I have spent the last eleven months in solar sales, and I will let you know what you need to consider before going solar.
Qualifying Questions
- What direction is your roof facing?
- How old is your roof?
- How long do you plan on being in your home?
Roof Direction
In Ohio, the optimal direction for a solar array is facing south. A south-facing roof can receive an efficiency grade of up to 100%. If your roof faces east and west, the efficiency grade will usually be around 85%. The roof of our home faces South/West, and our grade is 93%.
To calculate the efficiency grade, you need to factor in the direction of the roof if any shade is blocking the panels and the roof’s slope. If you have trees blocking the sun and are willing to cut them down, that can help increase your efficiency.
Roof Age
Solar makes a lot of sense if you have a new roof (less than 5 to 7 years old). Your panels will have a life span of 25-35 years. Approximately the same as a new roof.
This is important because if you install solar and need to replace your roof, you will be responsible for removing the panels and then reinstalling them. This is a reasonably easy job, but it takes time and does cost significant money.
If you want to replace your roof, solar is an excellent option because then you can match the life of the roof and panels perfectly.
For those who have 2 to 10 years left on your roof, don’t worry. The federal government extended the 30% Tax credit for the next ten years. For those who fall into the middle, I want to give you all the information you need to make an informed decision.
Are you Moving Soon?
If you are moving within 2-3 years, why are you even considering solar for your current house? Start planning on it for your next home. Find a south-facing roof with a new roof or a roof that needs to be replaced.
Look at the numbers closely. If you have a South facing roof, numbers can make sense if you plan on being in your home for at least 5-10 years. If you have an East & West facing roof, it may make sense if you plan to be in your home for at least 10-15 years.
When you are ready to move, will the next homeowner want solar? I believe they will. However, if you overbuild your system, they may not want it. Some households use more electricity than others. If they don’t feel like they need that much solar, will they still want to buy the property? Keep that in mind if you have three electric cars and a hot tub.
What To Know
If you are still interested in solar after answering those three questions. Find out what your electric company’s net metering policy is. Some companies have a 1-for-1 net metering policy, and others may not be as favorable. Even unfavorable policies can make sense for people to go solar. You need to know how yours works. There is a chance your sales rep may not even know. Half of my office thought all our customers were 1-for-1. Net Metering Explained
Our net metering policy is not 1-for-1. We plan to go solar next year, and because the policy is less than ideal, we will build our system at an 80% offset. We will only overproduce our energy for three months at 80%. If you have questions about why I chose 80%, feel free to reach out.
When looking at the proposal, the most important thing to know is how many kWh your system will produce. The solar company will ask for a copy of your electric bill. They want to know how many kWh you used in the past year. They will then build the system accordingly. Make sure you know the number used as well. If your net metering policy is 1-for-1, you want to produce at least as much as you used the prior year.
Often the solar companies will play tricks with these numbers. Sometimes your sales rep is aware, and other times they don’t know what they are doing. They will build your system and add an energy kit, giving you a smart thermostat and LED light bulbs. Reducing the energy, they need to produce for you makes the costs look better. Some sales reps will add this even if you already have the smart thermostat and LED bulbs. They charge an additional 300 dollars for the energy kit to reduce your electricity usage by 10-15%. Smart thermostats and LED bulbs are great and can reduce your electric usage, but many people already have them and do not need them in their proposal. If you don’t have a smart thermostat, I recommend going solar with no energy kit and buying one on your own.
Financing
One of my biggest hesitations to going solar was that I didn’t have the cash for the system. I also was not interested in selling any investments.
If you have the cash, that is amazing. Why not replace your electric bill if it sits in a low-yield savings account? The electricity prices have gone crazy lately, and I believe they will continue to go crazy. You can guarantee you are protected against inflation on electricity.
When you consider financing, I like to describe it this way. In 2015 when gas was $2.00 a gallon, would you have taken advantage of a deal that would have allowed you to pay $2.25 a gallon for the next 30 years? That is what financing will enable you to do. You may pay a little more per month now, but you will save significantly over a 25 to 30-year period.
My recommendation is to find your financing. A HELOC is a great option. Solar companies will offer an extremely low-interest rate to make solar look as good as possible. This is usually around 3% lower than what you can find from your bank. Their low-interest rate comes with a catch with extremely high dealer fees. This will usually add 25% to 35% to the system cost. This option could work if you take 25 years to pay off the system. However, if you plan on paying it off early, you are paying fees to reduce the interest rate, adding an unnecessary cost. This will cost you thousands of dollars.
Breaking Down Your Electric Bill
When looking at the details, find out how much you pay per month. Don’t guess, do the math. If you talk to someone in August about how much your electric bill is, you would think that it is higher than if you were discussing it in February. You already have the electric bill you gave the solar company with the yearly usage.
Take the most recent month. Look at the Supply, Delivery, and Hook up charges. If you can produce enough energy thru solar, you will no longer have supply and delivery charges. You will still have the monthly hook-up charge. Add your supply and delivery charge together and divide by the kWh total for the month. If you multiply that by your yearly usage, that is how much you will pay for electricity in a year. Of course, the power company will increase that cost each year, but that gives you a good idea.
Quick Tips
- Your sales rep is trying to get a sale; make sure you understand the numbers.
- Look very closely at reviews and the trends in new reviews.
- Solarreviews.com is a great starting point.
- Also, remember that some companies pay former customers to leave a positive review. Twice, I was asked to leave 5-star reviews in our weekly meetings. Once was for the company I worked for, and the second time was for a partnering roofing company. I took out my phone and checked my email.
- Find a company that will work on your project from beginning to end.
- If you have issues, you don’t want the sales guy to be different from the install guy.
- Ask if there is a production guarantee.
- The most important thing is how much your system will produce. If you have doubts about the company, find someone else.
- Big companies have the advantage of being able to promise and deliver fast installs most of the time. However, you will be a number to them when an issue arises. Your quick and efficient installation now takes an extra three months. They also send sales reps to your house who may or may not know what they are discussing and promising.
- Small companies may be unable to deliver fast installs, but you will not be as likely to get lost in the numbers. Your sales rep is more likely to have been with the company longer and know what he is selling. Small companies may have fewer in-house financing options, but that is not bad.
- Talk to at least two companies. Find another company if you feel uncomfortable with the person selling it.
I enjoyed going over numbers and helping people make the decision to go solar for the right reasons. After reading this, if you think solar makes sense for you, I still have contacts in the industry at both small and large companies. I trust them to take care of the homeowner. Let me know, and I can put you in touch with them.