SOLAR on your homes?

19 Replies

Just curious if anyone has installed solar on their new builds or other construction? What are your thoughts? I've been thinking of putting it on the house we own in Redding. It's a 4300 sq. ft. house on 20 acres. It's very sunny there much of the year, though when it rains, it can go for a month! 

If you do use it, have you ever been in a situation where there was an excess?

Texas is an oil and gas state.  You will likely offend about 1 in 2 buyers with solar panels.  :)

Although in Austin they are growing in popularity especially as the prices drop and electricity prices increase.  We haven't put them on any of our houses.  I'm not sure they are a selling point and they do cost more.  It's harder to justify a premium price for the panels.  They might make a good option for a buyer that wants them.  They can be installed pretty quickly.

That being said, I have solar panels on my personal home and they save me about $100/mo in energy costs.  In Austin, solar power offsets your usage ($0.11/kWhr).  However if you produce an excess they only give you ($0.03/kWhr) so that you don't go trying to be a producer.  They are telling you offset as much as you like, but don't produce because that will take money out of our (Utility) pocket.

my dad recently put solar on his house. I guess it is supposed to pay for itself in less that 7 years from what I understand. Redding is one of the sunniest cities in America. You've got that going for you :)

I think Solar panels for a personal residence that you have no plan on selling any time soon is awesome. My good friend and real estate agent and I were talking about this. She had a buyer just put a 30k solar system on their house only to get transfer orders to someplace else. They are going to recoup very little of that investment when they move. Same thing for rentals, people very often don't add that savings into the cost. They look at the rent # and not the all inclusive price.

I had this discussion with a Solar Operator recently.  And discussed it a little more in my blog, but as Elizabeth Colegrove  said, for a rental it is about 7 years payoff.  So for a long term buy and hold proposition it is better. But you need to factor in the additional work load of being responsible for paying the electricity bill, and/or reading the meter, and/or invoicing the tenant for electrical costs.  The roof also needs to have certain pitch, and certain orientation, and exposure.  I figured, hey, Properties in Las Vegas, great idea.  But then, yah.  

 @Karen Margrave

If I were you I'd try to find out whether a solar system will add to the appreciation of the house. The local installer can typically give his assessment upfront based on the parameters of the location including financing options (e.g. lease, power purchase agreement)

In the SF bay area if your bill is over $100/mo. than solar begins to make sense given enough unshaded roof area.

Not really worth it, 7 years is a long time, unless you get the solars at 10-13k (selling it at 25-35k, is absolutely absurd) installed, which is really what it is worth, since these panels came from China and it takes only 3 guys to install all of it in 3 days. I had an employee that previously worked with a solar contractor and had a little chat with him putting something for a friend's house.

There is a way to do solar that makes sense for a landlord.  Get solar installed financed with a Power Purchase Agreement (PPA), which is basically a long term lease.  Whatever electricity is consumed over the amount produced by solar is billed by your electric provider, assuming you are grid tied.  Then include the PPA as a component of the lease payment into the rent and you in turn pay it so that you are assured it gets paid.

I would also structure it so that your tenants will be effectively paying off the PPA in 7 - 10 years. Then once the solar is paid off, that "excess" part of the rent will be yours as free cash flow.

In my area they don't add any value to spec houses at this time. Installation would run $10k-$20k depending on what rebates are going on at the time, and the ROI for that money would be zero.

Now for your personal house I'd highly recommend it.

Had an interesting discussing at the Orange County BP Meetup (everyone should come) with an engineer that deals with solar projects. He has a lot of experience in that area with developers. I can put you in touch since he is in the are but not coming up in the BP search as having an account.

California gives nice tax breaks for solar panels. Mississippi, alas, has none. 

Originally posted by @Karen Margrave :

Just curious if anyone has installed solar on their new builds or other construction? What are your thoughts? I've been thinking of putting it on the house we own in Redding. It's a 4300 sq. ft. house on 20 acres. It's very sunny there much of the year, though when it rains, it can go for a month! 

If you do use it, have you ever been in a situation where there was an excess?

 Karen

I love to read your post, you have a great writing style.  Solar just seems like a large gimmick to me,  The latest attempt to PUSH it one us was done by a huge house flipper, The agents name is Polly Watts, 1000's of flips to her name in the last few years.  One of my team members our "buyers agent" found a new home for her client, one Ms. Watts was selling.  They attempted to add solar panels to the home as part of the sales contract. Understand they weren't installed, they were going to be sold as part of the deal.  The agent in our office agreed to their counter offer not really understanding what they were agreeing to pay a monthly fee for this "big mistake I know" but 2 days before the closing the escrow company calls and asked the agent to have her client sign the solar agreement, it was just $435.00 per month.

I understand this flipping company has a huge inventory of home that all can be potential solar sites.  I guess it speaks to the over all health of the market when big operators margins slip so low they need to step to this level.  To go back to your question about the product SOLAR ENERGY if it was really a long term solution, would all of this nonsense be needed to sell it or is the public so stupid we need to be tricked into using it.  

On a personal note we were in Redding, Ca last weekend for a wedding and went to a fabulous ranch home in the hills east of town off highway 44.  we saw ranch after ranch that looked amazing and were told that most were owned by people like yourself.  I'm wondering if you added the fact that you will only be using the SOLAR ENERGY 1/3, 1/2, or 3/4 of the year my guess is it just wont work out. I know they say the power could be reversed and you would be feeding the grid it just doesn't look right to me.  I think I must be just to old for such dreams "free power" that cost $435 per month.

Jim

Hi Karen,

I am going to put solar panels on my custom house (I'll be living in it for a long time I hope) and got a bids ranging from $2.85-$3.50 per kw installed.  With the federal tax credit of 30%, which has been extended through 2019, I estimate that my payback period will be 9 years.  We don't get as much sunshine as Redding and Virginia does not offer any state incentives so your payback period may even be shorter.  A good place to estimate how much energy your solar panels will generate is through this website by the Department of Energy: http://pvwatts.nrel.gov/.

We are going to install a dc to ac inverter that is compatible with Tesla's Powerwall.  When Tesla finally starts shipping these out to customers, the Powerwall will act as backup power in case of outages.  Of course, you probably know that typical backup generators can be very pricey so the Powerwall can be a great alternative if a customer elects to go with solar panels.  The Powerwall can also be beneficial if your area charges different rates for peak hours and normal hours of energy use.  You can use the solar energy stored in your Powerwall during peak hours to avoid those higher costs.   

The best report I've read about whether or not solar is a good investment for a homeowner is the Going Solar in America report by the N.C. Clean Energy Technology Center. The report found that purchasing a 5kw solar array in 20 of the 50 largest cities in the U.S. is a better investment than the S&P 500 index (assuming 6.61% annual return).  In cities with low electric rates and unfriendly solar laws, the customer may not make a return on investment.

I think if you do the analysis for the customer, they can decide if it makes sense for them or not.  But I think you are wanting this on your own home?  I would say do it because as someone who wants to reduce our dependence on dirty sources of energy - solar pv is the cheapest and easiest thing you can do right now.  

  

Woops just realized that the last few posts were from half a year ago.  

@Karen Margrave - did you get those solar panels?

Update - a work friend's husband actually installs solar panels for a living.  He told me they are relatively easy to install.  He can get them delivered to me for $1.50/watt, which is good compared to the $2.50/watt installed price I have gotten recently.  I am planning on getting a 4,680 watt array so this would save me $4,680.  If I went the DIY route, my payback period would be less than 5 years. Have you thought about installing them yourself since you already know how to build houses it shouldn't be that hard?  

make sure you get everything you need to protect your roof from leaks!  I'm a solar contractor and you can get equipment at good prices direct from websites and suppliers like renvu.com or civicsolar.com. I recommend Solar panels from SolarWorld and inverters from enphase or SolarEdge. If you want the hottest modules on the market, splurge a little for LG.