7 Steps – Best Way to Buy Solar Panels for My House
To properly plan and prepare to power your home with solar energy, there are a few steps to follow. After deciding which solar option makes the most sense for you, follow the steps after step 3 to maximize your experience when working with a solar installation company. Going solar can require a high upfront investment, ensure that you take the best steps when buying solar panels for your home. Follow these 7 steps, for the best way to buy solar panels for your house:
Will going solar save me money?
Do I have a good roof for solar? Find out.
Ways to go solar: Buy solar panels vs. lease solar vs. PPA
Determine my monthly electricity cost and usage
Get multiple solar quotes and what to ask solar companies
Find incentives for solar panels and battery backup
Work with a solar installer and utility company
1. Will going solar save me money?
Will going solar reduce your home’s electricity cost? The primary reason most people look into solar is that they are trying to reduce the cost of their electricity bill every month. The first step of going solar is to determine if solar will benefit you by looking at how much you’re paying for electricity on an annual basis.
Our electricity bill is like our wireless internet bill. It is expensive, it keeps going up, there aren’t a lot of alternatives, and we have to have it.
Therefore the first step towards going solar is to
determine if it could potentially benefit you financially. Therefore, before
even considering going solar, it essential to ask yourself the question,
“are there easy ways that I can increase the energy efficiency of my
home?” There may be easy and low-cost ways to reduce your total
electricity usage. It is an incredible feeling to be able to see a dramatically
smaller electric bill. So consider implementing some inexpensive and simple
efficiency measures before choosing solar.
Some of the following ways to reduce your electricity
use without solar include:
Home energy investigation: Investigating your
home energy usage and can help you understand where your home is costing you
money in terms of electricity usage and what steps to take to improve the
efficiency of your home.
Energy Efficient Home Appliances: Use your home
appliances like your dishwasher, dryer, A/C more efficiently, or consider
investing in energy-saving appliances.
Go with LED Lighting: Switch to energy-efficient
lightings, such as LED lighting, because they will leave a smaller carbon
footprint. They will also last much longer than a standard bulb.
HVAC System: If your heating, ventilation, and
air condition (HVAC) system uses electricity, the number of solar panels you
will require to offset the amount of power it consumes will be significantly
impacted. Efficiently heating and cooling your home will reduce the amount of
electricity you need to produce with solar.
Some homes may be on special programs that heavily
subsidize the cost of electricity.
Several tools are available to help homeowners determine their home’s solar energy potential, like Google’s Project Sunroof. These calculators can help you how much sunlight your home may be able to capture based on the location of the property. But there are other services as well that provide information on an estimate system size, the potential cost of going solar, and the amount of savings a home or business could receive.
These tools are a fantastic starting point and can help
you determine whether your home can truly maximize the benefit of solar energy.
As informative as these general tools are, a solar company will have more
refined tools that will consider all of the variables that are needed to
properly build and design a solar energy system personalized for your home. A
solar installer can provide an accurate assessment of your solar potential as
well as detailed recommendations, estimates, and solar equipment.
Several factors can dramatically impact the benefit you
receive from solar energy, such as the following:
Trees – Trees are fantastic! They convert CO2 into O2 and provide shade on a sunny day. But when a tree creates a shadow on your solar panels, it can substantially impact the performance of your solar energy system. A solar installation company will determine how to arrange the solar panels best to reduce any shading from nearby trees. But it is also essential to consider the potential growth of the trees nearby because they could create unanticipated shade in the future.
Roof – Your solar energy system, if designed and installed correctly, will last longer than your roof. We recommend that your roof have at least 15 years of life remaining before installing solar panels. Removing and reinstalling your solar energy system will add additional costs to a future roof repair, substantially impacting the financial benefit of your solar energy system. Not to mention the time it takes to do the roof repair, your solar energy system will not be operational for potentially a month or more.
Utility Provider – Your local utility company, may place certain restrictions or approval requirements that will impact the benefit you receive from going solar. Some utility companies will restrict the size of your solar installation or limit access to solar. These provisions vary from state-to-state and by the municipality. Check with your utility provider and state/local laws.
3. Ways to go solar: Buy solar vs lease solar vs PPA
As the solar industry has started to mature, there have
been more and more options to make it easier for both homes and businesses to
Purchasing to own a solar energy system fully is no longer the only option available for homes or businesses looking to go solar. Even if you don’t want to buy a rooftop system or if you rent, there are many programs available that will enable you to benefit from solar electricity. By installing solar panels on your roof, when the solar energy system generates more power than the home or business consumes, the excess electricity that your solar energy system generates is sold back to the grid.
Below are the most common options available for
accessing solar energy at home; check with local solar installation companies
and your utility company for programs available in your area.
Purchasing a Solar Energy System
Buying to own a solar energy system is the best option
for those looking to maximize the financial benefits of installing solar
panels. By purchasing a solar energy system with either cash or a loan, you can
take advantage of existing residential and commercial federal tax credits and
increase the market value of your home.
Buying to own a solar energy system is a good option if
one or more of the following apply:
You want to own the solar energy system installed on your roof
You would benefit from state or federal investment tax incentives
You’re looking to maximize your return on investment on your solar energy system
You are willing to be responsible for any solar repair and maintenance (For solar purchase, warranties are crucial. Most solar energy systems offer equipment performance warranties, but some solar installers offer workmanship guarantees, be sure to know what the warranties cover)
You want to increase how quickly your home sells, as well as increase the value of your home
Have the ability to make an upfront capital expenditure to purchase the solar system.
(For Commercial Businesses) Tax benefits by treating your businesses’ solar panel system as a depreciable asset
Financing Your Solar Energy System Purchase
By purchasing a solar energy system with solar financing, you can take advantage of the existing tax incentives for going solar and increase the market value of your home. Almost half of all U.S. households who want to go solar are unable to make the full commitment to purchase the system outright because of the high initial cost of adding a solar energy system to your roof. If you’re unable to buy your solar energy system upfront, another option is to finance it through various solar financing programs. These programs provide homes and businesses purchasing power to buy their solar system at a level that fits their needs and budget.
Consider financing your solar energy system purchase if
one or more of the following apply to you:
You are unable to pay for the initial cost of
Have a credit score above 650, but no access to
You would benefit from state or federal
investment tax incentives
Looking to maximize the return on investment
(ROI) on your solar energy system
You are willing to be responsible for any solar
repair and maintenance (For solar purchase, warranties are crucial. Most solar
energy systems offer equipment performance warranties, but some solar
installers offer workmanship guarantees, be sure to know what the warranties
You want to reduce your electricity costs
You want to sell excess electricity produced by
your solar energy system through a net-metering billing arrangement.
You want to benefit from owning a solar energy
system like the increase in your home’s valuation & home sale.
For Commercial Businesses) Tax benefits by
treating your businesses’ solar panel system as a depreciable asset, and the
interest from the solar financing.
If you lease your solar energy system, you can use the
power it produces, but someone else—a third party—owns the solar energy system.
The home or business owners pay to lease the equipment. Solar leases often
involve a little or no initial cost and fixed monthly payments over a set
amount of time. Under a solar lease arrangement, the homeowner will pay a
monthly fee for the solar energy system that is based on the estimated amount
of electricity that the system will produce. This monthly cost is typically
substantially smaller than an electric bill. Getting a solar lease is a
fantastic option for those who:
You want to save money on your electricity cost by paying little to no initial down payment
You aren’t eligible for the Federal Investment Tax Credit (ITC), commonly known as the Solar Tax Credit
You don’t want to have to worry about maintenance or repairs
You want the ability to sell excess electricity that your solar energy produces back to your local utility company through a net-metering agreement
Similar to solar leases, Solar Power Purchase Agreements (PPAs) allow homes and businesses to create a financial agreement with a solar company to install and maintain a solar energy system on a home or business’s property at little to no cost. The biggest difference between a solar lease and a solar PPA is that with a solar lease, you are paying a fixed monthly payment for the solar energy system. With a solar PPA, you are paying for the solar power that the panels produce. This production amount will vary from month-to-month. The residential or commercial building owner agrees to purchase the power generated at a fixed rate that is typically lower than the local utility electricity rates. For Southern California Edison customers (SCE) on Time-of-Use (TOU), their retail electricity costs will range from $.19 /kWh to $.43 /kWh. With a solar PPA, you can get a fixed-rate at $.13 /kWh – $.17 /kWh.
With a solar PPA, the solar company you work with will
help you from the design of the solar panels on your roof, to permitting,
financing, and the installation of solar panels on your roof with a small or no
upfront cost. A Solar PPA can be an excellent option if:
You want to install solar panels on your roof
but do not want the hassle that can come with owning a solar energy system.
You want the cost savings that come with solar
but not the upfront fees.
You aren’t eligible for the Federal Investment
Tax Credit (ITC), commonly known as the Solar Tax Credit
You don’t want to have to worry about
maintenance or repairs
You want the ability to sell excess electricity
that your solar energy produces back to your local utility company through a
of Owning Your Solar Energy System (Cash or Financing)
Maximize the return on investment on your solar energy system
Increase the market value of your home or commercial property by installing a solar panel system.
Be eligible to reduce your federal and state tax liability through the federal investment tax credit
(For Commercial Businesses) Tax benefits by treating your businesses’ solar panel system as a depreciating asset, and the interest from the solar financing. Speak to a licensed accounting professional for accurate financial advice regarding your particular situation.
of Solar Leasing and Solar Power Purchase Agreements (Solar PPA & Solar
Go solar with little to nothing out-of-pocket. Typically $0 down.
See immediate savings vs. your electricity bill by swapping your more expensive utility company electricity rate for a smaller one that is typically 30% – 50% lower.
Solar PPAs and most leases are guaranteed to be fully transferable. (the cost to transfer the ownership of the solar PPA to the new homeowner is around $100 – $150)
It can come with an annual rate increase of ~2.9% on electricity costs vs. 4-6% from your current utility company
4. Determine my monthly electricity cost and usage
To help your solar provider provide accurate
recommendations for your system’s type and size, gather information about your
home and electricity use.
Review electricity bills to determine your
annual electricity consumption. There are certain months where your electricity
bill will be much higher than other months (e.g., if you use the air
conditioner during the summer or heat your pool). With solar, you want to
determine how much your annual average monthly usage is to ensure that you can
properly size your solar energy system. Some utilities and solar installers
offer tools that can help with this review. The goal of your solar energy
system should be to offset 100% – 110% of your annual electricity consumption.
Consider any changes or short term updates that
may impact your electricity usage in the future. Do you plan on making
significant updates to improve your home’s energy efficiency? Or someone
potentially moving out? You may need less electricity than you did in the past.
Or if you plan to add a pool or an electric vehicle or an accessory dwelling
unit (ADU), your electricity needs may increase. Typically, most homeowners
believe that their electricity consumption will increase, not decrease in the
5. Get Multiple solar quotes & what to ask solar companies
When researching solar installers, be sure to find insured, qualified, and skilled professionals with the proper certification to install solar panels on your home roof. You should also ask friends and family members who have recently gone solar for references and check online resources for reviews. Before you make any financial commitments, ask your potential solar installer for proof of their license, and investigate their online reputation.
There are a few online resources that can help highlight key features of which solar installer to choose. Be sure to get quotes from reliable solar companies that you’ve researched on reputable sites like Yelp and the Better Business Bureau (BBB) vs. a solar pay-per-lead marketing website that sells your request to participating solar companies. Be careful with the types of solar companies you work with, learn more about the various types of solar companies you may interact with when going solar.
Obtain a minimum of three quotes for solar panel system installation and make sure the quotes are based on the same characteristics to ensure an apples-to-apples comparison. For example, ask each solar installer to give you a quote for a cash purchase on a 7kWh solar energy system. This will help properly compare solar companies you’re evaluating.
Be sure to ask the right questions to evaluate your
solar installers by asking:
Is your solar company familiar with my local utility, permitting, inspection, and interconnection processes? From signing the solar installation contract to, obtaining building permits, and receiving permission-to-operate (PTO) can be long and meticulous processes. Ensure that the solar installer you work with is familiar with local regulations, utility companies, and city permit offices will ensure that your system is installed and connected promptly.
What is your first-time inspection pass rate? By working with a local solar installer, who truly knows your local utility should have a high first-time inspection pass rate. There are always unforeseen potential issues that could occur during an inspection from the inspector, not being able to show up to failing to paint the conduit.
Can I get any local references from customers in my area? Nothing beats an excellent recommendation from a previous customer. By talking to former customers of the solar companies you plan on work, you can quickly learn about their experience installing solar panels on their roof, challenges you could potentially face, and how the solar company resolved them. Or check their portfolio of completed solar panel installations near me.
Is the company properly licensed and certified to install solar? Solar energy systems should be installed on your roof by a fully licensed company. With how large of an investment going solar can be, ensuring that the solar installation project is done by a properly licensed professional is a worthwhile investment. Most solar installation companies have an electrical background because these are essentially a personal power system on your roof. This means that the solar installer or subcontractor should have a C-10 electrical contractor’s license. You can check your state’s electrical licensing board to check whether your contractor has a valid electrician’s license. California’s state electrical licensing board, for example, is called managed by the California Contractors State License Board (CSLB). By working with a local solar installation company, they will be able to know which types of projects they can and cannot work on based on their license.
What is the warranty for this system? Solar equipment, like solar panels, comes with their warranties, typically 20-year warranties for solar panels and ten-year warranties on solar inverters. Ensuring that a reliable guarantee backs the solar energy system is often an indication that the solar installer is using quality equipment. Solar installation companies will also have workmanship guarantees and warranties, can provide additional peace of mind that the work will be completed properly.
[Solar Purchase: Cash or Financing] For homes and businesses who buy their system, they are fully responsible for any solar repair and maintenance. That is why it is crucial also to see if your solar installation company also provides workmanship warranties to help repair the solar energy system.
[Solar Lease and Solar PPAs] For homes and businesses who have a solar lease or a solar Power Purchase Agreement (PPA), the solar company that owns the solar energy system will be responsible for the system maintenance, repair, and performance.
Does the solar company have any pending or active judgments or liens against it? As with any project that requires the expertise of a skilled contractor, proper due diligence is highly encouraged. Be sure to check the state electrical board can tell you about any judgments or complaints against a state-licensed electrician. The BBB is another source of information to see if there are any active or pending complaints or issues.
The solar quotes that you receive should clearly state the maximum generating capacity of the system—measured in kilowatts (kW) or megawatts (MW). Request an estimate of the amount of electricity that the system will produce on an annual basis.
The solar quotes you receive should include the total
cost of getting the solar energy system up and running, including the solar
equipment, installation, connection to the grid, permitting, sales tax, and
warranty. A cost/watt and estimated cost/kW are the most useful metrics for
comparing prices across different installers, as installers may use different
solar equipment which impacts wattage and brands, or offer quotes for systems
of various sizes.
6. Find Incentives for Solar Panels and Battery Backup
Home solar energy systems are eligible for a 26% federal tax credit through 2019. The tax credit decreases to 22% in 2021, then to 22% in 2021, 10% in 2022 and expires December 31, 2022. For commercial solar energy, systems will be able to leverage a 10% Federal Tax Credit.
Note: For homes or businesses go solar through a solar
lease or solar power purchase agreement, will not be eligible for this federal
solar tax rebate since you do not own the solar energy system.
For homes or businesses in California who are considering a solar battery backup, they may be eligible for the Self-Generation Incentive Program (SGIP). The SGIP provides a rebate incentive for the installation and management of qualifying distributed energy systems.
Be sure to explore all available solar financing
options to ensure that you are getting the best fit for your goals. Being in a
position to get the best choices possible to best match your situation is
ideal. Be sure to check out the Solar Installation Guide for more financing
7. Work with a Solar Provider and Utility Company
After you pick your solar installer, your solar installer will walk you through the necessary steps to install solar panels on your roof. From completing the necessary permitting, get permission-to-operate (PTO), and finding you your local incentives.
One of the keys to maximizing your experience when
going solar is to determine the appropriate size of your solar energy system
accurately. The size of your solar energy system will be based on your
electricity needs (determined in step 4) as well as the following:
How much sunlight exposure your roof has
Available space on your roof
Location of the solar panels on your roof
The orientation and tilt of the solar panels on your roof
The solar panels efficiency at converting sunlight to electricity
Backup electricity sources like a solar battery or a diesel/natural-gas based generator.
Your solar installer will also ensure that all solar equipment from your solar panels to solar rails are installed correctly and oriented to maximize how much electricity your solar energy system generates for the next 20 years. Factoring in daily electricity generation and seasonality to ensure that you maximize how much your solar energy system makes across its entire lifetime. Achieve the best way to buy solar panels for your house.