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Journey to Solar – Part Seven – First Year Savings

Posted on March 25, 2014 by ocgreenmama

Now that we’ve had our solar panels for over a year, we have a better picture of how much energy they will produce/offset during the various seasons and daylight hours throughout the year.

Solar City, our solar provider, makes it easy for customers to monitor and understand their energy generation through their Solar Guard monitoring service. I can go online anytime and see our panel’s energy generation…

…by year

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…by month

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…or even by day

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Along with a running tally on the bottom of the screen, showing how much carbon dioxide we have offset with our system. To date, we have offset 16,599 pounds, the equivalent of 7.9 mature trees. I love that!

And while the carbon offset alone puts a smile on my face, what makes me smile even bigger are the savings, which I calculate at $3287.92 during the first year of our panels.

Here’s how I arrived at that number. The year prior to our solar panel installation, we paid $4956.49 to Southern California Edison. I know!! Can you see why we were very motivated to go solar?

Keep in mind, we did not have the roof space and elevation (this is all analyzed by Solar City’s engineering department – you don’t have to worry about this) to offset our entire energy bill. Solar City did make it clear that we would still have a bill from SCE each month. Some months the bill is almost nothing, and other months – like over the holidays with short days, Christmas lights and lots of parties – it’s higher.

All together, we paid $2203.37 to SCE during our first year of solar panels. However, this number needs some adjustment.

Our post-panel energy use is skewed higher because at the same time we installed our solar panels, we also added an electric car and charging station in our garage. This is not an energy expense that we had prior to installing our panels. All other things remaining constant, this should be backed out of our total energy expense to generate a true comparison.

Using a basic online calculator – which estimates that our car costs $.0382 per mile to charge in California – driving 14,000 mile in our first year – our car had an energy expense of $534.80.

Once you subtract this new, additional expense from our $2203.37, the total is $1668.57 in the first year with solar, as compared to $4956.49 in the year prior to going solar. Overall savings $3287.92!!

Not to complicate the numbers, but I think its worth mentioning that the $534.80 cost to drive 14,000 miles is a separate and additional savings. If you compare it to a car that gets 30 miles per gallon on average and gas cost of $4 per gallon, an equivalent gas-powered vehicle would have been $1866.67 to drive the same vehicle over the same time period.

If you do not back out the expense of charging the car, and instead you take $4956.49 paid to SCE and $1866.67 spent on gas, you get a grand total of $6823.15. Compare that to $2203.37 we paid for electricity in the first year (including cost of charging the car), that’s a savings of $4619.78.

Also, just as important to me as the savings, that is $4619.78 not spent on dirty, non-renewable, fossil fuels. Woo-hoo!!

Of course, our solar panels do have a cost. As I mentioned in previous posts, we chose Solar City’s pre-paid program, where we pre-paid our energy for the next twenty years. The total cost of our panels was $18,784 – total cost for all installation, warranty, maintenance, and energy generation for the next twenty years. We will never owe another dime for our solar energy. If you are interested in more about financing and paying for solar, I have lots more information in this post – Journey to Solar, Part Two, Financing.

So, our initial $18k investment will be paid back in five and half years with our current savings. Everything after that is pure money in our pocket. Keep in mind that is calculating no increase in utility rates during that time – which we know is never the case.  In fact, fossil-fuel energy prices rise by 39% on average over a ten-year period.

Our savings will begin to skyrocket over the next twenty years, as solar remains constant, SCE raises their rates year over year, and I continue to look at every nook and cranny of our house to find ways to reduce our energy consumption. I only wish I had a roof large enough for us to go 100% solar. If you do, do it. Do it now. Even if you only have room for a small system, the savings – in terms of the environment and cash in your pocket – makes it worth looking into for almost all homeowners.

If you have any other questions, ask away in the comments below, email me, or just stop me next time you see me. I LOVE talking about solar.

For more information about installing solar panels in your home, here is a link to view all the posts in my Going Solar Series.

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Journey to Solar – Part Three, Auditing & Evaluation

Posted on November 27, 2012 by ocgreenmama

After determining that you want to go solar and deciding how you want to finance your project, you move on to making final decisions about your system and energy needs.

At this point, the solar company sends out an engineering team to verify that the initial architectural plan is doable and feasible. The team gets up on the roof, crawls through the attic, checks the current electrical system, and takes lots of lots of measurements and pictures.

This all leads to the final architectural plan. In our case, it did vary slightly from the original plan. The actual capacity of our roof to house the panels was a bit off, and our system is going to be just slightly less powerful than the original plan.

After the final solar architecture is done, the next step in Solar City’s process is to conduct a Home Energy Evaluation, a comprehensive audit of how your homes uses – and loses – energy.

During the evaluation, a team of people arrive your house, crawl through your attic, check your heating and air conditioning systems, and use crazy contraptions like these…

…to analyze the “leakage” of your heating and cooling systems.

They also check every appliance, every light bulb, and every window and crevice of your home.

They crunch all that information and provide you with a report card of the energy usage of your home.

The good news for us is that overall, our home is pretty efficient. It is well insulated, with little “leakage” of air from the outside in, and vice versa. Our dual-speed pool pump is a huge savings, as well as our LED and CFL light bulbs.

A few things they did recommend: eliminate one or more refrigerators (we have a kitchen fridge, garage fridge, wine refrigerator, and kegorator – yes, I know, it’s total over consumption – perhaps the next episode of ecofessions?); upgrade to more efficient air conditioning units; add an extra layer of insulation in the attic; and continue replacing any remaining incandescent lights with LED or CFL bulbs.

The good news is that although our system is slightly smaller than originally planned, by incorporating some of these energy-saving measures, we can keep our solar energy to on-the-grid energy ratio in tact from the original plan.

So now we are one step closer in the process. One step closer to our goal of living off-the-grid as much as possible. Getting closer…

Next up…part four, applying for government rebates and getting association approval (the most entertaining part so far, I promise).

Related Posts:

Journey to Solar – Part One, Making the Decision

Journey to Solar – Part Two, Financing

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Journey to Solar – Part Two, Financing

Posted on October 2, 2012 by ocgreenmama

Once you make the decision to go solar, the next step is deciding how you want to pay for it.

Solar has come a long way from the days of buying the panels outright.

Today’s solar is flexible and can accommodate many different budgets.

There are basically three ways to go solar:

1. Purchase – this is the oldest and was the most common way to go solar years ago. Basically, you purchase the system, and apply for and receive all your rebates from the Federal and State government directly. Once you have the system installed, it is yours forever, but you are on your own for maintenance and service outside of the warranties. These days, very few customers go with this option.

2. Pre-Pay – This relatively new plan allows you to “pre-pay” your solar energy usage for a set period of time – generally 20 years. You pay a set amount upon installation of your solar panels – essentially, what you would pay for the kilowatt hours (kWh) at today’s rates, and then get all of your solar energy at no additional cost for the next 20 years. In fact, if your solar system does not generate the guaranteed amount of kWh on an annual basis, the solar company will be sending a check to you each year. At the end of the twenty years, you can renew your plan (at discounted rates) or turn the solar panels back in to the company. This plan includes system monitoring, repair service, insurance coverage, and a performance guarantee for the duration of the contract term.

3. Solar lease or Solar PPA – Both of these options essentially boil down to a zero-money-down situation, where you pay a monthly amount to the solar company once your panels are installed and up and running. They offer similar financial advantages to the homeowner. The primary difference is that with a lease you pay a set amount per month, and with a PPA you pay per kWh. One of the benefits of the SolarPPA is that you can purchase the system any time after year five. Availability of SolarPPA and SolarLease vary by location based on what your local utility company prefers. This plan also includes a “buy-out” at the end of the term, or turning panels back in to the solar provider (if they even want them at that point). Both of these plans offer flexible payment options, system monitoring, repair service, insurance coverage, and a performance guarantee for the duration of the contract term.

One thing I like about going with a full-service company like Solar City, is that regardless of which payment option you choose, they take care of every step of the process —including engineering, financing, permits, installation and ongoing monitoring.

In our situation, the Pre-Pay plan was the best deal by far – even better than purchase. With an initial investment of $22,000, it was calculated that we would save $90,000 in energy costs over the twenty-year period. With the payment plan, we could invest nothing initially, pay a set $235 per month for twenty years, and save around $60,000 in energy costs over the lifetime of our contract.

So our decision was whether we finance through the solar company at a set price of $235 per month – effectively paying them $53,000 over twenty years, or find a way to pay them an initial investment of $22,000 (even if we have to borrow money to put that down). For us, the flat fee of $22,000 made more sense. Money is so cheap these days, with interest rates at all-time lows, we just think that the initial payment makes sense financially. If you have access to cheap money through a line of credit, or savings, or even selling some investments, I think it makes sense. I mean, what investment is going to guarantee a return of $90,000 over the next twenty years?

In both scenarios, we would still have a small electric bill depending upon our energy usage. Also, it was projected that we would save a few thousand dollars on our electric bill per year initially, but that amount moved up to almost $9000 per year in year twenty of our agreement. The reason the savings are so high is that unlike electricity, the payment to the solar company is set per month, with no increase, over the course of twenty years.

With energy prices rising approximately 39% over the past decade, and estimated to continue, by locking in your energy costs now, you save a bundle over the next couple of decades.

Even if we decide to sell our house, the solar agreement is transferable, or we can transfer the solar panels to a new home. What’s more, homes that have solar panels are shown to increase in value by 3-4%, which for most people, covers the cost of the system.

But everyone’s situation is different and each buyer has to make the decision that is right for them. The bottom line is that no matter what option you choose, you are going to save money in the long-term by going solar.

For more on solar financing options, you can check out this link.

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Wordless Wednesday: Macy’s Store at Irvine Spectrum

Posted on September 19, 2012 by ocgreenmama

The other day on the Ferris Wheel at the Irvine Spectrum I spied…solar panels on the top of Macy’s.

They made me smile. And think I should probably shop at Macy’s more often.

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Journey to Solar – Part One, Making the Decision

Posted on September 18, 2012 by ocgreenmama

We are in the process of going solar at our house. I want to document our journey to demonstrate how simple, easy and cost-effective it can be. And hopefully inspire some of you to consider solar panels for your own home.

We are a few steps down the road at this point, but I’ll start back at the beginning with Step One – making the decision to go solar.

The reasons to choose solar energy are numerous and well documented. Let’s just say for me, it breaks down to either powering our home using solar (a clean, non-polluting, completely renewable energy source) or continuing to run off fossil fuels (a finite source that pollutes our water and air, and is a primary contributor to climate change). It’s kind of a no-brainer.

With that said, I will focus primarily on the financial aspects of going solar. Quite simply, it can save you A LOT of money.

In general, when looking at solar purely from a financial perspective, it makes sense for those who own their homes, are planning to stay there in the near future, and generally have an electric bill that is over $150 per month.

For us, our journey to solar started shortly after we moved last year and received our first electric bill – over $400! I couldn’t believe it. I had never seen an electric bill over $200 in my life.

Since then, we have implemented some energy-saving, cost-cutting measures, like switching all our bulbs to CFL or LED, turning off appliances not in use, and installing a new dual-speed pool pump (that alone has saved us about $75 a month). With these measures, we have reduced our bill to about $300.

Still, way too high, and using far too much energy from the grid.

So, I started interviewing solar companies.

It turns out, we can go solar for no money down, lease the panels for around $200 per month, and reduce our electric bill to about $40. That means, we can start saving money every month, right away, with NO MONEY OUT OF POCKET. Not only that, but as the years go by and Edison’s rates continue to increase (vs. our fixed-lease rate for our panels), we save even more money. I’ll give you more details and the full breakdown in my next post.

The next step is to select a solar contractor to perform the installation.

After looking at many companies, and meeting extensively with three, I settled on Solar City.

So far, I am very happy with my decision. Solar City’s service is excellent, their technicians are timely, and they take care of the entire process for you – including engineering, financing, permits, installation and ongoing monitoring of your system performance.

Now, we are on our way. Actually, the van showed up today to get us moving forward. I was so excited. I felt like a kid on Christmas.

In my next post, I’ll break down the three main ways you can pay for solar, how the math works in our case, and how it may work for you too.

For a good overall summary of the process, check out this short, informative video, “Affordable Solar Power and Better Energy”.

(Point of clarification: Solar City in no way compensated me or provided me with any type of discounts for this recommendation. I selected them solely because I felt they were the best provider in California.)

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