All photovoltaic solar energy systems are DC (Direct Current). In order for the power generated by the panels to be used in our homes, it must be converted to AC (Alternating Current) through an inverter. DC systems have one or more large inverters that are typically installed near the home’s main electrical panel. In contrast, the systems known as AC use one “microinverter” for each panel installed. Unless a home has significant shading issues, DC systems are usually more efficient and cost-effective.
Net Metering is a billing mechanism that credits homeowners with solar power for the electricity they send to the grid. For example, a home’s solar system may generate more electricity than is used during daylight hours. The excess power is returned to the grid and the homeowner is credited for it. At night, or during times when system output does not meet a home’s energy requirements, the home draws its power from the grid. Customers are billed only for their "net" energy use. On average, only 20-40% of a solar energy system’s output ever goes into the grid. This exported solar electricity serves nearby customers’ needs.
Some utilities bill homeowners monthly while others do it on an annual basis. Homeowners who use more power than they generate will receive a bill. If they generate more power than they use, they will earn a credit from the utility or in some cases a check. Each utility is different. Please ask your energy consultant to explain the Net Metering options for your utility.
In almost all cases, it is better to purchase a solar energy system rather than lease. Most purchase programs require no money out of pocket with interest rates as low as 2.99%. When you purchase a solar energy system, even if you finance it, you are eligible to receive a 30% federal tax credit on the total cost. You are not eligible to receive this credit when you lease the system. If you have questions regarding the tax credit, please consult your tax professional.
Owning a system also increases the value of your home. If you purchase the system with cash, the payback period will usually be between five and seven years. If you finance a system, you will typically have a monthly payment that is significantly lower than what you pay your utility. Most homeowners choose a term from 12 to 20 years. With modern solar systems expected to last 30 to 50 years, your solar energy system will continue to provide your home with power for years after you have paid it off.
The only scenario in which leasing a system makes more sense than owning it is if a homeowner has no tax liability. This could be because they are on a fixed income or are not a US citizen. Even if a homeowner has only a small tax liability, it makes sense to own.
Some solar companies try to sell homeowners on the idea that one brand of panel is as good as any other for installation on their home. This is because their own products are inferior, and usually from China. Despite what they may tell you, product quality is critical to the performance of your installation and your rate of return on investment.
The best measure of the quality of a solar panel is in its degradation rate. Initially, most solar systems are able to generate the power that they are designed to produce, but all solar panels degrade over time. The rate at which they degrade is what separates high-quality panels from those that are less so. Why does this matter? As the panels degrade, they will produce less power. To compensate for this reduced production, the homeowner will be forced to buy more power from the utility -- and buy it at higher prices every year. FreeVolt’s degradation rate is an industry-leading 0.14% per year, meaning that after 25 years, a FreeVolt solar energy system will still be producing 96.5% of its nominal power.
All solar energy systems should also come with a strong warranty. Most solar installers offer a warranty for a fixed period of years on their workmanship and roof penetrations while component manufacturers warrant the modules, inverters, and hardware. Since FreeVolt is the manufacturer and the installer of its systems, they cover the workmanship and roof penetrations as well as the panels and mounting equipment.
Offset is the percentage of the homeowner’s energy needs that are covered by their solar system. Most systems are designed to meet 100% of the homeowner’s needs, beginning with their historical usage and adjusted according to a thorough evaluation of any expected future changes. The system is sized accordingly. While it is impossible to predict exactly how much power will be used from year to year, it is important to get as close as possible. If the system is too large, the homeowner pays more than necessary for solar power. Conversely, if the system does not produce all of the energy required, the homeowner ends up buying power from the utility -- at rates that are rising every year.