Switching to solar energy generates benefits now and later, including when you resell or refinance your home. The idea of installing solar panels, though, can feel equal parts exciting and scary. We get it! But with the Inflation Reduction Act’s (IRA) recent extension of the 30% Solar Investment Tax Credit, this might be the right time to explore your solar energy options.
How should you start the process? We asked John Hrudicka, owner and CEO of ReNew Solar Solutions, a Pearl Network solar contractor based in Nashville, Tennessee.
“Solar is a huge investment,” says Hrudicka. “It’s so important to feel confident in your decision. ”He advises homeowners to take three general steps to arrive at that point of confidence:
Educate yourself about solar, generally and in your specific location
Talk to your utility company
Compare and contrast multiple contractors.
The internet is overflowing with information on residential solar power. To make a complex subject a little simpler, we’ll give you some of the basics right here.
How do residential solar power systems and energy storage work?
Each photovoltaic (PV) cell in a solar panel absorbs sunlight and converts it into direct-current (DC) electrical energy. That DC electricity flows to a device called an “inverter” that converts it into the alternating-current (AC) electricity your home uses. From there, the system is connected to your home’s wiring and (in most cases) to the electrical grid. Want more nitty-gritty-techie details? Check out this resource from the Department of Energy (DOE).
Energy storage comes in the form of batteries connected to your solar system. “The majority of energy consumption at home happens outside of core sun hours,” says Hrudicka. “So you either need to draw power from the electrical grid or you store excess solar energy — energy that you didn’t need at the time it was produced — in a battery.”
Is my home a good candidate for solar power?
The best candidates have roofs facing south and pitched at a roughly 25-degree angle, give or take a little. They’re also not shaded, especially on the southern side. To help you determine your home’s solar potential, Hrudicka advises downloading the SunSeeker app to track your home’s sun exposure in different seasons. You can also check out DOE tools.
Do solar panels have to be installed on my home’s roof?
No, you have options! They can also be installed on a nearby shed, barn, or other outbuilding, as long as their roofs are structurally capable. Or you can choose ground-mounted panels that can be tilted and angled to maximize energy production.
How do I estimate energy cost savings and return on investment (ROI) of solar?
It can take 9-12 years to recoup installation costs, according to U.S. News. (Remember, the system should serve you 30 years or so.) Your location plays a role in your specific ROI. In areas where utility rates are high, the ROI is more straightforward. “However,” says Hrudicka, “take into account that your utility will likely continue to raise its rates over the decades you have this system in place.” That means your time to ROI could be cut shorter.
Your solar contractor can help you estimate how much time you’ll need to recoup the cost of installing solar. Pearl Network Contractors are equipped with The Pearl Solar Equity Calculator®, which makes the math clear. For example, in this sample Pearl Certification, the calculator predicts the total discount cash flow over time using certified contractor data, NREL software to calculate solar production numbers, and an API to Freddie Mac’s 30-year mortgage rate.
But wait, there’s more! You can further defray the cost by taking advantage of federal and state tax credits plus rebates from your utility. Under the Inflation Reduction Act, the federal tax credit for solar installation is 30% of the cost of installation if completed between 2022 and 2032. Your state tax divisions can provide information on state-level incentives. Many utility companies will also give you savings for installing solar (see Step 2 below).
Last, but certainly not least, solar adds to the value of your home. When the value of their solar energy systems and other high-performing assets are properly documented via a Pearl Certification (and the included Green and Energy Efficient Appraisal Addendum), homeowners receive on average a 5% premium on their home’s appraisal value. That in itself can go a long way toward making up the cost of installation.
Will solar power make me energy independent? Will I still be tied to the grid?
The specifics depend on your state’s policies for solar. Going solar, especially coupled with home energy storage, does help reduce reliance on your local utility. But while new, more energy-efficient construction can go 100% off-grid, most homes need to stay connected.
“We typically design solar energy systems to produce roughly 75% of your energy needs, based on your entire last year of energy bills,” says Hrudicka. “The grid seamlessly kicks in when you need it. If we designed for 100% — meeting the height of your consumption on the hottest and coldest days — you’d need to pay for a larger system, and then you’d be overproducing the rest of the year.”
Will I still be billed by my local power utility? Will the utility pay me to produce energy?
Again, it depends on your location, making it very important to read about your state’s specific policies. In Tennessee, for instance, homeowners need battery storage if they don’t want unused solar power to go to the grid, where it’s used — for free — by other homes. In other states, your excess solar goes to the grid, but utilities credit it back to you on your monthly bill using a process called “net metering.”
Now that we’ve bombarded you with information like photons on a solar panel, we’ll keep this step short.
After you read online what your utility has to say about solar, it’s worthwhile to talk with a real person.
“Ask to speak to the head of renewable energy or solar for the utility, if they have someone in that role,” says Hrudicka. “Ask broadly, ‘Tell me about the utility’s policies and incentives related to solar.’”
“It’s exciting to see your system installed. Equally important is the company that stands behind it,” says Hrudicka. “Talk to several contractors. Compare their answers to one another and to what you learned from your utility.”
Start with these questions:
Tell me about your process — how will you work with me?
Listen for transparency and low pressure. Hrudicka conducts his process in stages, with a phone call, a Zoom meeting, and finally a site assessment. “Some contractors send salespeople to your house immediately,” he says. “The process pressures you to make a quick decision.” Hrudicka also provides lots of data about the solar panels he plans to use, equipping homeowners to ask questions and do their own research if desired.
How will you determine how much power my solar system should produce?
“If the contractor doesn’t take an entire 12 months of your power bills and usage into account, run away!” says Hrudicka.
What are your crew’s credentials?
Third-party licensure and certification can give you more confidence in the quality of work. “It’s even more important for solar, plus battery storage, since the installation becomes more complex,” says Hrudicka. Look for master electrician licenses, certification by the North American Board of Certified Energy Practitioners® (NABCEP), and membership in Pearl Certification’s Contractor Network. Contractor membership in Pearl’s network means your solar installation will be certified by Pearl’s experts for quality and energy efficiency.
What is your warranty on the installation?
If the contractor’s warranty covers only a fraction of the solar system’s 30 or so years of life, watch out.
To ensure you have the most choice available for your solar needs, register for Pearl’s free Green Door app, then connect with vetted Pearl Network Solar Contractors. Only Pearl Network Contractors can access the Pearl Solar Equity Calculator, providing you with valuable data about your potential investment before you make your decision.
You’ve started the solar journey just by reading this post. It’s a good time to keep going, and we’ll be here to help at every step.
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