Going solar

Copyright© 2016 Craig E. Forman All Rights Reserved www.tastytrader.net

Going Solar What’s Really Involved in adding a Rooftop Solar System?

Craig E. Forman www.tastytrader.net

Topic Summary

• Why go solar?

• Reducing your carbon footprint

• Reducing your electricity cost

• Why is MA a strong state for solar?

• How solar works

• Tax incentives

• The state SREC program

• Buying vs. leasing

• Financing your solar system

• The key players

• Technical stuff – what are all the pieces?

• Picking a supplier

• Photo Gallery 2


Why Go Solar?

3

• It is good for the environment (irrefutable).

• It raises the value of your property (maybe).

• It saves money (depends on your situation).


Environmental Impact

4


Effect on Property Resale Value

5

A 2013 study in CA concludes that each 1 KW DC of rooftop solar adds $5K to $6K in resale

value ($30K to $36K for a typical 6KW installation). We don’t have enough data to draw

conclusions for the

Boston area, but it makes

sense that selling a

property with very low

electricity costs would be

a net positive impact on

your property value

assuming you own the

system and the yearly

electricity savings are

passed on to the buyer.


Will doing a solar project save me money?

6

A GREAT QUESTION!

But first, let’s take an

overall look at things

we should do at home

before we even

consider a solar

installation.


How can I reduce my carbon footprint?

7


Easy ways to reduce your energy consumption

8

• Turn down the temperature of your hot water heater.

• Install setback or programmable thermostats.

• Get rid of that extra refrigerator in your basement or garage.

• Select Energy Star rated appliances.

• Turn off lights when you don’t use them.

• Install compact fluorescent or LED bulbs instead of incandescent bulbs.

• Only run the dishwasher when it is full.

• Update your furnace or AC unit (if it is very old) to a more efficient model.

• Install energy efficient windows.

• Insulate, insulate, insulate.


Schedule a free Home Energy Audit

9

A great place to start:

www.newtonsaves.com or

call 781-436-2639

Just enter your name,

email, and phone

Home energy assessments

are free and are performed

by Able Home Performance

http://www.newtonsaves.com/


Did anybody have this problem winter before last?

10


Why do we get ice dams?

11

Ice dams form because the attic is too warm and heat escapes to the roof, melting

the bottom layers of ice.


Can we do anything to prevent ice dams?

12

Why does my attic look like an igloo?


What is spray foam insulation?

13

• It is insulation that can be sprayed on the attic roof and gables to prevent heat loss.

• It seals the attic so there is little or no air flow. No attic venting is needed. Gable

vents are sealed, windows remain closed all year.

• Allows HVAC equipment & ductwork in attic to stay warm in winter, cool in summer.

• This keeps your attic at room temperature all year round, reduces heat loss in the

winter and allows the roof to remain very cold all winter, reducing ice dams.

• It is installed in one day, and you don’t lose attic storage space.

• Open cell spray foam insulation has a R-value of 3.4 to 4.5 per inch, so 8” of open

cell spray foam gives you an R-Value of around 32.

• Closed cell spray foam gives you an R-value of 6 to 7 per inch (near double the $),

so 5” of closed cell spray foam insulation has an R-value of around 32.

• 10-12” of fiberglass insulation gets you to R32, but it can’t seal or prevent ice dams.

• Approximate cost for 8” open cell spray foam attic insulation around $3K to $5k.


Check your historical spending on electricity

14

• Once you have done what you can to reduce your electricity costs, get your electric

bills for the last year and calculate your KwH usage per year (don’t look at $ spent).

• If you have the data, go back 3 years and calculate averages per year.

• Factor in a lower expected usage if you have made changes like adding insulation.

• Your goal in adding a solar PV system is to produce enough electricity to satisfy

80% of you needs, but this will be a lot easier if you reduce your usage.

• What do we use for the cost of electricity going forward? Great question.

• Take a look at your bill for your current cost per KwH of usage:

• Your bill is split into supplier charges and delivery charges.

• Generation charges go to the supplier of the electricity you use.

• Eversource fixes the supplier rate and changes it every 6 months.

• Delivery charges are set by whomever bills you (Eversource), and can change monthly.

• Current rates in Newton (Eversource) are Gen: 10.61cents + Del: 14.6 cents = 25.21 cents

per KwH.


Note how your electricity use changes from month to month

15

• Your bill probably has a bar graph showing your KwH usage over the past year.

• If you have electric heat, expect to see a spike in the winter months.

• If you use AC, expect to see a spike in the late summer months.

• Most of us will see a spike in Dec to Feb due to shorter days – more lights used.

Shorter days = more

electricity for lighting

Central AC uses more

electricity in late summer


Reducing your electricity bill with a phone call

16

• The electricity market has become very competitive.

• In Newton, you are billed by Eversource, but you can choose your supplier.

• You have no control over delivery charges, but you can reduce generation charges.

• Go to www.electricityrates.com and enter your zip code.

• Take a look at the offers, and choose the supplier that is offering you the best deal.

Some will give you a bonus (like a free $50 gift card) for signing up.

• Be sure to check the plan length (lock-in period). Supplier costs will always be

cheaper with a 6-month lock than a 9-month lock.

• Make sure that there is not an early cancellation fee (usually there is not).

• When your initial period is up, you can change to a new supplier if it’s cheaper.

• It only takes a phone call (about 10 minutes) to change your supplier.

• Your electricity bill will reflect the change in about 30 days.

• Don’t forget to check back at end of lock period (the price will almost always go up).

http://www.electricityrates.com/


Reducing your electricity bill with a phone call

17

• Here is what I found at my zip code 02460:

Best rate was 8.19 cents at

Direct Energy for 6 months

vs 10.84 cents, a 24%

savings on supplier cost!


Now back to the solar discussion

18

• So you have an idea of how to lower your electricity consumption.

• You have a pretty good idea of how much electricity you expect to consume each

year.

• You know exactly what you are paying for the electricity you now use, and you have

selected a supplier to get a rock bottom rate.

• Using your anticipated electricity usage, calculate 80% of your expected usage.

This is your target production number for electricity generation from a solar

photovoltaic (PV) installation.

• To estimate year one electricity costs savings (you really don’t know how much it

will cost in the future, but assume it will not get any cheaper), multiply 80% of your

usage by expected electricity cost. This is your expected savings on electricity for

1st year if you could offset 80% of your electricity usage with a rooftop solar system.

• It’s real money saved each year, but it doesn’t add to $25,000 or $30,000, so how

do we really get a solar system to pay for itself? The answer: financial incentives.


How Solar Works

19

Solar panels produce

DC (direct current).

Houses require AC

(alternating current).

Excess electricity

produced is put back on

the grid and you get paid

for all the electricity that

you produce.

An inverter is a device

that changes DC to AC.


What is Net Metering?

20

Allows you to

get paid for ALL

the electricity you

produce, even if

you produce

more than you

use in some

months.

Think of this like

“rollover minutes”

on your cell

phone plan.


What do the electric utilities think about net metering?

21

• In short, they hate it.

• In many states, utilities are fighting to cap or eliminate net metering.

• They argue that non-solar customers are subsidizing solar customers.

• Utilities get paid based on the NET electricity that you use, which can be low.

• With net metering, they act as an unlimited energy bank for the solar producer.

• You pay nothing for the right to store all your extra electricity back in the grid.

• Utilities have proposed that solar customers should be required to pay a usage

fee for the privilege of selling their excess back to the utility at market rate.

• Net metering is a GREAT deal for the solar customer. Will it last?

• If net metering goes away, we are likely to see greatly increased demand for

off-grid solar installations (excess electricity stored in battery banks).


Solar Components for Off-Grid Installation

22

• You store the solar energy in a battery bank to use when not producing.

Notice that there is no

power line connection

shown in this diagram!


The cost of solar PV modules is coming down

23

Source: Pvcharts.com


The cost of solar PV systems is more stable

24

Residential Sector:

Pricing fairly stable

over last 5 quarters

Why hasn’t the

cost of residential

solar dropped

more?


The cost of the PV modules is only ~ 20% of total

25

Total Installed Cost

about $3.50 / Wdc

PV Module Cost

About 20% of Total


The permit from the City of Newton cost a lot!

26

Note that the city of

Newton building permit

alone for my project was

over $500!


Why is Massachusetts a good place for solar now?

27

Massachusetts was the #4 state in 2015 for solar installed power, and has been #4 for 3 years.

Source: U.S. Solar Market Insight Executive Summary 2015 Year In Review

www.greentechmedia.com/research/subscription/u.s.solar-market-insight


Here’s why

28

• Federal Tax Credit (through at least 2019)

• State Tax Credit

• No sales tax on purchase

• Exemption from property tax increase for 20 years due to solar installation

• High cost of electricity (compared to other states)

• State SREC (Solar Renewable Energy Certificate) program (time sensitive!)

Some of these could change at any time! The incentives for a new technology

generally fall as the technology becomes more mainstream; i.e. credits for

electric vehicles.


Tax Incentives for Going Solar

29

• The owner of a solar system is allowed to take a 30% federal tax credit in the

year the system is put into operation. This is a DIRECT REDUCTION in the

amount of taxes you pay, and reduces the cost of the system by 30%.

• The Commonwealth of MA allows taxpayers to take a 15% tax credit in the year

the system is put online, subject to a maximum of $1000 credit.

• If you have to do expensive work to make the solar project viable like removing

some trees or strengthening your roof, if this is done through the solar

company, you will be getting it done at a 30% discount!

Net result: Out of pocket expense for a $30,000 system is only $20,000:

$30,000 less 30% Fed credit (-$9000) less State credit ($-1000) = $20,000


The property tax exemption for Going Solar

30

• MA law states that residential solar installations are exempt from property taxes

for 20 years. Thus, if you add a $30,000 solar installation to your home, your

real estate property assessment cannot be raised due to the solar installation

for 20 years (it can still go up, but not due to the solar installation).

• It is wise to inform your homeowners insurance company when you do a solar

installation, because they may increase your insurance rate slightly due to the

added value to your home. The insurance would be liable, for example, if a

tree fell on your roof and damaged the system.


The high cost of electricity in Massachusetts

31

We are here


The state SREC program

32

• SREC = Solar Renewable Energy Credit.

• The state builds demand for solar by requiring electric utilities to produce at

least a minimum percent of their power from renewable energy sources, and a

portion of that specifically from solar (solar carve-out), or else they pay a fine.

• Since electric utilities produce most of their electricity from fossil fuel plants,

they have to buy solar credits (SREC’s) in order to meet the requirements.

• A solar system owner “mints” one SREC for each 1000 KwH that is produced

from the solar system.

• SREC’s can be minted every 3 months (if you produced enough solar).

• New solar installations can participate in the program for 10 years.

• The value of an SREC is subject to market forces, but values are expected to

fall over time. The program has features to insure there will be a liquid market.

• Current program is called SREC-II. After SREC-II ends, SREC-III?.


Value of SREC’s

33

• Note that SREC-I’s are selling for ~ $450, but SREC-II’s are only ~ $260.

• After SREC-II ends, there will be another (SREC-III), but prices will be lower.

SREC-I = $450

SREC-II = $260


Getting paid for your SREC’s

34

• Once your system is running, you can begin participating in the SREC program.

• You register your system with a 3rd party reseller in the SREC market.

• You report your solar production number every 3 months on a gov’t web site.

• You pay a small commission to buy/sell through the 3rd party (around 5%).

Usually, they give you the choice to sell the SRECs as soon as they are minted,

or to keep them to sell later (like stock).

• Some 3rd party companies give you an option in which you instruct them to hold

onto your SREC’s until a time when they believe that it is most beneficial to sell.

• SREC income is a HUGE part of making your solar system cost effective. A

typical installation might mint 5-7 SREC’s per year, netting you $1K to

$1.5K/year avg over 10 years. That’s a big impact on system financial viability!

• I suggest that for new systems, you should use $200 as a target average SREC

value over the 10-year period that you can sell your SRECs.


Looking at a solar system financial plan

35

• Usually, the financial plan looks at revenue and costs for the first 20 years.

• Offset of electricity costs is considered revenue, along with SREC income.

• Costs include after-tax purchase price + interest (if you financed the purchase).

• Look to see (based on your assumptions) when your system is expected to

“pay for itself”. That is the system breakeven point. After that point in time, the

system has paid for itself, and all further electricity production is free (0 cost).

• With the current incentives in place, you will see typical breakeven around 5 to

7 years for many installations.

• Beware of sales presentations that are overly optimistic with respect to the cost

of electricity rising, the value of SREC’s, and the amount of electricity produced.

They can make the breakeven look much shorter than probable, so do your

own analysis and use your own numbers for estimates.

• Run projections with 2, 4, and 6% projected yearly increase in electricity cost.


Calculating Breakeven Time Spreadsheet

36


Getting quotations for solar systems

37

• There are many companies doing business in MA in the solar space.

• Several different models exist for how systems are sold, installed, and serviced.

• You must be an educated consumer in order to find a company that has a

solution that is a good fit for you.

• Your system’s ability to produce electricity with high efficiency depends largely

on physical features that you cannot change:

• What direction is your roof facing?

• What is the tilt of your roof?

• How much clear roof area do you have available for solar panels?

• Do you have issues with shading from buildings, trees, chimneys, etc?

• Are you willing to put panels on the front of your house, the back, or both?

• No installation is a perfect candidate. A good salesperson will help you

understand what you are likely able to achieve from your solar system.


Buying vs. Leasing

38

• If you have a system that is VERY WELL suited for solar, companies will offer

you a “no cost” leasing arrangement, where you can lease your roof to them in

return for a guaranteed discounted electricity rate. However, you will not own

the system, and you will not be able to take advantage of any financial benefits

such as tax incentives and SREC’s.

• You will most likely pay a monthly fee to the solar company for the system.

• Many leases will allow you to purchase the system at a future date (buyout),

but you will not get the tax benefits available to new installations.

• The purchase price may be inflated, and you will be buying old technology.

• You won’t get any of the tax benefits for the purchase of a new solar system.

• If you sell the property or want out of the lease, you will either need to get the

buyer to agree to assume the lease terms or pay to have the system removed.


Why lease if you can buy?

39

• For the reasons stated, my thinking is that the only time it really makes sense to

lease is if you cannot afford to finance the system until it reaches breakeven, or

if your tax bracket is so low that you cannot use the tax benefits.

• We will end the discussion on leasing here and will concentrate on purchasing

the solar system.


Financing your solar system

40

• Most of the solar sales companies have teamed up with a bank to offer

attractive financing for solar projects. It could not be easier.

• Many companies offer a 0% interest loan and no payments due for up to 18

months to finance the 30% federal tax refund. So you can get your 30% tax

refund in April of the year following your purchase, and you don’t have to pay

back the finance company until 18 months after your purchase. Talk about a

great deal! Just don’t forget to pay off the loan when the 0% goes away,

because they will start charging you interest. If your sales person doesn’t offer

this, ask about it, because it is common in the industry.

• The balance of the system purchase is usually paid in several installments;

typically ½ when the contract is signed, and ½ after installation is completed.

• The sales company will offer you financing, but if you need to, you’ll probably

get a much better rate if you can access a home equity line of credit.

Craig E. Forman www.tastytrader.net 41

The Key Players

The Sales

Company

Engineering Design

and Installation

Project Management

and Ownership

The solar industry is complex. It is also somewhat fragile because there are so many state

and federal incentives that are supporting the market. There are a number of different

business models. I have no preference as to what type of business model is best for you,

but you should understand who the players are and what their roles are.


The Sales Company

42

• This is the entity that makes the sales calls, gives you an initial quote, and

answers all your questions about solar. If not vertically integrated, they will

work with partners for the Engineering Design and Installation, and for Project

Management and Ownership. Try to work with someone who can answer your

questions and whom you are comfortable working with. Make sure that they

have partnered with companies who can offer you the features that you want in

your solar installation.

• Sometimes the sales entity may not even be local. With today’s technology

and satellite imagery, a preliminary assessment and quote can be done using

satellite images, without ever visiting the site.

• I prefer a sales entity that is a local person who I can meet face-to-face. You

will have a lot of questions to ask them.

• I feel much more comfortable if the salesperson has actually seen the site.


Engineering Design and Installation

43

• This is the entity that will be doing the site survey, the engineering study, the

detailed system design, ordering all the materials, obtaining all necessary

permits, completing the installation, and coordinating all inspections.

• They may also service your system if warranty service is needed, but

depending on the arrangement, another company could be brought in to do the

service.

• It is important that you assess the ability of this entity to perform a high quality

installation. Find out how long they have been doing residential solar

installations, and how many they have done. If possible, ask for a reference

from a recent install. Ask for the addresses of recent installation nearby so you

can drive by and take a look at them.


Project Management and Ownership

44

• Ultimately, when your solar system is up and running, there is a company that

owns the warranty liability for the next 20 years or more.

• Most likely, this is a corporation. It could be a solar company, or perhaps a

company that is involved in multiple green technologies such as solar and wind.

• This could be a US based company, or a US division of a global company.

• They will be monitoring your system remotely by computer, and will contact you

if a problem is detected.

• They are responsible for making good on any warranty claims. Since the

warranty period is long, try to work with a company that you think has a chance

at being around for the long term. Bigger is usually better. If warranty work is

needed, they will dispatch a local installer for maintenance on your system.

• Find out who would assume warranty liability if this company no longer exists.


Key milestones and timeframe for a rooftop solar system

45

Task - Milestones in Red Estimated Time Duration Notes

Take steps to reduce your electricity usage. n/a Prior to project start

Get quotes and select a supplier 1 week to 3 months Depends on you

Sign contract and pay initial deposit (~$500) n/a To Sales Company

Installer completes a site survey 2 weeks after contract signed Design and installation Co.

Initial design is generated 3-4 weeks after site survey

Design iterations made 1-2 weeks after initial design

Approve final design, make initial payment (1/2) n/a

Installation company orders materials 2 weeks after design approved

Material delivered to job site 2-4 weeks after ordering

Installation 2 days A few days after material

Net meter installed 2 weeks after install complete Utility does this

Town Building Department Inspection 1 week after install complete Town inspector does this

System turn-on, final payment (1/2) n/a System is now complete!

Select 3rd party reseller for SRECs anytime After system is live


Performance Guarantees

46

• Performance guarantees are not offered by everyone, but they do give you

peace of mind that your system will perform as promised.

• The supplier (after the final design is approved) will give you a final estimate of

your expected electricity production per year. The number will go down each

year due to degradation of the solar panels.

• If your system does not produce the minimum guaranteed amount of electricity

after each year, the supplier will reimburse you for the electricity shortfall,

based on the electricity rate in your contract (usually below market prices).

• I like performance guarantees not because I hope to collect money for

shortfalls in production but because it forces the supplier to give you a vetted,

realistic (probably conservative) estimate of what you are likely to produce.


Picking a supplier

47

• You should get at least 3 quotes, maybe more. There are many solar

companies out there and each one is a little different.

• Find a supplier who can give you what you want at a price that seems in line.

• Understand what components will be used in your system.

• Find out if they offer 0% financing for the federal tax refund and for how long.

• Find out if they offer a cash discount (if you don’t use their financing).

• Find out if they offer a performance guarantee, and how it works.

• Find out who is responsible for making good on any warranty claims. Since the

warranty period is long, try to work with a company that you think has a chance

at being around for the long term. Bigger is usually better.

• Find out what would happen if this company no longer exists.


• Solar panels – made by a variety of suppliers, both from US and China.

• Electronics package:

• Micro-inverters (1 per panel) and Envoy made from Enphase Systems

• Solar Optimizers (1 per panel) and gateway made by Solar Edge

• Central Inverter (used only with solar optimizers), converts AC to DC.

• External Breaker Box (mounted outside, allows system to be shut down in

case of a fire to cut all electricity to rooftop panels.

• Net Meter – provided by utility company, replaces your standard meter

• Solar Meter – mounted inside where you can record solar production in

order to generate your SREC’s.

Technical Stuff – What are all the pieces?


The solar panel

49

• Solar panels are made both in the USA and in China.

• The “sweet spot” today is panels in the 260W to 280W range.

• You may get a choice of several panels.

• Ask what the rated wattage is.

• Higher power panels are available, but they will cost more.

• Most panels are configured as 60 cells in a 10 x 6 configuration.

• Most panels are a standard size (65.3” x 39”)

• Beware of getting a non-standard panel – it could be difficult to replace.

• Ask what the panel will look like (or go see a house with that panel).

• Ask what the guaranteed power degradation is (try for < .7% per year).

• Check the warranty (look for 20 or 25 years)


Get a copy of the solar panel data sheet

Cell Configuration

Rated Panel Wattage

Power Degradation Spec


Two ways to convert DC to AC


Micro-Inverters vs. Power Optimizers

52

• Both micro-inverters and power optimizers are located on the roof, below

the solar panels; one per panel.

• Together Enphase and Solar Edge control 93% of the solar module

electronics market (source: PV Pulse).

• Try to make sure that your suppliers are using one of these two solutions.


Which is better, micro-inverters or solar optimizers?

53

• These are both good technologies, offering very reliable components.

• There is an ongoing battle in the industry as to which is better.

• The advantage of using micro-inverters is that it eliminates one large component,

the central inverter. This is the component that is most likely to fail; it is

expensive ($3K-4K), and has a shorter warranty (12 years, usually).

• The advantage of using SolarEdge power optimizers is that they can work with

panels at higher power levels (micro-inverters max out around 300 watts).

• Both companies say they are better in efficiency, so they are likely very close,

but optimizers seem to have a slight edge at the present time.

• Ask your salesperson which solution they use and why. They may even give

you a choice on which solution to use.

• The installers may have a strong opinion on which to use because one type of

system may be easier or cheaper to install.


Remote monitoring of your solar system

54

• All systems sold today include the capability for monitoring remotely via internet.

• Enphase uses a device called the Envoy to connect to your router.

• Solar Edge uses a product called the Home Gateway to connect to your router.

• You can monitor the system yourself, and the company that provides the system

warranty will remotely monitor the system to spot problems (hopefully).

• Both solutions allow you to see power and energy production, and highlights

any modules that are not working properly.

Enphase Envoy

Solar Edge Home Gateway


Enlighten Manager (Enphase) Array Power View

55

My solar panel

configuration


Enlighten Manager (Enphase) Power Graph

56

Why do we see a falloff in

power at the same time

every afternoon?


Enlighten Manager (Enphase) Energy graph showing targets

57


Class Feedback and Questions

• Please complete the feedback form. It helps me and it helps the school.

• Any personal comments or feedback on this presentation is welcomed.

• Email me if you want the entire slideset with photos sent to you.

• I am happy to answer questions on anything as you begin to develop your solar

project. Contact information here:

Craig Forman

[email protected]

phone: 617-527-3779

• If you want to know who did my spray foam insulation, or who my solar salesperson

was, or who the solar installer was, please email me and I will give you the referrals.

Good luck with your solar project! Thanks for attending.

58

mailto:[email protected]


Beauty is in the eye of the beholder

59

Some people are committed

environmentalists, and think all solar panels

are beautiful. Others would rather hide them

on the back side of the house.


This is not a solar PV system

60


In many countries virtually all buildings have solar hot water

61

Do you know

what country

this is?


My system photos

62

Rear of my house, before solar Rear of my house, after solar


My system photos

63

I had some tall trees to remove! Clearing debris from cut trees


My system photos

64

Pallet of material including 26 solar panels Rail mounting kits


My system photos

65

Start of installation Most rails in place on roof


My system photos

66

Rails and micro-inverters installed PV panels waiting to be carried up


My system photos

67

Carrying a panel up the ladder PV panels being put on rails


My system photos (basement)

68

Equipment located in basement Closeup of solar meter

Existing Breaker Box

Verizon FIOS (existing)

AC Fault Detector

Enphase Envoy

Solar Meter


My system photos

69

Attic conduit for solar power wiring Outside equipment