Frequently Asked Questions
Is my roof right for solar?
A solar power system can be installed on a flat composite, tar and gravel, bitumen, composite shingle, cement tile, or metal roof top. Solar panels are usually installed parallel to the roof surface. For this reason the orientation of your roof is important. South facing roofs offer the most annual production, while east and west facing roofs will produce less. However, west facing roofs produce more power during “peak” times when power can be worth more money. This is important for utility customers who can take advantage of time-of-use metering (such as PG&E and SCE customers). SOLAR SOURCE suggests that customers with older roofs redo their roof in conjunction with the solar installation.
Can I really zero out my electric bill?
Provided you have enough physical space, you can install a photovoltaic system that will produce as much electricity as you use, leaving you with a minimum bill of about $5.
Is solar electricity really cost-effective?
Yes. Your solar electric system will supply you with electricity, which will cost you less than the rates you are currently paying. Over the course of its 30-year lifetime, a solar electric system is a great investment. It is low-risk, high-return investment that is very competitive with other types of investments (stocks, bonds, and property). SOLAR SOURCE can look at your specific situation and calculate exactly what your return on investment will be and how much you will save over the life of the system.
Can my roof support the weight of the solar array?
Solar panel and mounting equipment add very little load to your roof. In most cases the solar power system will add less than 4lb/ft2 of load to the roof. Virtually all modern construction is designed to support loads far greater than this. Some older homes may require some structural work prior to installing a system. However this is very rare and is still an exception even for older homes.
How long does it take to install a photovoltaic solar system?
It will generally take us one day per kw of solar. So a 4kW system will take approximately 4 days under normal circumstances. This time can vary depending on the complexity of the installation.
How do I compare prices among different solar contractors?
Compare apples to apples. Ask for the California Energy Commission (CEC) rating of the system that is being quoted. Then take the final installed price and divide that by the CEC rating to get the true cost per kW. Compare that cost among quotes you receive.
Are there special loans for installing residential solar power?
Currently there are no state or federal sponsored financing programs for residential solar electric systems. However you can make use of any secured loan such as home equity loans (or lines of credit). These loans typically have the best terms and lowest interest rates. In many cases the loan payment is similar to the amount you will be saving on your utility bill. This results in an immediate positive cash flow.
Are there special loans for installing commercial solar power?
There are a number of ways to finance a commercial solar power system. These include:
•Property secured loans
•Capital equipment loans
•SAFE-BIDCO energy efficiency loans
•Equipment secured loans
•3rd party financing
Property secured loans usually offer the best terms and lowest interest rates. If you are in the process of refinancing a commercial property you should consider the purchase of a solar power system. Payments on a secured loan are often less than, or similar to, the amount that your business will save in utility bills. Therefore installing solar power could result in immediate positive cash flow.
Capital equipment loans are probably the most common method for financing solar power systems. There are many banks and institutions who grant capital equipment loans. The loan terms will depend heavily on your lender and credit rating.
SAFE-BIDCO is a state sponsored loan program. They will give loans to small businesses for energy efficiency upgrades. Solar power qualifies for these loans. The standard term on a SAFE-BIDCO loan is 5 years, with a 4% APR.
Equipment secured loans have much shorter terms than property secured loans and usually have higher interest rates. This is a good option for businesses that do not own the property or are unable to make use of a property secured loan.
Is utility power really cost-effective?
No. Your utility charges more than you would pay if you had a solar electric system. Utility rates are constantly increasing, and have increased 6.7% annually since 1970. As you pay your utility bill you do not gain equity in an asset. Paying for utility power is equivalent to having an infinite term loan with a variable interest rate, which always increases.
How long until my system realizes net savings?
If you finance your system, you may experience net savings as early as the first year. Instead of paying your monthly utility bill, you will make monthly loan payments for your PV system. You will effectively pay less for your loan over time than you currently pay your utility company.
Solar power systems usually yield an initial return on investment of 7-11%. As utility rates increase your return will also increase.
Systems will usually have a payback period of between 6-12 years. Your exact payback period will depend on your electrical usage, electric rate schedule, and cost of your system. In most cases the larger your electric bill the greater the return on investment and the faster the payback.
What does solar electricity do for the environment?
Your system will reduce the demand on existing fossil-fuel power plants, thereby reducing pollutants and global-warming CO2 emissions. The EPA says, “Using solar energy to replace the use of traditional fossil fuel energy sources can prevent the release of pollutants into the atmosphere.”
How does a solar electric system affect the value of my property?
According to The Appraisal Journal, Evidence of Rational Market Evaluations for Home Efficiency, a $1 decrease in your annual energy bills results in a $20 increase in your property value. Using this formula, one can estimate that your property value will increase by the net cost (after rebate) of your system.
How much power do I use?
You can find out how much electricity you use by looking on your utility bill or calling your electric utility. It is very helpful to get the last 12 months of electric usage in kilowatt hours (kWh). Your electric utility can provide you with this information over the phone.
Will my property taxes increase?
No. Despite the fact that your property value will increase, there is legislation that prevents your property taxes from increasing.
Why should I borrow money to pay for solar?
You have to pay your electric bills. You are already essentially financing an indefinite, variable rate loan from your utility company. Installing a solar power system allows you to refinance this loan at a fixed rate and term, pay less every month, and have your loan payments go towards ownership of a valuable asset.
Solar power is a low-risk, high-return investment that is very competitive with other types of investments (stocks, bonds, and property). Solar power systems usually yield an initial return on investment of 7-11%. As utility rates increase your return will also increase.
Will the utility company really pay me for my solar electricity?
Yes and no. Upon installation of your solar electric system, you enter into a Net Metering Agreement with your utility company. Throughout the year, you are given credit for every kWh that you produce. This credit is worth exactly what you would have been charged for that same kWh. At the end of the year, if you have produced as much as you have used, you will have reduced your electric bill to zero. You will only be responsible for paying the minimum charges for having a meter, which for most residences is $5.00 per month. However, you will not be paid for any credits remaining on your account after your 12 month billing cycle. At SOLAR SOURCE we size your system to meet your annual usage.
What happens to the solar electricity that I do not use?
Any excess solar electricity produced will go back into the grid through your meter, running it backwards. You are credited for each kWh produced at the same rate that you would be charged.
What happens on a cloudy day or at night?
Your solar electric system will not produce electricity without direct or diffused sunlight. On cloudy days and at nighttime, you will draw electricity from the grid. You build up credits on sunny days and draw from these credits on cloudy days and at night. Your system will still produce energy on cloudy days it will just be much less than when the conditions are more optimal.
How does the rebate work?
The rebates pay for 30-35% of the installed cost. These programs are administered by the state through the California Energy Commission and California Public Utilities Commission. However, these rebates will not be around forever. The California Energy Commission buy-down program will cease to exist when the current available funds are reserved and ultimately paid out. In addition, the rebate levels decrease every six months. The sooner you install, the larger your rebate will be.
Who gets the California Energy Commission rebate?
SOLAR SOURCE will charge you the after rebate cost. SOLAR SOURCE will then receive the rebate after the system has been installed and the paperwork processed. If you choose to pay 100% of the cost up front, then you may receive the rebate.
Are there any tax incentives?
Yes. Homeowners may claim a federal investment tax credit for 30% of the cost of the system. Businesses may claim a first year 30% federal investment tax credit. Commercial investments are also eligible for accelerated depreciation.
How does solar electricity work?
The sun’s energy in the form of photons release electrons from their bonds in the silicon semiconductors that make up the solar cells. The flow of these electrons makes up the current that will ultimately be utilized in your home or building.
What are the major components of a solar electric system?
A grid-tied solar electric system requires solar modules and one or moreinverters. AC and DC safety disconnects are the other necessary components.
What does the inverter do?
The electricity produced by the solar modules is direct current, or DC. The inverter converts this electricity to alternating current, or AC. Most electrical devices in homes and businesses run on AC electricity.
What if there is a black out?
If there is a black out or brown out you will lose power from your solar system.
Do I need batteries?
You do not need batteries if you are tied into the public utility grid. Essentially your utility company stores your solar electricity for free. Batteries would only be necessary if you need power during blackouts or if you are not connected to the grid.
Which appliances and loads can I power with my solar electric system?
You do not designate electricity to any specific loads. The electricity produced by your solar system functions in the exact same way as the electricity from the grid. Your solar electricity will provide power for all of your uses.