Solar Panel Installation (A U.S. Homeowners Guide)
Solar panel installation, a US homeowners guide, covering everything you need to know about integrating a solar system into your home.
Sustainability, renewables, energy storage, green energy bundling, and net-zero carbon grids have become buzzwords for the climate change movement in the last half-decade.
This is not surprising because back in 2015, all the world leaders decided to put the pedal to the metal towards all-out decarbonization.
The results since then have been phenomenal. In the United States alone, all energy-related carbon dioxide (CO2) emissions decreased by 11% in 2020 (COVID-19 played a major hand in this as well). In the power sector alone, CO2 emissions from coal are steadily declining (see image below).
As we speak, generation from renewables is on the rise. Generation from wind and solar increased by 17% in 2020. Still, they come with the issue of intermittency and are not accessible to all social classes.
These are exciting times, but at the same time, they can put a burden on those who are not well-informed on the cost impact of “going green.” An example of this is the drastic shift of California from fixed electricity rates to tiered and time-of-use (ToU) rates. This significant policy change is now forcing people to reconsider how and when they consume electricity. It may even be the very reason why you are reading this article.
Bottom line: The U.S. is running at full speed towards fighting climate change, and they are pushing everyone to cooperate. At the same time, the thought of installing solar panels on your roof is so overwhelming that most of us are likely to throw our hands up in despair.
Fret not. Luckily for you, that is the main reason why we created this in-depth guide on solar panel installation.
In summary, you ideally would want to partner with an accredited company for your solar panel installation. The key considerations when installing a solar rooftop are (1) the solar potential and policies in your area; (2) financing (we recommend you pay cash upfront and avoid lease terms longer than seven (7) years); and (3) choosing to DIY or not.
Solar Panel Installation (The 7 Step Process)
1. Figure Out Your Homes Energy Efficiency
Consider this as an optional step. Remember that you are here because you are already pumped to get into solar panels before the tax credit incentives go away.
Wait, there are subsidies?
Yes, 26% worth of rebates, to be exact. More on that topic later.
You are here primarily to install a solar panel system that is based on your current electricity consumption. However, if you feel strongly about reducing your greenhouse gas (GHG) contribution by being more efficient, you have our respect.
Now, here are some general guidelines and information to increase the overall efficiency of your home:
- Electricity consumption is highly driven by weather. Using temperature regulation devices such as heat pumps during the winter and A.C. during the summer significantly impact your electricity bill. Therefore, this is a great place to start. How? By using the upcoming concepts presented.
- Know when and where electricity is consumed. Measure everything in your house using a combination of these three (3) tools. Like we said earlier if you want to go all out, be our guests. If you feel this is taking too much of your precious time, save it for another time and skip to step two (2)
- Consider online energy monitoring & display devices. It is a one-time not-so-big-time investment that will help you monitor which time of the day. This method is perfect, especially for people who are stuck with seasonal time-of-use rates with their utilities. Knowing when and where electricity is wasted in your home helps you time your energy consumption decisions. In-house metering technology has aged well, providing energy consumers great feedback on how much electricity each appliance is eating up.
Just so we are clear, we are not affiliated with this company. Still, it is an excellent place to start if you would be interested in this activity.
Lastly, we think that one valuable benefit in availing energy monitors is that it will help you find phantom loads.
2. Assess Your Homes Solar Potential
The main factors to consider are:
Actually, there’s only one main factor: Your location.
Knowing how much solar energy is available in your area plays a significant role in determining how fast you can get your money back. If you’re going to pay all of your 5kW solar panel systems in cash, the typical ROI is 5-6 years when done with the help of a solar installer.
Yep, which state you are in has the most impact on how much solar irradiance is present (not to mention each state may have its own solar incentive programs). Irradiance is the rate at which solar energy falls onto a surface. If you are curious, it is measured in watts per unit area (W/m2).
Don’t get us wrong. The orientation and tilt of your solar panel installation also affect the total power output but don’t have as much of an impact compared to the location of your home.
Your location affects the amount of solar power that your solar panels can utilize throughout their lifetime. Average sunlight generally diminishes as you head farther north in the states. However, you can see that sunlight isn’t simply a function of map placement. Landscape features also play a vital role. This is why a northeastern state like Minnesota only gets 60% of the average solar power received by southwestern California folks.
We suggest finding out how much solar power is available in your area through the Global Solar Atlas (see image above). It has all the information on estimating your state’s solar potential.
Alternatively, we have compiled an easy-to-read table of all the American state’s peak sun hours here.
The second most significant factor to consider is the orientation of your solar.
In general, you would want your solar panels facing south. Of course, there is nothing much you can do if your roof doesn’t allow that. You could work with a solar installer to optimize the orientation of your solar through means of a customized mounting structure.
Angles also affect solar production, but not as much as the first two. A solar panel installation in Arizona facing east with a 5-degree tilt will yield much more than a south-facing solar panel with a 30-degree angle in Michigan.
But, if you want the best solar output, 30 to 40 degrees is the sweet spot.
What if you are willing to make the investment, but your area isn’t ideal for solar?
Of course, less solar power means more extended returns on investment. Thankfully, there are already existing solutions to this problem, such as community solar. Some tech companies like Arcadia are also beginning to solve this problem. They are focused on making renewable electricity available to anyone who pays for electricity through their platform.
We recommend using this easy-to-use calculator of PG&E to help you estimate your solar needs and how much it would all cost. We tried it. It is very consistent with the calculations we made in our previous article.
3. Understand All Your Solar Options
Now that you already know how much solar power you need for your home, let’s talk about financing them. Right off the bat, we recommend that you pay your solar panel installations in cash and avoid long-term leases.
“How long is long?”
In our opinion, only utilities should agree to power purchase agreements (PPA) that span ten years or longer. Corporate companies can tolerate 5-10 years of leases with solar developers. Still, residential homes should not tie themselves down to more than 7 years of solar financing contracts.
PPA and Lease Terms
In a nutshell, solar leases and PPA’s are the same things. They are both financing agreements between you and the company lending you money for solar panel installation. Let’s simplify this and walk you through how we would describe it in an honest door-to-door sales pitch manner:
- Zero down payment. It is perfect for people who can’t afford it and have no spare cash lying around (See where this is going?).
- You have two options to pay up your solar investment: paying a fixed rate monthly or an escalated rate that starts low and increases throughout the years. Each option has its pros and cons, but the bottom line is both are still financing, plain and simple.
- Typical terms are 20-25 years (The average stay in a home is 7-8 years).
- Most roofing materials in the United States have an average lifespan of around 15 – 20 years. This means you will most likely pay someone to take off the panels, replace your roofing, then put the panel back on. Additional cost. Longer ROI.
|Description||Power Purchase Agreements||Lease|
|Zero Down Payment||x||x|
|Escalated Rate Option||x||x|
|Ownership||You||The Solar Installer|
Aside from those similarities, the difference between a solar lease and solar PPA can be summed in one word: ownership. You own the solar panels with a PPA, but a third party finances it, usually with high interest over 20-25 years. It is also worth mentioning that you are liable for its operation, maintenance, and power output.
The solar installer owns the entire solar rooftop with a lease, and you pay a monthly “solar rent.” They will take care of all the maintenance and repairs for you, and this often comes with guaranteed solar system performance.
Regardless of which option you choose, the chances of defaulting on the solar panels are likely, given the long-term agreements involved.
Solar developers mastered the art of making these offers so tempting to get you to sign a three-decade lease. To give you an idea of why they are doing this, these companies add $0.25 to $1 per Watt to solar panel installation prices to cover customer acquisition costs.
Just take our advice and follow this simple rule:
Pay your entire solar system in cash. If you can’t cover it all, availing of financing services is satisfactory if your ROI is still 4-7 years. Lastly, make sure you aren’t tied to contracts that are more than seven (7) years long.
Okay, we said our piece. The decision is up to you.
“Okay, but how about me? I live in Minnesota, and I agree that solar power here isn’t that great. Regardless, I am still sold on its contribution to reducing GHG and my electricity bill. What are my options?
That’s good to hear, Bob. Let’s talk about community solar and some similar cutting-edge solutions.
Even though the decarbonization movement through solar and green energy tech is a noble cause to prevent climate change, it still isn’t accessible to everyone. One emerging solution to break the cost barrier of solar is through community solars.
Community solar is an alternative way to inject solar energy into your home virtually without having to install solar panels on your roof.
Pioneers of solar communities often come with flexible rates that are not profit-oriented but are more sold on the idea of making solar available for all. However, this also means that you are simply “subscribing” to that service to get served solar energy locally. You do not actually own the solar panel installation.
Another caveat we would like to add is that this method of investing in solar is available if there is an initiative in your state.
Only states that have policies to build a state-specific community solar market can proceed with this initiative. Not to mention that the space where the community solar shall be built should be ideal for solar power.
Community solar is the closest option in a world where an inclusive climate change program is the primary driver.
However, there will always be those who will try to break those community solar limitations mentioned above.
Companies like Arcadia, a climate-change-fighting tech company established in 2014, are slowly making strides towards making community solar available for anyone who pays an electricity bill.
4. Determine What Your Solar Electricity Needs Are
Knowing the effect of solar panel installation on your bill, in our opinion, is the most significant factor to consider from an investment standpoint.
Therefore, everyone must know the recent policy changes on how utilities will price our consumption since this will heavily impact our behavior as energy consumers.
These changes all cater to the ambitious climate change goals the world made back in 2015. Luckily, doing your share in this fast-paced decarbonization movement is as simple as understanding energy rate types.
There are mainly two types of electricity rates:
The latter can be further uncategorized into tiered or time-of-use.
Let’s look at the best applications for each type. If you are the type of solar investor that wants to earn stable savings for five (5) years, your best option would be to avail of fixed electricity rates.
However, states like California are planning to narrow down the consumers’ choices to tiered and ToU rates only.
In recent news, Southern California Edison residential customers are slowly being switched to new rate plans. Approximately half this number will see their monthly bills go down, the utility says.
A million or so may see their bills rise simply because of the new electricity rates scheme.
In summary, you will get standard electricity rates throughout the day. Still, between 4 p.m. and 9 p.m., you can expect a 60% spike in your electricity rates. This is mainly due to the duck curve phenomena caused by the steep decline of solar energy in the afternoon when the sun goes down (see figure below).
So, what signal does this send people who are planning to invest in solar? A perfect one. They are now encouraging you more than ever to continue with your solar panel installation.
They also say that you should consider adding energy storage with net energy metering to offset your solar energy for later use in the day. This arbitrage strategy will not save you from insane peak rates. It will also improve your ROI if you sell excess solar energy to the grid during peak hours.
However, this does not mean that your solar-only scenario is already ruined. It will still get the savings it promised you.
We understand that the previous discussion went off-topic quite a bit. However, as a solar investor, you need to know that the government is moving on from solar to other decarbonization technologies. It would be wise to be aware of the opportunities created by these policy developments.
Bottom line: Know the available energy rate options in your state. Then, look beyond solar if necessary to maximize your profits.
5. Compare Solar Installers Near You
At this point, you are already past the steepest part of the learning curve. You don’t need to entirely reinvent the wheel to find the right partner for your solar panel installation.
The process is straightforward and a lot like buying a house or a car.
The company is supposed to be capable and legitimate. They have to be knowledgeable in local permitting and processes. Overall, you want someone that has been accredited by an organization with the likes of the North American Board of Certified Energy Practitioners (NABCEP).
Lastly, it pays to find out what their post-purchase service track record is like. Conduct a quick internet search or talk among your peers to see if they have any feedback on their solar installer.
After gathering all this information and comparing each company side by side, you will need one last piece of the puzzle: their contract bid for the entire solar project.
Be sure to check main line-item categories such as:
Scope of work. Ensure that the solar installer covers all permitting, processing, designing, installation, commissioning, and testing activities. Of course, you would have to clarify if you still have to shoulder any processing fees outside the contract’s scope.
General requirement. These are the costs associated with manpower mobilization, permitting, construction, and compliance with your utility’s standards.
Engineering and design. You are paying professionals to design wiring diagrams, roofing blueprints for securely placed solar panels.
Electrical works. These contain the cost of all the conductors, inverters, panels, and other equipment for the solar system.
Long Term Service Agreement. This is not always in the contract, but if you are interested, you should discuss terms with the bidder regarding the scope of maintenance and repairs once the solar installation is complete.
In terms of the total cost, solar panel developers should charge you $2.71 per Watt DC on average in the U.S.
If you want state-specific rates, we suggest you check them out later in this article
So, for a 5-kW done-for-you solar panel installation, you are looking at around $15,000.
Make sure you have a copy of the solar panel and inverter warranties. Typically, they should indicate a performance guarantee per milestone, like 90% production at 10 years, then 80% after two decades.
6. Learn About Solar Financing and Tax Rebate Options
Making the decision to invest in solar and sometimes energy storage takes a lot of effort and resources. The U.S. government acknowledges this fact and rewards anyone for their contribution towards reaching the country’s decarbonization goals.
In, general solar panel owners are entitled to the Investment Tax Credit (ITC) that reduces the net cost of the solar system by 26%. This is the main reason why we want you to own the actual solar rooftop.
Now, suppose you cannot fully utilize the entire 26% in one fiscal year. The outstanding tax credit can be rolled over to succeeding years until it is fully redeemed.
PPA’s sometimes allow you to enjoy the ITC but not always. Clarify that with your solar installer if you will be going down this path. Lastly, a lease agreement doesn’t qualify you for the ITC.
Please take note that the ITC will be gone soon. Here is a table that summarizes the “sunset” timeline for this incentive.
7. Let Your Solar Panel Installer Get to Work
After doing all the steps above, you are now ready to have your solar panels installed. Here’s a recap of what we discussed so far:
- You want to help meet the U.S.’s decarbonization goals and make money at the same time.
- You’d want to make your home more efficient by monitoring your electricity consumption (when and where)
- You already know the big three (3) factors for solar availability: location, orientation, and tilt. If having solar in your home isn’t practical, try looking for a community solar to subscribe to
- Pay for your solar system in cash as much as possible. Avoid tying yourself down to 20-year contracts.
- Own the solar to enjoy the 26% rebate
- Be thorough when picking your solar panel installer.
How Your Solar Panels Will Be Installed
Step 1 – Check the roof.
Like all construction-related things, your contractor will first ensure that your home can handle the weight of your solar panels. They will probably conduct an ocular to confirm this. Upon verifying the roof’s condition, they can begin setting up their scaffoldings and installing the panels.
Step 2 – Install Solar Panel Mounts
The first thing they will put up on your roof would be the solar mounts. They will ideally set it up so your panels face south, tilted at 30-40 degrees. Some solar panel installers will go as low as 18 degrees but trust their advice. They breathe and live to maximize your panels’ solar intake.
Step 3 – Install the Solar Panels
After finishing your mount setup, the installers will lay down the solar panels. The crucial thing to look out for here is that they should be a snug fit to the mounts and be bolted nicely and tight.
Step 4 – Wire the Solar Panels
Aside from its rated power output, each solar panel has its own voltage and current specifications. Your contractor will wire them either in a series string or a combination of parallel and series wirings. This is to align their total voltage and current outputs with the limits set by the power inverter.
Another critical thing you should monitor closely here is the conductor size to prevent overheating and fires.
Step 5 – Install Solar Inverter
After wiring is finished, the solar inverter will be connected. This device converts the D.C. input of your solar panels to A.C., which is compatible with your home’s voltage and frequency rating.
Step 6 – Connect the Inverter and the Energy Storage (Optional)
Like we told you before, some people are already thinking about maximizing profits by shifting their solar use during peak hours. If your purchase includes a lithium-ion energy storage system, the contractor will integrate it into the solar inverter.
Step 7 – Connect the Inverter to the Electric Panel
After interconnecting everything, it’s time for the power inverter to be integrated into your home. Your contractor will probably connect it to your electric panel and configure protections systems to isolate your home from the solar panels during contingencies.
Step 8 – Testing and Commissioning
After setting everything up, your contractor will confirm that everything is intact and working correctly. They will monitor the solar panel’s power output and make sure it is not injecting harmonics into your home nor creating any problems for you. After all the commissioning tests are finished, they will hand it over to its proud owner. Congratulations!
Solar Panel Installation Cost in the United States?
Installing solar panels vary per state. We already mentioned this in a previous article. Still, in a nutshell, the system size, irradiance, and state-specific cost of living are the main key drivers of price per Watt of solar.
Here are some estimated figures for a typical 5kW solar system.
|STATE||COST PER WATT ($/W)||ESTIMATED COST (5kW SYSTEM)||STATE||COST PER WATT ($/W)||ESTIMATED COST (5kW SYSTEM)|
|Washington D.C.||$3.43||$17,150||New Mexico||$3.15||$15,750|
Can You Install Solar Panels Yourself?
Yes, you can. This decision is really considered by many confident DIY-ers since it will trim down your total cost by 65-70%. This 70% reduction we are talking about is attributed to soft costs that cover the cost of customer acquisition, operation expenses, manpower, and administrative costs.
That being said, if you are DIY-ing, it is best to hire part-time consultants that will check if you’re mounting and electric configurations are well-made. The last thing you want is shooting yourself in the foot for DIY-ing.
How Many Solar Panels Are Needed to Power a Home?
Like we mentioned before, the solar irradiance in your area determines how much solar power your panels can make. Now, the question of how long can these solar panels produce that kind of power is entirely up to how many peak sun hours are available in your area.
If you want to know the average daily peak sun hours in your state, we have that resource available on our website.
How Long Will Your Solar Panel Installation Take?
Well, if you are working with an accredited solar company, it shouldn’t take long. Here are our estimates.
Pre-installation. Site assessment, local permitting, informing your homeowners’ association, and sizing your solar system will take about 4-10 weeks.
The actual installation shouldn’t take more than a working week.
Post-installation. Testing the system, inspecting performance, and integrating the net energy meter into your utility’s system should take 1-3 weeks.
What To Do After Your Solar Panel Installation?
First off, congratulations! A lot of sweat equity, time, and resources were allocated, and you are now done with your solar panel installation. This is already a milestone, and you’re just waiting for your investments to trickle back into your piggy bank.
However, for savvy green energy consumers, this is only the first step to endless possibilities in the world of sustainable living. You know that building your fleet of green energy products around your solar project will not only reduce more GHG. It also has the potential to earn you more money by taking advantage of juicy subsidies and incentives set by the government.
Of course, this means new learning curves to conquer. You just broke through the barrier of a newbie renewable energy enthusiast. As you progress down this rabbit hole, you will discover more advanced concepts like energy arbitrage, behind-the-meter ancillary service.
If that didn’t get you excited, we don’t know what will! For the first time in history, residential homes can behave like mini power plants that contribute to grid reliability!
As you can see, our goal here at Climatebiz is not only to inform you about the possibilities. It is about changing how you view things. Once you begin looking at things through this lens, a lot of doors and opportunities await you.
How To Maintain Your Solar Panels After Installation?
Well, the good news is after everything you’ve been through, this one is already peanuts.
Just get a roof rake and a mop converter. Make sure your solar panels aren’t covered by snow during the winter and are washed squeaky clean every now and then. Once a year is usually fine, but if you really want to geek out on this, we have an article that perfectly fits your needs.