How does solar energy work?
CleanFactor Energy specializes in designing solar photovoltaic (PV) electric systems that convert the sun’s light into usable electric power. A solar panel is comprised of modules made of crystalline silicon that can be arranged in a system (array) to offset the majority of your annual electricity usage. Solar panels are roughly 5 feet by 3 feet in size and are oriented towards the south or west to most effectively capture the sun’s energy. Once the sunlight is captured by the panels, the electricity is routed to an inverter to create usable AC (Alternating Current) electricity and connected directly to the main electrical panel. This energy replaces electricity that would be sourced from the utility grid and any excess production would generate credits that offsets usage at other periods during the day.
ADDITIONAL FREQUENTLY ASKED QUESTIONS
Aren’t solar power systems too expensive to make financial sense?
Not so anymore. Solar equipment, most notably solar PV panels, have had significant price reductions in the past two years. Due to the global recession and increased manufacturing capacity worldwide, panel prices declined 80% from 2009 to 2014. This is a significant factor in the affordability as solar panels are the most expensive component of the system, typically comprising 40% of the cost.
What incentives are available to residential customers?
- The most important incentive is the Federal Investment Tax Credit (ITC), which provides residential customers a 30% tax credit on the net cost of their solar system. This incentive is available through 2019.
- Numerous state-level incentives are available as well, such as the California New Solar Homes Partnership.
- Local-level incentives are also available, such as the GoSolarSF program (San Francisco) that provides an additional $2,000-$3,700 in rebates.
What incentives do commercial businesses receive?
- Commercial customers are eligible for all the incentives listed above, but also receive favorable tax treatment on their solar investment. Solar PV system cost is depreciated using MACRS, an accelerated expense
- Congress recently approved the “Bonus Depreciation” tax schedule that allows businesses to deduct 50% of the project cost in the first year, with the remaining cost deducted over the subsequent 5 years.
- Commercial customers are also eligible for the 30% Federal tax credit.
Does going solar pay?
Absolutely. For PG&E customers that have high monthly electric bills in excess of $200 monthly, the payback on your solar investment is typically 5-6 years. Factoring in that solar PV has a life span greater than 25 years, it is a worthwhile investment into your home or business. Also, electricity prices have historically risen 5-6% annually, so you can lock in your costs with a solar PV system.
How much is solar and how do we pay for it?
- A mid-sized residential solar array is generally around $16000-20,000 before incentives and tax credits. Counties such as Sonoma and programs statewide have enacted PACE (Property Assessed Clean Energy) financing programs that allow residents to borrow the upfront cost of a system and pay the balance off over a long time period (5-20 years) via their property tax payments.
- Otherwise, many opt to finance their solar projects via a Home Equity Line of Credit (HELOC) or can lease the equipment via a solar lease program.
Why not wait if prices are becoming less every year?
Great question. Although prices significantly declined in recent years, they have largely stabilized since then. Panels will likely be less expensive in the future, but if you wait for price reductions, the opportunity cost of lost electricity savings and reduced incentive levels likely make it more costly to wait.
Aren’t solar panels unsightly to have on my house or building?
Beauty is always in the eye of the beholder, but panel manufacturers have become more cognizant of consumers aesthetic tastes. Many panels in the marketplace have a slick, all-black format that are far more appealing to the eye and less distracting to the beauty of your home. Check out our photo gallery for more examples.