Shining Light on Solar

Interest in harvesting usable electric energy from the sun continues to increase on a consumer level. United has seen an influx in the number of members who have installed distributed generation systems (solar) behind their metering point in recent years. In 2019, United members installed 95 solar systems. That number jumped last year to 745.

United will continue to support members who believe in solar energy, even though unscrupulous salesmen sometimes misrepresent and exaggerate the benefits of installing a residential solar system. Unfortunately, many sales proposals fall far outside the truth, leaving the member disappointed.

Contrary to claims made by disreputable companies, residential solar systems will not pay for themselves in a short amount of time, nor will the member’s bill be reduced to zero. United’s energy auditors have uncovered many fallacies that members have faced after finishing the installation process, leaving some members with buyer’s remorse after the fact.

Members looking into the possibility of investing in residential solar do not have to wade into the uncertain waters alone. United’s energy experts help members understand the practical side of solar installations, no matter what stage a member is in while considering a solar installation at their home.

United began offering a new solar solution this year for its residential members. The cooperative’s new solar solution can take members from solar education all the way to installation through a partnership with a  third-party installer. The co-op offers this service to its membership to educate members truthfully and allow them to make an informed decision after hearing all the facts.

According to www.thisoldhouse.com,  “While there are many reputable solar panel vendors, some unscrupulous companies take advantage of homeowners looking to invest in eco-friendly technology. Even if they aren’t outright scammers, they may overpromise on rebates and savings to make a sale.”

The following list demonstrates 15 of the most common misconceptions and miscalculations about residential solar installations.

• Reports have surfaced of contractors in United’s territory deceptively claiming to have a partnership with United in order  to gain the trust of the member. United and United’s third-party contractor do not go door-to-door soliciting business. Nor do they participate in telephone sales. To speak with one of United’s energy solutions team members today, call any local United office.
• United recommends getting at least three bids from reputable contractors and researching pros and cons before signing a contract. Generally, those who sign their first and only quote run the risk of paying significantly more than those who compare multiple offers.
• If members ever feel pressured by salespeople to sign a contract to “lock in” a deal that seems too good to be true, it’s probably too good to be true. Never sign a contract under pressure.
• Beware of anyone claiming to install solar for free. Do not fall prey to online ads, social media posts or marketing stating that a solar system can be installed for free. While there may not be any upfront costs associated with getting the system installed, there is ultimately a monthly lease or loan payment.
• The three main options for funding a solar installation include paying up-front in full, financing, and leasing. Each option has advantages and disadvantages. For example, one disadvantage of leasing a solar system is the homeowner does not actually own the system and therefore, does not qualify for any federal income tax incentives.  
• Be cautious of solar proposals and promises received from door-to-door salesmen and telemarketers. Some salespeople will offer verbal promises and commitments to quickly close a sale, never intending to deliver on their promises. All promises must be in writing in the contract to be valid. If not received in writing, these promises cannot legally be enforced.
• The cost of a solar installation varies depending on the system size, specific products selected and site details. Members should meticulously compare each bid and the equipment included in each bid. Solar systems are sold using the DC rating of the system. To calculate the DC rating of the system, multiply the number of panels by the output wattage rating of the panels. While one proposal may contain more panels than another, it does not mean that this system is larger. One major component often overlooked in a solar proposal is the inverter. It is crucial to compare the inverter technology quoted in each bid. Each inverter manufacturer has multiple models, and the manufacturer and model of inverter chosen can lead to steep variations in energy production.
• One size does not fit all when it comes to solar systems. Many variables come into play. What works for one house might not  work elsewhere. If the contractor doesn’t ask for 12 months of  electric billing history, this is a red flag. The system needs to be designed for a member’s individual usage.
• Solar does not possess a quick return on investment (ROI). Overall, members who pay up-front in full for solar through a third-party contractor can expect an ROI of about 15-20 years. If the system is financed, then this extends the time required to see a return on investment. Currently, if a member purchases a system through United, paying up-front in full, the average ROI is reduced to less than 15 years. Many factors can affect the ROI calculation such as the overall cost of the system, size and energy production from the system, interest rate on the loan if financed, utility rates and insurance premiums to insure the system.
• When financing a system, the monthly payments made toward the loan most likely will exceed what members see in savings on their monthly electric bill. United energy advisors recently interviewed a member who has a monthly payment of $260, but only realizes $115-$120 in monthly savings from the solar system.
• Solar contractors commonly quote a 3 percent or higher escalator on electric rates, which exaggerates the rate of return. This is misleading and makes the ROI look like it is much quicker than it really is. Historically, United’s rates have not seen this type of increase.
• Those who install solar panels could be eligible for a 30 percent Federal Income Tax Credit (FITC). Always speak with a tax professional or CPA to determine eligibility for the FITC. Not everyone qualifies for a credit.
• The placement of panels can greatly influence the overall production of the system. Shading will negatively affect the system’s production. In the past year, United energy experts have inspected several systems installed where shading from trees or other objects posed an issue. For optimal solar energy production, a solar sys tem’s average duration of direct sunlight should be 6-8 hours per day. Ideally, a fixed system should face due south to southwest, never northern orientations.
• Currently, United has a residential minimum bill of $25, so a member’s bill will never be $0. They also will be responsible for internet, area lights and applicable securitization charges on all delivered kWh to the member, even during the months when the solar system overproduces energy.
• Solar generation does not keep the lights on when the grid goes down. Grid-tied solar will not function as a backup system unless members have battery storage or a backup generator, which requires additional up-front costs.