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Posted: 1:47 p.m. Friday, Sept. 26, 2014

Solar Panel Installation Guide



By Clark Howard

ClarkHoward.com


Is your power bill getting too costly? Now may be the time to consider installing solar at your home.

Residential solar installations are expected to be up 50% year over year. A small number of states where laws are favorable to solar account for a big chunk of that growth: States like California and Arizona, where the sun is friendly to you, and then New Jersey, which may seem odd, but the laws in the state are favorable.

In many other states, the power companies have used their influence to stop residential solar installs from happening. That shows the power of corruption in state legislatures.

But the reality is solar has become economically compelling. The cost of panels has declined rapidly after many technological breakthroughs.

Yet you should only consider solar if you're planning to stay in home for 7 years or longer and you have a clear shot of the Southern sky.

Before you consider solar panel installation at your home, you've got to do your homework


Get ready for your quote

The process starts by going online to a solar company's website and putting in your street address. This will allow the company to use a satellite map to pinpoint your home and assess your solar potential. Have your past year's electric bills handy, because you'll be asked about your energy usage.

Your property will also need a fairly clear shot of the Southern sky. Don't worry if your roof is too shaded. You can still have ground-mount panels installed in a sunny spot on your property.

Some of the more popular solar companies include SolarCity.com, Sungevity.com, SunRun.com, Sungevity.com, and Us.SunPowerCorp.com. Know that it is an unstable field, so there will be casualties as some companies go out of business and others start up.

Consider a lease

While some people buy their system outright, most people put solar on their home through a lease agreement—often called a power purchase agreement (PPA).

With a lease, there are no upfront installation costs for you. You just pay a flat monthly fee or rate for the equipment and the energy you generate. The solar company typically handles necessary permits and takes any tax breaks or renewable energy credits—not the homeowner. They're also the ones who handle ongoing maintenance and repair.

But there is a drawback to a PPA. Installing solar with a PPA does create a drag when you sell your home, because a buyer has to qualify for both a mortgage and the long-term PPA on your panels. Very often, it can be harder for a buyer to qualify financially for the PPA than for the mortgage to buy your home!

Ultimately, my preference is for you to buy solar equipment, rather than lease it, if you're financially able to do so. There's even a 30% federal tax credit to sweeten the deal for buyers. Read my discussion about whether or not solar energy incentives whether are a good use of government money here.

Know the right questions to ask

Always remember to ask these questions of any company you're vetting to do an installation. The following is excerpted from my book Clark Howard's Living Large for the Long Haul, where I discuss solar panel installation on pages 147-151.

  • How long has the company been in business?
  • How many systems have they installed?
  • How long will the installation take?
  • Who pays for the permits?
  • Is it a roof-mount system or ground-mount system?
  • Who applies for any grants and submits all the paperwork?

Explore your alternatives 

You might want to consider solar shingles if you live in a restrictive covenant community that prohibits traditional panels. The solar shingles are small and they look just like the traditional asphalt ones you're used to. They even get nailed to your roof in the same way! You just need an electrician to hook them up to your home's electrical system.

Solar shingles are not as efficient as traditional solar panels, but The New York Times reports they can offset your bill by 40 to 80 percent, and they're typically 15 percent cheaper than a solar panel system. Visit DowPowerHouse.com for more details. So far they're only being sold in California, Colorado, and Texas.

Go green to get more green at resale

The longstanding assumption in the real estate market is that buyers don't really value energy-saving stuff like putting in solar panels. But that turns out to be wrong.

In 2011, the Lawrence Berkeley National Laboratory released the results of a nearly decade-long study of home resale values in California. The study found the typical home with whole house solar sold for $17,000 more than a home that didn't have it in the state. That can recoup virtually all, if not all, of any installation costs.

In a similar vein, green-certified homes can command 9% more in offers when it's time to resell. That's according to a 2012 study out of UCLA that looked at sales of more than 1 million California homes between 2007 and early 2012.

For further reading: