Are solar panels worth the cost for homes?

Are solar panels worth the cost for homes?

I’d say absolutely (although there could be cases where it wouldn’t make sense).

My Solar Panel Installation Benefit

Now, I care about the environment, but like most people putting solar panels on, I am not part of the top 1% (or 2% or 3%…). First and foremost, I needed to make sure it made economic sense for me.

I considered the installation of my solar panels with an analysis of the payback to me.

  • With no credits of any type (and assuming electric prices don’t go up), it was a 24 year payback (lifetime of the panels is guaranteed for 25 years and estimated lifetime is 50 years). Not great for me, but with the side benefit of helping the environment.
  • With immediate credits, payback was 5.5 years
  • With all current and future (period of 10 years) credits figured in, my payback was 1.86 years.
    Each year after the payback point saves me $2500 per year (plus any amount the electric costs go up) and improves my portion of reducing global warming significantly. The solar panels may also increase the value of your home when you sell it, but that number is harder to quantify.

If I had financed the entire solar panel installation with my home mortgage, the additional cost would have easily been covered by the average solar savings each month ($200+ per month). This shows that anyone can afford solar panels.

See also my post showing the items I considered in calculating my solar value.
Are solar panels worth it in the long term?

US Panels ARE cheaper

My panels (which are purchased, not leased - DON’T LEASE it’s a bad idea - It could make it difficult selling your home, and homeowners insurance may not cover leased panels) are made in the US. I chose them because even though more expensive initially, they produce more power and degrade less making lifetime cost per watt to be less than the cheaper overseas panels. So my US panels were really cheaper than overseas panels when I installed them. It just had a higher initial cost.

In my installation analysis, I considered the cost of money. Money earns interest. Money I borrow costs interest. Different types of solar panels degrade in power each year at different rates. Solar panel lifetimes can vary. Price of electricity over time changes (normally rises). Tax credits, rebates and energy cost savings all have to be figured in. Then there is the hard-to-measure saving from summer cooling (Solar Panels on roof shield a house from the sun’s heat saving cooling in the summer vs the winter’s heat savings which are smaller).

As an engineer, this is relatively easy for me (compared to most people), but the final numbers saved me money, employed many people, and saved a piece of the world.

Microinverters vs String Inverters vs Power Optimizers

Microinverters, String Inverters and Power Optimizers all convert DC solar panel power to AC. I recommend microinverters (or AC panels which are just panels with microinverters built on to them).

MicroInverters have the advantage of working even when individual panels are shaded or failed. These are the easiest for the homeowner (but worst for the solar company) to maintain. If the solar company goes out of business and a panel or microinverter goes bad, the rest of the array will still be working.

String Inverters will lose power of a string of panels if one of them is shaded or failed.

Power optimizers have advantages of a little bit better power conversion over microinverters, but still have a central string inverter that can fail.

Lifetime of Solar

Solar Panels and microinverters are typically warranted for 25 years. Central (string) inverters have a typical 10 year warranty (consider an insurance policy for them). Lifetime of solar panels are more on the order 40 years or more.

Dealing with Bad Solar Sales People

Sadly, all the solar installation companies that I checked out (it was over 9), have terrible salespeople. Not one of them could really figure out my true costs and paybacks, nor understood the advantages and disadvantages of various panel types and systems they sold. This means you have to stick to your own research (currently, I hope this changes).

Roof Information

Make sure your roof is relatively new. If you need to replace your roof after the Solar Panels are installed, there will be a lot of expense to remove and reinstall the panels. So if the roof is old, change it before the solar panel installation. Also, I highly suggest using a full, quality, water and ice shield under the tiles for the entire roof, not just the at the edges of the roof. This will minimize any possibilities of leaking during installation and in the far future. For me, it was an additional $400 for a Grace Water and Ice Shield.

Reasons people have against Solar

  • They are ugly - Can’t argue on this point, except that we know that beauty is in the eye of the beholder. If the house is oriented in the correct way, they can be made invisible from the street.
  • The home owners associations do not allow solar panels and/or getting permission is impossible - This shouldn’t be and in some places is illegal to put these restrictions. Solar panels and Satellite dishes often fall under similar rules. But HOA’s are designed to allow control to the community and skirt some laws that might allow them otherwise. See Can I Install Home Solar Panels with an HOA in 2019? | EnergySage
  • The large up front investment is difficult to finance unless it is part of the initial construction of the house. - some states support solar with supported loans. In most cases, the payback in electrical savings will pay more than the monthly financing cost of a loan for the solar itself.
  • The average break-even time is longer than the average house ownership time. - That is true in many cases, but payback can be anywhere from 0 to 25 years, all depending upon federal and state credits, rebates, SREC credits, electric rates, and if you have a hybrid or electric car. So YMMV. But if you get at least all your money back when the house is sold, it has the side benefit of helping the environment.
  • The original owner rarely gets back his investment - My payback was less than 3 years but without any credits, rebates etc, would have maxed at 24 years. If you can get back at least your depreciated solar installation cost (total cost less what you have saved) when you sell your home, then at a minimum, you have been green for that period.
  • A solar installation does not make it easier to sell your house - that may be true in some places, but not in most IMHO. Unfortunately the data on this is not well researched and may be area specific. You can always check with a realtor or two for opinions.
  • I don’t want to be stuck with operating a system I don’t understand and am afraid that it will be expensive to fix if they do something wrong - Totally agree, which is why microinverters are better, because they don’t have a single-point of failure and will keep operating in a reduced output without any repair at all. And there is nothing you really need to do except occasionally cleaning off dirt or dust with a hose in areas that experience that.
  • I have to work out with my utility company to accept the power I generate - In most places you are grid-tied and that is all normally done by the utility company. It is not a big deal.
  • If a storm ruins them, it is a horrible mess trying to collect insurance and repair the panels - I’ve never heard of this, but heck, insurance companies love to invent reasons not to pay off. But, if covered, they should pay for it (however, don’t lease panels).
  • The panels are a bit vulnerable - If installed by competent people, this should never be an issue.
  • I live in <fill in your location> and I don’t get enough Sun <fill in time period> - I live in Boston, with lots of cloudy days, and that has not been an issue. It mostly depends on the orientation of your home. Performing a site survey will ascertain what the yearly production will be. The most important is to figure out if it’s right for you. Go to PVWatts Calculator and calculate the power you will generate with specific panels you are thinking about. Calculate the numbers for each roof surface you would use and add the separate values together. Measure the angle of your roof using a phone app that measures the tilt angle of your phone. If you can’t get on the roof, just line up the phone with the plane of the roof from the ground.

... (View Full Article)

Share: