Here’s what to consider when deciding if solar energy is right for you
The first time Eric and Amy Forseter got bids to put solar panels on their East Bethesda home about five years ago, the payback wasn’t there. But by 2018 the technology had improved enough and the prices were lower so they decided it was worth the investment for their large colonial-style home built in 2010.
“Given all the carbon that is emitted in the world, we are always looking for a way to reduce our carbon footprint,” Eric says.
The Forseters’ panels have produced enough energy to reduce their electric bill by about 75%. That savings, along with tax rebates and the sale of excess solar energy they generate, means the Forseters anticipate recouping the cost of their system in five to seven years, which is ahead of the original projection. “I’m not becoming a millionaire off of it, but I’m saving money,” Eric says.
As solar becomes more efficient and concern about the environment grows, more homeowners are harnessing the energy of the sun to power their residences. The Solar Energy Industries Association says solar accounted for 40% of all new electric generating capacity in the U.S. in 2019—up from 4% in 2010 and 27% in 2014. The Pew Research Center reports that in 2019, 46% of American homeowners said they had given serious thought to adding solar panels at their home in the past year.
In 2010, there were about 150 homes with solar in Montgomery County. That grew to 2,506 in 2016 and 9,816 as of June, according to the county’s Department of Permitting Services. County Executive Marc Elrich has proposed a requirement that all new homes meet increased energy performance standards—through a combination of solar installation and energy efficiency measures—by 2022, among other strategies for all building types to meet the county’s goal of eliminating greenhouse gas emissions by 2035.
Local demand for solar is expected to continue, too, with passage of the Maryland Clean Energy Jobs Act in 2019 requiring that half of Maryland’s energy comes from renewable sources by 2030.
Bryan Bomer, green building manager for the county’s Department of Permitting Services, says many residents want to do the right thing, and switching to solar makes sense economically. “We have the availability here. We have a strong market. We have progressively minded people in the county who understand the impact of climate change,” he says.
The decision to go solar is made more enticing by state mandates for utilities to buy solar and by government tax incentives that reduce the bottom-line cost. Still, buying solar is a big investment, with an average price tag for installing a residential system running about $14,000 locally, according to Boston-based EnergySage, a comparison-shop website backed by the U.S. Department of Energy.
Initially, the COVID-19 pandemic hurt residential solar sales, as people were uneasy about making an investment during uncertain economic times, according to David Murray, executive director at Maryland-DC-Virginia Solar Energy Industries Association. Still, installation continued under strict safety guidelines from the Centers for Disease Control and Prevention. By summer, interest picked up as families that were working from home and using more appliances and electronics looked twice at their electric bills and turned to solar panels as a way to save money on energy, he says.
There are several factors to consider when you’re thinking of going solar, including the type of equipment, financing options, the suitability of your roof (slant, tilt and size) and the roof’s condition—it may not make economic sense to install panels on a roof that will need to be replaced in 10 to 15 years, according to the Maryland Energy Administration. Payback time can vary, but experts say it takes about seven to 10 years for the homeowner to recoup the cost.
For new construction, it is best to discuss solar early in the design process and have an analysis done to see if the site is suitable, says Tyler Abrams, vice president of project management for Sandy Spring Builders in Bethesda. Panels placed on south-facing roofs are most productive, although southeast or southwest can also work. If there is too much shade, solar panels may not generate enough energy to make it worth it.
About 10% to 15% of Sandy Spring Builders’ new homes include solar panels—twice as many as about five years ago, Abrams says. The company now outfits all of its homes with conduit (a big open pipe to accommodate wiring from the mechanical room to the attic) to make the addition of solar equipment easy in the future, he says.
Andy and Huda Montemarano wanted their new five-bedroom home, built in 2016 by Sandy Spring in the Edgemoor neighborhood of Bethesda, to be as energy efficient as possible. Along with a geothermal heating and cooling system, and lights that automatically shut off, they had solar panels installed.
“For us, it wasn’t so much about the money as it was not using up natural resources,” Andy says. “But the economics is certainly another feel-good aspect—especially in the summer months, when we don’t pay really anything for electricity.” Producing their own energy saves the Montemaranos $2,000 to $3,000 a year in electric bills, according to Andy.
As competition expands and equipment costs come down, it takes fewer years for the savings on electric bills to reimburse the owner for the installation. Payback is driving demand, and acceptance is growing, Abrams says.
“The stigma is changing. Some people feel that solar panels are ugly and try to hide them as much as they can and be strategic about where they are located,” Abrams says. “For others, it’s a bragging right.”
Zaidoon Khouri paid a bit more for sleeker black panels to match the black roof on his new Bethesda home in Glen Echo Heights. “I think the panels look really cool. They fit nicely with the modern style of our house,” he says of the system that was installed last November.
Khouri was thinking about having an aesthetically pleasing metal roof installed on the garage, which would have cost several thousand dollars more than a shingle roof. But when he realized the solar panels would cover the metal, he decided against it—an advantage of considering options early in the process.
Whether to go solar can depend in part on the incentives in the state where someone lives and the options for ownership. There are two basic choices when it comes to financing: Either the homeowner buys the system or it is owned by a third party and leased by the homeowner.
Owning the system allows you to reap all the savings in electricity that are generated and to benefit from the tax incentives. The federal government’s solar income tax credit for 2020 is worth 26% of the total cost of the system. You can claim the credit when you file your tax return. The amount of savings will go down to 22% for systems installed in 2021.
Tax incentives are declining (in 2019, the federal credit was 30%), although industry groups will lobby for extensions, says Nate Hausman of the Clean Energy States Alliance, a national nonprofit based in Montpelier, Vermont. “Increasingly, economics are driving the deployment of solar, rather than incentives,” he says.
States also offer perks to encourage solar. The Maryland Residential Clean Energy Grant Program provides upfront rebates of $1,000 statewide for eligible homeowners who buy solar systems. Residents also don’t have to pay regular sales tax on the equipment.
Solar loans are also available—from a bank, credit union or solar company—to purchase a system. Loans may be secured or unsecured and come with a variety of terms, interest rates and requirements.
Solar panels usually include two warranties, one that covers physical defects for about 10 years (although panels can last much longer); another for the actual performance output of the solar power, which is usually guaranteed to perform for 25 years at 80% of the energy produced in the first year of operation. If you own your panels and move, you can bring them to the new home. Or, some homebuyers may value them and want them to remain.
With a solar lease arrangement, the customer has no up-front costs. The panels are installed on your home but are leased from a company for a fixed monthly fee. As long as the value of the electricity you produce is greater than the cost of the lease, savings can begin immediately. The company that owns the panels is eligible for the solar tax credits, not you.
A power purchase agreement is an arrangement in which customers, rather than leasing the panels, which are owned by a third party, agree to buy all of the power generated by them. Then you can sell back any excess energy to the utility company. With this model, you only pay for the amount of power that’s generated and delivered to your home. Experts say these agreements are increasingly popular because they are being made with high-quality panels that are more efficient. Local companies are expecting an increased interest in third-party ownership if the economy is soft and people are hesitant to make big purchases.
Once a homeowner is up and running with solar panels, it’s important to know how energy bills will be affected. Maryland, along with many other states and the District, offers net energy metering. This is a billing arrangement that credits solar customers for the electricity they add to the grid beyond the amount they use—something more likely to occur in the summer, when there’s more daylight.
Maryland and D.C. also require a certain percentage of the energy sold by each utility to come from solar. And the 2019 Maryland Clean Energy Jobs Act requires that 14.5% of the state’s energy must come from in-state solar by 2030, driving up the value of solar panels and the price owners can get for the energy they generate. A Solar Renewable Energy Certificate (SREC) is created whenever solar panels produce electricity, and the certificates or credits belong to the person who owns the system. For every 1,000 kilowatt-hour of solar power a home generates, the owner accumulates one SREC that they can sell to the utility company or a third-party owner. As of early July, the market price in Maryland was about $76 per SREC, and experts say a typical customer might generate 10 to 12 SRECs a year.
As with any significant investment, it’s smart to do your research and look at customer satisfaction reviews.
“Whenever there’s a sales pitch, customers should discriminate and get multiple bids,” says Hausman of the Clean Energy States Alliance. “There are good resources out there and tools that make it easier and easier to do cost comparisons.”
EnergySage is an online platform that operates in more than 30 states to provide free solar quotes to customers in a standardized format with a ranking system to reflect the quality of the options. “Every company and website is trying to sell its own product. Objective information is hard to find,” says Vikram Aggarwal, founder and CEO of EnergySage.
EnergySage collects fees from more than 500 prescreened solar installers who participate in the service, but does not sell products. The model reduces the companies’ marketing costs and enables the service to offer lower prices, Aggarwal says.
To guard against salespeople who overestimate the potential savings, experts say it’s wise to use an online solar calculator. Websites such as pvwatts.nrel.gov from the U.S. Department of Energy can project savings for homeowners based on their location, utility rates and the size of the system.
Most residential solar systems generate electricity using two main hardware components: panels or modules that convert sunlight to power, and inverters that convert direct current to alternating current for use in the home. The panels are mounted on the roof and wired together in groups called “solar arrays.” The kilowatt-hours produced depends on the size or “power rating” of the system and the amount of sunlight it receives.
Companies can do a solar analysis to provide a preliminary estimate based on your average electric bill and the number of panels that can fit on your roof. Solar may be able to produce between 30% and 100% of someone’s energy, depending on usage and the surface space. Consumers also have the option of buying a battery system with solar panels, which can be an alternative to a generator when the grid fails in a storm and backup power is needed.
In the neighborhood where the Forseters live, solar is gaining momentum. Bernie and Paula Benson had their system installed in July 2018 and it covers 100% of their electric bill. They can see how well their system is performing on a phone app.
“I track it three to four times a day. It’s fun to watch,” Bernie says. “It has a little graph that shows by the hour how much you generate, and it tells you how many trees you saved.”
The Bensons bought their system through a co-op that negotiated a group discount for installation with Solar United Neighbors, a national nonprofit that promotes the use of solar and represents the needs and interests of solar owners. It has co-ops in Montgomery County that include 300 homes, according to Ben Delman, communications director. Once people buy through the co-op they can stay connected with fellow solar homeowners and join lobbying efforts to promote fair credits for the electricity they generate.
Bernie Benson has gone to Annapolis to make the case to lawmakers that the state should support solar programs. “We have grown children and grandchildren, and I’m very concerned about the environment and climate change,” he says. “To solve the climate change problem we are going to need everybody involved. We just wanted to do our part.”