6 Things I Never Knew About Solar
I’m relatively new to the solar industry, and prior to taking my current position, I wasn’t at all versed in renewable energy (which, of course, includes solar).
But, now my job is to educate folks in public and private organizations about solar. And over the last several months I’ve learned some things that, frankly, surprised me (shhhhh, don’t tell my boss—she may have second thoughts about hiring me). So I’m guessing the average Jane or Joe Business probably doesn’t know these either. Subsequently, I thought I’d share.
[drum roll….] Here are 6 things I never knew about (commercial) solar:
Going solar can make financial sense. It pencils out over the long term if you’re able to buy your system outright. In fact the pay back period can be pretty short if your organization is in a place with high electricity rates (like California). And if you choose to lease a system or enter into a PPA (more on this below) — you can actually start saving as soon as the system is turned on, with little to no up-front costs. (I realize that sounds like a sales pitch, but it’s true)
A solar installation works in coordination with your existing utility company. It makes sense when you think about it. Your panels generate power when the sun’s out, but where do you get electricity from when the sun’s not shining? That’s right, from your utility. In fact, many states allow something called “net metering,” which means your power company will credit you for any excess electricity you send back into “the grid”—which is what happens during peak hours, or anytime you’re generating more power than you’re using.
The technology has been around for decades, and it’s pretty mature. Don’t let solar panel efficiency ratings confuse you. At 20-something percent, or wherever they’re currently at, it’s tempting to anticipate significant improvement in the short term. But in reality, we’re not going to see 80, 60 or even 40 percent efficient panels available for commercial use anytime soon (if ever). Huh-uh. No way. Just so you know, those numbers stand for the percentage of the sun’s energy a panel can turn into usable power under ideal lab conditions. And despite millions invested annually by companies looking to improve that number, it’s only creeping up year over year. We’ll be lucky to get out of the 20 percent range within the next decade (or longer).
You don’t need to pay a lot of money up front to get it. I alluded to this earlier, but some of the more popular ways of going solar do not involve paying for (or financing) your system up front. Solar leases work similar to car leases, and another option—which is gaining popularity—is something called a Power Purchase Agreement (PPA), where you essentially “agree” to “purchase power” (duh) at a certain price over a specified period of time. And the price you agree to will be less than what you’re currently paying for electricity—as long as you’re in an area where solar makes sense (see the next point). If you enter into a PPA and pay more than you’re currently paying, I can’t help you. God bless your green, green soul.
Available sunshine is only one of the three key factors that make solar viable for you. Legislature and your local cost of energy are the two others. If you currently have cheap energy rates, you can pretty much forget it. Unless you’re hell bent on being green, and that’s the sole driver of you looking into solar, areas of the country with cheap electricity are not strong solar markets simply because customers won’t see the same kinds of savings as people who live in areas where there’s high-priced electricity. And local legislation also plays a critical role, as significant incentives are available in many places that really help make solar make sense—especially when you’re looking to buy (versus lease or PPA). Although leasing and entering into a PPA will also be more favorable in the “solar friendly” areas because whoever owns the system (the entity you’re leasing the system from, or buying the energy from) is still benefitting. So the lease payment or cost per kilowatt hour should reflect that savings.
You need to think long term. It may be tempting to get the cheapest solar available and start saving. And you will save, with almost any solar solution you choose (see the point about it making financial sense above). The issue is, these systems should be able to last you for decades. 20 plus years. And not all solar panels are created equal. Some of the less expensive solutions will start losing their ability to produce energy (at the level they were at when they were brand new) relatively quickly. So ten or more years down the road, you may kick yourself for deciding to go “cheap,” when at the end of the day, any solution is going to deliver savings—especially when you look long term. In most instances, there’s a reason why some panels cost more. Yes, warranties and performance guarantees can protect you to a certain extent, but what does it take to replace a broken or underperforming panel? How many phone calls? How many forms? How long until it arrives from overseas and (finally) gets installed? The bottom line is, do your research and make sure you’re comfortable with the company you choose to do business because they’re going to be in your life for decades to come.
So there you have it. I hope this was helpful. If you have any questions let me know in the comments below and I’ll do my best to get answers.