Managing Home Maintenance Costs

More and more consumers are installing solar panels systems on the roof of their homes. They have bought into the idea of generating electricity to reduce their costs. They consume less electricity and reduce pollution. Solar panels on your house can be an excellent way of saving money.

There are some practical issues associated with this trend. Many salespeople and solar panel companies will not talk about it. We happen to think it is important for the consumer to know these things. This info should be reviewed prior to making a decision about installing solar panels on your house.

Depending on the state and the subsidies, the amount of sun you get and the cost of electricity from the grid the payback for your investment could be as short as five years. You actually might save thousands of dollars in electricity costs over the lifetime of the solar panel power system which could last 25 years.

Sounds pretty good! But there are some issues the consumer should be aware of.

Solar Panels on Your House – Issues

While all of these incentives are available from government agencies, it may take some time to actually collect. If you are depending on this money for cash flow you might need to think again. The incentives will eventually arrive however just not in the time frame you were expecting.

Some systems require that you read the meter and send that information in once a month. Others will complete automatic readings for you at an increased cost. It really depends on whether you want to have the responsibility of meter reading once a month.

Most people assume that if the electrical grid goes down, they will continue to have power because they are generating power locally. Unfortunately, if the grid goes down, and you are connected to the grid your power system will automatically shut down at the same time. This is to prevent electrical power from being fed into the system while workers are trying to make repairs.

Finally, if you live in an area that gets lots of snow, you may need to clear snow from the solar panels before you can generate power in the wintertime. This is something that many consumers just do not consider as part of the decision to install solar panels on the roof. If Snow is covering the solar panels they will be unable to generate any electricity.

For more about solar panels and what to consider before installing solar panels, click here.

Why solar power will change traditional power systems and when is the big question facing electrical generation companies, transmission companies, and investors? Utilities in the power generation and transmission business have been cash cows for investors for years. Many investors are beginning to wonder if their cash dividends are at risk. The quick answer is that it depends on how the existing companies respond to this new source of power. How do they manage the environmental impact message for the new and old systems? There is no question that there is less air pollution from solar and wind farm generation compared to coal, oil, and natural gas-fired generation plants. There is a lot of pressure to have a higher percentage of generation come from these sources as time goes on.

Why Solar Power will change Traditional Power Systems

Traditional power system companies must realize that they need to invest in this new technology to protect their investments in transmission systems and retain existing customers while being seen as being progressive from an environmental perspective. Progressive companies will make this transition and therefore protect their dividend stream for investors while producing low-cost electrical power.

The real threat comes from rooftop solar power which removes bottom line revenue from the system. This drives the per unit cost up for everyone else who does not deploy a rooftop solar installation. Remote areas and high cost per kilowatt areas will be the first to convert, simply because of the economics.

An aggressive approach to generating power by traditional power generation companies will help to keep costs to the consumer down. This action will also decrease the motivation to install rooftop solar generation. The jury is still out on how this issue will evolve. However, investors in utilities would be wise to pay attention to these issues.

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Many people wonder how inefficient is solar energy. However we wanted to take a more positive approach. We wanted to assess how efficient solar energy is compared to some of the other technologies for generating energy. But first some information about the efficiency of solar panels which can be very enlightening.

It turns out that solar panels have a large range. They can range from a theoretical maximum of 55% efficient all the way down to 25% efficient. There are a lot of factors that go into determining how efficient and solar panel installation actually is. We will discuss some of the factors that go into determining some of the real issues.

How inefficient is solar energy

With sunlight shining directly on a solar panel at a 90 degree angle to the surface, the efficiency is going to be a maximum of 55%. This is due to the inherent capabilities of a solar panel. Next the angle that the sun strikes the panel is going to further determine the efficiency. It will change during the day. If the panel is not tracking the sun then the efficiency is going to drop as the sun moves off the 90 degree angle. In addition even with tracking, as the sun sets, there is more air and pollutants for the suns rays to pass through. This drops the efficiency further.

Next it depends on whether you have a sunny day or a cloudy day. On cloudy days or days with snow or rain the efficiency is really going to drop off drastically. Perhaps even below the 25% level on a particularly dark day during the winter. Don’t forget that in the winter in the northern climates there are less hours for the solar panels to generate electricity. Over all the average efficiency can drop to 25% or even lower. It really depends on the time of the year, the time of the day and the type of weather that is being experienced.

Other Types of Electrical Power Generation

It turns out that electrical generation by coal, gas, nuclear or wind plants are also around the 30% to 40% range based on current technologies. The major difference between solar power and some of the others is that all of these power generation techniques are using non-renewable energy sources while solar power is generating power from renewable resources such as sunlight.

Electricity generated by water flowing through turbines is probably the most efficient power generation of all and it is using renewable resources. Efficiencies approaching 90% are possible and far surpass all of the other types of electrical power generation solutions.  Some countries are fortunate to have lots of water and lots of potential water power driven generation solutions. They do not need to rely on other fuels and minimizes the use of non renewable resources.

We know that the coal and natural gas solutions are pretty much mature technologies, while solar and wind technologies are just getting started so their efficiency will no doubt improve over time.

One of the decisions that you must make when you purchase a solar panel system is the number of years of Solar System Warranties to purchase. Most people think of the solar panels as the main element and indeed they are, but there are numerous other parts that can cause your solar electrical generation system to stop working and that is when you really need to understand your solar system warranty details.  Do you want a solar system warranty or a solar parts warranty? A solar system warranty will cover the system, including all parts as well as the labor to diagnose the problem, locate the element that is not working and replace it. If you have a solar parts warranty, you will still need to pay someone to diagnose the problem and replace the part that needs to be changed.

What Are the Solar System Parts and How Long is their Warranty?

• The solar panels – good quality panels may have as long as 25 years
• Wiring – not covered
• Inverters – may have a 2-year warranty
• Batteries – may have an 8 – 10-year warranty
• Variety of connectors – not covered
• Misc stuff – not covered

The life span of these various parts will often last much longer than the warranty, however as we all know, some things just do not make the grade and that is why warranties are needed.  You also need to look at the fine print in the warranty. What does it cover?  Removal, shipping, repair, and installation are the main areas you need to consider. The more service you have, the higher the price will be for the initial installation and purchase.

If you have some sort of service contract with a supplier who is doing the initial installation and offering to provide maintenance and/or warranty service on your system, pay a lot of attention to this part of the contract.  Your system could operate fine for many years. On the other hand, there may be many small issues develop over time that requires someone to diagnose a problem and make the corresponding adjustment or replace a part.  All of these issues can add up quickly in terms of cost so you want to understand how this will impact your cash flow.

Insurance Coverage and Solar System Warranties

Damage from falling trees and other acts of nature, vandalism and other incidents too numerous to mention can also put your solar system out of commission. Warranties typically do not cover this sort of thing.  You may want to check with your insurance company to asses what insurance coverage they offer and how much it will cost. Damage from a tornado, for example, could easily put your system out of service and unless you have insurance, repairs are going to come from your own pocket. You may need a special rider added to your insurance on your home to cover the solar system.

Do your Homework

Like app products that are on the market, there are high-quality solar systems and there are lower quality systems at lower prices. The same goes for warranties and service contracts. Investigate all aspects and make informed decisions regarding the devices you select as well as the installation and service contracts that you put in place.

If someone is trying to rush you, then you may just want to back off for a bit and assess what they are trying to offer you and whether it makes sense for you. Think of your solar installation as a system and make sure that all elements are protected with a device warranty and a service or maintenance contract. The same applies to house insurance protection in the case of damage from some outside source.

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In our last post we talked about some of the variables that would go into a business case or business model for your assessment of whether it makes sense for you financially to install a solar panel system on the roof of your home. One of those variables, a big one, is of course the revenue you will gain from this type of installation.

It may be net revenue or it can also be cost of electricity not used that you would need to factor into your calculations.  Either way you need to understand how much electricity can be produced from your roof.  This is where it gets complicated, because you really need a solar site assessment to be able to calculate the theoretical value of this income.

Some companies will charge for the solar site assessment and then write it  off if you decide to go ahead with a solar panel installation.  It is all in what you negotiate, so have that discussion up front so that there is no misunderstanding once the assessment is completed.

Information needed to Complete a Solar Site Assessment for Your Home

The following list is pretty straightforward and should be included in your assessment if it is completed in a professional manner. This is something that you need to make sure that you receive from a professional company  and that it is done right. If they estimate high in terms of the amount of electricity generated, then your business plan may not pay off as expected. Take your time to understand all of the assumptions and confirm all of the estimates before you take the plunge.

• Which roof or roofs will be candidates for solar panels
• Azimuth of each roof
• Pitch of each roof
• Number of panels
• Wattage of each panel
• Inverter make , model, and efficiency rating
• Shading on the roof from External Factors

Which roof or roofs will be candidates for solar panels?

Typically, east, south and western roofs will be included in your assessment. Northern facing roofs will generate electricity, however since most are not receiving direct sun unless you are very far south, it is just not worth it to include a norther roof in your solar assessment.

Azimuth of each roof?

The azimuth is the angle between the north point and the direction your roof is facing. This is the accurate measurement of the direction each roof is facing and will be a factor in calculating the efficiency factor associated with each roof..

Pitch of each roof?

The pitch of each roof is the angle from the horizontal and also plays a part in the calculation of the efficiency factor of each roofs as well.

Number of panels?

The number of panels is a combination of the area of your roof as well as the ability of your roof to support the additional weight. Each panel will produce a specific amount of electricity depending on the Azimuth, the Pitch, the time of day and the season.

Wattage of each panel?

Each panel has a wattage that it is capable of producing. Different solar panels will have a different wattage rating or power that they will produce.

Inverter make , model, and efficiency rating?

Each solar panel is connected to an inverter. Which converts the electricity generated to the desired voltage and amperage level required to interconnect with all other panels. Also the electrical distribution system. Depending on the manufacturer, each will have their own efficiency rating as well.

Shading on the roof from External Factors?

This can be a huge issue and may vary depending on the time of year. Shading from surrounding trees will change from season to season as the leaves grow and fall from the tree. Other buildings or  obstructions on the roof such as a chimney can also provide shade. Which decreases the amount of power that will be generated. Decisions may have to be made in terms of trimming trees or locating panels only were there is no shade. Shading can be different in the  morning vs. afternoon so time of day must also be taken into account.

All of these factors should be assessed  in your solar assessment. These are mathematical calculations which can be generated by a computer model. We would recommend that some sensitivity analysis be completed on the results. Assess the impact more or less solar power generated will have on your budget and payback.

Consumers have to remember that sales people are motivated to sell you a solar system. They will more often than not make assumptions in their favor. It pays to take as much as 20% off the estimate of electricity generated to see what impact it has on the business case for your system.

More to come on alternative energies and solar systems. If you have added comments or opinions please leave us a comment. We are trying to learn as much as possible about this subject. For more help with solar power assessments, click here.