5 Reasons to Get a Solar Installer Quote Once a Year

Published on March 24, 2010 by Tor a.k.a. "Solar Fred".
Categories: Buying Solar, Solar Pricing, solar incentives.

Note to Self… Find a Solar Installer….

If you’re visiting at Solar Power Rocks, you’re probably here because you’re curious about getting solar installed for your home or business.

And yet, we know that a lot of people who visit our site meander away without ever checking to get a free solar quote, even though it’s, you know…free. Well, here are 5 pretty damn good reasons why you should get a solar quote once a year, starting with, you know, now:

1) Solar panels are getting commoditized.

Like oil and orange juice, solar panels are now becoming a commodity. Due to an oversupply in the world, solar panel prices have come down 40% to 60% in the last year alone. We’re talking a price drop in parts, not labor, but that parts discount might have made solar finally within your reach. But you won’t know that unless you get a quote.

2) Solar rebates and solar incentives change every year, sometimes several times a year.

States, utilities, and cities can all offer rebates and tax incentives. Sometimes these rebates run quickly out of funding. Other times, they’re brand new rebates that nobody had last year. Also, there are states like California where rebates are reduced incrementally as more people go solar. How these incentives affect your solar budget cannot be predicted without getting an individual quote for your home’s energy needs.

3) Energy prices and utility rates are rising.

As sure as death, taxes, and sunrises, electric rates are going to go up. You will never see them go down. Never. With solar, however, once you buy the system through a home equity loan or PACE program, that’s it. That monthly payment is locked in. So every time electric rates go up, no worries. In fact, that’s money in your pocket that you can invest or use to buy something else, like beer, or a Mini Cooper. Please drink and drive responsibly….separately, I mean.

4) Net metering laws change. So do solar policies.

If you don’t know what net metering is, well, fine. Learn about it here. I’ll wait….Now that we’re on the same page, just know that this law is not set in stone. For example, California almost lost its net metering a few months back, and that would have made solar a lot more expensive and killed a growing green industry. A solar installer giving you a quote could warn you about net metering changes, or new financing programs like PACE. But you don’t know unless you ask.

5) It’s good to benchmark your solar costs once a year.

As we’ve seen, solar panel prices have dropped, rebates rise and fall, and energy prices will rise every year. Therefore, if you know what solar cost you last year, you’ll be able to show yourself and your family that the price has really come down, and now’s the time to go solar. Finally. Or not.

But either way, by getting a quote once a year, you can have the solar facts, and not just guess.

Another post about New Jersey Solar and SRECs in general (and TRECs)

Published on by Brad Burton.
Categories: SREC.

Solar TRECs

As I’ve posted before, the economics for solar in New Jersey are crazy. With relatively pricey power costs, a good state rebate, and the Federal tax credit, solar makes strong financial sense in New Jersey by itself, even without the SRECs. But the SRECs and TRECs take everything to a new level. They help get solar to where it should be by making the financial benefit so strong you can’t overlook it.

What’s an SREC?

SREC stands for “Solar Renewable Energy Credit”. Think of an SREC as a coupon. Every time your solar power system finishes generating one megawatt of power, it spits out one of these coupons. If you have a nicely oriented, non-shady roof and 5kW of solar panels up top, you’ll generate about 7 of these SRECs a year. You can then redeem each coupon for cash at whatever it happens to be worth at the time. Now, here’s the tricky part… what it’s worth at the time… is weird… and how you “redeem” it… is weird.

What’s a T-REC?

TRECs are simply SRECs with a different letter in the front to confuse you. All that’s different is that the ‘T’ stands for “tradable”. This potentially means money for homeowners who start trading the RECs their systems produce. Eventually, even California will have TRECs.

What’s an SREC worth?

Short answer: Depends what state you’re in but in NJ, about $700. If the New Jersey utilities don’t meet certain renewable standards, they are penalized. Therefore, they gladly buy SRECs at any rate under what they would be penalized for (surprise, the penalty is about 700 bucks). In 13 other states, the worth of SRECs are all over the map. The good news is, if you own a solar system outright, you are already generating SRECs (woot.). They may have a shelf life (and so you may not be able to monetize all the ones you’ve created), but once they are available to trade in your area, you can reap some cash.

How do I get money from my SRECs?

Two options.

• Option 1: Trade them on the open market (which may or may not be possible).
• Option 2: Sell them to an aggregator.

Option 1: Register your solar system with WREGIS-Western Renewable Energy Generation Information System, and then trade them yourself on the open market. Online marketplaces will become more and more prevalent and there are a few that exist already. I hesitate to link to these because I am not sure which ones are the best to use. I’ve been getting into this more lately and will have better input to update this post. But for now it’s a considerable amount of work and option two is what most people opt for.

Option 2: There are companies that make a business trading these and there will be more coming. They will pay you cash for SRECs under a contract, where they basically purchase all the SRECs that your solar system will generate for a number of years. I’ve seen 1-year, 5-year, 7-year, and more contracts for this. SRECs only have a current day value, so the aggregator is making a guess as to what they will be worth. If it’s a 1-year contract, you can probably nail down the spread they are taking (difference between what you could get trading it yourself and what they will pay you for it) and… it’s probably worth it. In multi-year contracts there is more speculation about their future value, so it’s really impossible to say what’s a better deal, it’s just about risk. You’d be paying them for not having to take the risk on what they are worth in the future.

Solar increases the resale value of your home… fo’ reals.

Published on March 16, 2010 by Dave Llorens.
Categories: Affordable Solar.

I cooked up this video on 1BOG and thought it would be helpful to post here.  Take a look. I’d love to see some real estate data on this.  Seems like enough time has passed to have some solid data on turnover of homes that have solar installed.

If you look at Multiple Listing Service (MLS) data and you’re considering buying a home, or you’re a real estate agent, you can basically sort by everything down to “granite counter tops.”  But there’s not much in there in the way of any energy saving value–yet. Having solar will be a check box that you can sort by soon enough. Here are the math and details behind this video on how details on how solar effects the value of your home.

Going solar in San Diego? Should I get a small, medium, or large solar system?

Published on March 13, 2010 by Tor a.k.a. "Solar Fred".
Categories: Affordable Solar, SREC, Solar Pricing, california, solar questions.

San Diego Blooming

I was talking to Peter, a friend of mine who lives in San Diego, who was finally considering solar now that the economy seems to be back on track.

His roof is in good shape with plenty of golden San Diego sunlight shining upon it, faces South West, and his electric bill averages around $1440 a year or $120 a month.

Pete got a quote back from our new solar group purchasing partners at One Block Off the Grid (1bog). Those are the same guys who negotiated a hugely discounted deal for everyone in San Diego who signs up through their program. I’ve written about the type of savings here for their San Antonio, Texas program. New Jersey savings? Forget about it.

Anyway, the numbers looked good, but Pete wasn’t sure whether to go with a small, medium, or large solar system. That is, when 1bog gives its solar estimates through its solar calculator, it gives consumers three choices for estimates:

Small Savings ——– Medium Savings ———- Largest, Long Term Savings

For Peter in San Diego with a $120/month averaged electric bill, his choices were:

So, on first glance, Pete was thinking let’s go for the smallest size, because this is the lowest upfront cost. I could see how that was attractive, but there are several factors that Pete was missing:

1) The small system only offsets 61% of Pete’s electric costs. So, almost 40% is still subject to utility rate hikes, which everyone knows is going to go up over the life of his 25 years or more of solar. (Yes, solar lasts 25 years, often longer.)

2) Based on a 6% annual utility rate increase per year, the small system pays for itself in 7.2 years. But in just another year—or year and half for the largest system—Peter can still get paid back for his solar investment and have up to 97% of electricity costs covered. That leaves a measly 3% left to the whims for San Diego Gas & Electric rate increases.

3) Regarding the initial up front costs: If you’re talking about a home equity loan paid over 30 years at 8% interest, Pete’s monthly loan payment is going to be about $60/month for the small solar system. For the medium, around $95/month. For the largest, it’s going to be about $130/month.

Now, Pete was saying that $130/month is more than his current electric bill, but then I reminded him about the payback time period:  In around 9 years, his electricity is going to be 97% free and 97% rate increase-free, for the next 17 years, except for the inverter replacement cost in 12 to 15 years.

Of course, the inverter replacement costs are chump change compared to the long term savings: Over 25 years, according to the 1bog quote, Pete’s going to save about $70,000 with the largest system, and around $45,000 with the smallest. Big difference. And we didn’t even go into the expected home value increase thanks to the solar, or other bonus incentives, like SRECs.

The point here is that as Americans, we have to think more long term. I know it’s always tempting to go for the lower upfront costs, and any solar is better than no solar, especially for the environment. But if you look at all the numbers when you get a quote from 1bog or anyone else, you’ll see that a little more upfront costs pays you back a huge dividend in the long run.

If you want to see your very own, free, nobody-will-call-unless-you-ask-for-it, solar quote from 1bog in San Diego or your city, try their solar calculator. As for Pete, I think he’s going for the medium package. 79% free electricity ain’t bad either.

IRS forms for your 30% Federal Solar Tax Credit

Published on March 5, 2010 by Tor a.k.a. "Solar Fred".
Categories: tax credits.

Carl writes to us that his tax preparer doesn’t know how to apply for the 30% Federal Tax Credit.

We’ve answered part of this question before about how to calculate the 30% Federal Tax credit, but we’re going to go the extra mile and actually give all our beautiful solar people the IRS forms.  Send them over to your tax preparer and tell them to give you a discount. No need to thank us. Just buy us a beer next time you’re in the neighborhood, or let us sleep on your couch when we’re in your neighborhood.

For products “placed in service” in 2009, you need to file the 2009 IRS Form 5695 and submit it with your 2009 taxes (by April 15, 2010). On the 2009 1040 form, the residential energy tax credit (from Form 5695) is claimed on line 52.

“Placed in service” means the year your solar system was up and working on your roof. It doesn’t mean when you put down your deposit.  Similarly, for products “placed in service” this year in 2010, you’ll take the tax credit on your 2010 income taxes.

Thanks for the question, Carl! You rock for going solar!

New Solar Group Purchasing Programs in San Antonio. Here’s the Solar Beef.

Published on March 3, 2010 by Tor a.k.a. "Solar Fred".
Categories: 1bog, Buying Solar, Solar Installation Stuff, Solar State Incentives.

Photo:  San Antonio’s River Walk by Flickr/DCWriterDawn

Return visitors to SolarPowerRocks.com may notice that we’ve got some new links that say “Find Solar Group Purchasing Programs in Your City.” What does this mean and why should you care? A valid question. We shall explain.

What’s Solar Group Purchasing

It’s a simple concept. The more people who buy solar, the easier it is for a single solar company to give volume discounts. Our new partner, One Block Off the Grid, (1bog.org), pre-negotiates a no-haggle, low price for solar with a large installer in a particular city. All you have to do is sign up, and get the discounted deal.

There are many cities where 1bog.org has active solar deals. The latest two are in Northern New Jersey and San Antonio, Texas. We recently highlighted the tremendous rebates available in Northern New Jersey, so let’s shine a solar powered light on 1bog’s new San Antonio campaign.

Benefits:

• The lowest price Solar Fred has ever seen. At $4.80/DC Watt, I have to say that I have never seen a price that low for a residential installation. Seriously. The average price for solar around the U.S. is around $6 to $7/watt. That $1.20/watt discount is going to save you thousands of dollars. For say an average 5000 watt system, $1.20 x 5000 adds up to…. $6000 off! To see how much solar will actually cost you, 1bog has created a very simple to use estimate calculator. Use it after you read the rest of these bullet points. Or come back. I’ll wait.
• 1bog keeps it simple. They do your homework for you and deal only with the most qualified solar installers in your area. For San Antonio, 1bog chose Standard Renewable Energy, a national installer that’s been around the block with solar many, many times. In Texas alone, they’ve installed 200 kW a month for the past six months. That’s about 40 homes a month, so you know they’re going to do it right with all of that experience.
• You get quality solar panels. 1bog ensured that you’re not getting cheap no-name brand equipment for their low price. Depending on your needs, you’ll get either SunTech or Sanyo panels. That may not mean a lot to an average consumer, but Solar Fred knows panels, and these brands are highly rated with a long track record. Same with the inverter. Xantrex is a very well known, quality brand.
• It costs you nothing to get a quote or for 1bog’s discounted pricing. Unlike Costco, Sam’s Club, or other group purchasing programs, 1bog’s big solar discount service is free. There’s no annual membership or hidden fees. Instead, 1bog collects a referral fee from Standard, who is happy to pay it for 1bog decreasing their marketing costs. So all in all, it’s a win-win-win for everyone.

Honest, this San Antonio program really is a great deal that’s difficult to match, but you can certainly do your own homework and try. Just keep in mind that you need to sign up for this program before April 23, 2010. If you miss that deadline, bummer, but sign up anyway, and 1bog will let you know when the next San Antonio campaign starts.

Any questions, please let us know, or check out 1bog’s San Antonio site for the full beef.

I’m moving to New Jersey just to buy homes and put solar on them. Seriously.

Published on March 2, 2010 by Dave Llorens.
Categories: New Jersey.

The Solar Situation

There’s a situation. With Solar. In New Jersey.

Did you know New Jersey is the #2 solar market in the US just behind California? Well, there’s a reason such a tiny state has more solar per capita than the best solar market in the United States. The reason is SRECs. SREC stands for “Solar Renewable Energy Credit.” They are a certificate for renewable energy production you can trade on the open market.

How do you get an SREC?

You own something that creates renewable energy. In this case, solar.  When your thing that you own that creates renewable energy pumps out 1mWh or 1000kWh (1000 kilowatt-hours) of juice (enough to power a big giant home for a month), you get one.

How much is an SREC worth?

At the moment, $700. Why you ask? Because if the utilities don’t meet their RPS standards, which they are not, they get ding’ed to the tune of $720. It makes sense then, that they’d be happy to buy your SREC’s for anything under $720, so it’s pretty easy to set the market rate for them. If they all the sudden start magically meeting their RPS standards, that could change, but for now, SRECs are a freaking gold mine for any homeowner who has a good roof setup in NJ.

Why is solar in NJ such a sick investment?

This is best shown with an image. Here is a financial breakdown of an example system estimate in New Jersey taken from 1BOG’s solar estimate tool (it only works where they have active solar group purchase campaigns).

In other words, the SRECs, which are money in your bank, are four times as valuable as the money you spent on the system in the first place. That DOESN’T EVEN INCLUDE your electrical savings. Yes, it’s crazy. Yes, I know it sounds too good to be true. I know, I know, I know. Believe me, I know. Most are skeptical, and yah sure there’s some fine print:

The Small Print – What’s the catch?

There’s not a REAL catch, it is actually a ridiculous investment where you get a free solar system that makes you money for 40 years. But here’s the small stuff you should know.

• The SREC incentives are so sick, that they state will try to keep you from gaming the system and installing a system in suboptimal conditions. You can only have the state rebate (which is currently $1,750 per DC kilowatt) if you have a roof situation that will be 90% efficient (good orientation and no shading). Some people who do not have this install systems anyway just to get the SRECs and abandon the state rebate)
• There is enough money for the state rebate at $1,750 per kW to last a few more months, then it drops to $1,550. That’s about a $1,400 decrease in rebates on the average sized system in NJ, so you better get moving.
• If the utilities all meet their RPS standards, albeit extremely unlikely, the SREC market could become volatile. They will still be worth considerable amounts of money, but they won’t have a clearly defined market value like the current penalty is pinning it to close to $720.
• SRECs are hard to trade personally, although there are some online tools coming about to help you do it. Most people sell them to aggregators (which the solar installers help you with). The aggregators of course take a cut, I think around 10%
• The utility penalty I talked about drops 3% a year, so expect SRECs to do something similar

If you live in New Jersey and you are interested in solar (hopefully you are now), sign up to find out if solar works on your home in New Jersey. There is currently a group purchase program in the north and there will be one coming soon in the south.