Why did you get solar panels? How much do they cost? How long is the payback time? Does the utility pay you for generating electricity?

Our clients often have questions about residential solar arrays. Since installing panels on my own house last year, I have a few insights to share. First, installing solar will not necessarily be the right choice for everyone (at least not yet). There are many angles from which to approach the question.

If you put the same money into other investments, would that be a better value over time?

Adjusted for inflation, the average stock market (S&P 500) return over the last 30 years was just over 7%. The price of electricity has not typically risen as quickly as the stock market, but in 2022 Bloomberg reported that electricity prices rose 15.8% over the previous year, the largest increase since 1981. On my project, our array is predicted to have an 18-year payback assuming a 4% utility cost escalation – that is quite some time to wait for a return on your investment. But our array is producing more electricity than originally predicted, and electricity prices are going up quickly post-Covid. In addition, the energy market can be volatile and sensitive to international events, and solar panel efficiency is improving all the time. If you can afford the upfront costs of solar panels, you are locking in more stable energy costs, which provides some predictability down the line.

A solar array does become part of the equity in your home – they are an amenity that can be touted at the time of sale. Quantifiable value, however, is very market- and buyer-dependent, so there is not a clear formula to determine how much an array might affect property value.

Take advantage of subsidies at the time of installation

For all solar projects beginning construction between 2023 and 2033, there is a federal tax credit worth 30% of the total purchase price of your solar system. In addition, Washington State provides a sales tax exemption for purchase and installation of solar energy systems through 2029, and other states have similar incentives. Additional local solar incentive programs are also available in some areas.

Approach energy independence

Some owners like the idea of energy independence and resilience, whether for their property on its own or for their local electrical utility. Installing on-site storage batteries as well as solar panels can allow owners to operate completely off the grid. However, battery costs are still relatively high and battery design is evolving quickly, meaning that for projects within reach of a reliable power grid, batteries may not make sense. Gas-powered generators still tend to cost less than a battery array, but the gap is narrowing as battery technology improves.

Lower your climate impact

The U.S. residential sector accounts for 21 percent of all energy consumption and is responsible for 20 percent of our country’s carbon emissions. Powering your project with a solar array (especially when coupled with converting your usage from fossil-fuel burning appliances to electrical appliances and improving the energy efficiency of your home’s envelope) lessens your carbon footprint, reducing your contribution to climate change.

Make permitting easier

Washington State has established aggressive energy-reduction goals. As part of that effort, the 2018 Washington State Energy Code really tightened up efficiency requirements for new construction projects, and the 2021 code, which goes into effect in Spring 2024, will tighten things even more. The code incentivizes renewable energy sources with ‘energy credits’, which can provide design flexibility for other aspects of your project.

Do solar panels work in Seattle?

In the Seattle area, for about half the year an array tends to generate more power than you use and for about half the year you use more than you generate. With net metering, power generated by home arrays is distributed back into the grid, gaining the homeowner a 1:1 credit on their power bill. Once a year, the meter resets to zero. This means that extra power you generate in the summer offsets consumption on dark, cold winter days. In our case, over the year we generate more power than we use, so our monthly bill is just the base account fee. And for projects located in sunnier climates, like Spokane, Sun Valley or Northern California, the production will be even higher.

What if the roof doesn’t face directly south? What if the slope is not ideal?

Let the experts advise you! Yes, trees or buildings that shade your panels for a significant portion of the day can be a problem, but you never know until you see a full analysis. Our east- and west-facing sloped roofs were not ideal, but when coupled with a nearly-flat dormer we had plenty of space for an effective array. When solar installers prepare an estimate for you, they will review the size and shape of your roof as well as any shade it receives from neighboring structures, topography or trees. Such an evaluation is typically free and will provide insight specific to the property in question.