Over the last few weeks, I’ve written a lot of articles about our move to solar power. While you can read them all here, I feel like I need some kind of summary.
In each step of the process, I learned something new. Very often I learned it from commenters, who really stepped to the plate. So let’s dig right in.
Is Solar Right for Me?
That’s usually the first question people ask. Writing this to a national audience, there’s no easy answer. I can only break it down into small questions, which may be easier to answer.
1. Does your home have a roof that faces south? There’s a commercial building down the street that faces east-west, but it does have a roof that faces south. And if your front door faces north, the back of your house might have a roof that faces south.
2. Is your roof obscured by trees? Trees are difficult, but you may be able to trim them or take them down. If they are a neighbor’s tree it can’t hurt to ask. If they are environmentalists, point out that by going solar, the CO2 saved is the equivalent of planting 150 each year. The tree trimmed or taken down is going to be a hero. You’ll probably have to pay for the service and maybe even have to give a little extra to neighbor, but it is worth it.
3. Geography isn’t important as you think. If solar is viable in New England it should be viable in almost every part of the United States (maybe not Alaska).
4. What makes solar viable is a combination of many things:
5. Federal tax credits play a big role. Getting a big chunk of money back on your taxes can go directly towards paying down the loan
6. State grants also play a big role. A lot of that is what makes solar viable in places that don’t seem to have the best sun.
7. Solar Renewable Energy Certificates (SRECs) may also play a big role. Simply by producing solar power, you can earn credits. You can sell these credits on the open market and make money. It works a little like carbon credits if you are familiar with that concept.
8. Net Metering plays a huge role as well. We can sell the energy we produce back to the grid at the same price we pay. Thus during the day our meter spins backwards as we sell our solar energy. At night it spins forward as we use it, while we are not producing it.
9. Net Metering isn’t perfect everywhere. Some electric companies only pay a fraction of what you produce. In that scenario you might have to deal with batteries and other expenses that make solar less viable.
10. Mr. Electricity’s solar calculator is spot on…
11. … but it doesn’t replace having a local solar expert come do an assessment for you. You’ll learn the ins and outs of your local market and usually it is free.
12. If possible buy your solar panels don’t lease them. The companies that lease panels are going put you in a contract that my restrict your ability to sell the house. Also, the leasing companies are probably getting a very good rate of return by showing customers that they will still save money. (It’s just that their cut will be bigger than if you bought them yourself.) This is more of an educated hunch than mathematical analysis.
13. Finance the panels with a home equity line of credit if you can. Yes, it is a secured loan, essentially a second mortgage, but the rates are very good right now. Plus, it’s one of the few home improvements that I can thinking of which will actually not only pay you back, but save you money in the long haul.
The Future of Electricity
Thinking about the future of solar and electricity is like Louis Armstrong singing What a Wonderful World in my head. Typically, I try not to think about much what the future will be like. I want to hang onto every moment of the present. Nonetheless, personal finance is very much about thinking in the future, whether it’s getting debt-free, building an emergency, or crafting an annual $200,000 in retirement income.
Part of that is future planning is managing expenses. One of the best ways to manage them is to eliminate them. With that in mind, here are a few thoughts about the future of solar:
14. Technology continues its march and solar panels will get more and more efficient just like computer chips get faster and more energy efficient.
15. Even if your home isn’t suitable for solar now, you’ll be able to buy from a solar farm at a very competitive price.
16. I can imagine a time maybe 30, 50, or 60 years in the future when electricity essentially costs nothing… almost like how my Ooma Telo made my landline cost nothing other than taxes and fees for E911 service.
17. The implications of free electricity will be outstanding. Simple home renovations will mean free heat and hot water.
18. Improvements to plugin hybrids will enable them to go more than 100 miles on a single charge from the nearly free electricity provided by solar panels. If you need to go further, you’ll get well over 80 miles to gallon in gas.
I’m sad to end this series on solar, but I don’t expect to have anything to new to report for more than 6 months. The installation won’t be until next Spring/Summer because they don’t do them in the winter (snow gets in the way).
On the bright side, I’m extremely energized about the next series I am planning. I almost couldn’t tear myself away from the keyboard this past weekend. Look for it Monday of next week. In the meantime, I’ve got a few other articles planned for this week.