One year ago we has a solar panel system installed on our house. (our yard is too small for ground install) So after a year of real world use what have I found out? Did I save the world?
Firs a small disclaimer: I got my system installed before the state change in how the utility company treats home solar generation took effect. I will cover that below and show how things would be different.
Solar!
I am a numbers person, I had to see a benefit to my wallet before i would take the step to solar. For many years I looked at it and ran the numbers and solar just did not make financial sense. In the last few years, the prices came down and quality went up. When I looked at it, I could see a positive gain for my family and started getting quotes.
I called five companies, three returned the calls and provided quotes. One pressured me like a used car salesman about to lose his job, one was a sales man who loved the product but wanted me to want it, and the last was the “Tony Malito” of solar sales. (The ultimate high pressure shady used car sales guy who would overcharge his own mother and runs the most annoying radio ads) We picked the middle and have been very happy with the company.
we got a 9.9 kwh system, with inverter, monitor, generator hook up, and pre-set for the addition of battery bank Total cost with install and hook up: $24,231. which is “a lot”. (I personally think it was about 26% higher than it should have been, and they did a 4% price cut when the tax credit decreased by 4%.) We were offered $0 down and 20 years finance. We chose a 10% down and 15 year plan with a lower interest rate if we made a $6,300 payment with in 12 months. — the amount of tax credit we would get.
Install!
We had a small delay of four months due to COVID. First we needed a permit from the city to put in panels. (external addition to home, requires a review of plans and approval from the city. Normally it is a three week process, due to people working at home it took two months) The second delay was from the “friendly” utility company, who had to acknowledge the need to change meters to a “bi-directional” meter. This normally is a month long process that took two months and a week to get done.
Once the permits were in hand, the day was booked and as long as it did not rain, they would be there. The crew arrived, and the system was installed on the roof in four hours. All the wiring, testing, and inspecting took another five hours before the electrician was happy. (We only had power shut down for about 15 minutes when they tied into the house system.)
After that it was waiting for the utility company to show up and switch our meters. Which they did three and half weeks later. Then we were “making sunshine into dollars”. Sort of. It was the end of November then.
A small positive was that the loan did not start until we were connected to the grid (the power system of the utility), so there was no bills to pay for something not making electricity for us.
The Numbers!
Time to geek out.
The 12 months before solar we spent $1,410.22 on electric (not counting the connection fee, that is a constant). The 12 months of solar we spent $224.17 on electric. A small savings of $1,186.05. Our payments are $97.36 a month, or $1,168.32 a year. So are “real” savings this year was $17.73.
Be still my beating heart! $18 saved! Enough for two new books.
Actually that is great. Most people don’t come out ahead for five years or more.
We also had a lot of benefit for having beaten the deadline and been grandfathered into the “Net Metering” system.
Net Metering vs Paid Generation
The year we decided to get solar, our “Democratic” governor teamed up with the mostly Republican legislators to change the law the “friendly” utilities had to follow with home solar to “better protect the growing solar industry and customers of solar”.
See the thinking prompted by large amounts of campaign donations was that home solar owners were being cheated by the utility companies by not being paid for the power they generated. (that is mean, i know, there was no connection between the millions given over several years and this law change, because that would be buying votes)
Net Metering works along this line. Your panel makes power, it flows into your meter, if you need it, you use it at no charge, if you don’t need it, the power flows into the grid and the utility credits your account for what was generated and they sell the power to your neighbors. The “being cheated” according to the utility is you are not getting paid money for the power you generate that they then sell and get paid for! You just get a credit for the amount you generate and then that is applied against what you use when you don’t have sun making power.
So you can see how unfair that is and why the power company would want to change that to protect you.
So six months after we had our system installed the new law kicked in and anyone not “trapped” in this evil Net Metering now gets “paid for generation” of their extra.
Now it is the same — panel, meter, house if needed, if not into the grid where you get a check (well a payment applied to your bill) for what you sent into the grid which they then sold.
On the top that sounds cool, getting paid by the utility.
Except here is what happened. The Utilities ran to the Public Service Committee and asked for a rate hike to keep their dividend payments up and maintain their profit level. It was asked to raise the rate from $0.09275 to $0.1105 per kWh for what they sell and to pay home generation $0.0275 per kWh!
In the hearings they explained how much of a burden home solar is, that it harms the owners and hurts the companies so they should not have to pay more than wholesale prices. That if people wanted solar, they have a program where for $5 per month you can lease a solar panel and be credited the production of it...as a payment on your bill at twice wholesale pricing. (so about $1.25 to $3.50 a month per $5 payment.) They also stressed that they wanted to interpret the law to mean ALL home solar generation has to go into the grid, no first use by the owner. So you would generate say 100 kWh, send it to the grid and get paid $0.0275 per but still have to draw 100 kWh from the grid at $0.11 per.
(Now how that protects the growing solar industry is not clear to me.)
The PSC did not fully buy that. Possibly because of the large number of comments from existing and future solar owners. Or they are kind hearted.
They went with a price hike of 8% this year (2021) and 6% next. They have to “buy” generation at $0.0775 per kWh, and kept first use.
Bottom Line
While not great, it is better than what they wanted. (they also did not get the hike in connection fee that was pushed as a way to avoid bill fluctuations as the fee would be constant.) There are some legislators who are working to try to roll back this Paid Generation scheme, and one hopes the Solar businesses get big enough to bribe, I mean donate to like minded politicians, to turn the law around.
My family is going to be ok, and next year will likely be even better pay off as the cost is now higher and what we would have paid if we did not have solar and used the same amount is about $63 more. (so that and our $18 bucks, is almost an entire payment on the solar system.) And since they are not going to lower rates any time soon, the pay back date becomes even closer.