the solar system and therefore receive the tax credits. They also own any additional energy that the array makes and sell it back to the utility company. At the end of the lease period (typically 15 years), they own the array and you can either reapply for the lease, pay for the array, or have the array removed (which may or may not create an additional fee). While the leasing approach seems attractive because there are no up-front costs, the leasing company takes care of any repairs (which are unusual and under warranty by the equipment suppliers), and the cost of the lease is less than the cost of power (and doesn't increase as the cost of electricity increases) it is expensive. The down side is that these companies often base their rates on the high end of the installed costs, and the lease is equivalent to very high interest rates (on the order of 25% or higher). A personal loan, or a second mortgage, have the same benefits of no (or very low) upfront costs, immediate price reductions, and "locked in" payments - but these are usually 7 to 10 year loans, and at the end of that period there is no longer an electrical bill or lease payments. I highly advise being very careful about choosing a lease option, it is easy but can be extremely expensive.
A third financing option is through PACE funding. Basically, this involves obtaining a loan that is attached to your property tax and is paid off as part of the annual property tax payment. The main benefits of this type of financing is that it is extremely easy to qualify for, and doesn't negatively impact most people's credit ratings (because it becomes a "tax" and not a "loan"). The down side is that while there are no upfront finance charges, there are a lot of upfront fees paid for by both the homeowner and the solar installer. In addition, the interest rates are typically equal to or greater than commercially available loans of similar size and duration. Another upside is that since it is paid for as a tax, it might be deductible from income taxes. I would recommend that this financing option be investigated closely to make sure that the benefits outweigh the costs.
- How do solar systems save money? Residential solar systems in California enjoy an arrangement with the electrical utility that is called "net metering." This means that even though you have solar, you are still using utility supplied electricity. When you use more than you make (such as at night or on a cloudy day), the meter turns in the normal direction measuring how much power you are using. When you make more power than you use, then the meter goes the other direction - subtracting from the amount that you used. At the end of the year (at the "true up" time), you get a bill for the difference over the past year. If you used more than you made, you get a bill for the difference. If you made more than you use, you get a credit or cash for the extra power (but at wholesale rates rather than retail rates).
Perhaps the biggest value is that the solar production changes the rates being charged by moving you into a lower energy rate tier. In California, residential electricity is sold on a tiered basis where the first tier has a lower rate, the second tier has a higher rate and so on. As the month progresses the charge per kilowatt hour (kwhr) of power increases as you move from tier to tier. Solar systems offset the amount of power used, so that it is all in the first tier rates. Therefore, even if the solar might not be sized to achieve "net zero" it can significantly decrease energy costs by preventing payment at the higher tier rates. In California, the current tier costs are $0.164, $0.187, $0.275 and $0.335 per kwhr for an average rate of about $0.25/kwhr. Just moving to the lower tier not only saves the amount of electricity used, but can cut the rate of electricity by as much as 70% - depending upon energy use.
Another major advantage of solar is that it effectively caps the utility rate at the cost of the loan or investment rather than continually escalating with the utility rates. In PG&E territory, the 30 year annual rate increase is greater than 5% a year. When this is included in the "pay back" calculations for a solar investment, it often results in a "payback" time of seven years or less. This means that if you do nothing, within seven years or less you will spend the same as you will if you install solar. At that point the solar can be considered to be "free." Anything beyond that is free power. If you decided to expend the loan period to ten years or more, the annual payments will be much lower than without the solar.
- How long do solar systems last? There is no way to determine ahead of time how long a specific system will last, but history has some interesting examples for comparison. I discussed this issue with the group at Sandia National Laboratories (a facility that does extensive short and long term testing on solar equipment). They told me that they aren't sure about the expected lifetime of solar panels because they only have 45 years of history. Their expectation that newer solar panels should be expected to last longer than that. They typically come with a ten year warranty on the panels and a 25 year warranty on the panel output. The 25 year warranty is for less than 1% degradation in output per year, meaning that a 260 watt panel will still produce at least 195 watts after 25 years of service. Sandia's history indicates that a more reasonable expectation is a 1% decrease for each of the first three years, and then a level output for the remainder of their live. Therefore, a 260 panel is likely to produce 257 watts after a year, 255 watts after the second year and 252 watts after the third year and beyond. A very reasonable design option is to size the system based upon 252 watts rather than 260 watts to ensure that the power will be sufficient - this amount of oversizing a 20 panel array means an extra 1/2 of a panel.
The second major component that might need to be replaced over time is the inverter that converts the DC power from the array to AC power for the house. For a 20 panel array (5kW) the inverter will cost about $2200 for a single large inverter, or $3200 for 20 microinverters. The warranty for the $2200 units are typically about ten years, at which point it is often necessary to purchase a new inverter. The warranty on microinverters is typically 25 years at which point it might be necessary to replace one or two inverters. There are reasons beyond replacement costs and warranties to consider using microinverters that will be discussed in the next section of this discussion.
- How do you select components? The selection of components is a definite "it depends..."
I highly recommend microinverters, one small inverter mounted directly under each panel. They are about a third more expensive, but have many redeeming values. The first advantage has to do with array efficiency. Using a single inverter requires up to ten solar panels (or more) to be wired in series - like batteries in a flashlight. Each panel adds to the voltage of the string.
Since each panel operates at about 35 volts, a string of ten will have about 350 volts. Often they are connected to produce up to 600 volts. The high voltages decrease wire size requirements, but increase safety concerns because 600 volts DC is extremely lethal, and there is no way to turn off this power in the event of a daytime fire or other emergency except to cover them with an opaque material (very large blanket). On the other hand, using individual microinverters limits the dc voltage to 35 volts and the AC voltage to 240 volts (normal residential power). The AC portion of the power can easily be turned off at the main breaker panel.
In addition to enhanced safety, microinverters do a much better job of controlling the panels typically yielding as much as 5-10% greater output than a single inverter. If any portion of a panel in a string get shaded, then the output of the entire string is decreased. This is a major issue because even a small shade patch (as small as 4 inches in diameter) can decrease the output of the entire string by well over 50% (sometimes as much as 90%)! Shade is NOT compatible with string inverters. However, even if and entire panel gets shaded with microinverters, the output of the array is only decreased by the amount of the shaded array, in this case being 1 out of 20 or 5%. Microinverters often add a very significant effectiveness bonus over string inverters.
Solar panels have become a commodity and are all pretty similar across the board. Some claim to be extra efficient, but they also tend to be extra expensive. The more streamlined and "pretty" styles tend to be more expensive both for the panel and the racking hardware. There is a strong tendency that "invisible," "seamless," "integrated into the roof" also mean "more expensive." These are issues of taste rather than engineering values. The same goes for translucent panels that would make a nice shade structure over a patio or other place. Some panels look very nice and clean from underneath, but they tend to be two to three times as expensive as the "normal" panels.
- How much solar access is required to make a solar array "worthwhile?" Solar access refers to orientation, tilt angle and shading for a site. An important thing to keep in mind is that sun is only effective when it is less than about 45 degrees from the perpendicular of the array. This has some surprising results. For example an array facing due south is only effective from about 9:00 am to 3:00 pm - even though it appears to be in the sunlight for many more hours than this. The problem has to do with the reflectivity of the glass surface, and the decreasing size of the effective array size. The only part that counts very much is the 90 degrees from the orientation of the array meaning that the south facing direction is not very important.
The "best" orientation for an array in the Sacramento Valley is facing south with a tilt angle of about 25 degrees. If the array cannot be faced due south, the production will be reduced by up to 10% if facing east or west instead of south. For a 20 panel array, this can be made up by adding an additional 2 panels. Back in the time when solar panels cost upward to $20 a watt instead of today's $1 a watt, that made a big difference in price. However, that difference is now not nearly as important (expensive) and therefore many more roofs get adequate sun exposure.
The best tilt angle is about 25 degrees, but even laying flat on a horizontal surface only decreases the annual harvest by about 5%. It really makes very little difference.
While this is true for stationary arrays, the numbers are different for tracking arrays. Those can increase the overall harvest by about 25% above a stationary array. While this seems large, it can be matched by a 25% increase in the number of panels (five extra panels in the case of our 20 panel system). At $800 a panel, this increases the cost by $4000 to match the output of a 20 panel tracking array. However, solar trackers typically cost a lot more than that, and because they have mechanical components, they require maintenance. Cost, convenience and lack of maintenance usually mean that a tracking system is not worth the investment for small systems.
The next big issue with solar access has to do with shading, which can be significant and costly. A small amount of shading can be accommodated by using microinverters so that only the shaded parts are effected. However, careful shade measurements and calculations are necessary if shading is possible, especially if the shading extends into the months of March through October. Shading in the winter months is not as important because the sun is dimmer, there are more cloudy months, and usually the tilt angle is optimize for summer months and is very poor during the winter for a grid tied system. (Off grid systems might turn this optimization upside down to maximize the power production during the winter months at the expense of the summer months.)
- How do I get solar hot water? Back in the days when PV solar was extremely expensive, hydronic solar hot water panels (those containing a liquid that is heated in the sun) were the only affordable option. However, they are expensive, complex and prone to leaks and degradation of various sorts. With the new lower price of PV it is my opinion that it is much better, easier and cheaper to just add enough PV solar to heat the amount of water needed, and use well insulated, standard electric hot water heaters. They are very inexpensive, highly dependable, and require little or no maintenance.
It is my opinion is much better than going "on demand" hot water because those devices are very expensive, and have other problems. In order to get "instant" hot water, I recommend using multiple small electric hot water heaters located close to the demand. If they the hot water tanks are well insulated, they have very low standby loses. I installed a propane instant demand hot water heater for my house. It still has long pipe runs so takes a lot of time (and water) to get hot water to the faucet. In addition, it won't turn on with low flow faucets (such as low flow shower heads). The water heater requires a significant flow of water to turn on the heater (to keep the heater from overheating). The only way that I can accomplish this is to turn on the sink hot water as well as the shower hot water. That gives me a warm shower, but wastes all of that hot water down the sink drain! I will soon remove that device and install two smaller electric hot water heaters, one for the bathroom end of the house and the other for the kitchen end.
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