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Category: Solar 101

Net Metering Guide: How the Utility Credits You For Solar Power

Net Metering Guide: How the Utility Credits You For Solar Power

When you go solar, you need a way to store the energy generated by your panels. The easiest method is to hook into the utility grid to store energy and save it for later use.

But to do that, you’ll need to agree to terms with the utility company that outline how you are credited and billed for power. These policies are referred to as net metering (or net energy metering) agreements.

Under a net metering agreement, the grid acts as energy storage for the solar homeowner, banking the power they generate so they can use it later. The utility tracks your meter to record your net energy usage (energy consumed minus energy sent to the grid) so they can bill or credit your account based on overall usage.

Net metering agreements benefit both parties. The homeowner has a way to store solar power for later use, and the utility benefits because the extra supply of electricity smooths the power demand curve and prevents outages.

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Each utility company has different terms and conditions, so it’s important to contact them before going solar to figure out how the connection process works. This article covers some of the most common agreements so you know what to expect.

Types of Net Metering Agreements

What is Net Metering?

In broad terms, net metering is an agreement with the utility company that allows you to get credit for solar energy sent into the grid. The utility gives you a credit for the solar electricity you generate, and you can use those credits at any time to draw power from the grid.

Net metering allows you to get credit for solar energy you send into the grid.

The utility monitors the meter on your property to track how much energy you use. If you withdraw more than you produce, you pay the utility for any extra usage.

If you produce more power than you use in a given month, any excess production is credited to your account and rolled over to future months. These credits can be “banked” for periods of low production, meaning credits you earn in August can be used in December when the days are shorter and the weather is worse.

Under most net metering agreements, the utility will reimburse you for excess generation, either through a check or energy credits toward your future bill. However, most utilities pay reimbursements at a wholesale rate (vs. awarding credits at retail rates), so most folks choose to take the credit.

What is a Feed-In Tariff?

Most net metering agreements use one meter to track net energy consumption (energy used minus energy generated from solar) and bill everything at a uniform rate.

Under a feed-in tariff, the utility installs two meters: one for the power you use, one for the power you generate. Each meter is billed at a different rate.

Feed-in Tariffs incentivize solar adoption by making the utility pay higher rates for solar energy sent into the grid.

Feed-in tariffs are typically implemented by local governments to incentivize people to switch to renewable energy sources; the utility pays a premium rate to encourage solar adoption. For example, you might buy power at $0.12/kWh, but sell excess power to the utility at $0.25/kWh.

What is Net Purchase and Sale?

This is essentially the opposite of the feed-in tariff structure. The utility still installs two meters, but they charge electricity at retail rates and buy it from you at reduced wholesale rates.

Net Purchase and Sale allows solar owners to sell excess energy back to the grid, albeit at a reduced rate.

Under this billing structure, the utility only pays their “avoided cost” for anything you feed into the grid—the cost they would have paid to generate that electricity.

This is not as good a deal for the consumer as the regulated feed-in tariffs, but it’s still decent because you can receive payment for surplus generation.

What is Aggregate Net Metering?

Aggregate net metering allows for multiple meters on a property to be offset by a single solar system.

Aggregate Net Metering allows a single customer to monitor multiple meters on a property and be billed or credited for total usage.

Let’s say you live on a ranch property with your home, a barn, and a workshop, each with separate meters. Under this agreement, all three meters are counted toward the total net energy use on the property.

This works the same as ‘standard’ net metering. The only difference is that it allows you to track more than one meter on a property.

What is Virtual Net Metering / Community Solar?

Aggregate net metering allows a single customer to offset multiple meters on his or her property.

Virtual net metering differs in that it allows multiple customers to participate in net metering with a shared solar energy system.

Virtual Net Metering allows multiple customers in a community to buy shares in a community solar farm and divide the costs and benefits.

Under this policy, shared residences like apartment buildings can build a centralized solar system, with individual tenants metered and billed under their own account.

Similarly, neighborhood residents can build a community solar farm to supply power to multiple homes in the neighborhood. Those who choose to buy into the community solar program receive an ownership stake in the shared system. They would be entitled to credits and/or reimbursement in proportion to their ownership stake in the system.

What are Time-of-Use Rates?

Lastly, your net metering policy may be affected by time-of-use (TOU) rates. Under a TOU policy, the utility charges more for electricity during peak demand periods, when people are home from school and work in the evening.

Where applicable, net metering calculations are affected by TOU rates. Solar generates energy during off-peak hours (when the sun is out during the day), so that production is credited at a lower rate. When you flip on lights in the evening, you are billed a higher rate for usage during peak periods.

The result is that you can generate enough energy to cover your usage and still end up paying a bill, because you pay a higher rate to use energy in the evenings than the rate you are credited for producing during the day.

To counteract this, you can invest in an energy storage system that allows for TOU offset. A small battery bank can store daytime production for use during peak periods. By drawing power from your battery bank (instead of the grid) in the evening, you avoid paying higher rates during peak usage periods and maximize the value of your solar production.

Net Metering Caps and Restrictions

Some utilities have restrictions and caps on their net metering policies. These restrictions are in place to level out supply and demand, and to prevent people from taking advantage of the policies purely for profit motive (since you can make money by selling off surplus energy).

These restrictions may include:

  • System size caps: either a concrete limit (systems up to 1 MW) or a percentage (125% of consumption)
  • Technology restrictions: outdated or inefficient technologies may not be eligible
  • Credit rollover limits: credits can expire and be surrendered to the utility if not used within a certain timeframe
  • Property type: residential, commercial and industrial properties may have different policies
  • Renewable energy source: Aside from solar, net metering policies may apply to wind, hydro, fuel cells, biomass, geothermal, and other renewable energy sources.

Next Step: Understand Your Local Net Metering Policy

Thinking of going solar? Contact your local utility a call and ask about their net metering policies. Many have their policies published online.

They’ll explain how they credit you for solar energy produced, which is important to understand if you want to get the most out of your system.

For more help on permitting and interconnection with the utility, grab a copy of our free solar permitting guide!

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Solar Panel Warranty Guide: How Long Will My System Last?

Solar Panel Warranty Guide: How Long Will My System Last?

Solar panel warranties can be a bit of a headache to understand. They’re split into two categories (performance and workmanship), each with different warranty lengths and areas of coverage.

If your system stops producing the way that it should, it’s not always clear whether you’re covered. Since solar is a big purchase, it’s important to understand how solar warranties work to protect your investment.

For your peace of mind, here’s everything you need to know about how warranties work in the solar industry.

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How Solar Panel Warranties Work

What is a “workmanship warranty?”

The workmanship warranty on your solar panels covers any physical defects that stem from manufacturing errors. Some examples might be:

  • Imperfections in the frame or glass
  • Loose junction boxes
  • Faulty connectors
  • Bad cells or damaged cell connections
  • Defective backsheet

If the panel malfunctions due to a manufacturing defect, that is covered under the workmanship warranty.

What is a “performance warranty?”

The performance warranty guarantees your panels will produce near their rated output over the life of ownership.

Panel production naturally degrades over time, but it happens at a very slow rate—less than 0.5-1% production loss per year. While production loss will occur for any panel, the performance warranty ensures it happens at a reasonable rate.

For example, these Mission Solar panels output 360 watts. The warranty accounts for a 3% drop in production in the first year, then 0.7% every year after that. After 25 years, your panels should still produce 288.72 watts (80.2% of their original 360W rating).

A few premium panel manufacturers like LG offer better warranties (87% after 25 years) because their panels degrade at a slower rate.

The performance warranty ensures your system’s output is reliable and consistent. If a panel’s output suddenly falls off a cliff, it would be covered for replacement under the performance warranty.

Linear vs. Step Warranties

Most companies offer a linear performance warranty. Mission Solar’s guarantee of 0.7% production loss every year is an example of a linear warranty: it progresses at a constant rate year-over-year.

Some manufacturers offer “step warranties” on their panels. Under this warranty structure, the performance guarantee stays at a flat rate and steps down at certain milestones.

For example, certain Astronergy panels are covered at greater than 90% efficiency upon purchase, which steps down to 80% at year 10 and stays there until year 25.

Step warranties offer less coverage for under-performing panels. For example, if your panel is producing at 85% output in year 11 of ownership, you would be entitled to a replacement under a linear warranty, but not under a step warranty.

In general, companies have moved away from step warranties, but you may still find them offered on older modules, so it’s something to look out for.

How Long Do Solar Panel Warranties Last?

Most solar panels come with a 25-year performance warranty. This is the industry standard from Tier 1 manufacturers at the moment.

Workmanship warranties cover a shorter timeframe: Mission Solar and Astronergy offer 10-year workmanship warranties, but that number varies by manufacturer.

When the warranty expires, that doesn’t mean your panels stop working! They’ll still be producing power, albeit at a reduced rate. A 360W Mission Solar panel should still produce 288W after the 25-year warranty is up.

They can still be used to power your appliances, but they’re no longer covered if the production starts to taper off. A study by NREL (National Renewable Energy Laboratory) shows that 4 out of 5 panels outperform their warranty, so it’s likely your system still has some life in it after the 25-year mark.

What Are Third Party Warranties?

25 years is a long time. What happens if you need to put in a warranty claim, but the company that made your panels has gone out of business?

For that, certain manufacturers like SolarWorld offer third-party warranties and other forms of warranty protection. In case of bankruptcy, the warranty transfers to a 3rd party insurer who continues to honor replacements and refunds under the original warranty.

Tier 1 manufacturing companies are quite stable, but a lot can happen in 25 years. This provides an extra layer of protection so you don’t get hung out to dry.

Solar Inverter Warranties

So far, we’ve only covered the warranties on solar panels. But there are other parts of your system covered under their own product warranties.

Panels have the longest warranty of the bunch at 25 years. Inverters and batteries generally have shorter warranties.

Here are the warranties for the inverters we supply:

If you opt for a string inverter like the Sunny Boy or HD-Wave, you should factor at least one inverter replacement into the lifetime cost of ownership.

Most inverter manufacturers offer extended warranty programs to cover these replacements. These cost a little bit extra up front, but it’s cheaper than replacing the inverter out of pocket down the road.

Solar Battery Warranties

Battery warranties are a bit trickier. Flooded lead-acid batteries cost less up front, but have regular maintenance requirements to keep them in working order. These batteries have the shortest warranties, and if you fail to perform regular upkeep, the warranty will be voided.

Sealed lead-acid batteries and lithium batteries cost more, but the maintenance requirements are removed and they have longer warranties to match the higher price tag.

Sample battery warranties:

  • Crown flooded lead-acid batteries: 3 years
  • Fullriver sealed AGM batteries: 7 years
  • Discover lithium batteries: 10 years

Read our in-depth cost comparison of lead-acid vs. lithium batteries.

Another thing to note is that the true lifespan of your batteries can vary greatly depending on the application.

Battery life is measured in charge cycles. The act of discharging your batteries (to power your appliances) and recharging them from your solar panels counts as one cycle. For example, this Fullriver AGM battery has a cycle life of around 1250 cycles at 50% depth of discharge.

In off-grid applications, your battery bank is your primary source of energy. You’ll be cycling it on a regular basis to provide uninterrupted power to your property. With heavy use, you’ll reach the expected cycle life at a much quicker pace.

However, if you’re using batteries as energy storage for a grid-tie property, they’ll see less frequent use—only at certain times of day to offset high time-of-use rates, or as backup power during a grid outage.

Though you might use the same exact battery, it will have a longer lifespan in this application because it is not constantly cycling.

Factors That Can Void Your Warranty

One last word of caution: warranties only cover your equipment when your system is properly designed and cared for.

All warranties carry clauses that essentially boil down to this: “if you use the equipment improperly, we’re not responsible for the damages.”

For example, string inverters have a voltage range in which they can operate safely. Your system must be sized so that panels supply the right amount of voltage to your inverter, a process known as string sizing.

If your panels send too much voltage into the inverter, it can fry your equipment. That damage would not be covered under warranty because the manufacturer would consider you to be at fault.

Learn how we calculate string size here (warning: lots of math ahead).

Similarly, battery banks must be sized properly so that they charge or discharge at a healthy rate. Completely draining lead-acid batteries when you cycle them will reduce their lifespan, another mistake that would not be covered under warranty.

This is where we come in. Our complete solar systems are packaged with these restrictions in mind, so you can be sure you’re getting a system that’s properly sized. If you’d like to put together a custom system, you can also consult with an experienced solar designer to ensure your system is up to code.

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How to Size a Solar System: A Step-By-Step Walkthrough

How to Size a Solar System: A Step-By-Step Walkthrough

Once you have determined that a grid-tie solar system is the best option for your home, we want to help you size the system correctly. This article will teach you how to size a solar system that covers your energy use patterns, without over-sizing your PV array.

The process for sizing off-grid solar systems is different, due to the need to account for battery bank sizing. Click here for advice on how to size your off-grid solar system.

As a system designer, I follow a step-by-step process to size grid-tied systems that work with my client’s project constraints.

The first step is to figure out the main constraints on the project and using those restrictions as the starting point for the design. We can approach the project from one of three angles:

  • Budget constraints: Build a system within your target budget.
  • Space constraints: Build a system that is as space-efficient as possible.
  • Energy offset: Build a system that offsets a certain percentage of your energy usage.

I want to make sure I deliver a system that satisfies my client’s specs, but I also need to account for sizing factors that might not be immediately obvious to them.

Some common stumbling blocks that come up over and over again:

  • Local levels of sun exposure
  • Orientation of the array (facing and tilt angle)
  • Plans for future expansion
  • Product efficiency ratings
  • Natural degradation of performance over the life of the warranty

This article is intended to provide a step-by-step overview of the sizing process for grid-tied solar systems, taking the above restrictions into account.

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Sizing Grid-Tied PV Systems: Getting a Quick Estimate

First, gather the Kilowatt Hours (kWh) usage from your electric bill. We want to have all 12 months available so we can look at peaks and valleys in usage. Energy consumption spikes in the summer and winter with heavy use of your A/C and heating units. A full year of energy consumption data gives us the big-picture overview we need.

We also want to average the data from 12 months of bills to know your average monthly kWh usage. Grid-tied systems tend to overproduce in the summer with peak sun exposure.

If your utility provides a favorable net metering policy, the energy your system generates can be banked with the utility as credit to be used later. Not all utility companies do this; check with your local provider.

Next, we want to look up your sunlight hours per day, through a sun hours chart or the PV Watts Calculator (I will get to this in the next steps).

For a general estimate we can use this simple formula, then fine-tune as we get further into the design:

(Yearly kWh Usage ÷ 365 days ÷ average sun hours) x 1.15 efficiency factor = DC solar array size required.

If the solar array cannot face south, on the preferred angle, we need to adjust the system by adding more solar.

Here is an example. I live in New Mexico where the PV Watts Calculator says I have an average of 6.10 sunlight hours per day. That is a LOT, I know, but that is why I live here. I use 1000 kWh per month, or 12,000 kWh in a year. According to the formula:

(12,000 kWh ÷ 365 days ÷ 6.1 sun hours) x 1.15 = 6.2 kW DC solar system required

Fine-Tuning the Estimated System Design

When I am ready to make a solar system estimate as accurate as possible, I pull up the address on Google Maps. I check to see if I have any viable south facing options for a roof mount.

(Your solar system should point toward the equator, so if you live in the Southern Hemisphere, look for north-facing options instead.)

A roof mount is the simplest and most cost-effective solution. It costs less than other racks. Many times the slope of the roof is already set up for solar gain, and it keeps the solar panels close to the inverter and service panel. This is great for the efficiency and costs less in conduit and wire.

To learn more about the pros and cons of each mount type, read this article: Ground Mount vs. Roof-Mount Racking: What’s the Best Way To Mount My Solar Panels?

Customer Tom M. with his roof mounted system in Albuquerque, NM.

If a roof mount is not an option, I will look into the possibility of a ground mount or pole-mounted solution.

Once we know how much area we have for solar panels, and what angles and directions we will be working with, I get out the PV Watts Calculator and follow these steps.

How to Use the PVWatts Calculator

  1. Enter the address and hit the orange arrow to the right.
  2. Once you are on the System Info page, enter the DC system size from the previous section.
  3. Choose standard module.
  4. For array type, select “fixed” for roof mounts, or “open” for ground mounts.
  5. Leave the system losses at around 15%.
  6. Enter the slope of your roof in degrees, and the azimuth. Azimuth is the degrees relating to north and south, with north being zero and south being 180. (Click here to learn how to fine-tune your angle and azimuth values.)

Once all the info has been entered, click the arrow to the right and it will tell you how much power your system will put out on a monthly basis.

This is our step-by-step process for honing in on an accurately sized system. We provide this info because our audience is heavily inclined to DIY, and most people prefer to research at their own pace.

Once you’re ready, we do encourage you to schedule a free design consultation with us so that we can double check your sizing, find compatible products, and ensure the system works within your constraints (budget, build space and energy offset). You can also give us a call at 1-800-472-1142 for an immediate consultation.

Choosing Grid-Tie Solar Equipment

Once we know how big the solar system needs to be, we will cross-reference that with the amount of space available. If you are doing a ground mount, that is usually not a problem.

From my example above, I know I need a 6.2 kW DC system. I can multiply this number by 1,000 to confirm that I need 6,200 watts of solar panels.

My fastest resource is to go to our grid-tied solar packages and scroll down until I see something in this range. If the client expresses a desire to buy American-made panels, or needs certain features like individual panel monitoring, I take those choices into account.

Here are a few viable options I’d consider. Note that the imported panels are more cost-effective, so you get roughly 10% more production for the same price.

Grid-tie systems with American-made panels:

  • 6.2 kW system with 310W Mission Solar panels and SolarEdge Inverter / optimizers
  • 6.2 kW system with 310W Mission Solar panels and Enphase IQ7+ micro-inverters
  • 6.2 kW system with 310W Mission Solar panels and SMA central inverter

Grid-tie systems with imported panels:

  • 6.7 kW system with 335W Astronergy solar panels and SolarEdge inverter / optimizers
  • 6.7 kW system with 335W Astronergy solar panels and Enphase IQ7+ micro-inverters
  • 6.7 kW system with 335W Astronergy solar panels and SMA central inverter

If you’re having trouble deciding which products to buy, we’ve written articles covering that ground as well:

Of course, sometimes it’s easier to talk to someone with experience and have them walk you through the design process. The fastest way to get a thorough evaluation of your solar needs is to call us at 1-800-472-1142 and connect with one of our designers. We’d love to help you design the perfect grid-tied system for your needs.

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Pros and Cons of Solar Power

Pros and Cons of Solar Power

We’re huge advocates for solar energy, but we recognize it isn’t the right solution for everyone. While solar is sustainable and ultimately cheaper than utility power in the long run, it also requires a significant up-front investment and doesn’t work for every property / roof type.

The ultimate question is whether the advantages of solar power outweigh the disadvantages. In this article, we’ll present the pros and cons of solar energy so that you can decide if going solar makes sense for you.

Advantages of Solar Power

  • Energy independence
  • Eliminate electric bill
  • Profitable investment
  • Strong government incentives
  • Sustainable
  • Low maintenance
  • Improves property value

Disadvantages of Solar Power

  • Expensive up front
  • Takes up space
  • Energy storage is expensive
  • Not right for every property
  • Makes less sense if you rent

Advantages of Solar Energy

1. Energy independence

Traditionally, most people depend on the utility company to supply them with power. When the grid goes down, going without power for an extended period of time can be a helpless feeling.

If you own a solar system with energy storage, you can keep generating power during emergencies. That peace of mind is invaluable if you live in a place with an unreliable power grid, or are regularly threatened by severe weather conditions like tornadoes and hurricanes.

Utility power also restricts people who want to live off the grid, like a remote hunting cabin. Solar can generate energy where it would be too expensive to run power lines.

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It’s liberating to have complete control over where and how you produce energy. And with electricity costs rising, it also feels great to lock in a fixed rate for your electricity over the next few decades.

2. Eliminate your electric bill

Who doesn’t love one less bill coming out of their paycheck? With a properly sized system, you can drastically reduce or completely eliminate your electric bill.

Even if you extend your payback period by taking out a loan to finance your project, you still enjoy reduced electricity costs from the moment you flip the switch on your PV system.

This is the most exciting part of solar for many people: bringing the system online and watching their power bill disappear.

3. (Grid-tied) solar is a profitable investment

If you buy a grid-tie system (the type of system you build if you have access to power lines), you can expect your investment into solar to turn a profit in the long run.

Assuming the national average for cost of electricity, it would take about 6.08 years to recoup your investment into a $10,000 system. Beyond that point, you start to generate a profit from your system.

In fact, over the 25-year life of the solar panel warranty, we estimate you would earn $31,031 on energy bills after clearing the initial payback period.

4. Lucrative government incentives

The investment into solar becomes even more appealing when you take government incentives into account. State and federal programs are in place to encourage people to invest in renewable energy. Claiming these can put a ton of cash back in your pocket.

The main incentive is the 30% federal tax credit for going solar. Under this program, you are eligible to receive 30% of the total installed cost of your system as a tax credit at the end of the year.

This credit is a dollar-for-dollar reduction of your tax liability. Every dollar in credit is a dollar less that you pay in taxes at the end of the year. So if you buy a $10,000 system and receive a $3,000 credit, you will owe $3,000 less in taxes at the end of the year.

While the federal tax credit is the largest solar incentive, don’t skip out on local incentives, either. Depending on where you live, certain jurisdictions offer local incentives that can be claimed in addition to the federal credit.

5. Sustainability

A sustainable energy source is one that we can use without depleting the source of power. Oil and gas are not sustainable, because we consume those resources as we use them.

In contrast, solar is sustainable because the source of energy (sunlight) is constantly replenished. We can use solar energy without worrying about whether we will deplete the Earth’s natural resources for future generations.

6. Low maintenance

Solar systems don’t have a lot of moving parts. As a result, they rarely break down or require maintenance to keep them running optimally.

Panels are warrantied to last 25 years, but many have a much longer lifespan. (See our article “How Long Do Solar Panels Last?” for a study on the true lifespan of panels.) You rarely, if ever, need to fix or replace panels.

It’s common to replace your inverter at least once over the life of your system, as inverters are typically warrantied for 10-15 years. But that’s about the only scheduled maintenance you will encounter for grid-tied systems.

Off-grid systems are a bit more complex because they must include batteries, which often require routine maintenance. Specifically, flooded lead-acid batteries (the cheapest option available) must be checked and refilled with water regularly to keep them functioning properly.

However, building a grid-tied system eliminates the need for batteries, so most people will rarely need to check in on their system for maintenance or replacements.

7. Improves property value

Studies of the real estate market have proven that homes equipped with a solar power system sell for more than their non-solar counterparts.

In fact, the Lawrence Berkeley National Library conducted research that shows that solar homes fetch an extra $14,329 on average, a 3.74% increase over non-solar homes.

It’s no question that solar power systems substantially increase property value. Home buyers see solar as a major selling point, and they’re willing to pay a premium to move into a solar-powered home.

Disadvantages of Solar Energy

1. It’s expensive to get started

Solar is expensive – at least up front. To build a system that would power the average American home (which uses 897 kWh of electricity every month), you might pay $8,000-$10,000 depending on the products you choose.

That doesn’t include the cost of shipping or installation.

Of course, you’re paying for at least 25 years of energy production up front. In the long term, you break even on the investment and start to make money, but that doesn’t change the fact that not everyone has thousands of dollars in their pocket to get their solar dreams off the ground.

The up-front cost is the main barrier to going solar. Financing options are available, and the payback period is quite favorable even when you take interest into account. However, not everyone wants to be on the hook for loan payments.

2. It takes up a lot of space

Standard solar panels measure 39” wide by either 66” to 72” tall (for 60-cell and 72-cell panels, respectively).

To offset the national average of 897 kWh of electricity per month, you’d need at least 24 panels. In an 8×3 configuration, that system will be 26 feet wide by 44 feet tall. That’s going to take up a lot of room on your roof or in your yard.

Most people opt for a roof mount because it takes advantage of space that would otherwise go unused. If you need to design around odd angles and obstructions, you can always split the panels into sub-arrays, like our customer Luis did when he built his system:

Wholesale Solar customer Luis split his system into sub-arrays to work around the shape of his roof. We featured it as our Install of the Month in September 2018.

3. Energy storage is expensive.

Batteries are the single most expensive component to a solar power system. Not all systems require batteries, but they become mandatory when you go off the grid. They are also required if you need to supply backup power to your grid-tied property.

(Grid-tied systems don’t automatically provide backup power during outages. That’s a common misconception. For backup power, you need a grid-tie system with energy storage – essentially, a battery designed to work with grid-based systems.)

Expect to pay a lot more money when you add batteries to a system. Battery banks cost at least a few thousand dollars, and if you buy high-end lithium batteries for a full-scale off-grid system, that’s easily a 5 figure investment into the batteries alone.

Furthermore, batteries don’t last as long as the other parts of your system. Lead-acid battery warranties range from 1 to 7 years, meaning you’ll replace them 4 or 5 times before the panel warranty is up.

Lithium batteries justify their high price tag by lasting 10-15 years, but you’re still in for at least one replacement over the life of your system.

4. It’s not right for every property

Not every property is a good fit for solar power.

Some properties are simply too cramped to find any space to build a system. Others are covered in shade and wouldn’t get the sunlight required to generate enough energy.

While there are technologies like shade optimizers and custom racking to mitigate these concerns, they only accomplish so much. If you don’t have anywhere to put your panels, it’s going to be a real challenge to make solar work for your home.

5. It’s better if you own your home (and won’t be moving for a while)

Solar can be a profitable investment, but the payback math assumes you’ll be living in the same property for the full duration of the 25-year warranty.

It takes several years to break even on the initial cost of the system before you start to pocket the savings from your energy bill. Solar makes a lot less sense if you don’t own your home, or have the urge to move within the next few years.

The good news is that because solar increases property values, you are likely to recoup your investment into the system when you go to sell your home. But most people who go solar do it because they want to be self-sufficient and generate their own (less expensive) electricity for the next few decades.

Think about whether you’ll stick around for a while in your current property before you make the long-term investment into solar.

Questions? Consult with a solar expert.

Still not sure if the advantages of solar outweigh the disadvantages? You can always schedule a consultation with one of our expert design techs. We’ll answer questions, clear any design hurdles, and help you decide if solar is right for you.

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Grid-tied vs. off-grid solar: are you sure you want to live off the grid?

Grid-tied vs. off-grid solar: are you sure you want to live off the grid?

Let’s clear up one of the most common misconceptions in the solar industry: the idea that you must go “off the grid” to go solar.

This article will explain the different types of solar power systems: grid-tied vs. off-grid.

Many people call us looking for help going “off the grid.” But when we explore their motivations a bit more, we find that what they actually want is to ditch their utility company.

Really, they want to go solar to be independent, generate their own power, and stop paying money to the utility every month.

If this sounds like you, read on. Because you can accomplish all these things without going off the grid. It’s called grid-tied solar, and it’s the preferred type of solar system for any property that has access to power lines.

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Why? Because it’s cheaper. No, really, it’s a lot cheaper. You should always build a grid-tied system when you have the option to do so.

Let me explain why.

Grid-tied vs. off-grid: what do these terms really mean?

The difference between grid-tied and off-grid solar revolves around where you store the energy you generate.

Every system needs a place to store energy so that it can be used on demand. Your panels only generate charge when the sun is out during the day, but you still need a way to turn the lights on in the evening.

With grid-tied systems, the energy you generate is sent into the utility grid. Your panels feed electricity into the grid, which can be distributed to other people in your area.

In return, you receive a credit for the energy you generate, which you can use any time. Think of it like a transaction at the bank: you are allowed to withdraw as much as you deposit. This is what allows you to keep the power on when the sun goes down.

Off-grid systems are different. With no access to the utility grid, you must find another solution to store energy.

For that, you’ll need to add a battery bank to your system. Batteries provide dedicated energy storage. Without any access to power lines, batteries are mandatory for off-grid solar systems.

In summary: grid-tied systems store energy in the power grid, while off-grid systems store energy in batteries.

When in Doubt, Go Grid-Tied

It doesn’t cost anything extra to store electricity in the grid. But adding batteries to an off-grid system is a significant extra cost.

In fact, batteries are the most expensive part of a solar system. They represent as much as 30-40% of the cost of an off-grid system.

Batteries alone are a 4-5 figure investment. For that simple reason, we always recommend connecting a grid-tied system if you have the option.

Why spend thousands of dollars on batteries if you don’t need them?

Browse grid-tied system packages in our shop.

What about Energy Storage Systems?

Right now you might be thinking, “what if I’m connected to the grid but still need energy storage?”

For that, there’s a third system type. It’s called grid-tied with battery backup (a.k.a. energy storage systems).

These systems connect and store energy in the grid, but they also include batteries. There are two reasons you might want to add energy storage to a grid-tied system:

  • Store backup power in case of outages (useful if you live in an area with an unreliable power grid or severe weather)
  • Store energy so you can use it or sell it later (useful if you live in an area with a certain utility billing structure, such as time of use rates, high demand charges, or no net metering)

The same caveats apply: batteries aren’t cheap, and adding them to your grid-tie system lengthens your payback period. But in some places, it’s invaluable to add security against harsh weather, outages, and inflated electricity costs.

Energy storage systems provide extra peace of mind and help you get the most out of the electricity you generate. It’s up to you to decide if it’s worth it to spend more on your system for the added flexibility.

Browse grid-tied systems with battery backup in our shop.

Continue Your Research

Have any more questions about the process of going solar? Check out our Getting Started Guide, a crash course on the basics of designing and installing your solar energy system.

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What is a kilowatt hour?

What is a kilowatt hour?

Kilowatt hours measure energy usage and production.

If you’re thinking about going solar (or just want some advice on how to reduce your energy consumption), you’ve probably come across the term kilowatt-hours.

But exactly what is a kilowatt hour? And why do we need to know how many we use each month?

First things first: What is a kilowatt hour?

A kilowatt-hour (kWh) is a measure of how much energy you use over a set period of time. It determines how much you pay for electricity each month, since the utility company bills you on a cost-per-kWh basis.

Here’s how it works.

Every appliance has a rating which measures how many watts of power it uses. For example, an oven may be rated at 2000 watts, or 2 kilowatts. (1 kilowatt equals 1000 watts.)

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If you cook something in that oven for 30 minutes, here’s how to calculate the total energy used:

2 kilowatts x 0.5 hours = 1 kilowatt-hour (kWh) of energy used.

To determine how many kilowatt-hours an appliance uses, simply estimate how long you use it each day, then multiply by the wattage rating.

Easy so far. But how can you use this information?

Measuring Electricity Cost Per kWh

Utility providers track your usage with a meter and bill you based on total kilowatt-hours consumed.

In America, the average cost of electricity is about 12 cents per kWh. However, that can fluctuate based on where you live as well as what time of day you use the electricity.

Many utility providers bill variable rates for Time of Use (called TOU rates). If you are familiar with the concept of surge pricing, that’s what this is: electricity costs more when lots of people are using it.

There’s less demand during the day, so the rate is lower. When people come home from school and work, the rate goes up because the demand is higher.

You can usually find the breakdown of TOU rates on your utility provider’s website, or right on the electric bill.

But it might be quicker to measure how those costs average out based on your usage patterns. Divide your monthly payment by your total kWh usage to get your average cost of electricity:

$130 electric bill / 1,237 kWh used = 10.51 cents per kWh

How Kilowatt Hours Factor into Solar System Sizing

Understanding kilowatt hours is key to being able to design a system that works. Without that information, your system might be too small to cover your entire energy bill (or too large, in which case you’re just throwing money away and diluting the value of your investment).

So we use your kilowatt-hour usage as the starting point in the system design process. Once you know how much energy you use, you can size your system components to match usage demands.

Our solar cost calculator can provide a ballpark system size and cost based on your kWh usage. You can also read about the math behind this formula in full detail in our article: “How Many Solar Panels Do I Need?”

To get an accurate calculation, there are a few things to take into account:

  • Average monthly usage
  • Peak usage (it will spike when it’s snowing or 100 degrees outside)
  • Future changes in energy usage patterns

Your system should be sized to cover you year-round. Make sure to take a year’s worth of usage into account, since freezing winters and 100+ degree summers tend to skew the usage data.

Also, carefully consider whether your usage will increase in the future. If you plan to have kids, build a new shed on your property, or buy an electric vehicle, those things will eat up a lot more energy and your kWh usage will climb.

You don’t need to build for future usage now, but it helps to plan your system with expansion in mind. Certain pieces of equipment are designed to facilitate expansion, like microinverters and lithium batteries.

Read more: Best Grid-Tie Solar Inverters >> | Best Solar Batteries >>

Why kWh usage is so important for off-grid properties

When you’re connected to power lines, finding all this information is simple. Just grab your latest electric bill. Your provider prints your kWh usage on your bill every month, and some list their cost-per-kWh rates as well.

This makes it easy to do the math on system size. You can also drop the number into our solar cost calculator for a quick ballpark cost and sizing estimate.

Off-grid systems are different.

When you go off the grid, you likely won’t have a precedent to figure out how much energy you will use. Instead, you’ll need to fill out a load evaluation sheet, listing each appliance manually and estimating how much you will use them each day.

Daily kWh usage is crucial to building a system that can supply uninterrupted power to your off-grid property.

You don’t want to look at your yearly usage, but rather your needs on a day-to-day basis. The goal is to store enough power to cover yourself if any problems arise (like severe weather or equipment failure).

People tend to store about a day’s worth of power in their battery bank, and lean on a generator for backup. But you can plan for more cushion with your battery bank if you want the extra peace of mind.

To estimate daily usage, find the kWh usage (wattage x hours in use each day) for every large appliance in your off-grid home and add them all together.

The total is your daily usage, which can be used as the basis to size your system:

Daily kWh Usage ÷ Sun-Hours ÷ 0.9 (inefficiency factor) = Minimum Solar Array Output

How to Use Your kWh Usage to Estimate the Cost of Solar

Got your kWh usage on hand? Plug that info into our solar cost calculator to see how much it might cost you to go solar.

Grid-tied systems tend to pay for themselves quickly. It’s reasonable to expect to break even on your investment within 5 years.

Off-grid systems cost more and come with different expectations. Unlike grid-tie systems, the value in off-grid systems isn’t necessarily making a profit from your investment.

Instead, it should be viewed as a means to generate energy where there is no access to power lines. To determine whether off-grid solar is the right choice, you should compare it against the cost of other methods to generate power, like wind turbines or gas generators.

Interested in solar, but not quite sure where to start? Download our Getting Started Guide to get up to speed with the essentials.

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8 Costly Solar Mistakes to Avoid When You Design Your System

8 Costly Solar Mistakes to Avoid When You Design Your System

Today we’re going to look at the most common mistakes we see from beginners who are just starting to research and design their own solar system.

Our goal with this article is to prevent common headaches and (potentially costly) problems that stem from poor system design.

Since we came online in 2002, we’ve talked to tens of thousands of people about going solar.

Many of those calls start the same way: someone’s just had “the epiphany.” They realized solar power not only helps the environment, but is actually cheaper than paying the utility company in the long run.

Sometimes, people are so eager to get started that they dive in headfirst. They research products, calculate a cost estimate, and start sketching panel layouts for their roof.

But solar system design is a lot more complex than it appears on the surface.

So when people try to design a system without doing the research, they sometimes make mistakes. Big, glaring, expensive mistakes.

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I touched base with a few of my colleagues to brainstorm the most common solar mistakes and misconceptions people have when they first get in touch with us.

Here are the points that came up over and over again:

1. Confusing off-grid and grid-tie solar

Solar power allows you to generate your own energy, which means you won’t pay for power from the utility grid. People assume this means they will be “going off the grid,” but that’s not accurate.

In reality, most people are looking for a grid-tied solar system.

Here’s the distinction: your panels generate energy, but you need a way to store that energy for later use. If you have access to power lines, you can store the energy you generate in the utility grid. The utility company will credit you for extra power produced, and allow you to pull from the grid when you need it.

Off-grid properties have no access to power lines, so they need another method to store energy. That means off-grid systems need a battery bank to function. Batteries are expensive, but with no option to store power in the grid, they are mandatory for off-grid systems.

The bottom line is that saving money and being independent from the grid are mutually exclusive. Batteries eat into your ROI (return on investment), and grid-tied properties don’t need them.

You don’t need to go “off the grid” to get the benefits of solar power. If your property has access to power lines, grid-tied solar is the smartest option.

Why pay for batteries when the utility grid will take care of storage for you?

Related: Grid-tied vs. off-grid solar: Are you sure you want to live “off the grid?”

2. Improper system sizing

Sizing a solar system is more complex than it appears at face value.

If you’re just starting out with your research, you might think it’s as simple as looking at your latest energy bill, then buying enough panels to cover that usage.

But that would ignore factors like climate, panel orientation, shading, natural efficiency drop, and other things that impact the “true” output of your system.

That’s why we won’t sell complete systems to anyone until they’ve consulted with one of our in-house solar design techs.

During that conversation, we plan your system to account for the variables most people don’t think about. Some common ones are:

Efficiency

Panels have an efficiency rating, and they suffer a 0.5-1% efficiency drop every year. 20 years after you install it, your panels will be 10-20% less efficient. We design a bit of extra headroom into your system to account for the loss of efficiency.

Climate

Solar panels are tested in ideal conditions: an indoor factory with temperatures in the mid-70s. In the real world, your system can be exposed to much harsher conditions. High temperatures can reduce the amount of energy you generate.

Your location also dictates how many sun hours you get. The term “sun hours” doesn’t mean “how long the sun is in the sky.” It refers to the amount of time the sun is in the right position to generate peak energy. Most places get 4-6 sun hours per day, and the exact amount influences system sizing.

Voltage

Inverters and charge controllers have maximum and minimum voltage input windows. Panels and batteries have a voltage rating as well.

Your system needs to be designed at the right voltage based on the equipment being used and what it requires. We also account for things like temperature that can affect voltage and system performance.

If you don’t have the right voltage from your solar panels or battery bank, your system might not perform well or worse – you could damage expensive hardware.

Battery bank sizing

Mismatching your battery bank with your charging source is the most common issue when it comes to batteries, specifically with off-grid system sizing. Your array needs to supply enough power to keep the batteries charged, but not so much that they overcharge.

Too much current could damage your batteries from overcharging. On the other hand, undercharging your batteries can have an even worse effect.

Certain batteries need to be brought up to full charge on a regular basis. Leaving them at empty or partial charge for an extended period of time can cause the batteries to fail prematurely.

3. “Solar prevents power outages!”

You’re generating your own energy, so the lights should stay on during a power outage, right?

Unfortunately, that’s not the case with grid-tied solar systems. Although the power originates from your panels, it is still stored in the public utility grid.

When the grid power goes out, so does yours, because there’s no infrastructure to feed that power to your property.

The remedy for this is a grid-tied system with battery backup. When the power’s on, it functions like a normal grid-tied system. During an outage, a small backup battery bank kicks in to keep the lights on.

It costs a bit more, but the peace of mind is invaluable, especially if you live somewhere with extreme weather conditions or unreliable power from the grid.

4. “Solar is a bad investment” / “Solar isn’t feasible without the tax credit”

Look, solar isn’t cheap. It’s a 4 to 5 figure investment. We know that’s a big commitment.

But electricity from the power company isn’t cheap either, and it’s only going up in price.

The reality is when you look at the long-term value of owning a solar system, most grid-tied systems pay for themselves fairly quickly and actually make you a profit over the life of the warranty.

We explain how to calculate your payback period on our resource center page about the ROI of solar. But here’s the quick version:

Let’s use a system that costs $10,000 (to make the math easy). That would get you something like this 6.6kW system.

You get a 30% tax credit for going solar, so the out-of-pocket cost is $7000.

$10,000 – $3,000 = $7,000

A 6.6 kW system will offset around 900 kWh of energy usage per month. At a typical rate of 12 cents per kWh, that’s a utility bill of $108 per month.

900 kWh * 0.12 = $108

To calculate payback period, multiply this bill by 12 to get your annual energy savings (in this case, $1296). Divide that number into your system cost to calculate your payback period, the time it takes for your system to pay for itself entirely.

$7,000 / $1296 = 5.4 years

This system will pay for itself in about five and a half years. Most solar panel warranties last for 25 years, and inverters for 10 years. After you clear the payback point, your solar system starts to turn a profit for you.

This assumes you perform a DIY installation. If you hire an installer, you might pay them $1 a watt to set up your system. That would make your system cost $16,600 before the credit, and $11,620 after the 30% back. The math changes slightly:

$11620 / $1296 = 8.96 years

A 9-year payback period on a system with a 25-year warranty. Still not bad at all.

“But the tax credit is going away in 2022!” Yup, that’s true. And we hear people say subsidies are the only reason solar makes sense.

So just for fun, let’s try it one more time without the tax credit:

$16,660 / $1296 = 12.8 years

We’ve gone from 5.4 years to 12.8 years by hiring an installer and skipping the tax credit, and we’re still paying off the cost halfway through the life of the system.

Solar costs a fair bit of money up front, but no matter how you slice it, grid-tied solar can pay for itself long before the equipment wears out. The more expensive your power rates are, the quicker the payback period and ROI.

5. Leasing

Solar power is a sound investment…if you own your system.

When you lease your system from a third party through a Power Purchasing Agreement (PPA), the value of that investment pretty much vanishes.

We can think of a few reasons why leasing is a bad deal.

The first thing to understand is the lender owns the system, which means they’re eligible to claim all the incentives. You won’t see a penny from the 30% federal tax credit or any local rebates.

After you’ve been squeezed out of the incentives, you’ll also pay a premium rate to lease the panels, which includes interest. In all, you might find you paid twice as much to lease the system as it would cost to finance and own the system yourself.

Leasing also makes it more challenging to sell your home. You have to transfer the lease to the buyer upon sale. Or, you can pay off the remainder of the lease balance and add that amount to your asking price. Both options limit the pool of potential buyers for your home.

We explain more about why we think leasing is a bad idea in our article: Should you Buy, Lease or Loan?

6. Not planning ahead

I brought up the fact that most panels are warrantied for 25 years. That’s a long time to go without any big changes in your life.

When people start planning their system, everyone thinks about what they need right now. Not as many people think about how their needs will change in the future.

What happens when you have kids, build a new workshop, or buy an electric car that needs charging? You’ll start consuming more energy. So we always tell people to look to the future when you start planning your system.

Some things to think about:

Do you have space to expand the installation if necessary? For example, say your system takes up your whole roof. What happens when you want to add panels later but have nowhere to put them?

Is your system designed to be expandable? People often think, “hey, I’ll just add more panels!” without realizing the other parts of the system, like the inverter, need to be sized to match. Central inverters have a limit to the number of panels they can support, so it’s often not as simple as “just adding panels.”

Micro-inverters are a great option to facilitate expansion for grid-tied systems. They work on a one-to-one basis: each panel is paired with its own micro-inverter. When you want to add on, just pair another inverter / panel pairing and mount them onto your array.

For off-grid properties, you should also think carefully about battery sizing. Depending on the battery type and age, it might not be possible to expand your existing battery bank.

Lithium battery banks can be expanded, but lead-acid batteries have limited options for increasing storage capacity.

The reason? When you add new lead-acid batteries to an old bank, the new batteries absorb the characteristics of the old ones. The new batteries are essentially being aged prematurely.

Lithium batteries are the exception. They have an integrated circuit controlling the charge parameters. The old batteries charge independently from the new ones, so you don’t run into the same issue.

7. Overpaying for installation

When you start to think about going solar, the first option that comes to mind is a turnkey installation from a national provider like Tesla, Vivint, Sunrun, or SunPower.

They offer an all-in-one solution to design your system, source your parts and install it for you. You can’t beat the convenience, but you also pay a premium for the catered experience.

Turnkey installers charge you anywhere from 100-200% of the cost of equipment to install your system. For a system worth $10,000 in equipment, they may charge another $20,000 to install it.

Big solar installers need to charge this premium to cover advertising, office rent, insurance, labor, and other expenses required to run their business on a national scale.

What many people don’t realize is that you can buy packaged solar systems from a wholesale distributor, then build it DIY-style or bring on a local contractor to help with part of the installation.

Working with a local contractor can save you a lot of money if you are willing to organize the project and take on some of the easy tasks. To help you find a local contractor to guide you through your project, we wrote an article about how to find a solar installer you can trust.

If you do choose to take on the project yourself, we also recommend fielding quotes from multiple installers before you choose the one you’re comfortable with. Contractors charge quite a broad range of rates, depending on their specialty as well as the complexity of the project.

Even a rate difference of 25 cents per watt can change the bid by a couple thousand dollars. It’s smart to use a service like Solar Power Rocks to compare quotes from local installers and make sure you’re getting a fair bid.

8. Building a Frankenstein system

Finally, let’s talk about the phone call our system designers dread:

“I have an inverter from eBay and some panels I bought a few years back, can you help me build the rest of my system?”

A fair number of people hold out for great deals and acquire parts slowly over time, until they’re ready to slap all the parts together like some kind of solar-powered Frankenstein’s monster.

But just like with cars or computers, it’s not enough to have parts. You have to have the right parts that are compatible with each other.

Otherwise, you get…

  • inverters that are undersized for your panel output
  • panels that are different sizes and don’t fit together properly on the mount
  • components that don’t wire together because they have different connectors
  • a power center missing essential components like circuit breakers/disconnects, remote control, or monitoring hardware
  • a box of hodgepodge components that no one is willing to support because it was purchased from all over the Internet
  • …and countless other headaches

There’s a lot that can go wrong, but the bottom line is piecemeal systems like these can quickly turn into a disaster. Unless you start with a plan and stick to it, there’s no guarantee the parts you buy will ever work together.

How to Avoid These Costly Solar Mistakes

You might notice that you can’t actually buy a complete system from our website cart. We require that people get in touch for a design consultation first.

Why do we do it this way? Even though we don’t install equipment, we’re still responsible for designing your system properly. If we sold systems with incompatible parts, we’d get a bad reputation in a hurry.

Instead, we run the math on system sizing, plan for inefficiencies, check voltage requirements, provide wiring diagrams, and do whatever else it takes to make sure the system you build is going to work.

For off-grid systems, we even assemble pre-wired power centers in our warehouse so you don’t have to worry about piecing the components together.

Our advice: do as much research as you can to account for all possible variables. But before you pull the trigger on that big investment, run that design by a solar designer first. An experienced set of eyes could help you catch some potentially costly mistakes before it’s too late.

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Why Are Solar Panels So Expensive?

Why Are Solar Panels So Expensive?

Why Are Solar Panels So Expensive?

Large solar installers mark up their quotes to 2-3x the cost of equipment, turning a $10,000 system into a $30,000 project. You can save money by hiring a local contractor for much less (or even installing it yourself), turning your system into a sound long-term investment.

Over the long term, solar energy is the cheapest way to power your property. But it requires a significant up-front investment that slowly pays back over time.

Everyone loves the idea of saving money on energy bills. But when someone puts a quote in your hands for a system that costs more than a new car, you might start to have your doubts…

“Seriously, why are solar panels so expensive?”

We get this question all the time. Here’s our explanation:

1. Huge Markup on Turnkey Installations

Did you get a quote from a full-service solar company that installs their own equipment? If so, they’re probably marking up installation costs like crazy – as much as double the cost of materials. You can save a good chunk of money by installing it yourself or hiring an independent contractor for less.

2. 30% Federal Tax Credit

You get a 30% federal tax credit for going solar. Just know that whatever you pay, you’ll deduct 30% of the cost of your system and installation from your taxes. (Heads up; the tax credit is being phased out by 2022.)

3. Solar is an Investment

The initial cost of solar is high, but the money you save on electric bills pays for the system over time. The amount of time it takes you to break even is known as the payback period.

This is a significant concept for anyone trying to understand why solar is a smart investment. Watch this video to learn how to calculate payback period on your system:

4. It’s Fine to Start Small

You can always start small and cover part of your energy needs, then expand as your budget allows.

It’s hard to give a conclusive answer, since this is such an open-ended question. But we hear it most often from people who have quotes out with a turnkey installer.

A system that costs about $10,000 in materials, like this 6.6kW grid-tied system, might be marked up to $30,000 after installation costs from a turnkey provider.

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Which explains why sticker shock is a common phenomenon in this industry.

So here’s our advice: the best way to save money on solar is to install it yourself, or hire an independent contractor to complete the installation at a fraction of what a turnkey provider would charge you.

If the up-front cost is still a concern, the next solution would be to scale back to a more modest system design and then expand on it as your budget allows.

Don’t Overpay for Installation

Most of the time when someone asks us why solar panels cost so much, they’re working from a quote from a turnkey installer (a company that offers an all-in-one solution to source the equipment and perform the installation).

Here’s the trick: the cost of equipment is pretty much the same wherever you go. The markup is in the installation.

Large installers have overhead costs. They have to cover labor, pay rent on their office, maintain a fleet of service vehicles, supply equipment, take out insurance, and so on…

All those operating costs get rolled into the charge of installation.

And the markup is obscene.

A typical installation might take a team of 3 laborers a full 8-hour day to complete. At $25/hr, that’s $600 in total labor costs. Add a bit more for tools and overhead, and the installer might spend about $1000 to send a crew to complete the job.

And yet…turnkey installers charge 1-2 times the cost of equipment to install it. If your equipment costs $10k, your final bill may come out to $20-30k once everything is bundled together.

Uh huh. You can see why we’re such strong advocates for DIY solar.

If you’re holding a quote from a turnkey installer, we strongly recommend you explore DIY as an option. Installing a solar system can seem scary, but it’s a lot easier than it looks.

We’ve helped thousands of people through the DIY installation process – take a look at the customer galleries in our Install of the Month feature for inspiration.

Don’t feel comfortable installing your own solar system? There’s a nice middle ground between DIY and turnkey: buy the system direct, then hire an independent contractor to install it.

Independent contractors tend to charge way less for installation. They should charge you 75 cents to a dollar per watt, which means you’d pay $5-6k to install the same system we used as an example above. You can see the value comparison of all three options in the chart below.

This is not to say that we fault turnkey installers for what they do. If you have a family or a demanding job, time is likely your most valuable resource. A turnkey solution is absolutely worth it if you can afford it and don’t have time to design your system yourself.

Just know you’re paying a premium for them to install the system, and that premium is awfully steep.

30% Federal Tax Credit Makes Solar More Affordable

If you live in the United States and choose to go solar, your system is eligible for a federal tax credit.

Today, that credit is 30% of your cost to go solar (which includes the cost of installation and equipment). However, it will shrink over time to 26% in 2020 and 22% in 2021, disappearing completely by 2022.

The tax credit is a reduction of the income tax you owe. For example, if you owe $3,000 in taxes but received a $3,000 tax credit on a $10,000 system, your tax liability would be $0.

If solar seems too expensive, keep in mind that 30% of your system cost will be refunded when tax season comes. However, that benefit will be phased out over the next few years. So if you want to claim the extra kickback on your taxes, you’ll have to do so sooner rather than later.

Read more: The Federal Solar Tax Credit, Explained in Plain English

Understanding Payback Period

Even if you skip the installer, you’ll still spend a good amount of money on the system itself. That number can be a little bit scary without any context.

It’s important to think of solar as an investment with a payback period.

Solar saves you money in the long run by reducing or eliminating electric bills. Over time, the money you save on electricity adds up.

Your payback period is the amount of time it takes for your energy savings to pay off the up-front cost of the system. (Other factors, like tax incentives, also speed up your payback period.)

The formula for payback period is:

System Price ÷ Value of Electricity ÷ Annual Usage = Payback period (years)

(This is a simplified formula. It doesn’t take into account certain factors like energy cost inflation, which increases costs by about 3% per year, or the scheduled replacement of smaller parts, like the inverter.)

The system may be pricey up front, but it will provide more than enough energy to pay for itself. For example, panels are warrantied for 25 years, but our sample 6.6kW system may pay for itself after about 8 years of typical use. The final 17 years of ownership yields profit off your investment.

Learn more about how to calculate payback period and return on investment for your solar system.

Start Small To Trim The Cost Of Solar

You don’t have to offset 100% of your energy costs if your budget doesn’t allow for it. It’s always possible to start with a modest system and then expand later.

You can start as small as one solar panel and a single micro-inverter. Solar panels and micro-inverters are a 1-to-1 system, meaning each panel is connected to its own micro-inverter.

See it: Enphase IQ7+ micro-inverters

This configuration can be expanded indefinitely. We build modest systems like this all the time for people who want to offset a small portion of their energy, then add to it over time as budget allows.

If you want to take this approach, be sure to mention your expansion plans to your system designer / sales tech. Not all inverters and panels are compatible. Start with a long-term plan in mind and plan appropriately.

Conclusion

Solar can be expensive in the short term, but the incentives will save you plenty of money over the life of the warranty. And the return on investment improves dramatically if you skip the turnkey provider and install it yourself – or at least hire an independent contractor to do it for you.

Trying to figure out whether solar is right for you? Take a look at our guide to getting started with solar. It’s tailored for people who are just starting to research the solar energy landscape.

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60-Cell vs. 72-Cell Solar Panels: Which One’s Best?

60-Cell vs. 72-Cell Solar Panels: Which One’s Best?

What’s the difference between 60-cell and 72-cell solar panels?

The summary: 72-cells are about a foot taller, and they cost a bit less to mount in large-scale applications. However, both 60-cell and 72-cell panels use the same cell technology, and they work out to the same price from a cost-per-watt perspective. Either option can be used in residential installs—the ideal choice depends on your array layout and space constraints where you will mount your system.

The difference between 60-cell and 72-cell solar panels is simple: 72-cell panels are 12” taller and contain 12 more solar cells.

If that seems too obvious, I promise you: that’s pretty much all there is to it.

But there’s a reason we’re devoting article space to such a simple topic.

I was designing a system for a residential customer last week when she asked me, “I can’t use 72-cell panels at my house, right?”

For some reason, she had the impression that 72-cell panels are only for commercial use. Which couldn’t be further from the truth.

After some back-and-forth, I realized she had read a few articles online to help her decide which size panel to use. Turns out one of them had claimed 72-cell panels were only for commercial use, and require special hardware and extra labor to install.

None of which is remotely true.

So I wrote this article to help set the record straight.

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Dispelling myths about 72-cell panels

The big myth floating around the Internet is that 72-cell panels are not made for residential use.

That’s simply not true. In fact, roughly half of all residential systems we design at Wholesale Solar have 72-cell panels in them.

It’s true that commercial applications lean toward 72-cell panels. They require less racking rail, fewer electrical connections, and fewer clamps to secure in place. That means 72-cell panels are cheaper to install on a large scale.

But there’s no reason residential customers can’t get the same benefits from a 72-cell solar panel.

Are 72-cell panels harder to install?

I’ve also read claims that 72-cell panels are harder to install. This concern is somewhat overblown.

Yes, 72-cell solar panels are a bit bigger and heavier. But it typically takes two people to move and set a solar panel in place, regardless of size. Since there’s usually 2-3 people on an installation crew, finding a way to move the panels isn’t much of an issue. Any crew worth their salt will be able to handle the larger panel size.

Though the work may be a bit more physically taxing, the install tends to take less time overall. Since the system contains less panels, you’ll spend less time making electrical connections and fastening clamps.

You don’t need to buy stronger racking to support larger panels, either. Solar panel racking is universal.  The size of the panel you choose will not limit your mounting options.

While it is possible to buy a thicker rail, we only recommend that option to provide a stronger foundation in areas threatened by hurricanes, heavy snow and other extreme weather conditions.

You don’t need to spend more on “heavy duty racking” just to support heavier 72-cell panels (which is a very common misconception). The standard options will work just fine.

In fact, in most cases 72-cell panels will actually save you money on racking. Modules are mounted with rails running across the width of the panel. Because 72-cell panels have the same width as 60-cell panels (about 40” wide), they require the same amount of racking material to mount more solar power.

When to choose 60 cell vs. 72 cell panels

If the only difference between 60- and 72-cell solar panels is their size, how do you choose one over the other?

The ultimate decider is panel value, measured in cost-per-watt.

Divide the price of the panel by the rated panel output (typically 250W-375W per panel). This will give you a baseline to compare panel value, regardless of size.

Our advice is to go for the best cost-per-watt option that fits the space where you will install your system.

Here’s an example. If your mounting space is 35’ wide and 10’ tall, you can only fit a row of 10 panels. You can install more power by using 72-cell panels because you have enough space to accommodate the taller panel size.

Standard Solar Panel Sizes:

60-cell panels: 39″ x 65″

72-cell panels: 39″ x 77″

On the other hand, if your mounting space is 35’ wide and only 6’ tall, you’d have to use 60-cell panels.

Exceptions to the rule

There’s one scenario where 72-cell solar panels are less common. This exception comes when you build a system around micro-inverters.

Micro-inverters work on a 1-to-1 system, where each inverter is hooked up to an individual panel. The benefit of this type of system is that it is modular: if one part stops working, it doesn’t affect the rest of your array. This makes it easy to repair and expand your system.

Micro-inverters have a cap on how much AC wattage they can handle. For example, Enphase micro-inverters can only process 290-315 watts from the panels (depending on the model). If a 72-cell solar panel produces 350 watts, that’s more than the micro-inverter can process.

Your panels would still work, but you’re simply wasting electricity – and by extension, wasting money. You’d essentially pay a higher price for your panels without getting the benefit of additional output.

The key takeaway is that micro-inverters have limited capacity, and the panel needs to be sized to match. There are some 300 watt 72-cell panels that would be appropriate to pair with a micro-inverter. But this is a rare case, and most of the time it just doesn’t make sense to go this route.

Mixing and matching 60-cell and 72-cell solar panels

It’s possible to mix and match 60-cell and 72-cell panels if necessary.

For example, let’s say you have a triangle-shaped roof with less space near the top. You might install a row of 72-cell panels in the middle of the roof. Then you can add smaller 60-cell panels on the sides / top to hit your target system size.

It’s possible to mix panel sizes like this to fit the usable space on your roof. But keep in mind that different components run on different voltages, and you’ll need to pair each panel with a compatible inverter.

If you build a system like this, it’s worthwhile to spend some time with an experienced design consultant to make sure you aren’t wasting power or damaging your equipment.

Need help planning your system? Connect with a solar designer to get started.

Our advice: go with what fits

In short: buy the panels that fit your space. Don’t worry about individual panel size or cell count. Overall system cost is what really matters.

All other things being equal, go with the panels that give you the best cost-per-watt, regardless of size. The ultimate goal is to cover your energy usage as efficiently as possible.

And remember: don’t believe everything you read on the internet . . . except us, of course.

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How Long Do Solar Panels Last?

How Long Do Solar Panels Last?

How Long Do Solar Panels Last?

25 years (or longer). This is the industry standard warranty from Tier 1 manufacturers. In reality, solar panels can last quite a bit longer than that: the warranty typically guarantees panels will work above 80% of their rated efficiency after 25 years. A study by NREL shows that the majority of panels still produce energy after 25 years, albeit at slightly reduced output.

Investing in solar energy is a long-term commitment. The up-front cost can be hefty, but the investment pays for itself over time through tax incentives and monthly savings on your energy bill.

Investing in solar energy is a long-term commitment. The up-front cost can be hefty, but the investment pays for itself over time through tax incentives and monthly savings on your energy bill.

For people trying to calculate the value of their investment over time, one of the first questions we receive is: “how long do solar panels last?”

Panels are typically warrantied for 25 years, so you can expect them to last at least that long. But in reality, studies have shown panels continue to operate at reduced efficiency long after the warranty expires.

Let’s do a little math: solar panels suffer a 0.5% to 1% efficiency loss every year. At the end of a 25-year warranty, your panels should still produce energy at 75-87.5% of their rated output.

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According to an NREL study [PDF], nearly 80% of solar panels last longer than their warranty.

Standard Solar Panel Warranties

The typical warranty for solar panels is 25 years. During this period, manufacturers guarantee that panels will operate at or near peak efficiency. Most panels are covered to produce at least 80% of their rated output over the life of the warranty.

For example, a 300 watt panel should produce at least 240 watts (80% of its rated output) at the end of a 25-year warranty.

Some companies offer 30 year warranties or promise 85% efficiency, but these are outliers. The standard is 25 years at 80% efficiency.

Solar panels also have a separate workmanship warranty, to cover any manufacturing defects, such as a faulty junction box or frame. Typically the workmanship warranty is 10 years, with some manufacturers offering a 20 year workmanship warranty.

So…How Long Do Solar Panels Last, Really?

So what happens after the 25 year mark is up? Panels that output at 80% efficiency still work, right?

There aren’t any tricks here – the answer is yes! If your panels still output energy, there’s no real reason to replace them.

Panels frequently produce energy long after their warranty expires. According to a 2012 study by the National Renewable Energy Laboratory [PDF], the average degradation rate for panels is between 0.5% to 0.8% per year.

What is degradation rate? 

Degradation rate is the rate at which solar panels lose efficiency over time. A panel with a degradation rate of 1% per year will be 10% less efficient after 10 years.

In fact, 78% of systems tested had a degradation rate of less than 1% per year. That means that after 25 years of use, about 4 out of 5 solar panels still operate at 75% efficiency or better.

At this point, it’s fair to estimate your solar panels will still produce energy in some capacity, long after the warranty is up. For a great example, check out this 30-year old panel featured in Green Building Advisor. When the owner pulled it off his roof and ran it through tests, it still performed better than the factory specifications.

Here’s What That Means For Your ROI

That’s good news if your main concern is making a positive return on investment (ROI) on your system.

Most online calculators that estimate solar savings base the calculation on a 25-year warranty period. Any extra mileage you get from your panels is an added bonus.

Is solar a smart investment? Use our Solar ROI Calculator to estimate your payback period – how long it will take for tax incentives and energy bill savings to pay for the upfront cost of your system.

We can’t guarantee panels will outlive their warranty (that’s the point of a warranty, after all). But in reality, most panels keep producing at reduced capacity long after their lifespan should be up. This is because solar panels don’t have any moving parts, and therefore tend to be extremely reliable.

If your solar system is paid off and your panels keep producing, your ROI will stretch far beyond the estimate provided to you by any online calculators (including ours).

Want to give your panels the best chance to outlast their warranty? A little effort goes a long way to keeping your system running smoothly.

How to Extend the Life of Your System

Keep in mind solar panels are likely going to be the most resilient part of your solar system. You’ll still need to maintain or replace inverters and batteries to keep everything running.

Inverters have a shorter lifespan than your panels, and will need to be replaced regardless of what type of system you have. If you’re off-grid (or grid-tied with a battery backup), battery maintenance and replacement will add extra costs for you down the line.

The best way to protect your investment is to inspect the system thoroughly upon installation. Check your racking to make sure the panels and wiring are secure. The biggest threats to the life of your panels are physical damage or electrical failure due to subpar installation.

Replace Inverters After 10 Years

Most grid-tie inverters have a 10-year warranty, and many manufacturers give the option to upgrade to 20 to 25-year warranty coverage.

Warranty extensions for inverters are a smart investment. It’s safe to assume you’ll replace your inverter at least once before the warranty on your panels is up. If your inverter fails 15 years down the road, it will likely be replaced with a newer and better model.

Check with the inverter manufacturer about their extended warranty options and policies. Extended warranties are purchased directly from the manufacturer. SMA and SolarEdge currently both offer modestly priced inverter warranty extensions.

Off-grid inverters have shorter warranties. They range from 1-5 years, with extensions up to 10 years available for a few models.

When you purchase an extended warranty, look over the little details carefully. Some cover the cost of parts, but not the cost of labor.

This might not bother you if you plan on swapping out the inverter yourself. But you may pay out of pocket if you need a contractor to replace the inverter down the line.

Maintain and Replace Batteries

Battery maintenance and replacement is one of the main expenses associated with off-grid systems. Even lower-upkeep battery types, like lithium and sealed lead acid batteries, still need to be inspected a few times per year.

Most batteries come with a warranty of 3-10 years, depending on the brand. But if you don’t care for your batteries properly, they can fail within the first year of ownership.

For example, lead acid batteries need to be fully recharged after being used, and they will be permanently damaged if they sit for extended periods without being recharged.

Most high-quality off-grid deep cycle batteries will last between 5-15 years, depending on the battery type and how they are used and maintained. You can extend the life of your batteries by caring for them properly and by ensuring they’re installed correctly.

The best thing you can do is design your system properly from the start. Account for the proper amount of battery capacity, solar power, and inverter output up front to keep everything working properly.

Account For Efficiency Loss

Here’s the main takeaway: it’s highly unlikely that you will need to replace your solar panels before the warranty is up. Solar panels last a long time – longer than the other parts of the system.

However, the efficiency loss may mean your system no longer covers your energy needs. If your system output shrinks (or your energy usage grows), it’s possible to add capacity to your system, assuming the old and new parts are compatible. For more on that process, see our guide to expanding your solar energy system.

Download our free solar panel buying guide!