The Current State of Solar

A popular alternative

The dog days of summer seem like a great time to do what we did Tuesday – sign the contract for the installation of solar panels on our house. It’s going to be solar photovoltaic – the generation of electricity – and not solar hot water.

I’ve discussed solar electric with numerous clients over the years, so I figured it would be instructive to go through the process myself. Most of those clients considered solar in the context of living off-grid, totally separating themselves from the power company. In almost all cases it was prohibitively expensive because of the size of the solar arrays and storage needed to fulfill 100% of power needs.

An increasingly popular alternative is to have a system that ties into and supplements the grid, reducing your need for purchasing electricity but not trying to eliminate it. Ultimately it’s an economic decision – will you save more in power costs than you’ll spend to install the system, or is there no reasonable payback?

Our decision

Three factors led to us doing this now. Our city finally stopped requiring permits, fees, and inspections for solar installations, cutting $1,000 and two months off the installation process.

After reading of that, I learned that our utility company pays directly for 41% of the cost of the panels and their installation. The State of Arizona also provides a tax credit.

And finally, the federal government in January changed the rules so that they also provide a tax credit of 30% of the remaining cost. The change is that this used to be limited to $2,000, but now it is not limited.

The net effect is that we’ll be paying just 39% of the unsubsidized cost of an installation, less than $2.50 per watt. This is turning a twenty-year payback into a seven-year payback, making the whole exercise feasible.

Totally off-grid

There are two main options with residential solar electric systems. The one system is necessary if you’re intending to be off-grid, as in not being connected to the utility company at all. In that case you have to store the generated power in batteries – adding a layer of complexity and expense – and then you have to have a lifestyle that allows you to use less power than you produce.

If this is your intent, it should be factored into the house design from the start, so that all possible energy-reducing measures are incorporated from the start, including some things we wouldn’t do with a grid-connected house.

Our system

The other type of solar electric system is tied to the electric grid. The power produced by the panels is fed into the grid, essentially spinning the meter backwards. The electric bill is the difference between what you use and what you send into the grid.

That’s what we will have. The amount of electricity generated is a function of the number of panels on the roof. The number of panels installed is limited by the size of the roof. Panels only work on the roof planes that face south or west, so that determines the size of the system. Panels can also be installed apart from the house on a frame and stand, which increases your options, but also adds a bit to the cost.

The limited space we currently have constrains us to a 4.2 kW system. Even at that, the net effect should be to cut our annual electric bill in about half. In some winter months we hope to produce more than we use, in which case the power company will pay us for the difference at about half the going rate for a kWh.

The big WHY?

You might wonder why the power company would pay for so much of the installation. They have a goal of generating 15% of their power via renewable sources by 2025. Every system like ours gets them closer to their goal, and helps them to not have to build that capacity themselves, so they are sharing with us their avoided costs. Their contribution drops every year for the next five or so, so we’re doing this now to get the maximum subsidy.

You also might wonder just how strong the sun is in one part of the country versus another. Bob Warden installed solar panels at his house in Ohio, the well known Eagle’s Eye. We compared production estimates, and concluded that there might be a 20% or so difference in production between Ohio and Arizona because of the amount of sunlight available each day.

Interestingly, while the sun helps us in Arizona, the heat works against us. Heat lowers the efficiency of electrical components, so during the height of summer we’ll see lower efficiency from the system than we will in May and September.

Solar and domes

These systems work as well with domes as with any other structure, since they are just a source of electricity and are not affected at all by the type of house. Assuming you have access to the grid, then the economic wisdom of installing a system comes down to two factors – where you think the price of electricity is headed, and what subsidies are available.

Our power costs are set to rise another 8.8% in November. Our subsidies cover 61% of the total system cost. With the seven-year payback that yields, it was an easy decision. But since subsidies vary widely from state to state, you have to carefully research what incentives are provided by your state and utility.

A similar analysis led Bob Warden to add solar to Eagle’s Eye and is leading other clients to add solar to their houses. Both Round House (Bill & Debbie Burkett) and Way of the Circle (Deborah Patrick) are adding systems.

Not only are these three using less energy than their neighbors, since their dome houses require less than half the heating and cooling of a typical house, but they’re also giving back by generating their own electricity. They’re making the world round – and green – one house at a time.

^{Note: Jim Kaslik is the principal designer of Cloud Hidden Designs, LLC, an exclusive designer of residential domes since 1997.}