Solar Energy

Solar Energy.

Thinking about solar for your home or business? Here’s what you need to know before you install solar panels…

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How Solar Energy Works

Solar energy is growing very quickly in the United States. In fact, it is projected that solar installation projects will more than double over the next five years, with an anticipated 300 gigawatts of solar to be installed in 2023! And, by 2024, it is projected that almost 33% of all of the World’s electricity will come from solar energy! Today, there are over 10,000 companies involved in the solar industry. 

Now, those stats are impressive! But, as a consumer solar can seem confusing. With so many companies to choose from and so many enticing offers, it’s best to first understand how solar power actually works! Keep reading below to learn more about solar energy, how solar panels generate electricity, what it means on your utility bill and more…

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How Solar Panels Generate Electricity:

Solar panels, also known as photovoltaic panels or PV, capture the sun’s light and turn it into electric power. But, how exactly does that work? It’s important to understand the fundamentals of electricity to know how a solar system uses sunlight to power your home or business. Let’s explore this phenomenon more:

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Solar Panels Turn Sunlight Into Direct Current (DC) Electricity

First, when the sun is shining and even on cloudy days, solar panels absorb sunlight and convert it into DC electricity. Each solar panel contains many cells made of silicon that help in this process.

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Solar Inverters Convert The DC Electricity Into Alternating Current (AC)

Since almost all of the electrical systems in your home or business run on alternating current, AC electricity, the solar system has inverters that convert the direct current into alternating current, so the power can be used.

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Your Home or Business Then Uses The AC Electric That Comes From Your Solar System

Your rooftop or ground-mounted solar system is connected directly to your house or building so that you can use the electricity that is being generated from your solar panels. 

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Excess Power Is Sent To The Grid

If your system uses more than what you need, the extra power is then sent to the electric grid. If your system does not produce enough, then you will pull electricity from the grid to make up the difference. 

How Your Solar System's Production Is Measured:

Net Meters: In most states, your local electric utility company will install a different type of electric meter when you install a solar system. This new meter is known as a net meter and will measure the production of your solar system compared to your electricity usage. In months when your system produces too much electricity than you need, you will get a credit. And, in other months when your system does not produce enough, you will debit from your net account. 

Net meters make tracking solar energy simple. It allows homeowners and business owners to install solar and not have to worry about tracking how much electricity is being produced from their solar system. A net meter does all the math for you and it’s right on your bill!

Residential Solar Benefits

If you are looking for ways to reduce your electricity costs, support the environment, or you simply like to be on the cutting edge of the latest technology, then installing solar at your home might be for you! There are many financial and environmental benefits to a residential solar system. Let’s explore them below…

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Energy Savings From Solar

First, you can save money on your electric bills by switching to solar! Now, your total costs depend on the amount of sunlight in your home, state incentives, utility incentives, and other factors. However, solar can be very cost-effective. 

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Environmental Benefits

Switching to a residential solar system has many environmental benefits too! Since most of our electricity generation comes from fossil fuels today, every home that installs solar helps to offset those carbon emissions.  

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Tax Incentives

Do you pay a lot in federal taxes? Then solar might be for you. Currently, homeowners receive a 30% federal tax credit on the total cost of their solar systems!

Commercial Solar Systems

Business owners who decide to install commercial solar on their buildings can benefit handsomely. In fact, there are even more financial incentives for commercial solar than compared to residential systems. If you are looking to improve your organization’s environmental impact or ESG score, then solar can be a great avenue as well. Let’s explore the benefits of a commercial solar system:

    • Electricity Savings: In some states, installing a commercial solar system can be very lucrative. In fact, after the system is paid for, your total cost of electricity is greatly reduced. If you own a business with high utility bills, then exploring solar could be a great option, especially if your electricity rates are very high. 
    • SRECs: Another great benefit of a solar system are the SRECs that you obtain over time. SRECs are Solar Renewable Energy Credits that are accumulated based on how much electricity your system produces. These SRECs have a value and can be cashed in every month for over a decade. SRECs help to offset the total solar system cost.
    • Bonus Depreciation: Since the government is looking for ways to incentivize businesses to become more environmentally friendly, you also have the option of depreciating the total cost of your system in the first year. This deduction allows you to offset any energy savings or SREC income even more!
    • Federal Tax Credit (30%): If you elect to purchase or own your solar system, then you also qualify for a major tax credit. The solar energy incentive tax credit allows you to offset any tax liabilities to the tune of 30% of the total solar system cost! Business owners with tax liabilities can benefit tremendously from this credit. 
Now, if you are installing a commercial solar system, the costs can be much greater than those of a residential system. Depending on your total electricity usage and building size, commercial solar can be a large investment. There are many different ways to finance your solar project, so you do not have to come up with all of the money yourself. Let’s explore solar financing below…

Solar Financing And Purchase Options

There are many different ways to purchase or finance your residential or commercial solar system. The different solar options available are tailored to the needs of each customer. Let’s explore the various ways to purchase your solar system:

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Cash or Finance

You can simply pay for your solar system outright or take out a solar loan to own your system. If you interested in the 30% federal tax credit, then this is your best option. The tax credit, SREC income, and bonus depreciation for commercial solar systems are only available for customers who own or finance their solar panels. 

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Lease

If you are simply looking for positive cash flow with no out of pocket expenses, then a solar lease might be for you. Solar leases offer customers solar systems with zero dollars down a monthly lease payment. The lease payments are typically less than your electric bill, so customers save money over the term of the agreement. 

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Power Purchase Agreement (PPA)

If energy savings are what you're after, then you may want to consider a Power Purchase Agreement or PPA. PPAs are offered by solar companies to make buying solar easy as signing up for an electric rate. A PPA is an agreement by which the customer purchases the electricity at a fixed rate per kWh over a long term. In PPA situations, the solar company owns the solar system and simply sells the electricity to the customer at a lower price than their utility. 

Solar Options by State

Solar installations vary by state. Since each state and local utility company set their own incentives for solar, installation numbers are very different between states. For example, in states like California, New Jersey, and Texas where solar incentives are very lucrative, there are many more solar installations. In other states like South Dakota, solar installations are next to nothing. Here is a list of all 50 states and the District of Columbia and there total solar energy installations to date:

578 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN THE STATE OF ALABAMA.

16 MW OF SOLAR ENERGY HAS BEEN INSTALLED IN ALASKA.

5,984 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN ARIZONA.

588 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN ARKANSAS.

37,086 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN CALIFORNIA.

2,268 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN COLORADO.

1,137 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN CONNECTICUT.

172 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN DELAWARE.

9,539 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN FLORIDA.

4,566 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN GEORGIA.

1,487 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN HAWAII.

619 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN IDAHO.

1,559 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN ILLINOIS.

1,391 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN INDIANA.

519 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN IOWA.

106 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN KANSAS.

78 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN KENTUCKY.

211 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN LOUISIANA.

559 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN MAINE.

1,504 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN MARYLAND.

3,986 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN MASSACHUSETTS.

938 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN MICHIGAN.

1,709 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN MINNESOTA.

321 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN MISSISSIPPI.

428 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN MISSOURI.

127 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN MONTANA.

78 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN NEBRASKA.

5,003 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN NEVADA.

184 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN NEW HAMPSHIRE.

4,097 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN NEW JERSEY.

1,452 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN NEW MEXICO.

3,804 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN NEW YORK.

8,018 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN NORTH CAROLINA.

2 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN NORTH DAKOTA.

900 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN OHIO.

100 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN OKLAHOMA.

1,330 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN OREGON.

955 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN PENNSYLVANIA.

600 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN RHODE ISLAND.

2,044 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN SOUTH CAROLINA.

2 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN SOUTH DAKOTA.

608 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN TENNESSEE.

15,079 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN TEXAS.

2,735 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN UTAH.

407 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN VERMONT.

3,845 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN VIRGINIA.

332 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN WASHINGTON.

184 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN WASHINGTON D.C.

23 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN WEST VIRGINIA.

861 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN WISCONSIN.

143 MW OF SOLAR ENERGY HAVE BEEN INSTALLED IN WYOMING.

Who Should Avoid Solar

While solar energy is a great option in most states, there are certain scenarios where you want to avoid the hassles of a solar project for certain reasons. In this section, we outline the types of customers, both residential and commercial, who should avoid solar energy and the reasons why…

Residential

Solar energy might not make sense at your home if you meet any of the following conditions:

  • Your roof is covered with shade from trees and you’re not willing to cut them down.
  • You rent your home and do not have a long-term lease or do not plan on staying for at least 20 years.
  • You live in a solar restricted area.
  • You have a very old roof and are not willing to replace it before your solar project.

Commercial

Solar energy might not make sense at your business if you meet any of the following conditions:

  • Your roof is covered with shade from trees or rooftop obstructions like HVAC units.
  • You do not have adequate parking lot space to offset minimal rooftop space.
  • You are located in a solar restricted area.
  • You have an old roof and are not willing to replace it.
  • You do not own your building or do not have a long-term lease.

Community Solar: Roof-less Solar Energy

In some states, you can support solar energy and even save money without having to install a solar system on your roof! Yes, that’s right! The program known as community solar in some states, and shared solar in others, works by subscribing your meter to a local solar farm project. The solar developer then awards you credits on your utility bill for your support. Here’s how it works…

How Community Solar Works

Community solar is a unique program by which you can purchase solar energy without installing solar panels. Here’s how it works:

  • local solar farms generate renewable energy
  • renters and homeowners can subscribe their electric meters to these projects
  • utility companies administer the projects and keep track of subscribing customers
  • subscribing customers receive bill credits for participating

Is There A Catch?

We hear it a lot… community solar sounds too good to be true! Yes, we understand why you might feel that way. Sign up your meter and start getting bill credits? It sounds too easy! Well, since solar farm developers need real, active customers to make their projects work, they share a portion of their proceeds with you for signing up! It’s really that simple. Know that all community or shared solar projects are state-approved and utility-sponsored, so you can rest assured knowing that these programs are real!

How Do I Enroll In Community Solar?

If you are located in a state with a community solar or shared solar program, then signing up is easy! You simply enter your information, including your electric account numbers, and subscribe to the project. Depending on your state or utility, your bill credits with either appear directly on your utility bill or you will receive a new bill from the community solar company with your credits applied. Here are some of the states where we have active community solar projects:

Visit our community solar page to learn more about these programs and find a community solar program in your state.

Simplified Ways to GO SOLAR

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Frequently Asked Questions

Do you have a question about solar energy for your home or business? We’re here to help and answer any questions that you might have! Check out some of the more frequent questions we hear from our customers below. Don’t see your question? Contact one of our experts for some help or guidance!

Yes! Even though you install a solar system at your home or business, you still need to be connected to the electric grid so that you can use electricity when your system is not producing power. The only way for you to completely go “off the grid” would be to install a battery backup system that works when your solar system is not producing power (e.g. during the night time).

No! Even if your solar system covers more than 100% of your electricity production, you will still pay a small monthly connection fee to the local utility. 

If you are a commercial customer and billed on your demand (kW), then your solar system will only offset your kWh usage. You will still have a bill for the demand portion of your electricity, plus any kWh usage that is not offset by solar production. 

If you decide to move, the easiest route is to leave your solar system behind to the new homeowner or business owner. You can elect to disconnect your solar panels and take them with you; however, it costs money to do this. 

Most homes that have solar panels appraise for more money and usually homeowners are happy to purchase a home with solar panels. If you have a PPA, then the PPA will remain in place with the new homeowner or business owner. 

If you have a tax liability (i.e. you have to write a check to the IRS at the end of the year), then you can apply the solar tax credit against any money that you might owe. It’s best to speak with your accountant about your tax appetite before purchasing a solar system. 

While solar panel installations can most certainly be performed by skilled electricians, it is not recommended that you perform these projects yourself. Installing a solar system is more than mounting racking and panels on your roof. You have to ensure that the inverters are installed properly and that the right interconnection paperwork is filed with the utility company. A professional solar company is best for the job.

A typical roof lasts about 18-22 years. If your roof is nearing the end of its life then it is best to replace it before your install your solar system. If you do not, then you will have to remove your system to replace the roof later, which could add unnecessary costs.