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Author: Phil Taylor-Parker

Can Solar Energy Storage Be Claimed Under the Federal Tax Credit?

Can Solar Energy Storage Be Claimed Under the Federal Tax Credit?

Solar + Storage and the Federal Tax Credit

This month, House representative Mike Doyle introduced a bill to expand the federal tax credit for solar systems with energy storage. Under the new bill, all energy storage products would become eligible to be claimed under the tax credit.

The federal tax credit is a major incentive for going solar. Under the program, 30% of your project costs can be claimed as a credit to reduce your tax liability when you file your federal taxes.

But right now, the cost of energy storage can’t always be claimed under the credit. That would change with this new bill, which would remove restrictions and make all storage products eligible to get full value out of the credit.

As solar batteries become more affordable, energy storage adoption is on the rise. Sunrun reports that 20% of new solar systems installed in California in 2018 included an energy storage solution. If this legislation passes, it will accelerate solar+storage adoption by simplifying the process of claiming the credit.

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Why Invest in Solar + Storage?

Grid-tie systems connect to the public utility grid. When your panels generate energy, the electricity feeds into the utility grid. The utility credits your account for the electricity you contribute, which you can draw upon during low sunlight periods (at night, during bad weather, etc.).

Batteries aren’t necessary for grid-tie systems, but they add versatility to your application.

The main appeal is the ability to store energy and use it during peak periods. Your panels generate energy during the day when the sun is out, but most utilities charge much higher rates during peak usage periods (around 5-10pm, when people come home from work and school). Batteries allow you to store energy generated during the day for use during the evening, bypassing peak usage rates and saving you money.

Batteries also offer emergency backup when the power grid goes down. Since the solar array is tied to the utility grid, it needs to stop sending power into the grid during outages. This anti-islanding feature protects utility workers who are making repairs to the grid. With an energy storage system, your batteries will take over during outages, acting as a backup power source when the grid goes down.

How Solar + Storage Works Under the Current Tax Credit Law

Under the current law, energy storage solutions can only be claimed under the tax credit if they are charged by a renewable energy source (like solar). If you charge the batteries with grid power, that’s not a use case that is eligible for the incentive.

The amount you can claim is proportional to how often the battery is recharged from a renewable source. If you are charging your batteries from solar 90% of the time, you can claim 90% of the cost of the battery under the credit.

For example, here’s the math for a $5,000 battery bank that receives 90% of its charge from solar:

$5,000 x 0.9 (90% solar charge rate) x 0.3 (30% tax credit) = $1,350 tax credit

Furthermore, if you spend more than 25% of your time charging batteries from the grid, you can’t claim your batteries under credit at all. You must hit a minimum of 75% PV charging rate to be eligible:

  • Battery charged by PV under 75% of the time: not eligible to claim tax credit
  • Battery charged by PV 75-99% of the time: claim a portion of the tax credit equal to PV charging rate
  • Battery charged by PV 100% of the time: claim the full tax credit

Take a look at this 1-page fact-sheet from NREL for more info.

As you can see, not all energy storage products can be claimed under the credit, and the restrictions require the owner to track the charging source to accurately report their usage to the IRS.

Those restrictions would be lifted if the new bill proposed this month passes into law.

Proposed Changes Under the New Solar + Storage Tax Credit Bill

The latest bill introduced in the House seeks to remove the complicated limitations of the current incentives. Under the new bill, the full cost of all solar storage products would be eligible for the tax credit, just like all other system components.

There would be no partial credit or minimum charge restrictions. If you buy an energy storage system, it would be eligible for the full tax credit—period.

The change would make energy storage more appealing to the public, regardless of application, and add more momentum behind the adoption of storage-ready systems. That move is supported by solar enthusiasts and utility providers alike, as energy storage systems help smooth the demand curve, reduce the burden on the grid and prevent brownouts.

Interested in going solar with an energy storage solution? Take a look at our solar+storage packages and grab the free battery guide linked below for more info. If you have any questions, you can always call us at 1-800-472-1142 for a free consultation with a solar designer.

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How to File IRS Form 5695 To Claim Your Renewable Energy Credits

How to File IRS Form 5695 To Claim Your Renewable Energy Credits

Form 5695 Filing Instructions

This article provides quick step-by-step instructions to help you file IRS Form 5695 and claim your renewable energy credits. We’ve provided sample images of the tax forms to help you follow along.

The federal tax credit is a major incentive for going solar. If you build your solar system before Jan. 1, 2020, you’re eligible to claim 30% of your total project costs as a credit toward your federal taxes. The credit offsets any taxes you may owe, and rolls over for up to 5 years if the value of the credit exceeds your tax liability.

This article provides a simple step-by-step walkthrough that will explain how to file your taxes to claim the Federal Tax Credit for investing in renewable energy.

Before we start, you’ll need to gather your receipts for any project costs. You can claim the cost of the system as well as any associated installation costs (materials, hired labor, permitting fees, etc.).

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Free Federal Tax Credit Guide

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Step 1: Download Tax Forms

You’ll need four forms to file for the credit, which can be downloaded from the IRS website.

Form 5695

This is the Residential Energy Credits Form. We’ll be paying the most attention to this one.

Download 5695 here »

Form i5695

This is an information form about the 5695 that contains a worksheet we’ll be filling out.

Download i5695 here »

Form 1040

This is the Individual Income Tax Return form that most people use to file their taxes.

Download 1040 here »

Form 1040 – Schedule 3

This form covers tax credits, including the renewable energy credits. Add your Form 5695 results here to claim the credit.

Download 1040 – Schedule 3 here »

Step 2: Add Up Project Costs

First we need to know the total amount you paid to install your solar system. This includes the cost of components as well as any associated installation costs.

Gather your receipts and total any money you spent on the following:

  • Solar components (panels, racking, charge controller, inverter, wire, etc.)
  • Shipping costs
  • Solar consulting fees
  • Professional installer fees
  • Electrician fees
  • Engineer fees
  • Tools purchased or rented for PV installation
  • Equipment purchased or rented (scaffolding, man-lift, auger, etc.)
  • Wiring Screws, bolts, nails, etc.
  • Permitting fees
  • Other associated costs

Keep note of this total so that you can transfer it over to your tax forms.

Step 3: Start Form 1040

Begin by filling out Form 1040. This is your individual tax return. It’s a good idea to do this first since you will be referencing Line 11 (your total tax liability) later in this process.

Once you complete this form, switch over to Form 5695 to start calculating your residential energy credits.

Step 4: Start Form 5695

Form 5695 focuses on renewable energy credits.

Line 1: Enter the total amount you spent on your solar project, which you calculated in Step 2. We’re using $12,350 as an example, but be sure to enter your own total.

Lines 2-4: In this example, we’ll assume you didn’t invest in another form of renewable energy during the tax year. If you also invested in a solar water heater, wind power, or a geothermal heat pump, add those totals here.

Line 5: Total lines 1-4 and add them here.

Form 5695, lines 1 and 5

Line 6: Multiply the Line 5 total by 0.3. This calculates 30% of your project costs, the amount you can claim under the credit. Enter the result here.

Form 5695, line 6

Line 7: If solar was your only renewable energy purchase, check “No.” If you bought fuel cells, check “Yes.”

Lines 8-11: Skip these unless you purchased fuel cells during the tax year.

Line 12: If you claimed the solar tax credit last year and are rolling over a portion of that credit to this year’s taxes, enter the remaining value of the credit here. Otherwise, skip this step.

Line 13: Add the values from lines 6, 11 and 12. Enter the total here.

Form 5695, Line 13

Step 5: Fill Out Form i5695 Worksheet

Form i5695 contains instructions on how to fill out Form 5695. We need to complete the worksheet on page 3, then transfer that information over to Form 5695.

Line 1: Enter the total taxes you owe. This is located on Line 11 of your Form 1040. We’ve entered $21,442 as an example of what someone making $100k a year might owe. Again, enter your own results here.

Lines 2-9: Enter any other tax credits you will claim. For simplicity, we’ll assume there are no other credits.

Line 10: Add up lines 2-9 and enter the total here.

Line 11: Subtract Line 10 from Line 1. The result is the total value of the credits awarded to you. Enter it here.

Form i5695, Lines 1 and 11

Step 6: Complete Form 5695

If your credit is higher than your total tax liability, the remainder of the credit can be rolled over and applied to a future tax return.

Now that we’ve finished the worksheet, jump back to Form 5695.

Line 14: Enter the value from Line 11 of the i5695 worksheet you completed in the previous step.

Line 15: Check Lines 13 and 14 and enter the lower of the two numbers on Line 15. This ensures your credit doesn’t exceed your tax liability.

Line 16: If Line 15 is less than Line 13, subtract Line 15 from Line 13 and enter the value here. This is the amount of “leftover” credit that can be rolled over to a future return. This is not common.

Form 5695, Lines 13-15

We’re done calculating your renewable energy credits! Now we just need to add it to your individual tax return.

Step 7: Apply Form 5695 Results to Form 1040 – Schedule 3

Take the amount from Line 15 of Form 5695 and enter it on Line 53 of Form 1040 – Schedule 3.

Form 1040 Schedule 3

Attach Form 5695 and Schedule 3 to your Form 1040 when you file. (No need to include the Form i5695 worksheet.)

You’re done! Kick back and bask in your reward for investing in renewable energy.

If you have any questions about how the Federal Tax Credit works, or simply want to explore the possibility of going solar, give us a call at 1-800-472-1142. You can also grab our free Federal Tax Credit guide for more info.

Disclaimer: This guide is offered as basic instruction only and is not meant as professional tax preparation advice. For specific tax-related questions or issues, we recommend consulting a certified tax preparation specialist or CPA.

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Install of the Month – April 2019

Install of the Month – April 2019

Our April Install of the Month winners are Troy and Suzanne H. from West Virginia. They built their system in two phases, starting in 2014 and adding on in 2017 to build an array that produces 11.1 kW of solar power in total.

The project likely isn’t finished, either. They have their eye on retrofitting the system with a battery bank and converting to an off-grid setup as batteries become more affordable in the future.

As someone who grew up repairing his own cars and appliances, Troy was well-equipped to take on this solar build as a DIY project. Aside from an assist on the electrical hookup, Troy and his wife Suzanne were able to manage the entire build themselves.

Troy got back in touch with us to reflect on the process of going solar. Here’s what he had to say about the project:

What solar system type did you Install?

Grid-Tied

What was your primary reason for adding solar to your home?

Adding solar provided us the opportunity to not only produce our own power, reduce our carbon foot print and energy expenditures, but also to do our part to leave a better earth for our children and future generations. Eventually as battery technology becomes more affordable we would like to go off grid.

Did you have any previous DIY experience?

Growing up in rural West Virginia in a less than affluent family, I learned at learned at an early age from my father, in order to survive we had to be self sufficient. We had to maintain and fix our own vehicles, repair household appliances, perform general home renovation and maintenance, along with performing numerous other diy projects. In more recent years, my father and I, along with the help of family, converted a barn into a passive solar home.

What was the most difficult part of the installation?

I wouldn’t say anything in particular was all that difficult. However I got extremely lucky when my electrical inspector allowed me to use his crimpers to do an irreversible ground crimp. Prior to this, I called everywhere trying to rent or borrow one. To buy the crimpers that has the proper stamping die is very expensive. I performed the crimp while the inspector did his final inspection.

Probably my least favorite part of the install was jumping through hoops applying for permits from the power company.

How many helpers did you have?

My wife and I performed the majority of the install. We also got some help from other family members.

Did you hire a contractor?

The outstanding support from the technicians at Wholesale Solar made the entire process much easier. They made it possible to do the entire project without much outside help. Admittedly, before submitting my plans to the power company I had a Master Electrician friend review my plans and drawings.

Were there any unforeseen additional parts or tools you needed?

I can not imagine piecing out every nut and bolt, clamp or component on our pv system. Wholesale Solar did an awesome job putting the pieces together, making the install a snap.

How long was the full installation process?

We did our install in two phases. Phase one was a 6.9 kw ground array. The array sits 350′ from the house so it took a little additional work doing voltage drop calculations and running the lines. After the permitting process we rented a ten ton excavator to do the digging. We broke ground in September 2014 and that system went live in December of the same year. Phase two was a 4.2 kw roof array that included an EV charger. We started the install July 2017 and went live in September 2017.

How did it feel to get your solar project finished?

It was an incredible feeling of pride and accomplishment when we went online and started generating our own power. Our system not only provides 100% of our home’s energy needs (with the exception of a little wood for supplemental heating and a small amount of propane for cooking). It also provides energy for my wife’s EV to travel to and from work (home is the only place she charges), and we put excess (green) energy onto the grid that is used by our neighbors. Doing this in a coal state, where people said it couldn’t be done is beyond gratifying.

Who else did you consider before choosing Wholesale Solar?

We very quickly decided to go with Wholesale Solar as our PV supplier. Not only were their prices competitive with all out there, their tech support was second to none. After several initial calls to their tech support, I quickly realized they were the company for us.

What was your total solar install costs? (Ball Park)

Phase one’s total investment, including renting an excavator, additional direct bury electrical wiring, the ground structure, permits and inspections, before a 30% residential energy credit, totaled $17,688. Phase two total cost was $7204 before the 30% residential energy credit.

How much did you save on your taxes?

Though our state did not provide any tax incentives or rebates, we received a federal residental energy tax credit of $5306 on phase one and $2161 on phase two.

Components in Troy and Suzanne’s system:

Troy and Suzanne's Solar Breakdown:

  • System Cost: $24,892 including installation
  • Yearly System Output: 13,539 kWh per year
  • Federal Tax Incentive: Qualifies for $7,467 U.S. Federal Tax Credit
  • Utility Rates: 10.2 cents/kWh

It’s Your Turn

Thinking about making the switch to solar? Download our Getting Started Guide. We’ll walk you through everything you need to know about buying a solar energy system that covers your needs.

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Generator Sizing Guide For Off-Grid Solar Systems

Generator Sizing Guide For Off-Grid Solar Systems

Most off-grid solar systems are paired with a generator. Without utility power as a fallback, off-grid setups need a backup plan in case their solar system can’t produce enough to meet the property’s needs.

Gas generators are used in off-grid systems as a backup charging source to recharge the battery bank when solar can’t keep up with demand. They are also used for backup power in case equipment fails and the inverter system needs to be bypassed.

Here’s our advice on how to pick a generator for your off-grid solar system.

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Generator Sizing

As a general rule, the generator should be around 2 times the size of the inverter’s continuous output. For example, a 4,000-watt inverter should be paired with an 8,000-watt generator.

This is because the generator needs to charge batteries while still powering the loads (appliances using energy). If the loads total 4,000 watts, and the charger is 60 amps at 48 volts, that totals around 7kW of continuous power:

60a x 48v = 2,880 watts + 4,000 watts = 6,880 watts

8kW would make sense as a minimum generator size to power the loads and have enough power to charge the battery bank as well.

It’s a good idea to round up slightly to give some headroom for the generator, especially at higher elevations where your generator is going to lose some of its power. Engines can lose around 3% of their power for every 1,000’ increase in altitude. Make sure you account for this if your system will be installed at a high elevation.

Can I Use a Larger Generator?

A larger generator can be beneficial if you have large loads like an air conditioner or a welder that will only be used when the generator is running.

We frequently sell 12kW and 14kW Kohler generators with our off-grid systems using a 4000w inverter. A larger generator is going to burn more fuel, but otherwise will work fine.

Can I Use a Smaller Generator?

Smaller generators will still work, but it typically requires adjusting the settings to limit the battery charger’s output. Most battery chargers allow you to adjust the AC input amperage and charge rate.

You will need to match the generator’s voltage with the inverter. For example, 120Vac generators should be paired with 120Vac inverter/chargers, while 120/240Vac generators need an inverter that outputs 120/240Vac.

In the rare case that you are using a three-phase generator or inverter, the same rules apply: the generator’s voltage would need to match the inverter.

There is one exception we are aware of. Magnum PAE inverters are 120/240Vac but can handle a 120Vac input, provided you turn down the charge rate to 50% or lower, and adjust the AC input amps to match the size of the generator. This is useful if you need an inverter that can output 120/240Vac but are working with a smaller generator.

Generator Fuel Type (Natural Gas, Propane, Diesel)

Most standby home generators work on natural gas, propane or diesel. Diesel generators tend to be much more fuel efficient and longer lasting, but the initial cost can be 2-3 times more than a natural gas or propane alternative.

The Kohler 12kW & 14kW generators we sell can work with either natural gas or propane. Off-grid customers typically use propane instead of natural gas, but these models can be configured to work with either fuel type.

Other Considerations

Warranty

Most generators don’t have a warranty that covers off-grid or prime power applications. Check the generator warranty closely to be sure it can be used off the grid.

Kohler’s 12RES and 14RESA generators are both warrantied for 18 months / 1000 hours of off-grid use (whichever comes first).

If you need more power, dual 14RESA generators can be combined in parallel with the Kohler Powersync module for 28 kW of output.

2-wire start

Off-grid generators paired with solar power systems need 2-wire start capability to allow the automatic generator start (AGS) function to work. When your batteries drop below a certain voltage, the AGS kicks in to turn on the generator and recharge your battery bank.

Note that 2-wire start is different than electric start. Some generators will have a button for electric start/stop, but they can’t be controlled by a 2-wire signal, which means the inverter can’t communicate with the generator to trigger the AGS mechanism.

The Kohler 12RES and 14RESA are both capable of two-wire start.

1800 RPM vs. 3600 RPM

Most generators operate at one of two engine speeds: 1800 or 3600 RPM.

The difference is based on engine design and the alternator being used. 1800 RPM generators are generally considered superior because they are more fuel-efficient, but they cost quite a bit more up front. 3600 RPM generators tend to be cheaper but less efficient.

The Kohler 12kW and 14kW generators we sell are 3600 RPM. They are very durable, reliable and more cost-effective for typical off-grid applications. Kohler doesn’t make any 1800 RPM generators smaller than 24kW, although there may be options from other manufacturers. Be sure to do your research and read reviews to learn about the company and make sure you are getting a quality product.

Conclusion

When searching for a generator to support your off-grid solar system, keep a few things in mind:

  • Generator output should be 2x your inverter’s output
  • Match generator voltage to inverter voltage
  • Generator must be warrantied for off-grid use
  • 2-wire start is mandatory to work automatically with solar system
  • 3600 RPM generators are more cost-effective, while 1800 RPM generators cost more up front but last longer and are more efficient

For more help moving off the grid, check out our Solar Battery Guide, which explains how to size and select a battery bank to adequately support your energy needs off the grid.

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SMA Sunny Boy Review: Pricing, Specs, Pros and Cons (2019 Edition)

SMA Sunny Boy Review: Pricing, Specs, Pros and Cons (2019 Edition)

SMA Sunny Boy Review: Quick Summary

The SMA Sunny Boy costs less than other grid-tie inverters, but it only works if you build your system in full sunlight and face all your panels in the same direction.

The Sunny Boy is our preferred choice if you don’t need panel-level power optimization. But if you face issues with panel layout or shading, you’ll be better served by the SolarEdge HD-Wave or Enphase micro-inverters.

SMA has long been regarded as one of the most reliable string inverter manufacturers in the solar industry. In this article, we’ll review the SMA Sunny Boy, our pick for best inverter for “standard” grid-tied solar systems.

The Sunny Boy shines in systems that won’t be affected by shading, panel orientation, or other concerns that would impact production from your panels.

It’s not the most versatile, high-tech inverter around. But if you’re building a typical fixed-mount system that will receive full sunlight year-round, the Sunny Boy gives you more bang for your buck than any other grid-tied inverter on the market.

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SMA Sunny Boy Pricing

SMA offers a range of Sunny Boy models from 3 kW to 7.7 kW for residential grid-tie systems. Please note that the prices published here are current as of 3/11/19, but are subject to change in the future. Click the product links to view current pricing in our shop.

ModelPriceCost Per Watt
Sunny Boy 3.0kW$1,22541 cents/watt
Sunny Boy 3.8kW$1,25032 cents/watt
Sunny Boy 5.0kW$1,32526 cents/watt
Sunny Boy 6.0kW$1,42524 cents/watt
Sunny Boy 7.0kW$1,67524 cents/watt
Sunny Boy 7.7kW$1,72522 cents/watt

SMA Sunny Boy 7.7 kW Specs

Here’s a quick look at the specs for our most popular Sunny Boy model, the 7.7 kW configuration. It’s worth noting that the 3.0 and 3.8 kW models have 2 string inputs (instead of 3), but other specs like efficiency, warranty and voltages are the same for all the residential models listed in the table above.

  • Model: Sunny Boy 7.7 kW
  • Wattage: 7700 watts
  • Peak Efficiency: 97.5%
  • Warranty: 10 years
  • Input voltage: 600V DC
  • Output voltage: 240V AC
  • String Inputs: 3

Ideal Application For The SMA Sunny Boy

It’s important to understand the limitations of string inverters to help decide whether they are the right choice for your project.

A panel string is a group of panels that is wired into a single input on the inverter. Because the panels are wired in series, the production of every panel in the string is linked together.

If one panel suffers a drop in production, every panel in the string drops to match the output of the weakest panel.

Panel string diagram
Panel strings are wired in series. Production drop from one panel translates across the entire string.

You may own a string of 330W panels, but if a single panel in the string falls to 250W production, every panel in that string is going to produce 250W of power. That’s an 800W production loss over a 10-panel string—nearly a 25% loss in output.

For this reason, the Sunny Boy only makes sense when you can build your panels in a location that is fully exposed to sunlight year-round.

If trees, chimneys or other obstructions throw shade on a panel, it will cripple the production of a string, which affects your entire system.

It’s also not ideal if your panels face different directions—if you need to spread them across an unusually-shaped roof, for example. Panels work best when they face directly into the sun (ideally, you want to point them toward the Equator, which means a South-facing array is ideal for systems built in the US).

If some panels in a string face South and some panels face East, the East-facing panels will produce less power because they don’t point directly into the sun. The entire string will drop to match the output of the East-facing panels, sacrificing the extra output from those that face South.

Different strings can have different orientations, but all panels in a string should face the same direction.

To mitigate these issues, you would be better served by an inverter system with panel-level optimization like the SolarEdge HD-Wave or Enphase IQ7+ micro-inverters.

However, if you don’t need to worry about shade or panel orientation, Sunny Boy systems are extremely reliable and efficient at a price that is 15-25% less than alternative options. It’s the best value you can find on an inverter, assuming you meet these ideal build requirements.

Compare your options with our video review of the best grid-tie inverters on the market:

Pros of the SMA Sunny Boy

Best Value Inverter on the Market (In Ideal Conditions)

The Sunny Boy is the most cost-effective grid-tied inverter you can buy, provided your system meets a few criteria:

  • Built in full sunlight (not blocked by trees, chimneys or other obstructions)
  • Panels face the same direction
  • Large enough to meet minimum string sizing requirements (at least 4-6 panels depending on the panel and inverter models you choose)

Let’s compare two systems that would produce 906 kWh per month, enough to offset the national average energy usage for American households. (Prices are current as of 3/7/19.)

The systems are identical aside from the inverter equipment, and the Sunny Boy system costs nearly $1,600 less than the HD-Wave. You can save quite a bit of money if your system is built in full sunlight and you don’t need the power optimizers featured in the HD-Wave system.

Secure Power Supply

A feature unique to SMA inverters is the Secure Power Supply (SPS). The SPS provides a source of backup power in case of emergencies.

If your power goes out, you can plug into the SPS, a 2000-watt power source that draws backup power from your panels even if the grid is down. This is a nice failsafe to power critical appliances during an outage.

One caveat is that your panels must be exposed to sunlight and producing power for this to work, since the SPS draws electricity in real-time from the panels to make this feature work. At night or during heavy storms, the SPS is not a reliable substitute for a fully-equipped grid-tie system with energy storage.

Optimizers Are Optional

The SolarEdge HD-Wave comes with mandatory power optimizers—the system won’t work without them. With the Sunny Boy, the optimizers are an optional add-on.

This gives you the flexibility to start with the base Sunny Boy package, then retrofit optimizers on to the panels if you think they’re necessary.

For example, your system might be fully exposed to sunlight in the summer, but then you find that your house casts a longer shadow in the winter and covers part of your array. You can go back and add optimizers to the shaded panels to bring their production back up to par.

There is a trade-off, though. When you add optimizers, the Sunny Boy loses its Secure Power Supply functionality. This is a design oversight that we hope to see corrected in future models.

Nevertheless, it’s nice to have the flexibility to retrofit your panels with power optimizers should the need arise.

Great Customer Support

SMA has some of the best customer support in the industry. Their customer-facing tech team is knowledgeable and has great response time via phone and email. They also produce detailed product documentation to help people install, program and troubleshoot their equipment.

As a distributor, we’ve found them to be fair and responsive working with us to troubleshoot faulty equipment and process return claims.

In an ideal world, great support should come standard, but unfortunately that’s not always the case. Some solar manufacturers don’t even offer direct-to-consumer support, instead forcing the distributor to mediate technical issues and return claims.

Not SMA, though: their support team is one of the most accessible and competent in the business.

Cons of the SMA Sunny Boy

System Design Limitations

As mentioned above, the Sunny Boy works best if all your panel strings face the same direction and you can build your array in full sunlight.

If you don’t meet these requirements, production will drop fairly dramatically, and the Sunny Boy is no longer the most cost-effective option.

While the Sunny Boy shines in its wheelhouse, it’s not the most versatile inverter on the market. The SolarEdge HD-Wave is more fully-featured and tends to be the better pick when you need panel-level power optimization.

Rapid Shutdown Limitations

The newest electrical codes (NEC 2017) require rapid shutdown for PV systems installed on buildings.

For Sunny Boy systems, that requires adding optimizers, which means you lose the SPS feature—and the cost advantage over other inverters. A Sunny Boy with optimizers costs about the same as a SolarEdge HD-Wave system.

If you know you need optimizer technology from the start, you’re better off with a SolarEdge or Enphase system, which are built from the ground up for that purpose. SMA’s optimizers are an add-on to the Sunny Boy, which wasn’t originally designed with power optimization in mind.

Rapid shutdown requirements only apply in certain areas, and only when the system is installed on a building. Roof-mount systems often require optimizers to comply, but in many cases ground-mount systems are exempt.

Harder to Install

The Sunny Boy is larger and heavier than other inverters, making them a bit more challenging to install, especially for a DIYer working alone.

Larger Sunny Boy models weigh 57 pounds. They can be pretty hard to manage when you’re trying to lift and mount the inverter on your wall.

(Believe it or not, older models were heavier because they ran on transformers, while the latest Sunny Boy line is transformerless. Still, the Sunny Boy 7700 weighs more than twice as much as the 26.2-pound HD-Wave 7600).

It’s the largest and heaviest inverter we stock, and can be a bit challenging to mount if you are installing your own system without any outside help.

Short Warranty

The standard 10-year warranty is shorter than SolarEdge’s 12-year warranty on the HD-Wave, and much shorter than the 25-year warranty on Enphase IQ7+ micro-inverters.

You should expect to replace your Sunny Boy at least once, and possibly twice, over the life of your system.

SMA does offer an extended warranty plan that allows you to stretch the product warranty up to 20 years. Whether you buy the extended warranty up front or replace the inverter out of pocket later, you’ll incur some additional costs for a replacement at some point. Those costs should be factored into the lifetime ownership cost for your system.

SMA Sunny Boy: The Verdict

Our evaluation of the Sunny Boy is pretty simple. If you can build in full sunlight and don’t have any complicated layout requirements, the Sunny Boy is the best all-around value you can find.

If you need more advanced power optimization for individual panels, are working with an unusual array layout, or simply want a system that is easier to install, the SolarEdge HD-Wave or Enphase IQ7+ micro-inverters are going to be better options.

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The California Solar Mandate Rolls Out In 2020. Here’s What Developers & Homebuyers Need To Know.

The California Solar Mandate Rolls Out In 2020. Here’s What Developers & Homebuyers Need To Know.

California Solar Mandate: Quick Facts

  • New homes built in CA after Jan 1, 2020 must be equipped with a solar electric system
  • Solar systems must be sized to offset 100% of the home’s electricity usage – but homes can still use energy from other sources, like gas
  • The size of the solar array can be reduced if other energy efficiency improvements are made elsewhere, like the inclusion of energy storage or green building materials
  • The CEC expects the mandate to add roughly $9,500 to up-front development costs, but save the homeowner $19,500 over the life of the system
  • Housing developers can save money on solar installation by sourcing wholesale materials and employing their own contractors to build the systems

By now you might have heard that California passed a law requiring all newly-built homes to be equipped with a solar power system. The California solar mandate is part of an initiative by the California Energy Commission to have at least 50% of the state’s energy produced from clean energy sources by 2030.

This article will focus on what we do best as a distributor of solar equipment: helping you design and price out your system with the new CA solar mandate in mind.

Our focus is helping housing developers and contractors comply with the new requirements. But the same rules apply to individual buyers who are shopping development work to a private contractor, or building the home themselves as a DIY project.

If you live in California, and plan to build or buy a new home after this law goes into effect, this article will tell you everything you need to know to get started.

Let’s answer the most pressing questions on your mind:

When does California’s solar mandate go into effect?

January 1, 2020. If you file for your building permit on or after this date, the dwelling must be outfitted with a PV system.

According to Greentech Media, homes which are granted a permit in 2019 and built in 2020 are not required to comply with this mandate.

Which buildings must be outfitted with PV arrays under the new code?

The mandate only applies to buildings under three stories tall. Larger developments, like a new highrise apartment building, will be exempt from these requirements.

Do I need to offset 100% of the building’s energy usage?

Not quite. New dwellings don’t need to be zero net energy (with 100% of the home’s energy use offset by PV production). Instead, they must be designed to achieve zero net electricity, with 100% of the unit’s electricity production offset by solar.

The home’s total energy budget accounts for mixed-fuel energy usage, which means it’s still ok to rely on other energy sources (typically gas) to power a certain portion of your home. You can still use a gas stove or central heat, for example, and that usage does not need to be offset by solar.

Under the mandate, each property is assigned an “energy budget” based on its square footage. The budget varies based on climate zone and other factors.

The responsibility for hitting these budgets will fall on housing developers, who can use the CEC’s compliance software to calculate the requirements for new homes.

Are there any exemptions to the sizing requirements?

The new mandate was built with flexibility in mind, and contains certain exemptions. For example, in buildings with multiple dwellings (like an apartment complex), common areas are exempt from the regulations. That lowers the burden on the size of the solar electric system.

There’s also a compliance credit for adding energy storage to your system. Storing energy in a battery bank reduces the burden on the utility grid, which gives providers a reason to incentivize the inclusion of energy storage.

Homeowners who opt into energy storage are allowed to reduce the size of their PV array by 25%. So if you’re on the hook for 4 kW of solar, you could build a 3 kW system with energy storage to satisfy the requirements.

How much does it cost to install solar?

According to this NREL report (PDF) published in early 2018, the benchmark cost of a residential solar system is $2.70 per watt (fully installed).

Cost Breakdown:

  • Solar Panels: 50 cents per watt
  • Inverter: 20 cents per watt
  • Hardware (structural and electrical components): 30 cents per watt
  • Soft Costs – Install labor: 25 cents per watt
  • Soft Costs – Land Use, Sales Tax, Overhead, and Profit: $1.45 per watt
A breakdown of the cost of solar, as of Q1 2018.

This benchmark figure assumes you turn to a full-service solar provider for design and installation—a factor that most frequently applies to residential end-users.

Housing developers are much more equipped to minimize these costs, because they can use their in-house workforce to complete the labor. You’ll be able to source the equipment from a wholesaler, cutting out the third-party installer who makes a profit by marking up their installation services.

If you’re a housing developer, you can apply to become a Wholesale Solar partner and receive discounts on solar equipment, then perform the installation in-house.

Though NABCEP certification is nice to have, it’s not required to perform a solar installation. The work is straightforward enough that it can be performed by roofers, electricians and/or general contractors on your team who are competent and qualified enough to do construction work.

Many of our residential customers also choose to perform the installation themselves, using our DIY solar resources as guidance. The other option is to source the equipment directly, then turn to a local contractor to perform part or all of the installation.

This drives down installation costs significantly, as local contractors tend to be far more affordable than national providers: somewhere in the range of 75 cents/watt for installation services, vs. $1.60/watt from a large solar installer.

How to estimate the cost of solar based on expected energy usage

Looking for an estimate tailored to your home’s target energy usage? Here’s how to find an estimate based on your current usage:

Dig up a recent electric bill and look for your monthly kilowatt-hour usage. Then, plug that figure into our solar cost calculator to see how much it will cost to build a system that covers your usage patterns.

In step 7, if you choose the “Buy Direct” option (selected by default), please note that the system price estimate only includes the cost of equipment. To factor in installation costs, take the “System Ballpark Size” and multiply by 75 cents/watt, then add the two figures together for a total project estimate.

Once you have a target system size, you can also take a look at our grid-tied system packages for up-to-date pricing.

What financing options do I have?

Individual home buyers have a variety of options to finance the addition of solar to their new home. Developers can roll these options into the purchase contract, offering community solar or lease/PPA agreements for more flexibility.

The best long-term value comes when the homeowner pays for the system up front and owns it outright. But that also requires the highest up-front investment, adding costs that may not fit within every budget.

If buying the system up front isn’t an option, there are other ways you can comply with the new law. These include:

  • Finance the system through a bank loan or FHA title 1 loan
  • Rent the system through a lease or PPA (power purchasing agreement)
  • Invest in community solar, a central solar system that distributes power to multiple dwellings in a neighborhood, apartment complex, etc.

Though loans, leases, PPAs and community solar arrangements don’t offer as much return on the investment into solar, they also require less up-front investment into the system. If the buyer doesn’t want to stretch their budget, these options are an enticing alternative.

Learn more about common financing options in the solar industry.

Do I need to offset 100% of my energy usage?

Not quite. Each property is assigned an energy budget based on its square footage, and the regulations are tailored to mixed-fuel homes. That means the energy budget is built on the assumption that the home will run off a mix of electricity and gas, with the latter powering your heating, for example.

The new mandate was built with flexibility in mind, and contains certain exemptions. For example, in buildings with multiple dwellings (like an apartment complex), common areas are exempt from the regulations. That lowers the burden on the size of the solar electric system.

There’s also a compliance credit for adding energy storage to your system. Storing energy in a battery bank reduces the burden on the utility grid. Homeowners who opt into energy storage are allowed to reduce the size of their PV array by 25%. So if you’re on the hook for 4 kW of solar, you could build a 3 kW system with energy storage to satisfy the requirements.

Does solar add to the value of my home?

Yes. While the up-front cost of solar is expected to add roughly $9,500 to the price of a new home, the resident is expected to save around $19,000 on energy costs over the life of ownership. (Source: CEC 2019 Building Energy Efficiency Standards FAQ)

Grid-tied solar systems almost always provide a net-positive return on investment over the life of the warranty.

In addition, Solar systems improve property value by an average of 3.74%, according to a paper published by the Lawrence Berkeley National Library. Homes with solar energy systems are more desirable to buyers, with solar-equipped homes fetching an average of $14,329 than their non-solar counterparts tracked by this study.

While those numbers fluctuate based on the size of the system (and the value of the home itself), the data suggests that homebuyers are willing to pay more up front in order to save money on utility bills in the long run.

Should you decide to sell your home in the future, you’ll be able to make back some (or all) of the original cost of the system at closing. This benefit comes in addition to the money you will save on energy bills while living in the home.

What system components will I need to buy?

Aside from the panels themselves, you need additional parts to build a complete solar power system. The essential components are:

  • Solar panels, to capture energy from the sun
  • An inverter, to convert that energy to a format that can power your appliances
  • Racking, the foundation on which you mount your system

These are connected by smaller components like wiring, fuses, and disconnects. You can also add equipment to monitor your system’s output online, which helps troubleshoot any issues with shading or defective equipment.

To eliminate guesswork, we offer several pre-sized packages with everything you need to get your system up and running.

What are the best solar brands and products on the market?

If you’d like to have a hand in the research process and pick your equipment yourself, we’ve got you covered. Take a look at our reviews of the best solar products on the market:

We regularly re-evaluate and update these articles as prices change and new options become available. This is a great jumping-off point to help you design the best possible system for your specific needs.

More Resources

California’s solar mandate doesn’t go into effect until 2020, but it’s never a bad idea to start the planning process early. Here are some of our most valuable resources to help you plan your solar project:

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The Federal Solar Tax Credit, Explained in Plain English

The Federal Solar Tax Credit, Explained in Plain English

What is the solar tax credit?

When you install a solar system, 30% of your total project costs (including equipment, permitting and installation) can be claimed as a credit on your federal tax return. If you spend $10,000 on your system, you owe $3,000 less in taxes the following year. The solar tax credit expires in 2022.

The 30% Federal Solar Tax Credit can save you thousands when you switch to solar. But how does it work?

We’re here to explain the Federal Solar Tax Credit in plain English. If you want a basic overview of solar incentives without wading through the tax jargon, you’re in the right place.

What is the Federal Tax Credit for Solar?

When you install a solar power system, the federal government rewards you with a tax credit for investing in solar energy.

A tax credit is a dollar-for-dollar reduction of the income tax you owe. $1 credit = $1 less you pay in taxes. It’s that simple.

A quick but necessary disclaimer: we’re solar experts, not tax accountants! We do our best to give accurate advice, but please check with a professional to be sure you’re eligible to claim the credit.

For example, let’s say you owe $5,000 in federal taxes this year. If you claim a $3,000 tax credit, that pays off part of your liability. You would be left to pay just $2,000 in taxes after the credit is applied.

It’s different than a refund, because you have to owe taxes to claim the incentive. But since most people owe taxes, most people end up being eligible.

How much money do I save with the Federal Tax Credit?

Right now, the tax credit is worth 30% of your total system cost. This includes the value of parts and contractor fees for the installation.

If it costs $10,000 to buy and install your system, you would be owed a $3,000 credit.

You are only allowed to claim the credit if you own your system. This is why we’re strongly opposed to solar leasing if you can avoid it. If another company leases you the system, they still own the equipment, so they get to claim the incentives.

You still get the benefits of cheap, renewable energy. But missing out on the tax credit is a huge blow to getting a positive ROI from your system.

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Free Federal Tax Credit Guide

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It makes more sense to finance instead. You’re still on the hook for a loan, but you retain rights to the incentives that help make solar such a sound investment.

How Long Will the Tax Credit Stay in Effect?

As the saying goes, “all good things must come to an end.”

Soon, the federal government will begin trimming back on its 30% tax credit incentive.

The credit steps down in value over the next few years, until it disappears completely for residential customers in 2022. Here’s the value of the federal tax credit over the next five years:

  • 2018: 30%
  • 2019: 30%
  • 2020: 26%
  • 2021: 22%
  • 2022: 0% (10% for commercial projects)
The rate of the federal tax credit for solar installations through 2022.
The Federal Tax Credit is slated to be phased out by 2022.

You can claim the credit in the same year you complete the installation.

The tax credit plays a major part in the return on investment you see from going solar. It won’t be around forever, but the good news is you still have at least another year to capitalize on the full 30% credit.

How do I claim the Federal Tax Credit?

So let’s get to the good stuff. What do you need to do to actually get your hands on this money?

Our first bit of advice is to keep all your receipts from the start. The more you spend on your project, the larger your credit – make sure to keep track of everything!

Here are some of the expenses that you are allowed to claim:

  • Solar equipment
  • Freight shipping costs
  • Solar consulting fees
  • Professional installer fees
  • Electrician fees
  • Engineer fees
  • Tools bought or rented
  • Wiring, screws, bolts, nails, etc.
  • Equipment purchased or rented (scaffolding or a man-lift, for example)
  • Permitting fees
  • Permitting service costs

Costs will vary depending on the approach you take to installation. Hiring a contractor is an expense that can be claimed.

You can also choose to install the system yourself. Although you can’t claim your own labor as an expense for the credit, you still come out far ahead on overall project costs.

The graph below shows a comparison of the total installed costs (post-Federal Tax Credit) of the same exact system when you choose to DIY, hire locally, or source the work to a national installer:

Solar Installation Costs after Federal Tax Credit has been applied

How to File Form 5695 With Your 1040 Individual Tax Return

Once you’ve spent the money, you’ll need to prove it to the government to claim your tax credit. For that, you need IRS Form 5695 to claim the residential energy credit.

If you file your own taxes, use the steps below to claim your Residential Renewable Energy Tax Credit. (You can find an in-depth walkthrough of this process with visual aids on EnergySage’s website.)

  • Gather all your expense receipts and put them in a safe place.
  • Confirm you are eligible for the tax credit. (If you own the system and owe taxes, you’re probably eligible. Check with a tax specialist if you’re not sure.)
  • Complete IRS Form 5965 to add up your renewable energy credits.
  • Add your renewable energy credit information to your typical form 1040.

That’s it!

We hope this serves as a good introduction to the Federal Tax Credit and helps you navigate the research process. If you need help from a solar designer, get in touch with us for a consultation. We’re happy to walk you through any questions you may have.

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Weighing the Pros and Cons of Tesla’s Solar Roof

Weighing the Pros and Cons of Tesla’s Solar Roof

Quick Review: Tesla Solar Roof

Tesla’s sleek, eye-catching Solar Roof looks amazing and will make you the envy of your block. You’ll have to pay more for a full roof replacement—not to mention the premium for the Tesla brand name. Those costs eat into the value of your investment into solar. But if you don’t mind ponying up, Tesla backs its new product with a generous 30-year warranty.

Tesla’s Solar Roof is finally making its way to consumer homes. Ever since the product reveal nearly two years ago, people regularly ask us whether the Solar Roof is a sensible way to go solar.

We decided to weigh the pros and cons of Tesla’s latest offering to see whether it lives up to the hype.

Production of the Tesla Solar Roof has been limited, and prices are still sky high to capitalize on new release hype. We love the design, but we need to see a steep price drop – and proof the product is reliable – before we recommend it as a sound investment for the average residential consumer.

The Basics

What makes the Solar Roof unique? In a conventional setup, solar panels are housed in a dedicated module, which is then attached to a roof or installed elsewhere on your property. In contrast, Tesla’s Solar Roof is a rooftop with solar panels embedded directly into the shingles.

The solar array isn’t a separate unit installed on top of your roof – rather, it is your roof.

Tesla Solar Roof vs. a conventional solar array
Left: a solar array installed by a Wholesale Solar customer. Right: Tesla’s Solar Roof.

Each shingle is a discrete solar panel. A percentage of the panels are solar-enabled, while the rest are “decoy panels.” The non-enabled panels look exactly the same, to maintain a uniform aesthetic. Customers can determine what percentage of panels they need to enable to meet their energy needs.

Are You on the List?

Tesla loves to build hype around their products long before they hit the market, and the Solar Roof is no different. After announcing the concept in October 2016, Tesla CEO Elon Musk tested the first trial installation in his home in Q2 of 2017. (Isn’t it nice to be the boss?)

The publicity generated intense interest from consumers, who rushed to sign up on the waitlist for residential installations. It took less than three weeks after sign-ups opened for Tesla to sell out their stock through the end of 2018.

Now, we’re getting our first look at a completed installation looks like in a residential setting. YouTube channel E For Electric tracked down Tri Huynh, one of the earliest adopters of the Tesla Solar Roof, to speak with him about the installation process.

Huynh applied to install a Solar Roof for his home as soon as the announcement was made. He said it took well over a year for Tesla to contact him to conduct a site survey. After screening his eligibility, Tesla warned it would be another year for production to finish before they could proceed with the installation.

Huynh didn’t mind the wait. His home already needed a new roof, and as an early adopter of new technology, he was willing to hold out until the Solar Roof hit the market. He put down the $1000 deposit to hold his place in line.

Tesla finally met with Huynh for a site survey early this year. Two solar techs spent a day evaluating his property, even flying a drone above his house to take aerial pictures.

Shortly after that, Tesla deployed a team of 20 workers to perform the install. It took about two weeks to complete, although rain added delays to the process.

The size of the workforce and install time both seem excessive to us. But the Solar Roof is a new product, and Tesla wants to get it right. We expect that process to be streamlined as they work out the kinks.

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Evaluating the Pros and Cons of the Tesla Solar Roof

Tesla is a company with a certain mystique about them – people get super excited about every announcement they make. So it comes as no surprise that people constantly ask us what we think about the new Solar Roof.

We wanted to take a deep dive into what we know about the Solar Roof to help you determine whether it’s a viable option for your needs.

First, a quick summary of the pros and cons:

Pros

  • WOW FACTOR. It’s gorgeous – no blocky solar panels jutting out from your roof.
  • DURABILITY. Solar Roof panels received the highest possible hail, wind and fire resistance ratings.
  • WARRANTY. The 30-year warranty goes beyond the industry standard. There’s also a lifetime tile warranty to cover physical damage.
  • EARLY ADOPTION. Who doesn’t love to be the first to get their hands on new tech?

Cons

  • EXPENSIVE. The Solar Roof costs about 4 times as much as a DIY solar installation. You pay a steep premium for the Tesla brand.
  • THE WAITING GAME. The first residential customers spent over a year on the waitlist before their Solar Roof was installed.
  • UNRELIABLE. More discrete parts means more chances for hardware to fail. Past iterations of the solar shingle design were notoriously high-maintenance.
  • POOR ROI. Paying more for Tesla-branded eats into your investment.

Let’s take a deeper look.

Pros

Slick Design

First and foremost, the Solar Roof looks amazing.

It’s designed to be indistinguishable from a roof built out of traditional materials. Looking at pictures of the Solar Roof, I wouldn’t have guessed there were solar panels built into this rooftop unless you pointed it out.

Tesla will offer 4 different tile designs to match the style of your home. The panels come in textured, smooth glass, Tuscan and slate designs, which rival the appeal of their asphalt counterparts.

Tesla's Solar Roof tile designs
The tile designs for Tesla’s Solar Roof, from top to bottom: textured, smooth glass, Tuscan, and slate.

Durability

Tesla claims the Solar Roof tiles are three times stronger than traditional roof tiles. This claim is backed by standards tests conducted by ANSI, ASTM and UL, which conduct standards tests for (respectively) hail, wind and fire resistance. Tesla’s tiles received the highest possible marks in all three categories.

The Envy Factor

This is the hardest to quantify, but it can also be the strongest motivator for people willing to make a huge investment into an exciting new product like this.

Before the price drops and the product becomes more widely available, it’s an awesome feeling to be part of the exclusive club that has access to cutting-edge technology before anyone else. Think of the first time you saw someone flying a drone – or driving a Tesla car on the street, for that matter. It evokes a natural sense of awe and curiosity.

The Solar Roof is no different. Huynh said that his neighbors regularly stopped by to chat during the installation, and most couldn’t resist lingering to ask questions about the newest Tesla product.

People are naturally drawn to innovation, and early adopters get a rush from riding the first wave of a new technology. As another early residential Solar Roof customer put it, “I feel like we’re living in the future!”

(Mostly) Generous Warranty

The Solar Roof is covered under a 30-year warranty for power and weatherization. The power warranty covers the output capability of the solar arrays. The weather warranty protects against failure as a result of water damage or other weather effects.

30 years eclipses the standard coverage for most solar arrays on the market, which typically offer a 25-year warranty. The extra 5 years may be a selling point to counteract the hesitation early adopters have when they invest into an unknown product. With no established track record, there’s no guarantee the product life won’t be shortened by a major design flaw down the road. The 30-year warranty may help alleviate those fears.

Tesla also offers a lifetime tile warranty, which covers physical damage to the glass in the tiles. If one of the glass panels ever breaks, even after the 30-year period, it will be covered under the lifetime warranty.

However, this doesn’t quite tell the whole story. Most traditional solar panels come with a 25-year power warranty and a 10-year workmanship warranty. If your array breaks down due to product defects, you’re covered for 10 years.

It’s not clear whether Tesla’s warranty covers the same ground:

Our tile warranty covers the glass in the tiles. The power warranty covers the output capability of the solar tiles. Weatherization means that there will be no water leaks or other weather intrusions during the warranty period that result from our installation.

-Warranty info from the Solar Roof product page

There’s no mention of a workmanship warranty, except as it relates to weather intrusions. So if your system fails due to faulty wiring, bad connectors or a broken junction box, you might end up paying for it out of pocket.

Tesla’s warranty is longer than the industry standard, but the extent of coverage may leave something to be desired.

Cons

There’s no doubt the Solar Roof is an innovative product. There’s nothing on the market that competes with it right now. That said, there are a handful of prohibitive factors that would stop us from recommending it to a majority of hopeful buyers.

Steep Up-Front Cost

Let’s get The Big One out of the way: for the Solar Roof to be financially viable, it needs to replace your existing roof. And even then, building a traditional roof with a dedicated solar array is a more efficient investment.

When Consumer Reports ran the numbers on the cost to install a Solar Roof, they estimated a typical installation might set you back $73,500 for a 3,000-square-foot roof.

Compare that to our discrete solar modules. A package for the same sized home might run one-third to one-quarter of that cost to install on your rooftop, depending on the energy output.

Even if you paid for a brand-new roof and then built a solar array on top of it, you’d come out spending much less. EnergySage estimated a 33% price premium on the Solar Roofcompared to building a traditional asphalt roof + solar array.

As you can see, the majority of the installation cost of the Solar Roof comes doesn’t come from adding a solar array. It comes from building an entirely new roof, which is a much steeper investment. And Tesla hopes to upsell you on roofing costs based on their strong brand capital.

Low Return on Investment

But let’s say the stars align. You’re in the market for a brand new roof, and you’re looking to go solar as well.

Even under these ideal circumstances, the Consumer Reports analysis couldn’t conclusively state it would be a good investment.

For a two-story home in Texas, where the A/C might run 300 days a year, the $73,400 in tax credits and energy savings falls short of the $86,100 cost to install the Solar Roof. In that scenario, the homeowner would find themselves $12,700 in the hole. Even with substantial energy savings, they would actually lose money over the life of the warranty.

Things look a bit brighter for a small ranch-style home in sunny California, where energy costs are sky high. Consumer Reports estimated a $56,800 Solar Roof might earn the owner $41,800 in net savings over the life of the system.

That’s not bad, but it’s still a far cry from a traditional PV system, which can pay for itself 2-3 times over during the life of the warranty.

The premium you pay for Tesla-branded roofing materials eats into most, if not all, of the money you save from reduced energy bills. The end result is that it takes ideal circumstances just to break even on the investment.

One of the main selling points for solar is its viability as a long-term investment. It’s not uncommon to see a 200-300% return on investment out of a traditional solar array.

Since the install cost is substantially lower, the average payoff period is much shorter. Investing in a traditional solar array can net you a healthy profit in the long run.

With the Solar Roof, Tesla aims to upsell a product you don’t need (a new roof), eating away at the value of your investment into solar energy.

In terms of the time value of money, it’s crazy to invest $70,000 for 30 years to see little to no return. There are better ways to put your money to work for you.

Availability

Even if you do need a new roof, we’re operating under the assumption that the installation will even be available to you. As it stands, you’ll need the leeway to plan the installation far in advance, as people have already been on the waitlist for the Solar Roof for over a year.

If you’ve already decided you need to replace an old roof, you may not have time to wait to get started. The need to replace leaks or structural damage is likely too urgent for you to hold out on the waitlist.

Similar problems arise with the construction of a new home. If you’re working with a contractor, your build is probably on a strict timeline. Holding out for the go-ahead from Tesla might not work with permitting, your contractor’s schedule or your own target move dates. After all, you can’t move into a house with no roof because you’re waiting for Tesla to call you back.

As production of the Solar Roof ramps up, we expect the waitlist to clear, at which point these problems will disappear. For now, Tesla needs to clear through their backlog of eager customers, which may throw a wrench in your plans.

Untested Technology

We touched on this a bit in the warranty section. New technology always comes with unanticipated problems and surprises. The first version of a product never works as well as its successors. It always takes a few iterations of new technology to come out with a stable and reliable product.

The 30-year warranty does a bit to assuage these fears – if something breaks, you’ll be covered. But that doesn’t change the fact that it’s still a hassle when things break. Failures mean calls with support, appointments with technicians, and warranty paperwork to fill out. It may not cost you money, but it still adds stress and takes time out of your life.

Tesla designs great products, but every new product has some kinks to work out. A solution from a more established product line is bound to work more consistently and require less upkeep on your end.

Extra Maintenance

In addition to the stability of first-generation technology, we have concerns that the design of the Solar Roof itself could lead to extra maintenance.

Each shingle is a self-contained solar panel. That means that there are hundreds of individual panels that make up your solar array. And more parts equals more opportunities for an individual part of the system to break down.

The best-case scenario is that each part functions independently, allowing it to be replaced without affecting how the rest of your Solar Roof functions. At worst, if the parts are inter-connected, one panel going out may put a damper on the energy generation capabilities of the entire array.

There’s a precedent for these concerns. The Solar Roof is a new take on existing technology known as Building Integrated PV (BIPV). There’s a reason BIPV products fell off the market: the product was unreliable, difficult to install, and more expensive than traditional solar panels. As Green Tech Media noted, “BIPV frequently amounts to paying a premium for less of a return. That math has already killed a long line of companies.”

Until the Tesla’s new product eclipses the performance of its predecessor, we see no reason why the Solar Roof won’t suffer from the same problems that doomed BIPV.

Contractor Woes

Since the Solar Roof is a new product, it will be challenging to find a contractor capable of performing the install. Tesla is notoriously picky with who they vet to perform their labor. Even if the Solar Roof is available in your region, there’s still the additional hurdle of securing a qualified installer.

There’s another major complication with the installation process. The people who install the roof are different than the people who do the electrical work. Roofers typically aren’t electricians, and vice versa. Installing the Solar Roof will require the coordination of multiple specialized contractors.

In the past, we’ve had customers tell us they ditched Tesla over frustrations with the long waiting period and lack of available contractors to perform the install. Not only are traditional solar panels a more sound investment, navigating the installation process is more manageable than tracking down a team of Tesla-certified installers.

The Final Verdict: Should You Buy a Tesla Solar Roof?

The Tesla Solar Roof is a gorgeous product with a prohibitively high cost to install. Right now, it’s largely a premium solution for early adopters who don’t mind paying more to access cutting-edge technology in high demand. Anyone who invests in the Solar Roof should also be willing to contend with more frequent maintenance than a traditional solar array might require.

Lastly, you should be willing to wait for production to catch up to demand. Just know that you’ll be running on Tesla’s schedule, and they’re a lot better about generating hype around new products than meeting production deadlines.

Consider the Tesla Solar Roof if:

  • You have the financial means to make a substantial investment into a new roof
  • You like to get your hands on cutting-edge technology and don’t mind joining the waitlist
  • You don’t mind performing more regular maintenance on your solar panels
  • You live in a populated region with access to Tesla-certified installers

Go with a traditional solar array if:

  • You want to maximize your return on investment
  • You want the most efficient product for your money
  • Your purchase is time-sensitive
  • You’re willing to sacrifice aesthetics in exchange for functionality
  • You want a stable, market-tested product
Download our free solar panel buying guide!