By: Roxana Papescu |: San Diego Union-Tribune
About a year ago, the California Public Utilities Commission revised the state's rules for installing solar panels on rooftops. In its December 2022 decision, the commission added incentives for customers to combine solar with batteries, but the new rules also reduce the net energy metering, or NEM, reimbursement rate.
According to price comparison tool EnergySage, new panels can require a large investment, averaging $2.8 per watt including installation. “For a 5 kilowatt-hour installation, this equates to approximately US$14,004 excluding benefits, although prices range from US$11,903 to US$16,105. After federal tax credits, average prices dropped by 30 percent," the site says.
NEM 2.0 is being phased out in April 2023, leaving the new NEM compensation rate (which solar customers receive when their rooftop systems produce more energy than they consume) as the only option for new solar installations.
Because the current export rate (compensation to solar panel owners for the excess electricity their panels export to the grid) is 75 percent lower under the new rules, the calculations for new installations have changed.
The reward will come later, but now it's important to add batteries, which increases the initial cost. Tax benefits reduce part of the profit. But other important incentives recently expired or are expected to expire later this year.
With all of this in mind, does adding solar make sense?
Many owners say no. In 2023, the number of solar installations will decrease dramatically.
"Data on the deployment of inter-grid communications shows that sales of solar energy have fallen by 66-83 percent compared to the same period last year since the release of NEM 3.0," the American magazine "PV" reported in December. "In addition, mass layoffs took place in the industry." The California Solar and Energy Storage Association, a clean energy trade group, says more than 17,000 solar jobs, or 22 percent of all solar jobs, will be lost by 2023.
But solar experts say adding new panels still makes sense in some cases.
Faced with this rapidly changing situation, the Union-Tribune turned to three experts:
Experts
Their responses, slightly edited for scope and scope, address consumer solar installations in the context of investor-owned utilities such as San Diego Gas \u0026 Electric.
new rules
TIME. With the new rules, will consumers be able to install solar panels now? If so, why?
Teresa. Under current billing standards, going solar alone won't make sense for most homeowners, as their return on investment, i.e. the savings on their bills, will be negligible. Battery technology is a plus. This resulted in greater cost savings. Energy can be stored in batteries until it is needed, when the level of availability is highest.
The number of variables and factors to consider when choosing the right solar and battery power system has grown exponentially. No more "How much electricity am I using?" but "When did I use it?" This should also be considered, as well as the question "What will my future electricity needs be?" Buy an electric car or, for example, install a heating and air conditioning system with a heat pump.
Hickey: Savings depends on an analysis of ROI, length of stay in the home, total cost of the system, payment method and necessary incentives to go solar. Can you afford the initial costs? Do you plan to live in the house for a long time? Most homeowners move after (on average) six years. To date, the estimated payback period for the construction of a new solar system is about seven years. Taking into account the increased costs of the backup system (battery) and the reduction of energy credits returned to SDG \u0026 E in the new system, the average payback period is estimated to increase to 10-12 years.
Many customers do not have the money to pay for a solar system up front. They then have to add the interest rate and cost of the loan to the total cost of purchasing the system, again widening the break-even point for financing.
The percentage of electricity used directly in the home can also affect long-term savings. San Diego has a low net enrollment rate. When you send excess solar power to the grid, you only get a fraction of its retail value back. But if you install solar panels, you can reduce grid usage at night and during cloudy weather, resulting in greater savings on electricity costs and a faster return on investment.
Del Chiara: Yes, for most consumers there is still a benefit to generating their own electricity with rooftop solar. Consumers will have to be more patient in waiting for the initial investment or be prepared to enter into a power purchase agreement with another installer, but savings can still be had by upgrading your home with solar panels. This is because with a rooftop solar power plant, you are guaranteed to generate electricity for the next 20-30 years.
If you sit down and do the math, most consumers will spend $60,000 or more on electric bills over the 20-year life of a solar system. So if you look at it in the long term, it is still a sound investment. And if you sell your home within those 20 years, the solar system will increase its resale value.
I should point out that if you opt for a power purchase agreement where your solar panels and storage systems are owned by another company, the upfront costs won't matter.
TIME. Are certain types of solar installations more suitable or profitable under the new regulations?
Del Chiara: The simple answer is that there is no standard consumer or profile of a good solar user. The key is having a south or west facing roof with no shade, or an object on which to place the ground array. The more electricity you use, the more you save with solar, but solar is suitable for all types of consumers. Despite this, the CPUC recently made solar energy for multi-meter properties such as apartments even worse than for single-meter properties such as single-family homes. Some apartments can still use solar energy and benefit from it, but unfortunately the commission makes this difficult. This applies to schools, farms, shopping centers and other multimeter users.
TIME. Is it better to size up initially or add more as your needs grow?
Teresa: In our experience, homeowners increase their electricity consumption after choosing solar. Because now they can afford to turn on the air conditioner in the summer, replace the heat pump or buy an electric car, since the cost of refueling a household car is only a small part of the cost of refueling a gasoline car. .
Del Chiara: It is best to predict the growth of electricity consumption and expand the system for the future. Consumers can meter with solar systems for up to 150 percent of the electricity they used in the previous 12 months. (150 percent is the regulatory requirement.) Although solar systems are modular, meaning components can be easily added like a Lego set, this leads to cost inefficiencies. If you upgrade, you may not have the right size inverter, which can cost $5,000 plus installation.
You can also add batteries later without any penalty, but sometimes this also requires a new inverter compatible with those batteries, which can lead to additional costs. So the short answer is you can always make changes, and with solar it's relatively easy to do so. But it's much more efficient in terms of time and money to have a good idea of what you want and build a suitable solar system from the start.
However, sometimes I see consumers put too much thought into their decisions, and this indecision leads to years of delay. Years when they could save hundreds of dollars every year.
Battery, storage, etc.
TIME. Can energy storage be abandoned or will it negate the benefits of increasing solar power?
Hickey. Storing excess solar energy in batteries, rather than selling it SDG \u0026 E at a low price, helps customers achieve a faster return on investment. When you store electricity in batteries and use it later, you save the full cost of energy for every kilowatt-hour.
Without batteries, if you sell the excess capacity at below (current) cost, you will only earn a few cents per kWh of electricity. The current policy pays about 75 percent less for excess solar energy than (the previous policy).
Teresa: Right now, the optimal way forward is solar and batteries. This is a larger initial investment that extends the payback period. However, it gives homeowners the same benefits in saving utility costs compared to today's solar systems. The batteries can perform additional functions, such as backup power during grid outages, and are helping to create a more sustainable California power system through innovative programs such as virtual power plants.
Under the old net metering compensation system, homeowners were locked out of their contracts for 20 years after the system was installed. Keep in mind, the CPUC and some members of the California Legislature have tried to limit or change these homeowner agreements. In the old system, most homeowners used batteries as a backup power source only when the power went out.
However, as virtual power plants become more common and stored battery energy becomes more valuable to the grid, customers using the aforementioned compensation systems will understand and realize that adding batteries can provide additional savings compared to using solar alone. Also, as utilities change the time-of-use structure, or TOU, for NEM 2.0, batteries will make more sense over time as they will gain more value over time to offset consumption. NEM loan.
Del Chiara: If you're a consumer today and you're considering going solar, the (current) policy is that the payback period for your solar + storage system will be less than the time it's installed. - Only solar systems pay for themselves. Therefore, it is better to add batteries. All this is due to the high speed at night, which the battery can avoid. However, the downside is that the initial cost will be higher if you add batteries.
While the higher upfront cost will eventually pay off and thus be a valuable investment in your home, many consumers still can't afford it or are embarrassed to do so. That is why it is difficult for us to sell the system today. When developing NEM 3.0, the CPUC thought too much about the consumer experience. The fact that the combined technology (solar + battery) provides a better deal for consumers does not mean that consumers will be motivated to spend more money. More expensive products are usually more valuable to consumers, but if you're middle or working class, you can't always afford to spend more. Hence the decline of our market.
Batteries add $15,000 to $25,000 to the cost of solar. That's a big increase in start-up costs, but a federal tax credit reduces them by 30 percent if you're financially responsible enough.
TIME. What is a virtual power plant?
Teresa: The Virtual Power Plant program creates a source of income for its owners through the energy stored in the batteries. About 400 hosts are now participating in this program. Each person only makes a small amount of money using batteries, but they will become a larger part of distributed energy generation, storage and management.
Get a better deal
TIME. What can consumers do to get the best deal on solar installations? Does the company ever run promotions? Are the panels for sale?
Teresa: All solar companies have promotions from time to time. The best time to invest in a home solar management system is during the off-season (end of summer and winter) as demand drops and contractors look to hire staff. If you wait until the summer, when the huge electricity bills hit homeowners, demand will certainly be very high.
Hickey: Solar installation is recommended in years when the customer's tax liability is high. Learn about current federal, state and local benefits. The federal tax credit, or investment tax credit, or ITC, is currently 30 percent through 2034 (note: the cost of a new roof is not included). These federal benefits cover the costs of panels, cables, inverters and storage solutions. Adding a data storage solution next year will also qualify you for a tax credit. Excess tax credits are not refundable. Also, (note) this is not federal coverage, but a reduction in the tax liability they had in the year of installation. Therefore, if the tax liability is low, it will not provide much incentive.
TIME. What metrics or diagnostic questions can the public ask contractors when evaluating bids?
Del Chiara: First, make sure they are properly licensed and confirm that there have been no complaints or actions against the contractor by the State Contractor Licensing Board. The next litmus test is to find out if they are members of a trade association such as the California Solar and Storage Association. The best companies in any business are the ones that value the information and quality control offered by the sales team. Ultimately, the best solutions are informed solutions based on personalized interactions. Almost anything can be found online these days, so I caution consumers not to pay too much attention to the sometimes random but fast-moving online reviews. The product itself has a very low failure rate, comes with a long warranty, and all contractors in California are required to warranty their installation work for 10 years.
Teresa: (Red flags) occur when they don't actually analyze the owner's consumption data. If not, they are not offering a system that truly benefits their owners.
TIME. What mistakes do people make when buying solar energy?
Del Chiara: The biggest mistake is not getting three competitive bids from experienced and properly licensed contractors. Another important thing is to check the validity of your electrical service panel. Many older homes need to upgrade their service panels before adding solar panels and storage.
It is also important to invest in energy efficiency measures, as unused electrons are the cheapest. But the right and the reverse side of the coin. Consider whether you will be adding an electric car, electric furnace, or heat pump in the near future. It is more difficult to develop a system after its creation, although it is possible.
Teresa: Homeowners tend to overlook the condition of the roof where the solar panels will be installed. If the roof is old and worn, that means it will need to be replaced at some point during the 25-plus year lifespan of the solar system. It is better to repair the roof before installing the panels, so that in the future you will bear less costs for the temporary dismantling of the panels and their re-installation to create a new roof in a few years.
TIME. Is there anything else that consumers should pay attention to?
Del Chiaro: In today's uncertain government policy market, it's a good idea to add solar insurance to your shopping spree. This is possible for you to be able to get along about you, even if you are rushed. Togo, I infuse I recommend all the things to consult with the Solar Rights Alliance, the non -commercial propaganda group.
Hiki. In the state of the state, the staff wounded the multiplicity of the stimulus for the use of saline energy, but the program is ended in 2023. As we put on this moment, the uniform stimulus on the state of the state is extended from the 2024.
California also impersonate non -blogging. Sunny houses or Dac-SASH program for one family. This is only accessible for the demolished community. The second Californian Program of Posashpostiya is this independent program of generation (SGIP), which includes in the deposit of energy, but does not include saline panels. In the SGIP there is a category of "spare housing capital" for homeowners with low incomes, entry from the medical point of the shelters of the Polish and the affiliates, the inflamed padge.
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