In all of my years of selling solar, and being a solar customer myself for my commercial and residential properties, I’ve developed what I believe to be the salient points to consider when deciding if solar is the right decision for you. Before you go any further into this article please keep in mind that it is assuming that you, and your home are actually eligible for solar energy, in order to be eligible you have to have a.) good credit; b.) the right roof space, orientation, and surface type; c.) have a large enough energy bill to warrant looking into solar; d.) be connected to a participating utility provider.

Decision Matrix

*This decision matrix illustrates a high-level consideration process that helps you narrow down which solar options would be right for you.

To start, regardless of how you go solar the first thing you need to understand is you’re only evaluating electricity, that’s it… Many people get caught up in ‘all the options’, or the equipment itself. This is a mistake and will likely lead to a very confusing and cumbersome buying process for you. If you look at solar for what it is, which is electricity, than you will be in a better frame of mind to make the best decision (meaning the best value for your electricity). Even if you purchase a system and own it outright you’re still just looking at electricity cost, in this case it’s referred to as levelized cost per kWh (kilowatt hour = unit of electricity). Using rough math, and not considering other factors such as degradation of energy production, soiling etc., an example of levelized cost per kWh is, a $10k solar system that produces 10,000 kWh per year and has a warranted system life of 25 years, that’s 250,000 kWh that will be produced over it’s warranted life, if you divide the system price of $10,000, by the lifetime production of 250,000 kWh, you will get $.04, that is the average cost per kWh that you’re now paying. In this scenario, it’s like going to Costco and purchasing electricity in bulk!

You Own:

Solar Utility:

Pros:

  • You’re 100% owner and can do with it whatever you please.
  • If you don’t finance it, you will have no further payments on the system or for the electricity.
  • There are no strings attached, to your home or other. Free and clear title essentially.
  • Dramatically lower cost of electricity and isolation from any future rate increases from your local utility.
  • Receive a 30% federal tax credit on the gross cost of the system; and in some areas you may even receive additional incentives from your utility company or local government.

Pros:

  • You have no liability for the system.
  • All monitoring, insurance, and maintenance covered by solar utility provider.
  • Guaranteed lower rates and savings.
  • Similar to how you buy electricity today, simply a different source, not responsible for anything but purchasing the power produced.
  • Lock in lowered rates for 20 years, foreseeable electricity costs for 20 years.

Cons:

  • Capital expense required: whether you finance or pay cash there is capital outlay.
  • You’re responsible for monitoring and maintenance: even if you have a company offering to cover this for you, if you have a problem you will still be responsible for contacting the appropriate parties and running the gauntlets of warranty and repair remediation.
  • There are additional insurance and taxes that will be due when the real property value is increased.
  • If financed, expensive origination fees and interest.
  • You have to have the tax appetite, or be able to use the tax credit, before 2016 or else that money is never recaptured.

Cons:

  • You don’t own the system, but you own the electricity.
  • Confusing concept to most, difficult to evaluate if over-thought.

Options to go-solar when owning:

  • Pay cash
  • Source your own financing through a home equity line of credit (HELOC) or other
  • Unsecured financing options
  • PACE financing – this is a financing program where the dollar amount is funded through your property tax via an assessment

Options to go-solar as your utility:

  • Power Purchase Agreement (“PPA”): this is a pay for what is produced plan, you lock in a specific rate, say $.15 per kWh, and the system is metered just like your current utility provider does, and you’re charged based off what you use.
  • Lease: this is a rain or shine, fixed and flat payment that you make every month regardless of what the system produces.
  • Pre-paid: this is where you essentially prepay all of the electricity, at a discount. This is a good option if you want to combine the benefits of owning the system, with all of the benefits of the solar utility options. Meaning, you will have no future solar payments with this system, and, you don’t have to worry about monitoring, maintenance, insurance, etc.

 

Now that you’re looking at solar as the electricity commodity that it is, you need to now filter out all of the options that are definitely not a fit for you. Don’t be confused by all of the noise in the solar industry, there are only 2 primary ways to go solar, you can own the system, or you can use a solar utility to own it for you and you simply benefit from discounted electricity prices, that’s it! Now there are subsets to both of these options, which we will cover once we decide which of these 2 are worth looking at, the table below covers the salient points to each:


If you’re like most home owners, you like the idea of saving money and you like the idea of solar because it is a clean energy source and it’s renewable, and you likely don’t care for your existing utility company, does this sound right? If so, you are part of the mainstream on this one. We’ve found that the biggest reason that homeowners don’t take advantage of this no-brainer option is due to one of the following:

  1. It seems too good to be true and there has to be some fine-print that is sure to bite you in the long run.
  2. You’ve heard a horror story about someone going solar and something went wrong when they went to sell their home, or the like.
  3. Contractors before have burned you and you’re sure that this solar business is either a scam or filled with untrustworthy providers.

Any of this hitting home for you? If you’re considering solar and you’ve been looking into it I’m certain that it does, and I’m certain because we talk to hundreds of customers every day and the reasons and stories don’t change much. None of the reasons above that are naturally holding you back are valid, and if you take the time (30 – 60 minutes) to read through the solar agreements, or speak with a competent consultant, not just some solar sales-person, you’ll realize that not only is none of the above true, but all is thoroughly addressed in the solar agreements. So don’t let that hold you back.

If you’re still reading this than you are both interested in solar, and are relating to this publication, so let’s now complete the evaluation overview so that you can make an educated decision on how you’re going to go solar. So let’s recap really quick, you now realize that this is all just a consideration of how to purchase electricity, right? You are approaching this with an open mind and not hanging on to fictitious fears or preconceived notions, correct? And you realize that amongst all of the noise and conflicting information that people have ‘told’ you about may not all be legitimate, right? Ok, great! So the process is:

Step 1: first start with are you qualified, as stated above there are a few factors that need to be confirmed before you even waste your time looking into solar

Step 2: are you wanting to own, or are you wanting to use a solar utility. I’ve seen people waste a lot of time exploring the purchasing option when it is not even a viable option at all, so to by-pass that, here are a few questions to ask yourself regarding ownership of solar being right for you, if you answer ‘no’ to anyone of these than there is little point kicking tires on a customer owned purchase:

Question 1: Do you have the ability to benefit from a tax credit that is several thousand dollars before the end of 2016? So, do you expect you’d owe taxes at the end of the year? Or do you expect that you have taxes already withheld from your paycheck that are in the several thousands of dollars, that you could claim to get back at the end of the year?

Question 2: Do you have the credit to get a loan for $15,000 – $50,000? Or, do you have the cash? And if you do have the cash, are you willing to part ways with that kind of money, even if the rate of return (coming from the avoided utility costs) is 10% or better?

Question 3: Do you prefer to take ownership of things? Or do you prefer to realize benefits but have someone else worry about the operations and maintenance?

Step 3: find a solar provider; for all of you do-it-yourself types, I apologize but this is not for you, I’ve only once in my career had someone actually do this themselves and not thoroughly regret it. So how are you going to find, and evaluate solar provider options? Well the internet is a good place to start looking for options, but what are you to do when they all are trying to ‘sell’ you something? That’s difficult to trust and put’s you in a defensive situation where you’re now overwhelmed with just trying to keep all of these people honest. Solar is not like working with a ‘contractor’, you can’t get 3 bids and properly evaluate those options, there are too many variables with solar electricity and every company will put some sort of spin on their offering to try to make it stand out and a lot of companies aren’t integrity driven like Ablaze Energy and they will flat out manipulate the numbers to try to convince you their offering is better. Here is what you need to look at once you have a solar provider (or several) to evaluate;

  • Do they have reference customers that they can send you and you can talk to?
  • Do they show up on the Better Business Bureau, what are their reviews like?
  • Do they have a Yelp! Record? What are those reviews like?
  • Did the representative demonstrate competency and integrity? Or are they pushing a certain product/service on you?
  • Are they quick to respond, punctual with follow ups and scheduled meeting times?
  • Price, is there offering better than what you’re currently paying your utility company?

Step 4: pick a direction and dive in! That’s right, time kills everything, and the more that you drag your feet the more money you waste paying too much for your electricity. Don’t be chicken little and let your preconceived notions make this important decision for you, once you’ve decided there’s a option that seems to fit your needs, complete your evaluation process by reading through the agreement and understand what you’re agreeing to. Most solar agreements are less than 12 pages and easy to read, no lawyers necessary, they’re plain English. If you’re comfortable with the terms of the agreement and you don’t have any unanswered concerns, sign up and join the solar revolution!

Step 5: sit back and let us do the work: as the owner of Ablaze Energy, the best solar provider in the country, I have to plug our great organization. If you end up going solar with Ablaze you will have a great customer experience, we facilitate everything for you so that all you have to do is sit back and enjoy knowing that you’re locking in a lower utility rate and you’re doing your part in lowering your carbon footprint.

Lastly, for those of you that think just because there are a lot of solar companies out there this is a dime a dozen opportunity and it will be here forever, think again. The tax credit that makes most of this possible expires in 2016 and your system would have to be installed before then to qualify, so given there’s a couple month sales to install process if you’re considering solar your clock is ticking.

Please feel free to download any of the following:

  • Sample PPA Agreement
  • Sample Lease Agreement