What you will find on this page
On this page you will find more solar information about the following questions to help you along as you are thinking about and deciding to go solar.
- What types of solar systems can I choose from?
- What are the main components of a solar photovoltaic system?
- Will my solar system be connected to the grid?
- Will I need a battery?
- What is the Solar Investment Tax Credit (ITC) and how long does it last?
- What are the ways to pay for solar?
- How should I think about the return on this investment (ROI)?
- Are the age and condition of my roof a factor?
- What should I be thinking about when buying or selling a home with solar?
- What are the risks to going solar?
- How long does going solar take?
- How can I determine the quality of the solar equipment?
- Will I still have a bill from Duke?
- How much solar do I need to offset my electricity usage?
- Topic contributors
What types of solar systems can I choose from?
Photovoltaic (PV) and solar thermal are the two established solar power technologies.
Solar photovoltaic panels produce electricity during the day that can be used throughout your entire home, or stored by batteries for nighttime use, while solar thermal systems produce heat and are most often paired with hot water storage tanks that will store the heated water until needed.
Photovoltaic systems can be roof-mounted or ground-mounted. Solar thermal systems are most commonly roof-mounted.
In Lake Hogan Farms, you will need to submit an application to the Architectural Review Board (ARB) for their review and approval. Their primary criteria will be design/aesthetics of the installations and neighbor approvals.
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What are the main components of a solar photovoltaic system?
There are a couple of required and optional components of roof-mounted or ground-mounted solar systems.
- Required: Solar panels, often referred to as “modules”, that capture the direct current (DC) from the sun
- Required: Inverter(s) that convert Direct Current (DC) to Alternating current (AC) for use in your home, which can be either a wall-mounted inverter or a set of microinverters that are paired with each panel and should be part of the total solar installation proposal
- Optional: A battery to store electricity from your solar panels as a back-up when the grid goes down
- Optional: An additional component, called the Power Optimizer, can be added to wall-mounted inverters to optimize the output of each solar panel module
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Will my solar system be connected to the grid?
Most likely yes. Homeowners going entirely off the electricity grid is still rare in large part because of the feasibility and logistics of batteries to cover all their power needs at any time of day and night.
Because of that, your solar photovoltaic system will most likely be tied to your existing grid and set up as an exchange with the electric company.
This means that, during daylight hours, the solar power from your solar panels would power your home, passing all solar power that is unused to the grid and spinning your utility meter backwards to credit your utility account while, during the evening and at night, when your solar system is not generating any power, any electricity needed will come from the grid, spinning your meter forward.
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Will I need a battery?
If you want autonomy from the grid, yes. Is it a requirement for going solar, no.
There are benefits to having batteries, such as grid outages when solar panels are not generating electricity, but batteries still are a significant expense. They change the overall return on investment (ROI) for your system.
When considering a battery, make sure the sales rep fully digs into and models how going solar panels with a battery might change how you use electricity and the required size of your solar system.
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What is the Solar Investment Tax Credit (ITC) and how long does it last?
Regardless of where you live in 2020, the federal solar investment tax credit provides a 26% Federal tax credit based upon the total costs of your solar system. After 2020, the 26% ITC decreases to 22% in 2021 and then all the way down to 10% in 2022 and beyond.
The ITC can only be earned once your solar system is fully installed and operational. For this reason, it is a really good idea to consider installing a system before the last quarter of each year, so that you can take advantage of both the remaining summer sunlight and so that the system will be installed and operational by the time your personal taxes have to be filed for the year.
This link will take you to more Residential Renewable Energy Tax Credit information by the N.C. Clean Energy Technology Center at N.C. State University.
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What are the ways to pay for solar?
The good news is that you have several options.
You can pay with cash/check or using a loan like a home equity line of credit (HELOC). You may also be able to use a credit card or another form of credit.
If you decide to finance your solar system in some way using a loan or another form of credit, it is important to keep in mind that financing negatively impacts the return on this investment by adding interest to the cost of the system. This is also true for loans directly offered by solar companies that typically add a percentage or fee to cover the cost of processing the loan with a third party lender.
Also worth considering when financing the purchase is the potential added complexity of closing out a loan or transferring it when you’re selling your home.
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How should I think about the return on this investment (ROI)?
It depends on several factors, and the sales consultant should be able to model this for you based on your specific electricity needs and financial considerations. Yes, you can run hypothetical scenarios using various calculators out there. In the end it will come down to your details.
The primary factors that affect your ROI considerations and calculations include the production capacity of your system (e.g. right size for electricity needs), its gross cost, the credits you qualify for (e.g. ITC and Duke rebate in our area), and how you pay for it (e.g. interest).
What you need to do is look for the point in time after which the solar system has paid for itself (e.g. the time period after which the amount you would have paying to the electric company paid for the system.)
Here is a simple example: If the solar system you want to install costs $20,000 after all the credits and your current monthly electric bill is $125 on average, it would take you a little over 13 years to break even. Because of the rising cost of electricity for most Duke customers, outpacing inflation, the break even could be much sooner.
$20,000 ÷ $125 = 160 months of paying the $125 average monthly electric bill
160 ÷ 12 = 13.33 years
During that time, your electric bill would, of course, be close to zero depending on the daily fluctuations of total electricity generated by your solar panels and used by your household.
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Are the age and condition of my roof a factor?
Yes. If your roof is older than 10-12 years, you may want to replace your roof either at the same time as your solar installation or beforehand. Keep in mind that replacing your roof in this scenario is not part of your investment in going solar and calculating the ROI for making that decision. You would have had to replace the roof within a short time anyway.
Replacing your roof after the solar system has been installed would be an incremental cost that would affect the ROI of your solar system because you would have to uninstall the system and panels, store everything while the roof is being replaced, and then reinstall it after the roof replacement. This could add as much as 40% or more to your installation costs.
Also, you might be eligible to apply the solar investment tax credit to the costs for the portion of the roof replacement that is under the solar array.
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What should I be thinking about when buying or selling a home with solar?
Studies have proven that homes with solar appraise sufficiently higher than ones that do not have solar. You will likely recoup your investment when you sell. PV Value is a cool, free online tool for estimating the value of your solar system throughout the remaining life of the panels and can help you explore the value you could add to your home when putting it on the market. You can also use it to evaluate if you are getting a good deal when buying a home with solar.
Other factors to consider when buying or selling a home with solar include:
- The condition of the roof below the solar system is a watchout. Potential costs associated with uninstalling, storing, and reinstalling the solar system after a purchase/sale will affect your ROI.
- Beware of the transfer of a loan associated with the solar installation from buyer to seller. It will be a topic during the purchase/sale if a solar system is not fully paid off. Whether this is do-able depends on the loan terms.
- NC’s green tax laws prevent increases in home values due to investments in solar systems from triggering increases in property taxes.
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What are the risks to going solar?
This mostly depends on your situation and how you go through the process. Here are some tips and reminders:
- Be certain that how you are paying for your solar system makes sense for your household. For instance, extending credit when already stretched would suggest that this might not be the right time to invest in solar.
- Consider all aspects of getting a solar system when making a decision, not just price.
- Double-check and confirm any and all assumptions about federal and state tax credits.
- A solar system is meant to be maintenance-free but is a purchase that will be with you for a long time. Take care of it by having it washed down with organic soap every two years to remove soil or debris build-up. The company installing your system may have specific recommendations.
- Because you live in Lake Hogan Farms, home of many squirrels, install a critter guard to protect the system. Damage by squirrels would most likely neither be covered by homeowner’s insurance nor a warranty claim.
- Do what you need to feel good about and trust the reputation of the company installing the system.
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How long does going solar take?
Installing a solar system requires going through a permitting process with the Town of Carrboro and Orange County, and ends in a net metering process with your utility company, likely Duke Energy. A typical installation process can take 30-60 days from contract signing to installed and your home running on solar. Here are is a breakdown of the process.
- Site Survey
- Structural & Electrical Engineering
- Permit & Interconnection Agreement Submitted
- Materials Ordered
- Permit Received & Installation Scheduled
- Installation & City/County Inspection
- Utility Net Meter Installation
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How can I determine the quality of the solar equipment?
There are many brands of solar panels, solar inverters, and solar batteries. The well-known brand names (like Tesla, LG, and Panasonic to name a few) are great quality usually, but also typically more expensive because of their popularity.
Instead of being driven by a perceived value, you could start with what is known as “Tier 1” solar panels. It’s a tiered system for solar manufacturers created by the Bloomberg New Energy Finance Corporation (BNEF) to communicate the bankability of solar panel manufacturers. Think of this as a good, surrogate measure of quality and durability based on the willingness of banks to invest in these solar panel manufacturers.
You may also want to specifically consider these:
Warranties
Solar energy is a long-term investment, meaning it can last 40+ years. The warranties of solar panel warranties help guarantee that long-term investment. Manufacturers typically offer two types of warranties: a performance warranty and a product warranty. A performance warranty ensures that your solar panels have the ability to produce electricity as they age – or stay above a specific degradation rate. Product warranties protect you against any manufacturing defects.
Module Efficiency
The efficiency of your solar panels is how much electricity it produces versus the amount of energy from the sun. Panels with higher efficiencies often cost more, but allow you to produce the same amount of electricity with fewer panels.
Panel Type, Size, Color, etc.
There are a few different options when it comes to choosing solar panels. You can choose between monocrystalline or polycrystalline panels. Blue, white or black backsheets. Black or silver frames. 60 cells or 72 cells. Not all manufacturers offer all options.
Customer Reviews
While we shouldn’t take every review hook, line, and sinker, check out what people are saying about the manufacturers and their solar panels. Look for common themes, whether they be praise or criticism, to get the most accurate insight into the product. And consider the date of the review – the solar industry is changing rapidly and many manufacturers are modifying existing products or adding new ones to address concerns or out-compete a new innovation in the industry.
Manufacturer Profitability
The solar manufacturing space has been challenging in the recent past. Several manufacturers have gone out of business or are getting bought out. It is important to be comfortable with a manufacturer’s status. No one knows the future. For you, a company’s current financial status is a good data point to have when considering their long term viability. Having a diversified product line (eg. LG Electronics where they make more than just solar products) is a plus. It means more stability for the company and more certainty that they will be able to pay in a warranty situation.
Source: Paradise Solar Energy Blog “Tier 1 vs Tier 2 Solar Panels”
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Will I still have a bill from Duke?
Yes. Even if you can offset 100% of your energy consumption with solar, Duke Energy will still bill you the basic customer charge (~$12) for staying connected to their grid.
In NC, Duke Energy stores any excess units of energy (kWh) your solar system produces and gives them back to you when you need them. This is called net metering. Credits will roll over from month to month but will be zeroed out by Duke on May 31 of each year. That leaves you without any energy credits going into the hottest months of the year. When your air conditioners are working the hardest, you will still need Duke. (South Carolina law requires Duke to pay its customers for the credits it takes each May 31. NC law hasn’t gotten there yet).
During months with shorter days, you will pay for energy if your solar production is lower than your consumption. During other months you would earn credits when the reverse was true. If your solar system offsets close to 100% of your annual usage, then you should expect to be paying an average bill that is close to your basic customer charge. You can evaluate whether this is the case after the first full year of owning a system.
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How much solar do I need to offset my electricity usage?
You can figure this out on your own and come prepared when you meet with a sales rep. Doing this will help you make sure you’re getting the right size system for your home. And it will help you check the rep’s trustworthiness.
First, calculate your annual kWh usage for your home i.e. how much solar electricity you will need your system to produce so you can offset your annual electricity consumption. Here are some ways to do that:
If your Duke Energy bill has a graph in the top left corner of the first page, read the graph to determine how much kWh you used each month for the past 12 months
OR
Sign in to your Duke Energy account online, then in the top right corner click Menu >> Energy Usage and scroll down to the bottom of the page to read the table; add up the past 12 months of kWh used per month to get your total for the past 12 months.
OR
If you haven’t been in your home for 12 months or more, there are ways to estimate your annual usage from 1-2 months of data – your solar sales rep should be able to provide assistance here, but ask to see the table.
Once you know the electricity you consume in your home, divide that number by 1.3 for a rough estimate of how much solar you need. The factor of 1.3 applies because you live in North Carolina vs the equator. Then, use the National Renewable Energy Laboratory’s PV Watts Calculator to hone in on a more accurate system size estimate. This tool uses irradiance and weather data around your home to provide a more specific estimate of potential solar production for your home.
Here is an example for estimating how much solar you need:
In this example, assume that adding up the last 12 months of kWh usage on your utility bill comes out to be 12,158 kWh.
Dividing this by 1.3 provides an idea of the size of the system you need: 9,352 watt (or ~9.3 kW) solar system.
Go to the PV Watts Calculator and enter your address, the current system size estimate (e.g. 9.3 kW), the array type (e.g. roof mount), the pitch/tilt of your roof (e.g. assume 22 degrees), the azimuth or direction your roof faces the sun (e.g. 180 degrees due south), and adjust the system losses based on how much shading you think your roof has from surrounding trees (e.g. 20%).
PV Watts then provides you a kWh range for this system in your area. This kWh output from PV Watts may be bigger or smaller than your average annual electricity consumption, which, in this example, is 12,158 kWh.
Now, go back to the first page of the PV Watts Calculator and adjust the system size input until the kWh output from PV Watts is roughly the same as your average annual electricity consumption.
If what the sales representative is recommending to you is a lot bigger or smaller, they better have a good explanation.
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Topic contributors
Nicole Fouche, Danielle Leonard, Tilly Pick