This article was written by Luke Henry, one of our distributed utility technical specialists.
You’ve done the research and have decided to install solar at your home. What’s next to keep the process moving? To know what else to expect and get the system, installer and agreement that meet your needs, here are a few considerations.
Contacting Your Local Electric Utility
Many utilities have websites dedicated to residential solar where you can find utility-specific answers to basic questions, resource materials, information on in-home energy assessments, as well as links to third-party experts and installers the utility has worked with. Your utility may also offer rebates for home energy efficiency improvements that could be worth considering prior to installing your solar array.
When contacting your utility, here are several questions to explore:
- What rebates are available for installing renewable energy?
- Do you offer net metering or buy-all/sell-all arrangements? (See below for more information.)
- Do you offer rebates for home energy efficiency improvements?
- Do you offer free or low-cost home energy audits?
- What is your rate schedule? Are there time-of-use options or flat rates?
- How is surplus power handled? Is it paid out to the homeowner or returned in the form of a credit?
- Do credits roll over month to month? Do they expire at the end of the year?
- Are there any monthly fees?
Selling Power to the Utility
When considering your future electric bills and how solar energy is treated by your utility, there are certain things to know.
How does my utility pay or credit me for my solar energy?
- Net Metering: An arrangement in which any surplus power from your solar array is credited to your account at the retail rate (i.e., the rate you pay for electricity).
- Buy-all/Sell-all: An arrangement in which a second electric meter is added to track your solar generation. 100% of the energy produced by your array is sold to the utility via that meter (at a lower wholesale rate), and you continue to buy 100% of your home energy use from the utility via your existing meter.
How much is my energy worth?
- Flat Rate Structure: The price of the electricity you consume and sell to the utility is flat and does not change based on the time of day and season. Most homeowners currently are billed using this rate structure.
- Time-of-use Rate Structure: The price of the electricity you consume and sell to the utility depends on the time of day and season. Electricity consumed or sold during on-peak hours costs more than during off-peak hours.
- On-peak hours: Times when overall electricity demand is high, and the utility is running at high capacity. The more expensive electricity rate is meant to discourage use during these hours, as utilities may have to turn on auxiliary power plants to meet demand, which is costly.
- Off-peak hours: Times when overall electricity demand is low, and it is cheaper for the utility to produce power. The lower electricity rate is meant to encourage use during these times, which helps level-off the day’s usage.
Solar Pricing, Before Incentives
What you’ll pay for your array depends on a number of factors, including your location, the installer, the components, any add-ons (e.g., monitoring, data acquisition system or specialty equipment), the size of the system, the distance between your home and the installer’s headquarters (because of travel time), the difficulty of the installation and more.
In North Carolina, the cost of solar in spring 2020 ranged from $2.80/watt to $3.21/watt. This means that a 10-kilowatt system would cost between $28,000 and $32,100 before incentives. Solar Reviews has a county-by-county breakdown of solar pricing, where data is available.
Incentives and Financing Options
The Database of State Incentives for Renewables and Efficiency (DSIRE) is an excellent resource for information on the latest tax credits and incentives for renewable energy and energy efficiency home improvements. It includes national, local and utility incentives.
For solar arrays, the main incentives to be aware of are the North Carolina-based Property Tax Abatement for Solar Electric Systems and the federal Residential Renewable Energy Tax Credit. However, there are many other incentives available, and some may be accessible in your location. Your solar installation company should be able to tell you which ones apply to you.
If you do not have money to buy a system upfront, there is financing available. Sometimes, your installation company will have options, and certain banks, like the Self-Help Credit Union, offer solar-specific loans. You may also be able to take advantage of the HomeStyle Energy Mortgage, which allows borrowers to take a mortgage valued at 15% of the as-completed appraised property value of the home. Keep an eye out for “creative” financing. For example, some companies offer long loan terms to make the cost more affordable, bridge loans (0% interest for a short period and high interest later) and other variations.
Be sure to evaluate the different options to get what’s best for you. It is important to fully understand the potential financing terms to be able to pick the right one.
Finding an Installation Company
There are a few ways to go about finding a solar installation company. If you have neighbors or friends who have added solar, ask them about their installer and experience. In addition, you can reach out to your utility for recommendations and search online for companies in your area.
Focus on local companies who are likely more familiar with your utility and ordinances. Their proximity will also bring down the price of the system, and companies located farther away may be hesitant to perform the installation because of travel time.
The Solar Energy Industries Association (SEIA) has a database of all the solar installers in the state, as well as information on data and pricing. Look for ones accredited by the Better Business Bureau (BBB). While being accredited isn’t required, it can provide confidence regarding trustworthiness and quality.
Be sure to research companies before reaching out. Check reviews and look at previous installations, how long they’ve been in business and their licensing (you can check for electrical contracting licenses by searching the NC State Board of Examiners of Electrical Contractors website). You will want a company that performs the kind of installation you are seeking. In other words, you probably don’t need to consult with a company that mostly does off-grid installations if you want a grid-connected system.
When you are ready to talk to installation companies, get bids from at least three. Bids should come after the company performs a site assessment at your home. When receiving bids, have the company specify both DC and AC capacity (in watts or kilowatts) and estimated annual production by month (in kilowatt-hours). Knowing capacity and production data will help you compare bids and tell you how much energy will be produced by your system and seen by the meter. The bids should take into account losses in the system, inverter size and efficiency.
Collect bids for the same type of system across installation companies. Do not get a bid from one company for a ground-mounted system and one from a second company for a rooftop array. Keeping the type of system consistent will help you evaluate offerings. If you are still unsure about what type you want (rooftop, ground-mounted or other), get bids for each type from each installer.
Keep in mind that the cheapest bid may not be the best. A low price could signify inexperience or poor construction practices. Quality should be considered over price, and before signing a contract, have an attorney or lawyer read over it if possible.
Here are some things to look into when doing your research and contacting installation companies:
- Are they familiar with the local permitting and interconnection process? Will they handle all of the permitting and paperwork for the installation?
- Will they file the paperwork with the state agencies and utility on your behalf or assist you with those filings?
- Can they provide you with references from other customers?
- Will an NABCEP (North American Board of Certified Energy Practitioners) installer or electrician be present during construction? What are their license numbers?
- An installation company must have a certified electrician employed or contracted to install solar in North Carolina, and having that electrician or a certified installer on-site will give you more confidence in the quality of your system.
- What does the system warranty cover, and does it include a roof warranty (for rooftop systems)?
- Is your homeowners insurance sufficient for the interconnection agreement with the utility (grid-connected and hybrid systems only)?
- This is an agreement between you and your utility that allows you to sell power to the grid. It outlines the selling price and details how energy will be sold. It also sets certain safety requirements that your system must meet to keep the grid and your system safe in the event of a fault. The installer should be familiar with this information to set the correct parameters on your equipment. Most utilities also require that some kind of insurance be put on the system in case of a fault or damage.
- Are they insured?
- Do they offer loans or financing?
It is important to keep all documentation received from the installation company, as it will be useful during tax season and if an issue comes up with your system. Your loan/mortgage provider may also require copies of certain documents. Ensure that you have all manufacturer-provided information on your solar modules, inverters, optimizers, combiner boxes and disconnect boxes. You will also want a written installer warranty (workmanship, equipment, roof), equipment warranty (if separate from installer warranty), interconnection request, interconnection agreement, permits, inspection results, site assessment results, and any receipts and invoices.
In addition, request a single-line diagram (SLD) of the system (a simplified system drawing set detailing all equipment, hardware information, wire sizes, wire run lengths, etc.) and documentation showing where it will be installed, where conduit runs will be and where home penetrations will be. This information will allow you to ensure the installer built the system the way it was intended, and it is useful for checking compatibility if you need to replace or install new equipment down the road. An SLD is essential, as your utility will require it before you interconnect to the grid, some financial institutions will require it before you get funding, and some regulatory bodies will require it before you can receive permits.
Taking these additional steps and having this knowledge will put you in a better position to get the system, installer and agreement that work for you. If you missed our first article on items to consider before going solar, you can check it out here.