The Advantage of Solar

Research in the state of California has suggested the average homeowner that has solar panels represents a major step up on the market in comparison to their neighbors who do not.  Many people may have heard that solar panels pay for themselves in the long term of energy consumption, but they can also pay for themselves in the added value of a house.

The premium added to a solar-powered house is about $4 to $5 per watt of power produced.  Since an average California house uses a three-kilowatt solar system, it amounts to a price tag of about $15,000 to $20,000 higher than a house running on conventional electricity.

Existing Compared to New

Since people expect that a new house will have more modern features, sometimes they will see a solar panel and think that it is a standard in the housing industry.  This simple bias means that an older house will get disproportionately more value out of installing solar panels than a newer home will.

In fact, an older home that installs a set of solar cells can see a value increase that is three times that of a new house with solar panels.  Despite the fact that it costs the same amount of money on a new or an old home and the fact that solar panels have a shelf life (albeit a very long shelf life), the installation puts more money in the pocket of older homeowners.

The Benefits

There are many reasons that prospective homeowners look for solar panels when they are shopping around for a place to live.  Some are Eco-conscious, but the vast majority realize that the cost of heating, cooling, and powering a house is a massive investment.  Being able to minimize or even eliminate these bills will allow for major savings down the line.

After all, the duration of a set of home solar panels can be as much as twenty five years with only about ten percent loss in efficiency, provided they are kept clean and there are no changes to the cloud cover overhead.  As such, even a reduction of one hundred dollars per month in utilities would amount to $30,000 over the course of twenty-five years — much more than the cost of purchasing and installing these panels.  None of that investment goes to waste once the house is on the market, since new owners will want the same savings as prior owners enjoyed from the features and are willing to pay more for it.

About The Author: Mauro Small writes for Go Green Academy, an information website on topics related to energy efficiency, climate change and sustainability.

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Q: I understand my solar electric system may generate more power than I need to run my home. Can I sell this excess electricity back to the power company, and if so, how do I get started?

A: Maryland residents can absolutely sell their excess solar energy back to their power company.

Maryland has committed to producing 20% of its energy from renewable sources (including 2% from solar) by 2020. The state is actively encouraging the practice of net metering – selling excess energy generated from privately owned systems back to the utilities – in order to meet this goal.

To be eligible for net metering in the state of Maryland, your solar electric system must meet the following conditions:

• It must produce no more than 2 megawatts of power. (Most residential solar electric systems fall in the 4-6 kilowatt range, well within the guidelines.)
• It must be intended primarily to serve your own needs for power. Eligible systems may not generate more than 200% of your annual baseline energy usage.
• It must be located on your property or on a property immediately contiguous to yours. However, you do not need to own the system. Leased systems or solar systems owned by third parties are eligible for net metering in Maryland.

Get Started with Net Metering in Maryland

To get started with net metering, you must first send in an application to your utility company. Your qualified solar installer should handle this process for you as part of the installation package, as well as ensuring that your system meets all utility company requirements.

Depending on your location and equipment, you may run into a few minor expenses in setting up net metering. Your utility provider may charge a small fee for the application. Also, net metering requires an electric meter that can measure the flow of electricity in both directions – from your system to the grid as well as from the utility line to your home. If the equipment needed to monitor your system is more expensive than what is typically provided in your area, the utility company may charge you the difference in cost.

Once your system is installed, the fun begins. When the sun is shining brightly and your system produces more power than you are using, your meter will run backwards – meaning that you’re actually selling your home-generated power to the utility. Of course, at times when you’re consuming more power than you generate, you will be charged as usual. In the end you will only be charged for the net amount of power you use: your total usage minus the amount you produce. If you generate more net energy than you use, the utility company will end up paying you!

Don’t be alarmed, though, if you don’t see your net metering reflected on your monthly power bill right away. Most utilities, including Baltimore Gas and Electric, calculate net metered energy on an annual basis. Each April you’ll receive a check for any excess power produced over the course of the year (from April 1st of the previous year through March 31st of the current year). PEPCO, on the other hand, does calculate net usage on a monthly basis – but they may not be able to tell you exactly how much total power you’ve used (a situation they’re working to correct.)

(Editor’s Note: Learn more about understanding your PEPCO, BGE or Delmarva electric bill.)

Net metering in Maryland is a fantastic opportunity to get the most out of your solar electric system. But it may not be available forever. The program is first-come, first-serve, only until the state’s net metered power generating capacity reaches 1,500 megawatts. There’s still plenty of room for newcomers. However, if you’re considering investing in solar you might want to do so sooner rather than later, given that Maryland’s installed solar capacity grew 865% between 2011 and 2012.

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The first step is understanding your electric bill.

Understanding Your PEPCO Electric Bill in Maryland

If you live in Maryland and PEPCO is your utility provider, your electric bill should be a little easier to understand thanks to a new design rolled out by PEPCO in March.

Information about your energy usage is found on Page 2 of your PEPCO bill. The section titled “Details of Your Electric Charges” includes your rate schedule and meter information, such as meter reading dates, energy consumption, and energy type. It also informs you of your next scheduled meter reading.

In the upper right corner of Page 2, you’ll find a section titled “Electric Summary.” This is a quick and easy way to find your electric charges for the month. You’ll need to know how much electricity you use each month, on average, to evaluate the ROI of solar panels for your home.

PEPCO can view a video guide to understanding your PEPCO bill here. View a sample PEPCO bill here [PDF].

Understanding Your BGE Electric Bill

The other major utility company in Maryland is BGE. Your BGE bill provides detailed information about your home’s energy use. The summary section on the left hand side of your BGE bill includes information about current charges, including gas, electric, and service contracts.

On the right hand side, you’ll find your electric usage profile and gas usage profile. While both are important for understanding your home’s total energy use, the information about your electricity usage is most helpful for determining how much money solar panels can save you.

Page 2 includes a section titled “Electric Details.” This is where you’ll find information about your electric rate schedule, meter readings, and how much electricity you used during this billing period.

You can find a sample BGE utility bill here. BGE also provides a guide to help you understand your BGE bill.

Understanding Your Delmarva Power Bill

If you’re a Delmarva Power customer, you’ve probably noticed the utility company has recently made a number of changes to your monthly statement, making it easier to understand your power bill than ever before. Here’s a look at the key sections of a typical Delmarva bill:

1. The payment coupon – This is on top of the first page. It states your name, address, amount due, and due date.
2. Electric delivery summary – This is on the bottom of the first page. It states your mailing address, account number, the billing period for which you’re being charged, the address where the electricity is hooked up, and the total amount charged.
3. Electric meter information – You’ll find this on top of the second page. It shows the information from your meter and the approximate date when it will be read again.
4. Electric delivery charges – This is found in the center of the second page. It shows the rate at which you’re billed, the current seasonal rate, and the rate schedule that applies to your account. It also includes a breakdown of several special charges. We’ll look at how those work in a minute.
5. The bottom of the second page shows a chart of your monthly power usage over the past year, to help you manage your utility expenses.

The “Special Charges” section of your Delmarva Power statement contains a lot of information. Let’s look at each of those areas:

1. Delivery charges – This reflects the charges you pay to have the electricity sent from the plant to your home or business. It’s one of the fees that persons who use solar power don’t have to worry about.
2. Customer charge – This shows the flat rate that you’re charged simply to keep the account active.
3. Distribution charge – This shows the cost associated with receiving power from your local substation.
4. Universal service program – This money goes into a fund to help persons with financial difficulties to pay their electric bills.
5. MD franchise tax – The utility collects this tax for the state government.
6. Environmental surcharge – This charge goes to fund various environmental projects within Maryland.
7. Total electric delivery charges – This is simply a subtotal of the amount owed.
8. Supply charges – This section shows how much you might save if you purchased your electricity from other suppliers. This section is especially important if you’re considering switching to solar power, as it can give you an idea of the savings you might realize. Learn more about the costs of residential solar power.

Other Electricity Providers in Maryland

Thanks to the restructuring of the electric utility industry, Maryland homeowners can choose the electricity supplier that best fits their needs. PEPCO and BGE may be among the largest electricity suppliers in Maryland, but there are plenty of others. Click here for a list of electricity suppliers serving Maryland.

When calculating your solar panel ROI, the key figures to look for on your electric bill are your electric rate (sometimes called a rate schedule), your total energy usage, and your total electricity charges and electric bill amount. We’ll use these figures to calculate your potential utility bill savings from solar power.

Next Step: Evaluate the Cost of Solar Panel Installation

In the next blog post in our series on the ROI of solar panels, we’ll explain how to determine the installed cost of solar panels. In the meantime, you can request a FREE evaluation from our solar installers to find out if solar is right for your Maryland home.

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Efficiency

Solar shingles have historically been considered less efficient than their paneled peers, but advances in technology have made the competition between the two a bit tougher. In 2008, the U.S. Department of Energy’s National Renewable Lab introduced a “copper indium gallium diselenide (CIGS) thin-film solar cell” that reached a record 19.9 percent conversion efficiency. Traditional solar cells have pretty steadily maintained a conversion efficiency rate of about 20 percent, which more efficient models of solar tiles can easily reach and even exceed.

Cost

One of the primary motivations for most people to go green is to save money, so cost is an important factor in evaluating the latest green devices. With that being said, it should be noted that neither option is very cheap starting out, but the investment is well worth it in the long run. According to research collected by National Geographic, new solar shingles cost 10 to 15 percent less per watt compared to traditional flat panels. Shingles can also be installed in one-third of the time it takes to install panels, which reduces labor costs.

It’s also worth noting that homeowners qualify for the Solar Investment Tax Credit (ITC) for installing energy-saving systems, and also reap the benefits of a higher home value. Not to mention: lower monthly energy bills.

Quality

Solar panel racks tend to be bulky, while solar shingles feature a sleek look that blends in with your surrounding shingles. Despite a conveniently lightweight design, solar shingles can withstand a heavy snow, wind, hail and other tumultuous weather conditions. They are Class A fire-rated and come with extended power generation warranties. Unlike solar panels, solar shingles are tied into the grid of existing power line, which provides dependable power on cloudy days and overnight.

There’s a broad misconception that going green means sacrificing comfort. In reality, making these changes improves efficiency, convenience and comfort for all homeowners who make this commitment. To give back to the world and start living a smarter, more responsible lifestyle, try going solar today.

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In the absence of abundant sunshine, countries and states must typically leverage financial resources to boost solar photovoltaic (PV) adoption.  Germany and Japan are prime examples of countries that owe much of their solar success to relatively high GDPs.

But one state continues to defy conventional wisdom, proving that neither sunshine nor economic might is a prerequisite for solar PV dominance. Despite its relatively small size and mid-Atlantic location, Maryland became America’s 8^th largest solar market in 2012.  In just one year, it installed more than 74 MW of utility scale, residential, and commercial PV capacity.

What makes Maryland’s achievement so remarkable is that it beat out obvious favorites like New Mexico and Texas – states renown for their year-round sunshine.  In fact, Maryland even outshone Florida – the “Sunshine” State.

Even more remarkable, 2012 was a record-breaking year for the country’s solar industry.  According to the Solar Energy Industries Association and GTM Research, the nation installed more than 3,300 MW in 2012 – a 76% increase over 2011.

Securing the #8 slot in a slow year would have been impressive.  But that Maryland accomplished this during a time of unprecedented nationwide solar growth is nothing short of a miracle.

The Secret Behind Maryland’s Solar Boom

It’s actually not a secret.  Maryland’s approach to renewable energy is both simple and effective:

Lacking the financial resources of larger states and the solar resources of sunnier ones, Maryland develops supportive green policies to encourage PV installations.

The state has some of the most generous renewable energy incentives in the country, providing its citizens with a range of local, state, and federal rebates to help bring the cost of new installations down.

Its Clean Energy Grant Program, alone, reduces the upfront cost by $1,000 for qualifying homeowners and businesses.  There also exist any number of financing arrangements and tax credits to further drive down prices to make solar even more attractive. In addition, the average cost for solar PV panels in Maryland fell 33% from 2011 to 2012, making new systems that much more affordable for homeowners thinking about a solar panel installation in Baltimore, Annapolis and other markets.

Taken together, Maryland’s incentives, financing options, and increasingly low panel prices place the state on competitive footing with more traditional solar hotspots like California and Arizona.

If current trends continue, 2013 could be another banner year for the Chesapeake Bay State.

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• Reduce the energy your home consumes
• Receive lower electricity bills each month
• Become part of the global green movement

But are these benefits enough to make the transition?  After all, to become truly energy efficient requires a full audit of your home followed by any number of improvements and upgrades.

Well, according to new research by the University of North Carolina and the Institute for Market Transformation (IMT), the benefits extend well beyond your utility bill.

How Greater Energy Efficiency Makes Your Mortgage More Secure

In this breakthrough study, researchers surveyed more than 70,000 homes, separating them into categories based on the ENERGY STAR program – a Department of Energy and EPA rating system that assesses the efficiency of consumer appliances and building designs.

What they discovered was that for each additional ENERGY STAR improvement, the mortgage default risk decreased.  In fact, fully compliant ENERGY STAR homes had nearly a 33% lower chance of defaulting.

The reason behind this interesting trend?

Well, remember those extra savings you get from lower monthly electricity bills?  As that money builds up over time, you increase your ability to meet future financial obligations.

• For some, this means better vacations
• For others, it may mean a college education
• And for a sizeable chunk of homes in this landmark study, it means not defaulting on a mortgage

Additional Implications of Energy Efficiency

Not only can greater energy efficiency reduce your risk of defaulting, but it may also help you qualify for more attractive mortgage payment terms.

If lenders view you as a lower risk, they can offer better premiums and interest rates – both when buying a new home and when you refinance.

And keep in mind that we’re not talking about oversized mansions that consume tons of energy.  The study focused on single-family homes with an average sale price of $220,000.  Efficiency upgrades don’t just make sense for resource-hungry homes – anyone can benefit.

Time for an Energy Audit?

There are very few risk-free investments in this world.  Even education, one of the old standbys, is in trouble these days.  Just ask any college senior about to graduate with crippling student loans.

But energy efficiency is one of those rare investments that pays dividends almost immediately.  Just to review:

• More money in the bank due to lower electricity bills.  This is a benefit that grows with time as utility rates continue to rise
• Reduced risk of defaulting.  There’s no price tag for this peace of mind
• Better mortgage terms, which in turn, means more money in the bank

And to top it off, you help the environment.

Want to learn more about making your home energy efficient?  Click Here!

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The report was covered during a Google Hangout news conference on March 14th. Panel members included Rhone Resch, President and CEO of SEIA; Arno Harris, the CEO of utility-scale solar company Recurrent Energy, and Shayle Kann, Vice President at GTM Research.

As a whole, the solar industry exhibited 76% growth last year over 2011, making solar the fastest growing source of new electricity and one of the fastest growing industries in the in the U.S.

Resch credits the strong growth of solar to stable fiscal policies, especially pointing to the federal investment tax credit for solar energy, which was granted an 8 year extension in 2008.

U.S. solar industry trends identified during the hangout included:

• Solar has become an accepted technology: 9 out of 10 Americans – including both Democrats and Republicans – now support the development and use of solar energy. Americans recognize that solar represents independence through domestic energy and jobs.

On the corporate scale, major companies such as Apple, FedEx, GM, Macy’s, and Wal-Mart – as well as the U.S. military – are making repeated investments in solar infrastructure.

• Solar is expanding geographically.  12 states installed more than 50 mW each in 2012, compared to only 5 in 2011. California is still the country’s largest market for solar, but it no longer dominates. Ohio and North Carolina in particular were cited as having made huge strides recently, with a pipeline of over 400 MW of projects slated to be developed in North Carolina alone in 2013.

• More people are investing in solar. The industry has matured and diversified in terms of size and business models, and is now attracting larger and more diverse investors. The technology is especially attractive to American investors because it represents energy independence and domestic job growth as well as being a clean energy source.

• Solar has become affordable: The cost of solar panels has declined 60% since the beginning of 2011. The average price of a completed system has dropped 27% since this time last year.  Residential systems now cost an average of $5/watt (installed), commercial is at $4/watt, and utility solar systems have attained an unheard-of $2/watt.

“You constantly hear people saying, ‘solar is too expensive,’” said Resch.”Well, you can’t make that argument anymore because we’re continuing to see the cost come down as the industry expands our scale.”

Panel members were in agreement that despite recent price drops in the hard costs of solar, there is still plenty of room for future price reductions in installed systems. According to Kann,the soft costs involved – especially financing – also promise tremendous opportunities for reducing cost.

So should home and business owners hold off on adding solar, in the hopes that prices will fall even further?

Not necessarily. Remember that the 8 year federal tax extension expires in 2017 – and with it the chance to save 30% on a solar system. And with prices as low as they’ve become, and financing options expanding, this may well be the ideal window of opportunity for homeowners to make their own investment in solar.

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Living a more sustainable lifestyle doesn’t have to be difficult. Small changes are easy to make and can add up to a significant positive impact. The list at AltEnergyShift includes dozens of simple changes you can make to be more eco-friendly.

We thought we’d elaborate on a few of our favorites:

#4 Install CFLs or LEDs

In Maryland, Pepco offers ENERGY STAR qualified CFLs to Maryland residents at a discount purchase price.  Single CFL bulbs are discounted $1.50 and a multi-pack of bulbs is discounted $3. Customers of Potomac Edison in Maryland can also save up to $1.50 per bulb or $6 per multi-pack off.

Rebates for CFL lighting fixtures ($10 rebate from Potomac Edison) and ENERGY STAR qualified LED lighting fixtures ($30 rebate from Potomac Edison) are also available. Check with your utility company to learn more.

#9 Insulate, Insulate, Insulate

Adding insulation can quickly help reduce your utility bills. The Department of Energy has a great resource to help you learn what areas of your home to insulate.

#22 Buy at the Farmers Market

Looking for recipe ideas featuring fresh, locally grown vegetables? The National Farmer’s Market Association is a great place to start. Here’s a list of farmers markets in Maryland, and one for Virginia, too.

#33 Take the Stairs in an Apartment…Get Exercise and Save Electricity

The American Heart Association recommends 150 minutes per week of moderate exercise. That’s just 30 minutes a day during the work week. Climbing the stairs to your 3^rd floor loft is an easy way to get your heart pumping and shed pounds…and since you’re not taking the elevator, you’re using less electricity.

#58 Collect Rainwater

Want to build your own rain barrel? The Maryland Department of Natural Resources offers this easy step-by-step guide.

Of course, one idea that’s missing (!) is install solar panels! Installing solar panels reduces your consumption of electricity generated from burning coal or natural gas. And solar energy is 100% renewable.

Feeling ambitious? You could even install a solar-powered attic vent or a solar water heater. Here in Maryland, solar water heaters are gaining in popularity almost as fast as solar panels. The low cost of solar power has made it easier than ever to power your home with renewable energy.

How Are YOU Shifting to Living Green?

When we last checked, the “366 Ways” list at AltEnergyShift was stuck at 73 ideas. We want YOUR ideas! What are you doing to make the shift to living green?

Share your ideas in the comment below or join AltEnergyShift and add your tips there. Help spread the word by sharing this post with your eco-minded friends.

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Leasing solar panels – commonly known as “third-party owned” solar panels – has earned media attention recently as an alternative to purchasing solar panels. Despite historically low solar panel costs, the cost of installing a photovoltaic system leads some homeowners to consider leasing the solar panels installed on their roof, rather than owning them. But third-party owned solar panel systems aren’t always a smart option.

What is Third-Party Owned Solar Power

TPO involves solar companies financing the installation and maintenance of residential PV systems. Homeowners get lower electricity bills and no upfront capital costs when leasing solar panels. In return, they pay a monthly leasing fee to the provider. Financing can be provided by a solar installer, a manufacturer, the utility company or another source.

Currently, 14 states have embraced third-party ownership of solar power. In California, for example, TPO accounts for 74% of residential solar installations state wide. Some reports project third-party ownership of solar installations could make up 83% of solar capacity in the United States by 2016.

There are drawbacks, however. One of the primary advantages of solar power is independence from the utility company. By installing rooftop or ground-mounted PV arrays, homeowners are able to generate their own electricity – even selling electricity back to the utility company, in some cases. Leasing solar panels creates another binding monthly payment for homeowners.

Leasing Solar Panels Creates Debt

When you purchase a solar system, you’re adding value to your home. A leased solar panel system, on the other hand, creates a debt liability that may need to be passed on to a homebuyer. In a real estate market that is already weak for home sellers, leasing solar panels creaties another obstacle to a home sale. And in some cases, the new homeowner may have to pay a hefty fine to break the lease agreement you entered into with your solar provider.

When you lease solar panels, you surrender many of the advantages that come with buying solar panels. Instead of enjoying solar tax credits and rebates, those benefits will go to the owner of the solar installation. So will the rights to earn and sell renewable energy credits.

Why Lease Solar Panels When You Can Buy?

A typical 5kw system begins paying for itself immediately. In Maryland and Virginia, a 5kw solar installation can pay for itself in as little as 5 years through lower electricity bills, SREC sales and other cost recovery methods. For homeowners who can make the financial investment up front, the ROI of installing solar panels is pretty clear.

Financing for solar panel installations is available. The Federal government provides a helpful consumer guide to financing solar energy systems, which is available for download [PDF].

If leasing solar panels is the best option for you, Renewable Energy Corporation can assist you with financing. Contact our estimators for a FREE solar estimate and to discuss financing options.

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