Solar Starter Guide
This online starter guide covers the essentials of solar. Topics include: Net Energy Metering, project financing options, how solar works, and more. We’re constantly updating this page with the freshest facts and findings from our marketplace. Want even more resources? We’ve built a thorough library of educational videos. We also regularly update our blog with timely updates on local incentives, equipment launches, solar trends, and more. Enjoy!
Jump to Topic
- Why go solar?
- How does solar energy work?
- What are the key aspects of solar for my home?
- What are the key pieces of equipment for a solar panel system?
- What are the best ways to pay for a solar panel system?
- How much does a solar panel system cost?
- What are the important aspects of planning my solar project?
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1. Why Go Solar?
First things first – here are the top reasons why homeowners across the country are making the switch to solar power.
Positively Impact the Environment
Reduce your environmental impact. Both your carbon emissions and water usage are significantly reduced when you switch to solar.
Eliminate Your Electricity Bill
You can start saving on your electric bill from day one. Avoid utility rate hikes and fees for decades to come.
Gain Energy Independence
Be prepared with a home battery backup system. Free yourself from utility policy changes and protect your home when the grid goes down.
Increase Your Home’s Value
Increase the equity of your home with a solar PV system. Invest long term in your home and reduce your total monthly expenses.
2. How does solar energy work?
So you understand the great benefits of solar – but how does the technology actually work? Check out this next section of our starter guide and these videos to find out. For more educational videos, visit our educational video library.
Your solar panels convert sunlight to DC electricity.
Your inverter converts DC electricity to AC.
Electricity is used to power your home.
Extra electricity is sent to the utility grid for a credit, or to your battery if you have one.
3. What are the key aspects of solar for my home?
The basics of home solar are pretty simple. There’s just a few things you need to be familiar with to understand how to set up a proper system.
Net Energy Metering (NEM)
NEM is the policy that allows you to push and pull energy to and from the grid through your electrical meter. Traditional utility users pull energy from the main grid, use the energy in their home, and the meter counts how much is used. With solar, you will push your excess energy into the grid during the day and pull it out at night to use for lights, TV, A/Cm or anything else you may need.
After you go solar, you will still be connected to the grid. This is so you can take advantage of NEM to maximize the value of your system. Essentially the grid functions as a bank storing your energy from your solar panels until you are ready to use it. With a battery backup system and secure power supply, you can use the energy from your system when the grid goes down.
If you don’t use all the energy your system produces in a day, that energy will roll over to the next day and so on. This happens day after day, month after month. This allows you to use all the energy you produce with your solar system. If you have higher usage months (AC, guests, holidays, etc) you draw from the extra energy credits you earned earlier in the year.
Once a year you “true up” with your utility where you settle the balance on your energy credit. If you consume more than you produce then you’ll pay the utility for the excess energy you pulled from the grid. If you produce more energy than you consume, the utility will compensate you for your excess energy at a below-retail rate.
4. What are the key pieces of equipment for a solar panel system?
Here are the most important equipment components to the standard solar panel system for your home.
Solar panels are modular pieces, usually rectangular in shape – approximately 3’ by 5’ long. They vary in size, electrical output (measured in Watts), efficiency, and even color (most solar panels have either a black or silver metallic frame, and the cells will usually appear a dark blue or black in the light.) Panels can be mounted to a home or building’s roof structure, or installed on a ground-mount racking structure. The panels contain silicon cells that when exposed to sunlight, create a flow of direct current electricity or DC.
Keep in mind: When thinking about where to locate solar panels for a home, it’s important to consider factors that will affect the system’s energy production (measured in kWh). In the Northern Hemisphere, facing south is typically ideal.
The inverter is the device that converts (inverts, technically) the direct current electricity produced by the solar array(s) into usable alternating current, or AC electricity. There are several different types of inverters a solar
installation might employ. String inverters are the simplest, most mature inverter technology, in which the DC from groups of solar panels linked in series are fed into the inverter. The inverter puts out AC electricity which is then fed to the home’s electrical infrastructure. Micro-inverters are small, modular inverters that are furnished behind each solar panel in an array (1:1) and effectively compartmentalize the AC energy production of each panel so that the reduced production of one panel does not affect the output of the entire system.
Keep in mind: Some inverter companies such as SolarEdge offer power optimizers, which essentially act like micro-inverters on a string-array.
It’s important that every residential solar system has a monitoring system. This is the system that will allow you to view and measure real-time and historical energy production data of your system. Some monitoring systems display this energy production data via a physical display unit, while others employ an online interface, or both! As “smart” or connected homes become more prevalent, solar installers can provide whole-house energy consumption monitoring as well. In order to ensure your solar system is producing energy normally, it’s important to make sure your solar panels are paired with an energy production monitoring system.
Keep in mind: Pick My Solar will audit your monitoring system FREE of charge to ensure your solar array is producing what it should.
A racking system is the structure on which your solar panels will be mounted to your home’s roof structure or on to the ground. While some racking systems may vary in their look, they exhibit similarities in their form and function. It’s important to make sure your racking system, if roof-mounted, is properly flashed and sealed to ensure your roof is well-protected against the elements. Roof racking systems vary slightly depending on the type of roof.
Keep in mind: On flat roofs, a ballasted racking system can be used which requires no roof penetrations.
From our blog:
5. What are the best ways to pay for a solar panel system?
You will save money by generating and using energy from your solar system that is less expensive than what you currently pay your utility provider. There are four ways to do this and, depending on each unique project and situation, you may want to buy your system outright, take out a loan, lease your system, or enter into a Power Purchase Agreement (PPA).
Purchasing your solar system will provide the best return on investment, however, there is an out of pocket cost. By investing in your solar system up front, you won’t have any new monthly payments, just a lower, possibly “zeroed-out” electric bill! It’s proven that solar increases a home’s resale value – so while the system may take a few years to “pay for itself”, the value added to your home from your new PV system would be immediate!
Taking out a loan will allow you to start saving from day one. For example, you may have a current electricity bill of $150 each month and after installing a solar system, you could pay $130 per month for the duration of the loan. This will allow you to immediately start saving $20 each month. Then after the loan is paid off, all of the electricity provided by your solar panels will be free!
Keep in mind: If you can take advantage of the 30% Federal Investment Tax Credit, you will have the most savings by purchasing your system with cash or a loan.
A Power Purchase Agreement (PPA), is very similar to a lease. Electricity costs are measured by each “kilowatt hour” (kWh) used. For example, if you are currently paying your utility company 16 cents for each kilowatt hour of your electricity, you can enter into a Power Purchase Agreement with a solar company and pay, for example, 12 cents for each kilowatt hour that your solar system produces.
Leasing your solar system is a great option if you don’t have a significant tax liability. The leasing company will be able to use the tax credit and, in turn, offer you a solar system with a lower monthly payment than what you are currently paying for your electricity. With a lease you will not have as significant of lifetime savings, but it can be a great option for people with low or fixed income or retirees looking to reduce their monthly expenses.
Keep in mind: Leasing your system or entering into a PPA will both help save you money, however, they will not provide you with as great of savings as the purchase or loan options.
All four of these options can provide cheaper electricity than your utility. Because every situation is unique, Pick My Solar will assess your project on dozens of factors to determine the optimal solar financing solution for your situation.
6. How much does a solar panel system cost?
You understand the big picture of how a home solar array will spare you from paying a utility company for your electricity, but you’re still a little hazy around the actual pricing for solar. There’s just a few terms you’ll need to know to be an expert on the basics of solar costs.
Key Solar Pricing Terms
- Gross System Cost – ALL of the costs associated with your solar project. This includes permits, material, warranties, taxes, financing costs (if applicable), etc.
- System Size – The size of your solar energy system. This is calculated by multiplying the DC Watt rating of the panel make and model, by the number of panels in your array. The average system size in the United States is 7kW (kilowatts).
- Price Per Watt (PPW) – The PPW of a system is the standard metric by which to compare the price of your solar system offers. This is simply the gross system cost, divided by the system size (in DC Watts).
Factors that Influence Solar Pricing
- System Size – Most solar installers will offer a lower PPW the larger a system gets; some installers have a “flat” pricing structure.
- Panel Type – Usually, more efficient, lower degradation panels will have a higher price point. Price can also vary by color and brand.
- Inverter Type – String inverters tend to have a lower price point than micro-inverters and optimizers. However, the benefits of micro-inverters or optimizers may yield long-term benefits that outweigh additional cost due to the increased efficiency of the system.
- Upgrades – Main electrical service panel upgrades are sometimes necessary for residential solar installations in order to accommodate a system’s electrical output or to meet municipal building codes and standards.
- Location – Location, location, location – do you live in a remote area? Is your roof difficult to access? Is the solar installer busy? Do they have steady supply and demand to offer competitive pricing? Is your building jurisdiction or HOA solar-friendly? All of these factors can add to your system’s PPW.
7. What are the important aspects of planning my solar project?
Now that you understand the key factors for solar pricing and equipment, it’s time to share the important aspects to planning your solar project. This includes choosing the right installation company; reviewing the solar contract and warranties; understanding the process of solar installation; and making sure you properly maintain your system once it is fully installed.
When considering your installation company, it is important to know their number of installations, their locations, their bankability, their online reviews , and most importantly, our internal rankings. You will also want to strongly consider the length of their workmanship warranty. Workmanship warranties cover roofing penetrations, water damage, electrical work, and anything related to their installation for the time period described. You’ll also want to get references and testimonials from their past customers. Pick My Solar provides information for every installer in our network.
Contracts can often be overwhelming and packed with a lot of legalese. There are a few key areas of the contract that you should confirm are accurate: progress payments (how much you pay and when); any additional line items (service upgrades, EV chargers, buried lines); escalator rate (for lease or PPA); detailed warranty information; cancellation clause; system’s first year production estimate; and hardware specifications.
A professional, licensed solar installation company will provide an installation or workmanship warranty in addition to the warranties provided by the equipment they install (panels, inverter(s), optimizers, monitoring, racking system, etc). As for the equipment, most solar panels come with a performance warranty lasting 25 years. The performance warranty guarantees that a panel’s output capacity will not drop by more than 0.7% per year, or less than 20% over 25 years. This means that your system is warrantied to be at least 80% as productive 25 years after it is installed. This degradation rate can range from about 0.4% per year for modules from companies like SunPower, to about 0.9% per year for others, but 0.7% per year is the industry standard.
The actual installation of a solar PV system typically takes only a day or two. First, the materials are brought to your house as the crew of 3-5 workers arrive. Next, standoffs are installed on the roof, then flashings. Rails are then installed and the solar panels are attached to the rails, conduit is run for the wiring, and the system is then tied-into the main service panel. City inspection is then scheduled by your solar installer. After your city approves the system, the installation company then applies for permission to operate from the utility, which can take 1 – 4 weeks depending on the utility and volume of applications. The installation company will then switch on the PV system, set-up the monitoring system, and then you are good to go!
Solar PV systems require almost zero maintenance. The rain should be sufficient to clear off the dust and dirt on your panels, but you could do no harm by hosing of your panels every 2-3 months at the most. In areas that receive snowfall, snow shouldn’t be a major problem. Panels will still receive sunlight through the snow and heat up, causing the snow to slide right off.
When purchasing a solar system, maintenance is on the homeowner. Your workmanship warranty will cover labor to service or replace any hardware if it cannot be fixed remotely. If you lease a system or do a PPA, the financiers will almost always offer a ‘maintenance package’ where they offer to clean the system biannually or annually. Studies have shown that this is unnecessary for most tilted arrays. Be wary of these ‘maintenance packages’ as they are often overpriced.