Net-Zero & The Importance of System Size
There are many benefits to going solar, from eliminating your electric bill, locking in a long term fixed utility costs to protect yourself from electric rate increases, especially with NEM 3 coming later this year. Not to mention the 26% savings you can realize with the 26% tax credit and the environmental impact we make by going green. It is clear to us that the financial benefits of switching to solar have the greatest impact on the consumer, and we strive to ensure every customer we work with gets the most value out of their system. We put the interests of our customers first.
With every system we design, we aim for Net-Zero. What is Net-Zero? It means your energy consumption is less than or equal to the energy you produce, so you aren’t pulling any electricity from your utility company, that your system didn’t produce. Why is this so important? Utility companies implemented rate plans for solar customers that aren’t favorable. It is called a Time-Of-Use (TOU) rate plan, and it definitely appears to be designed to safeguard the utility company as more and more people go green.
Let’s briefly touch base on Time-of-Use before we get back to Net-Zero and how we use the most accurate methods of designing your system.
Time of Use Rate Plans
Below is a graphic of Southern California Edison’s Time-of-Use 4-9 Rate Plan for weekdays.
From 8 am to 4 pm and 9 pm to 8 am, any energy you pull from the grid is at 27¢ per kWh (kilowatt-hour). From 4 pm to 9 pm it goes as high as 43¢ per kWh! Now let’s think about this. Your solar panels will produce the most energy while the sun is up, but many customers find themselves using the most energy after sunlight hours. If your panels aren’t producing enough energy to offset that peak time usage, then you will end up with a bill where you are paying more per kWh for electricity from Edison than you were before.
This is why it is so important to get your system properly sized, taking into account the amount of energy you use and more importantly when you use it.
Importance of Sizing Correctly to Achieve Net-Zero
Your solar installers must get your system designed correctly or it can actually make things worse if you have a finance payment and still have an electric bill. Suppose your solar company isn't analyzing your hourly electrical usage for 12 months, and they just analyze your daily or monthly usage during that period. In that case, they are doing you a disservice. They, and you, need to know how much electricity you use and when you use it. Not analyzing these key points can lead to a system that underproduces, especially during the expensive peak hours.
Many people think peak utility hours would be during the hot sunshine hours, but as family dynamics have changed, so has peak usage time of use; peak usage in past years was 12pm to 6pm, but with everyone working, going to school, and sports, the peak times have shifted to 4pm to 9pm, and these are the hours when everyone comes home and turns on the AC, lights, cooking, laundry, etc. Peak demand hours. Power companies capitalize off solar users because solar doesn’t produce energy at night. Solar owners are now automatically switched to a TOU or “Time of Use” plan instead of staying on the usual price per kWh. For this reason, you need professionals like Option One Solar that utilizes a more accurate process of obtaining hourly kW usage for the past year when designing your system. Most solar companies, or installers, will try to close the deal quickly by only taking your average utility bill and sizing your system based on that information. This practice doesn't take into account your time of use and in most cases will have a negative financial outcome because you may still get an electric bill and if you finance, now you have two payments. With Option One Solar, that does not happen!
Why go solar then, if the utilities are going to try and get me on it? It’s simple, professionals know how to beat this game by providing you with a system that overproduces to compensate for the TOU catch-22, or it stores energy to where you don’t use electricity during peak times. Now, you are making even more money.
How we size your system
At the start of your solar consultation, we discuss your current situation and goals and gather your energy usage “interval data” using cutting edge software. We will send you an email with a link to log in to your utility company and authorize the sharing of your usage data with us. This data tells us how many kWh you use, and more importantly, the time of day that you use it, for a period of 12 months. If privacy is a concern (of course it is), do know that your login information is never shared with us.
Benefits of Net-Zero with Solar
There are several reasons why you would want to size your solar system to obtain net-zero. Here are a few in no particular order:
1. Tax incentives and energy bills
There’s not a better time to go net-zero. With the many state and federal incentives, the 26% tax credit available for new installs is the biggest. This credit will only last until 2022, but reaping this reward cuts the costs of systems down dramatically. Now that you are net-zero with your new solar system, you’re diverting all the money you were spending on energy back in your own pocket each month, instantly. This process makes it easy for homeowners to pay off their system in less than five years and receive a good deal of pocket money for the next 20 years. That's a promise you can take to the bank, literally!
2. Higher resale value for your home
Net-zero homes' popularity has and is growing, especially as energy costs continue to rise. Buyers love the idea of not having to purchase their energy each month and having resilience vs. outages and emergencies. Who wouldn't? Berkeley Labs estimated that homes with a solar system receive at least a $15,000 bump in their value.
3. Minimizing your ecological and carbon footprints
Leaving a better future for the next generations is on many peoples' minds, especially parents. Using solar to offset your energy consumption decreases your carbon and ecological footprints. You are no longer adding to the need for fossil fuels, which leads to climate change and resource depletion. How we harvest fossil fuels is one of the most prominent ecosystem destroyers. A net-zero home removes you, or at least minimizes, your role in that horrible equation. You can decrease your impact even more by using your new solar system to power your electric car. That takes you out of the two biggest pieces of America's energy sink pie. If you install solar at your business, you now have hit the trifecta award. The more people that go net-zero with solar, the better chance our planet has to stay intact for years to come.
4. Understanding the maximum potential of solar financial benefits
Let's take your $150 energy bill (approximation based on averages). That'll save you $1,800 a year in extra income just using simple math. Now, multiply that by your solar system's lifespan of 25 years, and now add a 6% inflation rate based on the average utility company, and you have $105,150 in just avoided electric bills. That's a significant amount of savings for investments, savings, vacations, college funds, or get some financial breathing room for your family. The additional equity your home has given you opportunities for remodeling or additions that will continue to improve your home's value.
It gets better. The value of your $150 electric bill by diverting this to yourself and avoiding utility bills rate increases (inflation) on average of 6%, equals $105,150. Now let’s say you take that extra money and reinvest it into a low-risk mutual fund of 6%, which is very conservative. Now that $150 monthly investment will be worth $287,682 over 25 years. The average system cost is 25k, so you end up with an approximate net investment of $262,682.
So in the end, I think we can all agree that earning $262k is far better than giving away $105k.
Option One Solar makes this a reality for our customers every single day.
Ready to Get Started?
Rest assured, the Option One Solar professionals have completed this process many times and get it done quickly and skillfully. They are committed to designing systems that genuinely meet their customers' needs and result in the best return on investment, ROI. The Time to Go Solar is Now!