Since it’s a year this month that our solar photovoltaic (PV) system got turned on, I thought it would be good for me to share my family’s experience – the nitty gritty – of purchasing, installing and using our rooftop solar system.
First, I should let you know why we decided to do this now. I’ve worked on climate change and clean energy policy and programs for 30+ years – most of it at the US Department of Energy (DOE). I’ve drunk the kool-aid on the significant need for us all to do our part.
Yet, between having an old roof and so much to learn about the range of possibilities, inertia won out. However, when I realized the existing tax incentive (called the Investment Tax Credit) was down to 26% in 2020 (going down to 22% in 2021 and then would be phased out), it was finally time to jump on this. Plus, a huge help was that our county, Montgomery County, Maryland, had organized a co-op through a non-profit, Solar United Neighbors (SUN), to help educate homeowners and facilitate the decision process.
Cutting to the chase … my husband and I purchased a PV rooftop system in 2020. We paid $21,621 for a 8.96kw-sized system consisting of 28 panels, plus an electric vehicle charger. This amount was effectively reduced by a $1000 rebate from the State of Maryland as well as a 26% Federal tax credit ($5,621) that was in place for 2020, for a net price of $15,000. We chose to pay upfront, but there are a number of other ways to get favorable terms with little or no money down.
In May 2020, we joined Montgomery County’s solar co-op. Solar United Neighbors (SUN) coordinates the co-op — educating and serving as the neutral source of information, providing helpful interactions with those who’ve actually installed solar systems in Maryland, and running the installer selection process. This was an excellent way to learn about our different options – including electric vehicle (EV) chargers and onsite battery storage – without any obligation to move forward. We knew we would have to replace our roof since it was 26 years old. So, much of our work that Summer was finding a roofing company. We jumped into every aspect of learning about roofs and PV solar (and battery storage).
In June, the co-op ran the competitive solicitation to find an installer who would provide a range of products and offer discounts based on the expected purchase volume from co-op participants. We signed an initial contract for our solar installation in July, with a $1,000 deposit. System drawings and final documents were completed by August, our roof replacement happened on October 6 and our new PV system was installed on October 19. Within a couple of weeks, our utility (Pepco) did the final inspection, which allowed us to finally “turn on” our system on November 6, 2020. This was just in time for the end of daylight savings time and the least amount of annual solar production, so we did not really know how productive our system would be until later in 2021.
We had a number of interactions with our installer, Solar Energy World, and the salesperson, Eric, was always there to answer questions and handhold us when we got confused.
Our system has worked great. We’ve had a few times when the app that tracks our usage goes down, but that was easily rectified and mostly due to our home WIFI issues.
We are benefitting from two payback streams – 1) avoided electricity charges from our PV generation that reduces (or eliminates) how much we pay each month for electricity from our utility, and 2) direct payments for our Solar Renewable Electricity Credits1 (SRECs) that our utility and others can buy to meet their renewable energy obligations (note: this differs by State).
We saved about $1920 in electricity payments, when comparing what we paid for electricity for the one-year period before and after we got our PV system. It’s impossible to know exactly what we saved, since it’s hard to compare one year of usage to the previous. It was especially tough given the pandemic, when we had more people at home for most of the Spring/Summer 2020 (before solar), with no vacation, unlike any other year of our lives. In that time period, when we all needed to find space to work in, I spent most of my days in my sunroom, which only has electric heat (and a ton of windows), unlike the rest of my house, which is heated with natural gas. Unlike most with natural gas heat, our winter electricity can be higher than would be expected. Whereas in other years, we just wouldn’t use our sunroom on the hottest and coolest days, I used it regardless in 2020.
In comparing our year-on-year usage, I calculate that we paid on average $75 per month with PV vs $235 per month before PV. Getting actual bills of only $6-8.50 a month during the Summer from Pepco, our electric utility, just reinforced our decision to go solar, especially since our friends have been complaining about their sky-high electricity bills this past summer. Also, distribution and other charges are based on utility-provided electricity, so when we produce solar electricity, we also save on extra charges.
We received 4 quarterly payments over this year, based on how much we generated. SREC payments: $739.31 for producing 11,773 kwh over the year (our payment does not include October 2021’s production, since it will be paid out in early 2022). Each quarterly payment varied, since it depended on how much our system produced the previous 3 months, as well as the swap price of SRECs in Maryland (varied between $73.65 and $74.70 per kWh produced).
In the weeds
As a former economic analyst at the US Department of Energy, I know my analyst friends would want to wade further into the weeds of inputs, so I need to add some details for those interested. We pay for 50% wind for our electricity, and while the charge was mostly about 8.7 cents/kwh, it recently went up to 10.02 cents/kwh. Also, the distribution charge (called Energy Charge on our bill) and other charges on our utility bill are now slightly higher too, and they add up when you use over 1,000 kwh a month. Also, having my two college kids at home in 2020 meant we were using more electricity for computers, lighting, dishwashing and laundry, but not for heating, water heating or our stovetop, which are all powered by natural gas. Bottom line: our baseline year’s usage was somewhat inflated because of pandemic impacts of having more people in my home, but it is somewhat offset by currently higher utility charges plus not yet receiving our SREC payment for October 2021.
To estimate our break-even payback from one year of data, here is my calculation (undiscounted): Net Solar System Payment/Annual Electricity Savings + Annual SREC payments = $15,000/$1920+$739.31 = 5.6 years
This means we can expect to break even in less than 6 years. At that point, we will enjoy significant gains between our savings and SREC payments for the remaining 20-25 years of the expected life of our system.
This is my family’s experience. For those who are bummed they are no longer eligible for tax credits, they are in fact restored to 30% in the Build Back Better Act, if only the Senate sees fit to pass it. Also, PV panel prices would have been expected to decline at the same rate they had been declining for years, but the supply chain issues could result in higher panel prices than what we paid, at least temporarily. I highly recommend using a co-op if it’s available where you are.
I learned long ago through my DOE work that taking the first climate-friendly action is the hardest, and that others follow naturally as you get the rush from taking meaningful action. I found this to be true for my family.
We first took advantage of several incentives built into the 2009 American Recovery and Reinvestment Act. We did a low-cost ($100) energy audit, followed by recommended actions of air sealing and attic insulation, benefitting from significant rebates. We’ve since upgraded to highly efficient air conditioning and appliances, like our refrigerator. I agree with the general recommendation that solar should be considered only AFTER one maximizes energy efficiency in the home.
We recognize that we, like the vast majority of Americans, are energy hogs. So, we’ve accepted our climate change responsibility to begin controlling what we can in our home. In addition to our energy efficiency upgrades, our PV solar system, our hybrid electric car (I love my Prius!), we pay a premium on our electric bill for 50% wind for what remains after our solar generation. We know we need to convert to plug-in electric cars and will do this as we replace our family fleet. We are very interested in adding battery storage to our PV system, and will continue to monitor the options available to us.
While in the past natural gas was considered the best way to go for heating, hot water and cooking, we will switch to all electricity as we upgrade those in order to go fossil fuel-free. We have started paying for a weekly composting service. Our investment portfolio is transitioning according to ESG (Environment, Social and Corporate Governance) parameters, meaning we do not invest in fossil-fuel based industries or those that are not committed to good governance and social responsibility.
As the famed climate scientist Dr. Katharine Hayhoe says (see podcast reference below), it was ordinary people’s actions that finally ended slavery, got women the right to vote, and pushed for civil rights legislation. As we’ve all seen from information coming out of COP-26 in Glasgow, it’s incumbent on everyone to do our share and push our decisionmakers to implement actions necessary to leave a livable planet for our kids and grandkids, and their progeny.
My story is meant to inspire others to start or continue on their climate change journey. Becoming more energy efficient saves money, in addition to saving energy. If your house is not conducive to rooftop solar or you live in an apartment or condominium, you can participate in community solar or pay a green power premium on your electricity bill for renewable electricity. Electric cars are the new rage. Many businesses are getting on the climate train, but they need consumer signals to confirm and extend their efforts. Our range of motion in this area is plentiful.
I’m available to share further about my experience with anyone interested. I’d love to hear about yours too.
Linda Silverman, owner of LS Insights and current Chair of the Climate, Energy and Air Quality Advisory Committee. Read the original article published on her Perspectives from My Career and Life blog here.