This experience was from Texas but it could happen to you!
by Wes Geary
Solar is wonderful and it can save consumers money if purchased right. However, I’ve got a cautionary tale from a recent encounter with a company that tried to sell me a larger than necessary solar energy system upgrade. With the current Inflation Reduction Act’s incentives for renewable energy production, solar companies have been given new life and are aggressively pursuing customers to take advantage of the tax credits.
A lady called and asked if I was interested in solar for the home. I told her we had 8 panels but might need a few more since we were not at net zero right now. She asked me to send her a copy of one utility bill. I told her I’d do that and suggested that they look at a whole year’s bills to get a better idea of what we need because usage varies greatly during the year. I already had a spreadsheet of the prior 12 months’ bills; I added the current bill that just arrived--now it had 13 months of data. The data showed fixed charges of $20/month for reading the meter, average variable electricity usage charges of $35 per month, and a net total of 3185 kwh of electricity we bought over those months.I emailed everything to her, and I mentioned that our electric bills were already fairly low.
Their salesman called a few days later and recommended we add 9 more 400 watt panels because that was the maximum we could fit on the southside roof. He also recommended a battery to capture excess daytime production and use it at night, hopefully getting us close to a net zero energy bill. He emailed me a proposal that was basically just a sentence saying the total price for this upgrade was $39,000 before the federal tax credit.
His proposal didn’t use any of the utility bill data I sent him. He determined how many panels I should buy based on the maximum number our roof would hold rather than how much energy we needed to reach our goal. Also, he didn’t show me how long it would take me to recoup the purchase price through my energy bill savings.
By my calculation, the 9 panels he recommended would have generated 7110 kwh in 13 months (9x 0.4kw x 5hr/day x 395days), when we only needed 3185 to be at net zero. This kind of error happens when you determine the system size based only on roof capacity and ignore the home’s historical energy usage. Also, the local utility provider, CoServ, does not credit its solar customers for overproduction, so we’d be giving away over 1/2 of the electricity produced by those new panels! (Grateful for Xcel and our Colarado state utility board on the side of the customer.)
Next, I did a rough of calculation of the payback period. After the 30% federal tax credit, a $39,000 system would cost us $27,300. If the system eliminated the variable cost of our electricity, it would take 65 years for it to pay us back at current rates. If electricity prices continue to increase by 2.69% per year, the payback period is 37 years, a very long payback given that the panels only had a 25-year warranty!
The main lesson is, make sure the salespeople show you their math, and explain clearly and simply how much they think you will save in kwh and in US dollars, based on your actual utility bills. Don’t let them determine how many panels you need solely by how many your roof can hold. They should start by considering what your actual electrical needs are. Make sure they exclude fixed costs such as the cost of reading the meter from their savings calculations; those costs must be paid whether you use the utility company’s electricity or not. Finally, a solar company must tell you the payback period for the investment you are making. If not, be sure you ask, and always review their calculations.
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