NEM 2.0 vs NEM 3.0 Explained

Net Energy Metering Changes and Requirements for California's Renewable Energy Producers

The California Public Utilities Commission (CPUC) recently approved NEM 3.0, a new policy that will replace NEM 2.0 starting from April 13, 2023. Curious about this update and how it might impact your utility bill? Read on to understand the differences, and make informed decisions on your energy consumption.

Background:

In California, customers can install renewable energy systems like solar panels, wind turbines, and fuel cells to generate electricity. These systems are connected to the main electrical grid, allowing customers to offset their energy needs and even send excess energy back to the utility company. 

The state has various laws that require the California Public Utilities Commission (CPUC) to establish rules known as "tariffs," which ensure that utility companies must allow customers who generate their energy, also called "customer-generators," to use the energy they produce on-site and receive a financial credit on their electric bills for any surplus energy they contribute. 

It's important to note that participating in these tariffs doesn't affect a customer-generators eligibility for other rebates, incentives, or credits the electric utility provides.

What is Net Energy Metering?

Net energy metering is a billing system that allows customers who generate their own solar or wind power to earn credits for the excess electricity they contribute to the grid. With NEM 2.0, the credits earned for supplying electricity to the grid were equal to the price of consuming electricity from the grid on a one-to-one basis. However, NEM 3.0 will change this price ratio.

What's Changing with NEM 3.0?

Under NEM 2.0, customers could choose their rate schedule if it followed a time-of-use (TOU) structure. However, NEM 3.0 will require customers to be on a specific TOU schedule determined by their energy provider. This change makes NEM 3.0 more restrictive and limits customer choice in selecting their rate schedule.

What is the reason for the change?

• The Commission reviewed the NEM program and found it puts too much financial burden on fewer people, especially those with lower incomes.

• To address this issue, the November 2022 Proposed Decision introduces changes to the incentive structure.

• Starting in 2023, customers installing solar panels will need to use their local utility's rate that promotes reducing carbon emissions.

• Excess energy sent back to the grid will be compensated based on its value to the grid.

• The new incentive structure will be implemented gradually over five years.

Who will be impacted?

• The program modifies the compensation for new residential rooftop solar and solar storage projects in the service territories of SCE, PG&E, and SDG&E..

• Customers already participating in NEM before the Proposed Decision adoption and those who register within 120 days after adoption will not be affected.

• Based on the Commission's timeline, the existing program may start to phase out on April 14, 2023.

What is the new incentive structure?

• Base Rate and Temporary Bonus

The Proposed Decision introduces a new way to compensate solar and battery systems that export energy to the grid. It consists of a base rate and a temporary bonus called an "adder."

• Base Rate Determination

The base rate is an estimate of the value of energy supplied to the grid. It considers energy generated by solar panels or stored in batteries. The rate is calculated using the Avoided Cost Calculator, regularly updated by the Commission. This calculator is also used for other energy programs in California.

• Temporary Bonus "Adder"

The Commission determines the adder individually for each utility company. It ensures that the average solar project built in 2023 recovers its cost within nine years or less. Projects built in the first year lock in the total adder amount and the nine-year base rate. Afterwards, only the most recently updated base rate applies. The adder amount is about 40% of the average base rate in PG&E's service area. However, the adder in SDG&E's service area is zero because the electricity rates are already high enough for solar projects to recover their costs within nine years.

• Discounted Adder for New Projects

New projects built over the next five years will be eligible for a gradually decreasing adder over the following nine years. The adder will phase out entirely after five years. Solar systems constructed to meet the state's new rooftop solar building requirements cannot receive the adder but can still claim the base rate.

• Income-Adjusted Adder

The proposed decision includes a higher adder level to ensure low-income customers achieve the nine-year payback period. It recognizes that low-income households pay lower subsidized rates and receive lower incentives than offsetting their electricity costs with rooftop solar.

Would energy storage be included in the new NEM program?

• Incentives for New Customers

The Proposed Decision needs to incentivize current NEM customers to combine their solar systems with energy storage. However, the proposed revisions introduce solid incentives for new customers installing solar and storage systems.

• Operating Systems for Reliability

Under the revised NEM program, households installing solar and storage systems would need to operate them in a way that promotes reliability. It means they would be required to use an Electrification rate, which varies depending on when the grid is most stressed.

• Compensation for Excess Energy

Customers with solar and storage systems would receive compensation for any excess energy they generate. The compensation would be based on the value of that energy to the grid. The proposed successor tariff aims to encourage the pairing of storage with solar by providing an incentive to store solar-generated energy and release it when the energy's value is highest. The current program structure offers a small incentive for combining storage with solar.

Get Expert Guidance on NEM Incentives

By exploring the interconnection guide, you can find a list of California utility companies participating in the NEM program. Additionally, contacting an Eco Home Solar Energy Specialist can provide further guidance and support. Take advantage of these resources to make informed decisions about renewable energy and contribute to a more sustainable future.

 1 2022 Rooftop Solar & Storage Net Energy Metering (NEM) 3.0 Proposed Decision Summary

2 SCE stands for Southern California Edison, an electric utility company serving Southern California. PG&E stands for Pacific Gas and Electric Company, an electric utility company serving Northern and Central California.SDG&E stands for San Diego Gas & Electric, an electric utility company serving San Diego and southern Orange counties in California.

Buyer’s Guide To Solar Battery Systems

Do you want to go off the grid and live a truly independent life? Or maybe you want to save money on your energy bills. Solar batteries can help you achieve your goals.

What are solar batteries?

Solar panels generate clean, renewable energy for your home. But what if you want to go even further and become energy independent? That's where solar batteries come in.

Solar battery systems store the excess energy generated by your solar panels, so you can use it even when the sun isn't shining. It can give you peace of mind during power outages and help you save money on your energy bills.

There are a few different types of solar battery systems available, so choosing one that's right for your needs is essential—some factors to consider are the size of your home, your energy usage, and your budget.

PROs of solar batteries

Energy Independence

Solar battery systems can help you become energy independent, meaning you won't have to rely on the grid for power. It can be a great way to save money on your energy cost and reduce your carbon footprint.

Backup Power During Power Outages

Solar battery systems can provide backup power during power outages, so you won't have to worry about being without electricity. It is essential if you live in an area prone to power outages.

Reduced Energy Bills

Solar battery systems can help you reduce energy bills by storing excess energy from your solar panels when the sun isn't shining. It can save you money on your monthly energy bills.

Increased Home Value 

Solar battery systems can increase the value of your home. According to a study by Zillow, solar-powered homes sell for an average of $15,000 more than homes without solar panels.

CONs of solar batteries

Solar batteries efficiently store energy from your solar panels and use it later. Overall, using solar batteries saves money on energy bills for the long term and reduces your carbon footprint. However, it's critical to be aware of the cons before you make a decision.

High Up-front Cost

Solar batteries can be expensive, initially, sometimes costing as much as a solar system. It can be a barrier for many people interested in installing solar batteries.

Limited Capacity

Solar batteries can only store a certain amount of energy, so they may not be able to power your home for an entire day or night. It is something to consider if you live in an area with frequent power outages.

Difficult to Install

It is because they require professional installation and can be bulky and heavy. If you're uncomfortable installing solar batteries, you'll need to hire a professional, which can add to the cost.

How do solar batteries work?

Solar batteries are like giant power banks that store energy from your solar panels. When the sun is out, your solar panels generate electricity. This electricity can be used to power your home or stored in the battery for later use.

Your home can draw electricity from the battery when the sun isn't shining. This way, you can still have power even when the sun isn't out. Solar batteries can also be used to provide backup power during power outages. If the power goes out, your solar battery can keep your home running for a few hours or even a few days.

There are three main ways to configure a solar battery system:

Option 1: Off-grid system

In an off-grid system, your solar panels and battery are the only power sources for your home. It means that you are entirely independent of the grid.

Option 2: Hybrid system

In a hybrid system, your solar panels, battery, and the grid work together to power your home. It is a good option if you want a backup in case of an outage but don't want to be completely independent of the grid.

Option 3: Grid-tie system

In a grid-tie system, your solar panels are connected to the grid. It means your home can draw electricity from the grid when your solar panels aren't creating sufficient power.

Different Types of Solar Batteries

Solar batteries come in various types, each with its advantages and disadvantages.

Here are the most common types:

Lithium-ion Batteries are a popular type of solar battery for home use. They're lightweight, energy-efficient, and have a long lifespan.

Lead-acid Batteries are less costly than lithium-ion batteries but are also less efficient and have a shorter lifespan.

Flow Batteries are still under development, but they have the potential to be highly efficient and longer-lasting than lithium-ion batteries.

Nickel-cadmium Batteries are durable and work well in extreme temperatures, but they're also expensive and contain cadmium, a toxic material.

The best type of solar battery for you will depend on your needs and budget. Lithium-ion is the way to go if you're looking for the most efficient and long-lasting battery. If you're on a budget, lead-acid batteries may be a better option. And if you need a battery that can withstand extreme temperatures, nickel-cadmium may be the best choice.

No matter which type of solar battery you choose, research and talk to a solar installer to ensure you get the correct battery for your needs.

FAQs:

Why should I need a battery with solar panels?

Solar panels generate electricity when the sun is shining. However, the sun doesn't always shine, so you need a way to store the electricity generated by your solar panels. A solar battery can also provide backup power during power outages, so you won't have to worry about being without electricity if the power goes out. 

Can I install my solar battery?

Installing your own solar battery is possible, but it is not recommended. Solar batteries are complex and require specialized installation. Hiring a qualified solar installer to install your solar battery system is best.

Are solar batteries eligible for the federal tax credit?

Yes. The 30% federal tax credit can reduce the cost of your solar battery system if your battery can store at least three kilowatt-hours of energy and be installed as recently as 2023.

Do I need to do anything extraordinary to maintain my battery backup system?

No, there is very little maintenance required for a battery backup system. You will not need to top up with fuel (like you would with a generator), and there is no need for regular maintenance.

How long will my battery backup system last?

The lifespan of a battery backup system will depend on the type and level of consumption. However, most battery backup systems will last for 10-15 years.

What is the warranty on a battery backup system?

Most battery backup systems have a warranty covering the battery's performance for a certain period. The warranty will vary depending on the manufacturer, typically ten years.

What are inverters, and how do they work with battery backup systems?

Inverters are devices that convert direct current (DC) electricity into alternating current (AC) electricity. Solar panels generate DC electricity, while the electric grid and homes generally use AC electricity. Inverters are necessary to convert the DC electricity from solar panels into AC electricity that the grid or the home can use.

What if my battery backup system doesn't have inverters?

Some battery backup systems do not come with inverters. If your battery backup system does not have inverters, you must purchase them separately. Inverters can be expensive, so it is essential to factor them into the overall cost of a battery backup system.

Are you tired of paying high energy bills? 

Solar batteries store the energy your solar panels generate, so you can use it even when the sun isn't shining. It can give you peace of mind during power outages and help you save money on your energy bills.

There are a few different types of solar batteries available, so choosing one that's right for your needs is essential—some factors include the size of your home, your energy usage, and your budget.

Once you've chosen a solar battery system, the installation process is relatively simple. A qualified electrician will connect the system to your solar panels and your home's electrical system.

Once the system is installed, you'll enjoy the benefits of energy independence. You'll no longer worry about power outages or rising energy prices. You'll also be able to reduce your carbon footprint and help the environment.

To learn more about solar battery systems and the brands on offer like SolarEdge, Enphase, NeoVolta, Renogy & HomeGrid contact EcoHome Solution and Request a Quote today. We can help you choose the right system for your needs and install it properly. 

20 Simple Ways To Make Your Home More Energy Efficient

Energy efficiency is something that everyone can do. It refers to reducing energy consumption without compromising the quality of our home life and the services and products we use in our daily lives. While some may believe that improving energy efficiency is only possible for those who can afford expensive technologies or modifications, this is untrue. 

Thankfully. You don't have to spend much money to do it. Here are easy home-improvement ideas and some small habits you can start doing today. Save money all year, get some tax breaks, and help the environment simultaneously. 

1. Audit your energy consumption

A professional energy assessment can help you identify inefficiencies in your energy system and start implementing energy-saving practices. By taking these steps, you can reduce your energy bills, minimize your environmental impact, and enjoy the benefits of a more energy-efficient home.

2. Use smart landscaping

Not only can a beautifully designed landscape improve the aesthetic value of a property, but it may also help homeowners save money on their heating and cooling bills. A strategically positioned tree, shrub, or vine can provide adequate shade, serve as a windbreak, and cut down on your monthly energy costs. A typical home can cut its annual energy consumption by up to 25 percent by planting trees strategically.

3. Switch to smart devices

New homeowners want smart homes that will make their lives easier while lowering carbon consumption. Smart devices detect power usage and turn it off when not in use. Humans may forget, but smart electronic devices don't, and who wouldn't want that in their new home? Tech-enabled homes are in high demand, and adding smart devices in the space is an excellent method to boost the value of your property.

4. Make sure your home is well insulated

If you have good insulation, you can retain a lot of heat during the cold winter: heat insulation, weather stripping, and other methods. Seal air leaks around your windows, doors, floors, ceilings, attic, walls, basement, or crawl space with caulk or foam. You can do this independently or hire a professional to install it.

5. Think about getting new windows

You can also lose a lot of heat through your windows in the winter and cool air in the summer. It can be terrible for your energy costs over a year. Some older windows could be better at saving energy than you would like.

Single-pane windows and aluminium frames are much worse than double-pane windows and other frames made of vinyl. You could also tint your windows and leave your blinds open, which won't cost you a dime, to let in some light. If you're having trouble, you could hire someone to install windows. 

6. Use Compact Fluorescent Bulbs (CFLs)

If you have older light bulbs in your home, you may also use more energy than you need to. So many people are switching to fluorescent bulbs because of this. They may cost more initially, but they save you money in the long run.

See also: How do solar-powered household items make it easier to live in a green way?

They can last up to 12 times longer than a regular incandescent bulb. You can even use some fluorescent bulbs and some incandescent bulbs together. It will still significantly affect how much energy you use overall.

7. Look for appliances that use less energy

Make your home more energy efficient by buying new appliances. Look for ones with the HE logo. Energy-star appliances use less energy, and although they may cost a bit more initially, they are a much better investment. Choosing your appliances this way will save you money over time.

8. Use an appliance-monitoring device

Whole-house energy monitors have the potential to measure the amount of electricity used by your home down to individual circuits. It can measure the use of personal gadgets, allowing you to identify areas in which you can save money. Many homes save an average of roughly 10% on their power costs in the first year after installing a monitor, and more energy-conscious people can save up to double that amount.

9. Renovate your kitchen and bathroom

These rooms are often the most energy-intensive areas in a home, and making simple changes during renovations can significantly reduce energy consumption. Upgrading to energy-efficient appliances and fixtures, for example, replacing old, energy-guzzling refrigerators, dishwashers, and washing machines with newer, energy-efficient models, can help reduce your overall energy consumption. Additionally, installing low-flow showerheads and faucets in your bathroom can significantly reduce water usage and the energy needed to heat that water.

10. Reduce reliance on the grid

Generating your energy through renewable sources can significantly reduce your reliance on the grid and overall energy consumption. Many states offer incentives and rebates for implementing renewable energy solutions, making it a cost-effective and sustainable option for many homeowners.

11. Put in some shade-loving plants

With good landscaping outside your home, you can protect it from the hot summer sun and the cold winter winds. On hot days, the tree and its leaves will shield your house from the sun's rays and keep it cool enough to stay comfortable. Suppose you have been using energy-efficient appliances and sound insulation in your home. In that case, the effect will be much smaller because your home already blocks all the heat.

12. Put in a smart thermostat 

A programmable thermostat is another good way to reduce the amount of energy your home uses. Set the thermostat to a higher temperature when you're away or a lower temperature in the cooler months. A programmable thermostat doesn't cost much, and you can pay for it in a few months with the money you save by using less energy.

13. Turn off gadgets when you're not using them

When not in use, printers, desktop computers, microwave ovens, and coffee makers with LED clocks that run all night use electricity. If you don't need them right away, turn them off. Even if you are away from home for a long time, try to turn off your fridge.

When you add up how much energy you will have saved by the end of the year, these small savings will add up to a lot. Also, when you're not using a battery charger, unplug it. Chargers for cell phones, laptops, and other wireless devices use much energy even when they aren't charging their devices.

14. Turn down the water heater to lukewarm

You can cut your electricity bills by making a few of these changes. First, turn your water heater's temperature to warm (around 120°F to 130°F). To wash your clothes and dishes, you don't need water that's hotter than that. Second, use showers and baths with low-flow fixtures. Third, insulate your hot water pipes, so they don't cool down as fast.

15. Tune-Up Your Heating, Ventilation, and Air Conditioning System

Tune up your heating and cooling system once a year to ensure your furnace and air conditioner are working at their best, saving you money every month. A checkup for your home's heating and cooling system makes it more efficient by ensuring connections are tight, parts are well-oiled, and coils are clean. Keeping your HVAC system in good shape can also keep you from replacing your furnace, which can be very expensive.

16. Cook wisely

When cooking, a considerable amount of energy is used. Using fans to move hot air around more evenly lets food cook at a lower temperature and employs about 80% less energy. At the same time, convection ovens use about 20% less electricity than regular ovens. Pressure cookers make cooking a lot faster. Food will heat up more quickly in pots and pans with lids than in pots and pans without lids.

17. Change the way you wash your clothes

Only use the medium setting on your washer once you have a load of clothes. Save half of the water and energy with the medium setting. If the clothes aren't dirty, don't use a high-temperature setting.

Every time you use the dryer, you should clean the lint trap. Extra lint is not only a fire hazard but also makes it take longer for your clothes to dry. Before putting clothes in a dryer, you should spin-dry or wring them out. If you can, hang your clothes out to dry on lines and racks.

18. Get a water heater without a tank

Tankless water heaters, also known as demand water heaters, heat water directly instead of storing it in a tank and only when needed. They don't waste energy like traditional storage water heaters do when they're not being used. It will save money on energy costs.

When the hot water tap is on, cold water flows through a pipe into the unit. A burner or an electric element heats the water. Because of this, tankless water heaters always have hot water available. You don't have to wait for a storage tank to get hot enough.

19. Cut back on how much hot water you use

Your water heater uses a lot of energy and costs you a lot. You could take short showers instead of baths or use a water timer or shower head that uses less water. Turn down the temperature setting on your water heater. Wrapping your pipes and insulating your water heater with a water heater blanket will keep the water hotter for longer and save you money. Washing clothes in cold water makes them last longer.

20. Consider switching to solar

While there are many simple and affordable ways to improve power consumption in your home, switching to an alternative energy source is the best way to achieve long-term and sustainable energy efficiency. You can drastically reduce your reliance on non-renewable energy sources by generating electricity. 

And when it comes to switching to renewable energy for the home, solar panels are by far the most common choice. Solar is an excellent option to get off the grid and start using a better source of electricity because it can power your home with just a few panels. Solar photovoltaics have made great strides in recent years, and government incentives are increasing the number of people switching to this environmentally friendly energy source.

The price of installing solar photovoltaic panels has dropped by half in the past decade, making it a viable option for homeowners who want to save money while contributing to a more sustainable energy future.

Ask us About Solar Panel Installation and Financing.

Get in touch with us for free guidance if you conclude that installing solar panels is the most effective way to make your home more energy efficient. Contact us for free advice. We will assist you in obtaining the most suitable financing plan for solar panels. We'll begin the installation process so that you can immediately start saving money on your regular power bills.

Guide To Integrating Solar Power in Commercial Buildings

Understand the basics of solar power for commercial buildings, including a step-by-step process for installing, computing costs, and financing methods.

Just as more residential homes are integrating solar power, corporate, nonprofit and government buildings are also switching to solar in a big way. In 2022, more businesses are choosing to install solar at their facilities according to a recent report from Solar Energy Industries Association. This guide is for commercial property owners who want to transition to a more energy-efficient source and save on utility bills.

What Is Commercial Solar?

Similar to residential solar installations, commercial solar panels harness the power of sunlight and convert it into electricity to power office buildings, factories, warehouses and more. Since the sun will always produce sunlight, solar is one of the most sustainable forms of energy. Compared to traditional energy sources like coal and gas, solar technology does not produce harmful emissions, so it's also a cleaner source of electrical power.

These days, many other large companies across the U.S. and the world are transitioning to solar. Walmart, IKEA, Costco, FedEx, Apple, and Verizon for example, have switched to solar, where it’s feasible, to power their facilities. Installing solar panels not only saves money, it can also significantly reduce a company’s carbon footprint.

Where are Solar Panels Installed?

A roof installation, similar to residential solar power systems, is the most ideal option for commercial buildings. Offices, warehouses, factories and other similar spaces often have vast roof-tops where the panels can catch the most sunlight.

Other installation options for commercial solar panels include parking lots that can be turned into solar carports, which are virtually open-air garages with solar paneled roofs. Ground-mounted solar arrays that have the ability to tilt and elevate during certain hours to catch the most sunlight are great for commercial facilities built on an expansive area.

How Much Do Commercial Solar Panels Cost?

According to the December 2022 market research from covetool.com, a 10 kW to 2 MW commercial solar panel system costs $1.83 per watt before any tax rebates or incentives. Larger fixed-tilt or one-axis tracking utility-scale systems greater than 2 MW cost $1.06 per watt on average.

Commercial solar installation costs for small and mid-sized businesses range from $43,000 for a 25 kW system up to $175,000 for a 100 kW system. Businesses recover about 45 percent of solar panels costs within the first year through tax credits and rebate programs.

How Much Electrical Power Can Solar Generate?

It depends on the daily average electric consumption of the building. To figure out how large a solar panel system is needed to power a commercial building or facility, multiply your business’s hourly energy needs by the number of hours of peak sunlight in your area.

For reference, if the sun shone for five hours with enough intensity to generate the full power rating of the solar installation, the 30-panel solar installation would have developed 11.7 kW x 5 hr = 58.5 kilowatt-hours (kWh) of electricity.

Refer to this formula —

How many solar panels do I need for commercial use?

Once you figure out how large your commercial solar system needs to be, you can divide the total wattage by the wattage of the individual panels. Depending on the size of these panels, this will determine how many of each you will need.

Is there a difference between commercial and residential solar panels?

Commercial and residential solar panels are similar in terms of how they work – both absorb sunlight that is transformed into energy. As with most commercial products and applications, size matters.  Everything is done on a larger scale to generate more wattage quickly and meet the energy demands of a busy enterprise.

What Is The Process For Installing Commercial Solar?

1.     Perform a Site Audit

The solar company you’ve chosen to install your commercial-grade panels will review utility consumption and cost by reviewing your utility bills. They will complete a thorough inspection of the building or grounds and gather information, including measurements of beams and structural walls, to aid in the system design process.

The installer then submits a proposal with the recommended location, layout and dimensions of the system, as well as its size and generation capacity. It will also detail the specific models of solar panels and inverters and a description of the wiring.

The proposal will state the cost of the system including the equipment and labor, minus rebates, and other incentives, projected energy costs and savings, and warranty information.

2.     Approve the Engineer’s Plan

The data gathered during the audit is handed over to solar engineers who then plan, design, and execute the solar energy project. During this process, the engineer will report on the cost, efficiency, schedule and safety recommendations prior to starting the project.

3.     Complete Permit Applications

Depending on the state, local government, and size and complexity of the system, this process can move along quickly or take a lot of time and money. EcoHome Solutions can provide dedicated assistance in completing permit applications as fast as possible. At this point, the installer will begin completing paperwork for rebates and incentives on the owner’s behalf.

4.     Supervise Panel Installation

Depending on the size and complexity of the project, an installation can take between two days to two weeks. For the typical attached or hybrid roof installation, holes are drilled into the rafters in alignment with the solar panel mounts. Thin pieces of metal are then placed over the mounts, preventing water leakage. The panels are then attached to the rails and connected together. Finally, the solar panels are connected to the inverter.

5.     Request for Final Inspection and Interconnection

Before the newly installed commercial solar system can be used, the owner must first obtain the sign-off from the utility or city building department with a final inspection. Inspectors ensure that the modifications to the building or grounds are up to code and that proper permits have been acquired.

Then the owner must submit an interconnection request to their utility. The interconnection waiting time, requirements, fees, and application process will vary depending on the location of the commercial facility. Each state has jurisdiction over interconnection to the grid and in many parts of the country, this process can be very complex and cost-prohibitive.

How to Pay for Commercial Solar: Financing Options

Refer to this guidance from ecowatch.com to decide which solar financing option is right for you. Ultimately, the way you choose to pay for your solar panel system will depend on a number of factors, including your expendable income, your credit score and ability to get a good loan rate, and more.

Here’s a summary of the types of solar panel financing available:

Thinking About Switching To Solar?

Find the perfect solar panel design and integration for your commercial facility to meet your current energy usage and start saving on your monthly utility bills using omni’s solar panel calculator. And if you decide that going solar is right for your company, contact us for free advice. We help with the design and set up of solar panel equipment, installation, including acquiring financing, permits and warranties. 

Are Solar Panels Worth The Investment?

There are certainly several considerations to determine whether solar panels are worth it. Do you live in a sunny location? Do you plan to live for many years in your solar-powered home? Are there tax subsidies available in your area to help you save on energy expenses? If all these factors check out, you may find making the switch to solar a worthy, long-term investment and here are 5 reasons why:

1. Free Electricity

If you look at your solar power system as a financial investment, you could expect it to generate annual returns ranging from 10 to 30 percent or more over time. While this may vary depending on your state’s incentives and tax rebates, on average it’s estimated that a solar power investment is paid off within eight years by slashing electric utility bills. Today’s solar panels last for upwards of 25 years, with few associated maintenance costs, automatically generating savings for more than two decades.

2. Increasing ROI

Residential electricity costs are setting new record highs! According to the latest report, the average monthly cost of electricity in the US hit 15 cents per kilowatt-hour in June, increasing the average American’s utility bill by 11% from last year.

Average electric bill costs differ, and some states are more affordable than others. Still, it does not matter which state you live in, because the cost of electricity increases every year. This means that switching to solar generates an annual return on investment as you save money on higher energy costs well into the future.

3. Federal, Local and State-Level Tax Incentives

As of August 2022, the federal government has offered a Solar Tax Credit to qualified residents. If you install solar energy equipment in your home any time this year through the end of 2032, you are entitled to a nonrefundable credit off your federal income taxes, equal to 30 percent of eligible expenses.

Some states offer incentive programs that may make installing solar panels worth the investment. For example, in California, if a solar system is placed in service in 2022, you will qualify for a 26% tax credit instead of 22%. You must purchase the system to claim the Investment Tax Credit (ITC). Depending on the cost of the system and the taxpayer’s finances, this could be reason enough to consider it.

4. Sell Surplus Solar Electricity

If your home generates more solar electricity than it needs, you can sell the excess back to the grid and make money. You receive monthly bill credits for that energy at the retail rate. For example, PG&E in California is running a Net Surplus Compensation (NSC) program for qualified residents per the California Assembly Bill 920 which allows state utilities to offer payment for surplus energy sent back to the electric grid by your home or business’ renewable energy systems.

5. Increase in Property Value

More and more property buyers want eco-friendly homes with a pre-installed solar panel system. With the growing concern for the climate and the rising cost of traditional sources of energy, the market is leaning towards renewable, solar electricity to boost property values. Solar shingles designed to blend in with your roof’s existing slates command top-dollar in today's home market.

Thinking about investing in solar panels?

Even if the initial cost of installing solar panels is more expensive than electricity purchased from a utility, investing now will help you avoid the increasing cost of energy in the future. And having peace-of-mind from independently generating clean and renewable electricity to power your home, is its own reward.

If you decide that going solar is right for your home, contact us for free advice. We help with the design and set up of solar panel equipment, installation, including financing and warranties.