Understanding the basics of solar energy technology is the first step to confidently helping your customers make the switch to cleaner, more affordable energy. This article outlines the basics of solar including how solar panels work on a home, estimating system size, and the perks of installing solar.

Why is it important to understand Solar Energy?

Knowing the basics of solar electric technology is the first step to confidently moving forward with working with your customers in helping them make the switch to cleaner more affordable energy by installing solar panels on their homes. After reviewing this article, you should know the solar basics including how Net Metering works, how solar panels work on a home, financing options for going solar, and some of the main motivators for homeowners to make the decision to go solar.

General Solar Knowledge

What is a Photovoltaic (PV) System? What is Solar Energy?

Solar photovoltaic (PV) systems, also known as solar electric systems, capture sunlight energy and convert it into electricity. PV systems can be used to power everything in your home from lights and appliances to an electric vehicle.

How does a Solar PV System work?

  1. Individual Photovoltaic (PV) Cellsare connected to each other in a Solar Panel or Solar Module. Solar panels convert the energy from sunlight into direct current (DC) electricity.
  2. The DC electricity is delivered to the Inverter, which converts direct current (DC) electricity into alternating current (AC) electricity that we use in our homes and business. Most appliances and electrical gadgets run on AC electricity.
  3. The Utility Meter records the net amount of energy consumed by utility customers. When a solar customer produces more energy than they use during the day, the meter will “spin backward” and the excess electricity is sent to the electric grid. At the end of the month, the utility company bills the customer for the net amount of energy they purchased from the electric grid.

How are solar system sizes estimated?

The average residential system size is about 5 kW but there are several factors that impact the optimal system size for your customer, including their 12-month prior electricity usage and desired bill and energy offset as well as the space their home has available.

How Does Net Metering (NEM) Work?

Net metering is a billing mechanism that credits solar energy system owners for the electricity they add to the grid. For example, if a residential customer has a solar system on their roof, it will likely generate more electricity than the home uses during daylight hours. The extra electricity is “sold” to the utility in the form of a credit that is used to buy energy from the utility when needed.

Customers are only billed for their “net” energy use. The amount they receive as a credit depends on the net metering conditions offered by their utility.

Here’s a short video that describes how Net Metering works for PG&E customers:

Solar Energy Incentives

What is the Federal Investment Tax Credit or the Solar Tax Credit?

The Solar Tax Credit is a federal tax credit for solar systems you can claim on your income taxes and reduces your federal tax liability. The tax credit is calculated based on a percentage (30% until 2032) of the total cost of your solar energy system. Currently, the final day to qualify for the 30% Solar Energy Tax Credit is December 31, 2032.

The Inflation Reduction Act of 2022 extended the Federal Investment Tax credit for residential solar for 12 years until 2034. The solar tax credit will be 30% until the end of 2032 when it drops down to 26% in 2033 and then to 22% in 2034.

Renewable Energy Certificats (RECs) are granted to renewable energy producers in certain states for every 1,000 kilowatt-hours (kWhs) their system contributes to the electric grid. Some utilities or renewable energy aggregators may compensate solar producers for their portion of solar RECs that will be used to meet renewable portfolio standards.

You can find out more on the U.S. Environmental Protection Agency website.

The Benefits of Solar – The Homeowner Value Proposition

What are the benefits of solar?

There are a variety of financial and environmental reasons why homeowners are going solar. The following sections will take you through many of the financial and environmental benefits, which you should be familiar with in case a customer asks about them during a proposal.

In summary, your customers have two options: stick with their current electricity provider, or GO SOLAR. Here is a summary of the consequences of each option:

What happens if you stick with your current electricity provider?

  • Unpredictable rates
  • Pay more each year
  • No chance to save money
  • Adds no value to your home
  • Contribute to more pollution

What happens if you GO SOLAR?

  • Zero ‘Out of Pocket’ option
  • Long term savings
  • Control and predictability
  • Adds value to your home
  • Take advantage of tax benefits
  • Lower your carbon footprint
  • Protect land and water resources

And here’s another fun fact: There is a person going solar almost every minute today. People are joining across the nation because, if your roof gets good sun exposure it is a financial no brainer. You have to buy energy either way, why not pay less for clean electricity right?

There’s definitely a shift going on! Here are just a few of the stats that show how much solar is catching on.

What are the financial benefits of Solar?

  • Rising Energy Costs
  • Electric Bill Savings
  • Predictable Electric Bills
  • Increasing Home Value
  • Solar Tax Credits

How much are energy costs rising?

Since 2010, residential electricity rates in the United States have increased by roughly 15 percent, according to data from the U.S. Energy Information Administration.

In some regions rates have jumped by nearly 12 percent in a single year, a much faster rate than the national average. Another financial benefit of going solar to take into consideration is the “cost of doing nothing,” or what is also called the “avoided cost of power.”

By choosing to go solar your customer is not only reducing their electric bills but also avoiding the inevitable higher prices in the future.

How much can you save on electric bills?

The most common reason homeowners decide to install solar is simply to save money. While eliminating their electric bill is not always possible, going solar allows customers to spend less money on electricity by lowering their utility bills which is possible by avoiding the cost of power that utilities charge!

Why are predictable Electric Bills better?

The previous two benefits are both financial, but they are also based on particular numbers or calculations specific to a customer. One financial benefit that is not necessarily determined by a formula is control. The value of financial control is overlooked in many ways, but in reality, this is one of the most effective selling points for solar.

How does solar increase the value of a home?

Homeowners who go solar are not just saving money, they are also investing in an asset that allows them to build equity in their home. Solar PV installations, even when financed with a PPA, become a part of the customer’s home, and each payment made towards the cost of the solar PV system creates some additional home value.

NREL Study Finds Solar Homes Sold 20% Faster and for 17% More.

According to the U.S. Department of Energy’s Office of Energy Efficiency & Renewable Energy, a home with solar panels will sell twice as fast as a home without solar panels.

The U.S. Department of Housing and Urban Development states that energy-saving improvements increase the potential resale value of your home and help it sell more quickly because they:

  • “Make your house more affordable to more people.”
  • “Attract attention in a competitive market.”
  • “Are improvements which will actually save money.”

How do I explain Solar Tax Credits?
The Federal Solar Investment Tax Credit is perhaps the most well-known incentive and the most important for driving the solar industry’s growth. However, it is not the only tax credit available, and a number of states and local municipalities have solar investment tax credits for their residents.

There are resources available, such as the DSIRE database (www.dsireusa.org) to help you stay up to date with incentives on a local level, and understand what financial benefits remain even after the expiration of the federal tax credit.

What are the environmental benefits of solar?

  • Lower Greenhouse Gas Emissions
  • Avoiding Pollution and Chemical Spills
  • Land Preservation
  • Protecting Human Health
  • Protecting Water Resources

Are you ready for a free consultation? Please call, text, or use the Flowcode below. I will need your electric bill, contact information. Please be prepared with your bill and anything you may add in the future a pool, EV, etc.

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