Get answers to the most common questions about solar energy.
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REBATES & TAX INCENTIVES
Q: What is the federal tax incentive for solar and how does it work?
A: There is a federal tax incentive called the Solar Investment Tax Credit (ITC). This tax credit allows homeowners and businesses to claim up to 30 percent of the price paid for installation. The tax credit is applicable to solar photovoltaic technologies (i.e. solar electric systems), solar storage, and solar heating and cooling systems. It is not applicable for solar hot water systems used for swimming pools. Currently the federal tax credit is available until December 31, 2019 when it begins to phase out according to the schedule below:
- 2016 – 30%
- 2017 – 30%
- 2018 – 30%
- 2019 – 30%
- 2020 – 26%
- 2021 – 22%
- 2022 – 10% (commercial only)
More information can be found at http://calssa.org/itc/.
Q: Are there incentives for solar & storage consumers at the state and local level?
A: California has state and local incentives that vary by municipality, utility district, and technology. There are no longer rebates for solar electric systems (i.e. solar photovoltaic or PV systems) for Pacific Gas and Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E) customers. Customers of municipal utility districts such as Los Angeles Department of Water and Power (LADWP) or Sacramento Metropolitan Utility District (SMUD) should contact their local utility to inquire as to whether rebates for solar electric systems are still available. Additional information can be found at http://www.dsireusa.org/.
The state just extended the rebate for storage batteries, which can reduce the upfront cost by one-third to a half. Read more.
Rebates for solar hot water systems are available throughout the state. For more information, go to http://www.gosolarcalifornia.ca.gov/solarwater/index.php.
SOLAR & STORAGE INSTALLATION
Q: How much does a solar system cost?
A: The cost varies depending on your home and the size of the solar system you are looking to install. An average price of a typical residential solar system is around $25,000 before rebates or incentives but the best advice is to contact qualified solar installers in your area to obtain this information. Some solar leases offer options for little or no money down. However there are factors that influence the cost of solar which include:
- Unshaded roof space
- Your current energy usage
- Net metering policy in your neighborhood
- Local rebates and/or state or federal tax credits
Q: I already have solar. How much do storage batteries cost?
A: As with solar, the cost varies depending on the above factors. The upfront cost of a battery plus installation for an average sized residential home can be $10,000 to $15,000, but the state rebate and the federal tax credit can bring that cost down to between $6,000 and $12,000.
Q: What is the difference between a solar lease and a solar power-purchase agreement?
A: Solar Lease: A solar customer will sign a contract with a solar company installer and pay for the system over a period of time – usually years or decades rather than paying for the power produced. You may pay either no up-front costs or only a portion of the cost and you may purchase the system before the end of the lease. Under a lease, the installer retains the federal tax credit and other incentives.
Solar Power-Purchase Agreement (PPA): A solar customer has a developer build the solar system on the property at no cost. The developer sells the power generated by the solar system to the customer at a fixed rate that is usually lower than what the utility charges for energy. At the end of the contract, customers have the option of extending the contract or buying the system from the developer. Under a power purchase agreement, the developer retains the federal tax credit and other incentives.
Q: What should you know about utility and inspection sign-off
A: A new solar system must be inspected and approved by the local permitting agency and usually by the utility with which you entered into an interconnection agreement. Inspectors may require your provider to fix certain issues that they may find. You must have a copy of the building permit to prove the final inspection sign-off to qualify for most solar rebate programs as well as to connect the system to the utility grid.
Q: What happens if want to sell your home and move?
A: The answer depends on whether you own or lease your solar system.
You do not own your solar system (lease or PPA):
- Your buyer may need to meet the solar leasing company’s credit requirements and be willing to assume the lease agreement and payments.
- You may be able to move the solar panels to your new home particularly if you are moving to a home within the same utility area. However this would most likely be at your expense.
- You may be able pay off the lease and transfer the solar rights to the new homebuyer.
- You may be able to buy-out your lease from the provider. This could result in additional value to your home.
You own your solar system:
- In general, solar increases the value of your home. Be sure your system is in good shape and it should be beneficial when you sell your home.
SOLAR ENERGY SYSTEM FUNCTIONALITY
Q: Are solar panels impacted when it’s raining or cloudy?
A:Solar panels will work when sunlight is partially blocked by the clouds. Rain is actually helpful as it will keep your panels operating efficiently as it will wash away dirt. Furthermore, in net metering areas, energy generated by panels during the daylight will offset energy not only at night, but on cloudy days, when your panels are not operating at full capacity.
Q: What is the best way to monitor a rooftop home solar system?
A: Home solar systems are generally designed to automatically operate with some inspection and cleaning maintenance. However there are options to obtain a monitoring system to view the system’s production and savings.
Q: What types of issues can reduce the energy output from a rooftop solar system?
A: Common issues that could reduce energy output include:
- Not regularly cleaning your modules, which could result in a loss of up to five percent in some regions.
- Checking to be sure that shade is not encroaching from growing trees.
- Annual checks for internal problems, such as module or cell damage. Key tell-tale signs include cracks in the glass, brown/burn spots on the modules, burnt solder joints on the cell grid, and signs of delamination and cell damage.
- IMPORTANT: Do not attempt to repair such problems yourself. But check your warranty terms and get a qualified professional to check and do the necessary repairs.
Q: Will solar technology work if the power goes out?
A: No. The solar system will shut off automatically in order to protect maintenance crews that are working to fix the power. If you are in area that regularly experiences power outages, it may be worth considering contacting your installer to ask about adding batteries or other products that will provide at least basic power during such outages.