As public awareness and concern over energy price volatility, national energy security and the environmental consequences associated with conventional forms of electricity generation continue to grow, so will the need for clean energy to come. By adopting renewable energy, sources like solar, homes and businesses can stabilize their long-term risk of high-energy costs. The question still weighs on many minds – personally and professionally, “Do I go solar or not?”
As this industry becomes more prevalent, as do the providers offering the services and equipment – thereby providing even further questions and items to research – If I go solar, who is the best provider for me? What is the best cost point? When will I see my return? What are the tax incentives? And the questions continue…
The upfront questions that need answered would be as followed:
1. Do you own your home?
a. If you do, make sure you plan to be in that home for at least 5 to 8 years
b. The cost of Hardware and Non Hardware are expensive and typically leased, therefore identifiable as a lien item when you choose to sell your home. We will talk about this later in the article.
2. Is your home in the sun more than 60% of the day?
a. Most homes in Colorado are surrounded by trees to shade the recreational areas. Many homeowners supported this in an effort of arbor day, plant a tree, save a tree, etc…
b. If your home only gets 15/20% of sun during the day – let’s say in the morning from 9 to noon- and then the back tree’s block any other sun on a roof panel, your return on solar would be minimal if any at all
c. The calculations appear complicated, however simple in the form of ratings, factor and energy output
3. Are you informed completely?
a. I wouldn’t just research the companies that sell solar – I would interview the community at large on other programs
i. Much like market comparisons when you go to sell your home – find those who have solar systems about the size that you are looking for – rooftop or ground positioned.
4. What is all involved
a. Equipment costs – this is photovoltaic systems, hardware components, modules, inverters, mounters, racking hardware, systems writing, plus much more
i. Please do not forget to ask about pigeon wiring – this protects your system from pigeons building homes in between the panels (who would think)
b. Non-Hardware costs – this part can get a bit overwhelming but if you chose the right service provider, they should handle this all behind the scenes. Please double check everything, because in the end, you are responsible as the homeowner/business owner
1. This requires a number of approvals and can be quite time consuming (and therefore expensive) and permitting fees can sometimes add significantly to the cost of the solar system.
ii. System inspections
1. Once the permits for the system are obtained and installation is completed, systems must be inspected and approved by a permitting official. This is important because he/she ensure the system was installed according to local codes and is working properly.
iii. Securing Interconnection approvals
1. The geek mode prevails of this amazing system and concept – the solar energy systems are connected to the electrical grid, your system (it’s back-end project) must be reviewed by the local utility company to ensure the solar energy will have no negative impacts to their grid overall. Believe it or not, the electrical company is interested in if your system will support or restrict the overall electrical system.
c. The breakdown is here for you to understand the in-depth details to the Non Hardware parts of this process
e. To understand your ROI (return on investment), Project Financing is a vital component of the process. You can work this in to your budget personally, but if you ever decide to sell your home, be very aware that this finance will require to be paid off before you close or they can lien your property, which will hold up any closing of the sale on your home until the financing is paid. This is not an item to negotiate on a closing contract – they will not budge. This could be $10 to $15k of immediate cash that will need to be paid out before the closing can occur. This is why I emphasize, please make sure you will not be moving for at least 5 years and if so – be aware of this liability in negotiations.
f. As your Solar providers are trying to overcome major hurdles in the Non Hardware arena – they are also contending with
i. Customer Acquisition;
ii. Systems Designs updating daily;
iii. Covering Installer Overhead as most subcontract this;
iv. Sales Tax; plus much more
As for me, speaking as a homeowner who has solar on her home – I love it! I am single and do not use a lot of energy, so most of my months are only the minimal leased fee of $9.95 per month (versus an average expense of $72 a month) – at the end of last year, I sold the extra energy my system generated. It wasn’t a ton of money, but it was a nice surprise of income that was naturally created and I feel like I gave back to the electrical conglomerate.
Even though the solar concept works for me, it does not work for everyone – I would approach with these details:
1. Ask your communities social media platforms for references on service providers;
2. Talk to similar home owners that have used it, who have been through the installation process, applied for the rebates (or attempted to) and have experience the positives and negatives to the experience;
3. Interview the service providers and check their references (even the ones they did not provide you);
4. If you chose to continue in the investment and strategy – keep track of all of your costs, communications and details;
5. Talk closely with your tax preparer to watch for additional government incentives on the horizon; and
6. Contact your homeowner insurance provider to add this investment to the policy.
Carrie Van Meter
719-657-7050 – call/text
All Access Accounting, LLC