Shedding Light on Solar Power

Introduction: BuildFax has seen a tremendous uptick in solar permit activity over the last few years, and often receives questions about it. We’ve asked an expert in the field, Jonathan Deesing, Home Solar Specialist at Solar Power Authority, to fill us in on some of the most important details. 


The future of home improvements and green living is pretty bright – thanks to solar power. The buzz around it is quite warranted; however, a lot of the terminology can be overwhelming to understand. If you’re interested in learning more about the value a solar panel array can bring to a property, or if you’re just curious as to why these systems are so in demand, we’ve got you covered.

Bring on the Benefits

Along with reducing carbon footprints and enabling sustainability, solar panels are financially beneficial, saving users quite a bit of money on utility bills. While the average U.S. consumer uses 10,932-kWh in energy per year, a 5-kW solar panel system can produce more than 4,000-kWh in the same time—which cuts a residential property’s power consumption and bill by nearly 35%.

If that stat isn’t enough, solar panels can also help a property stand out in an increasingly competitive market. A 3.1-kW system, for instance, can add an average of $24,705 to a residential property’s sale price. By this measure, solar panels provide substantial returns almost immediately. Consumers often see a high ROI whether they sell their home shortly after installing the panels or if they stay in the home for decades.

Average Solar Costs and Tax Incentives

Solar energy system costs depend on the company, type of solar panels, property size, geographic location, and other factors. But general expenses range between $15,000 and $40,000 for residential setups. Consumers who finance their array with a loan will also accrue interest on top of initial expenses. Fortunately, those installation costs can be dramatically reduced with the help of federal and state tax incentives.

At the federal level, the Residential Renewable Energy Tax Credit provides a 30% credit if a system is installed by December 31, 2019. Beyond the federal credit, multiple states offer incentive programs and rebates, including the Texas SMART Source Solar PV Rebate Program, California Solar Initiative, New York Residential Solar Sales Tax Exemption, and the Energy Smart Colorado Renewable Energy Rebate Program. Taking advantage of federal and state incentives may help cut costs significantly—making the addition even more worth the investment.

Understanding Net Metering

Net metering, where available, is a huge boon for solar users. In its most basic form, net metering is an electricity policy that sends excess electricity produced by a solar panel system to the grid to service others in the area, running the array owner’s meter backward in the process. At the end of each billing cycle, array owners are only charged for the “net” energy used, with the net being the difference between the energy produced by the system and the energy consumed by the house. This ends up being great for all involved. The array owner gets credited, and electric companies can rely more on renewable energy sources.

Currently, more than 44 states have net metering policies in place, but vary in specific rulings, regulations, and cap limitations. As a result, Alabama, Georgia, Oklahoma, and Tennessee received an “F” grade for renewable energy interconnectivity and net metering, California, Massachusetts, Ohio, Oregon, and Utah received “A” ratings in both categories.

Solar Power Purchasing Options

Paying in cash is the simplest array purchasing method, but with a system costing several thousand dollars, most property owners prefer to calculate installation costs to ensure the upfront investment is a feasible option. An alternative is to apply for a solar energy loan. Solar loans allow buyers to put relatively little money down and pay off the loan—and interest—in reasonable monthly payments.

For homeowners or business owners who don’t want to purchase a solar array outright, rental arrays can be used. Renting allows consumers to reap select benefits of solar arrays—such as saving money on energy bills—without investing a lot upfront. Array renters should know that they likely won’t be eligible for the tax rebates as owners.

There are two popular ways to rent solar arrays: through a solar lease or a solar power purchase agreement (PPA). With a solar lease, the renter pays a fixed monthly fee to use a provider-owned solar energy system. A PPA, on the other hand, has a developer finance, install, and maintain a solar array on the renter’s property. The array provider then sells the power generated to the renter at a fixed rate, which is usually cheaper than what’s charged by traditional power companies. PPAs typically last 10 to 25 years. At the end of the contract term, the renter may be able to extend the agreement, remove the system, or purchase the array from the provider.

Maintaining and Cleaning Solar Panels

Solar panels are durable and can last more than 20 years. While most systems require minimal care, proper maintenance and regular cleaning can help extend that lifespan and improve overall efficiency.

The level of cleaning and maintenance required also depends on the geographic location of the array. In colder climates, for example, panels will need to be kept clear of snow. Arrays in arid or windy locations may need cleaning after storms or high winds to remove dirt, dust, and sand. Solar setups near an airport, by a freeway, or in a congested city may need more frequent cleanings to remove oil and pollutants.

Before performing any cleaning or maintenance, property owners should contact the solar panel manufacturer or consult their array manual for specific instructions and warnings. Hiring a professional for cleaning and maintenance is also recommended.

Depending on financing, location, and system size, solar energy systems can be smart investments for business and residential properties. Comment below and tell us whether you think a solar array will provide worthwhile returns in your area.

Article by Jonathan Deesing, Home Solar Specialist at Solar Power Authority. Follow him on Twitter – @Deesing