Frequently Asked
Questions about photovoltaic systems
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Electricity generated by
solar panels is referred to as PHOTOVOLTAIC energy. This tongue
twisting word is often shortened to "PV," and thus
we refer to a solar system that generates electricity as a PV
system.
Q. What is a PV
system?
A. PV technology produces electricity
directly from electrons freed by the interaction of sunlight
with a solar panel made of semiconductor material. The power
provided is direct current (DC) electricity. The basic building
block is known as a cell. Many cells put together are known as
a module, and many modules assembled together form an array.
A PV system will consist of an array of modules generating DC
electricity, an inverter, and sometimes battery storage back
up with charge controller.
Q. What is an inverter?
A. There are two kinds of electricity,
DC and AC. Homes that are connected to utility power use AC electricity.
Flashlights, small radios and automobiles use DC electricity.
In order for you to be able to use solar to operate the appliances
in your home, an inverter will convert PV power from DC to AC.
Inverters can be further classified as units that use batteries
(UPS) and those that use the utility grid as power storage (Grid-tied).
Inverters are now required to possess meters that will indicate
their performance and some manufacturer's supply remote display
units that can be mounted inside the home. It is important to
check on your inverter regularly to become acquainted with its
operation and performance.
Q. How much electricity
will a system produce?
A. The amount of power produced will
depend upon how large the system is. In California the average
residential customer purchases 6,500 kilowatt-hours (kWh) per
year. There is enough sunshine falling upon on the average home
to produce this and a system can be designed to offset all electrical
needs. The cost to accomplish a 100% system may be prohibitive
and sometimes it makes more sense to simply reduce or 'shave'
your consumption. Some utilities use tiered rates when they charge
for consumption which means that the more energy you use the
higher is the cost per kilo-watt-hour. The most economically
feasible size is usually between 50% and 75% of your annual household
needs.
Q. What about blackouts?
A. A solar system using batteries
for storage can "ride-out" utility blackouts. Batteries
add significantly to the expense of a system while providing
no payback, need weekly maintenance, are hazardous and will need
replacing every five to ten years. For this reason most city
dwellers are opting for a "grid-tie" system.
Q. What is a "grid-tie"
PV system?
A. Today in California you may connect
your solar system directly into the wires of your utility. Since
the "Net Metering Law" allows you to do this you will
actually be spinning your meter backwards when your system is
generating more power than you are consuming. When you generate
excess electricity (more power than you are using) it will enter
the grid and be used by your neighbors. Your meter will tally
the excess and give credit your account. After a year the excess
credits are eliminated and you balance is adjusted back to zero
again. In effect, if there are any unused energy credits at
the end of the year, the utility received this solar power for
free.
Q. What is Net Metering?
A. Because of the Net Energy Metering
(NEM) law, Californians are allowed to "sell" clean
solar generated electricity to the utility at the same price
at which it was purchased. This is fundamental to the economics
of generating your own power and has been instrumental in the
development of Distributed Generation (DG) of power. Without
Net Metering, the utility would, as it has in the past, sell
energy to you at retail but buy any energy from you at wholesale
pricing. This is a huge benefit to anybody owning the property
now and in the future as there are only a limited of Net Metered
systems being allowed in any utility's territory. The current
statewide cap of 2.5% of any utility's customer base is will
soon be reached and NEM systems will no longer be available.
The comparison to the HOV yellow stickers awarded to buyers
of qualified hybrid vehicles would apply here. Only 60,000 of
these stickers were issued and cars with the privileges of the
"fast lane" commute are worth more than even newer
versions without the stickers.
Q. Just how big is a
typical system?
A. Typical residential Solar PV systems
range in size from fifty to six hundred square feet. A system
composed of the very highest efficiency monocrystalline cells
will produce 1kW per hour for every 60 square feet. Less efficient
polycrystalline cells will require 90 to 130 square feet while
thin-film systems need the largest area of all - sometimes as
much as 300 square feet to generate 1 kilowatt.
Q. What is the California
Energy Commission (CSI) Rebate Program
A. The State of California will help
you buy a solar electric system. The California Public Utilities
Commission will pay you a lump sum rebate up front or monthly
for five years based upon the actual performance of the system.
The amount of the lump sum rebate is calculated by using an online
tool (http://www.csi-epbb.com/) created to take into account
module and inverter efficiencies, tilt and orientation, shading
and local weather to produce an Expected Performance Based Buydown
(EPBB). The rebate was administered by the California Energy
Commission (it was called the Emerging Renewables Program or
ERP) but the program was extended and altered on January 1, 2007
(it is now called the California Solar Initiative or CSI). In
prior years the rebate had been as high as $4.50 a watt but was
summarily reduced to $2.50 in 2007. As of June '09, the rebate
level for Edison customers has dropped down to a maximum $1.90
per watt. The rebate paid is now reduced by the degree of shade
measured on the panel's surface, the tilt and orientation as
well as the inverter efficiency. On July 1, 2009, the rebate
was again reduced by using newer performance ratings for solar
panels that were mostly lower than in the past. Many other factors
are involved in this complex calculation as well.
Q. How can I get
information on the State's Rebate program?
A. You must be serviced by SCE, PG&E
or SDG&E utilities to qualify for the state rebate. You
may apply for the program yourself by going to their website,
http://www.gosolarcalifornia.ca.gov . We can also provide the
forms and do the necessary paperwork to make your reservation.
Q. Is there a program
for residents of the City of Los Angeles?
A. The LADWP has a similar program
for its customers. Information on this very successful program
can be found on the web at http://www.ladwp.com/ladwp/cms/ladwp004171.jsp
. We can prepare all of the forms and make the necessary submittals.
LADWP is funding systems with a rebate starting at about $4.18
per watt as a lump sum payment and uses an online calculator
( http://rredc.nrel.gov/solar/codes_algs/PVWATTS/) to assess
its value using performance related variables (tilt, shading
etc.) Glendale, Burbank, Riverside and Anaheim have their own
solar programs each with varying rules and strategies.
Q. How much does
a PV system cost?
A. As systems get larger, the cost
per watt is lower. A two (2) kilowatt system may cost between
$16,000 and $20,000 ($8.00 to $10.00 per watt), while a five
(5) kilowatt system may be installed for as little as $35,000
($ 7.00/watt). All of these prices are figured before the rebates
or tax credits. The final cost may be as low as $2.50 per watt
(or $12,500 for a 5 kW system) depending upon which incentives
your utility may offer.
Q. Are there tax
credits or any other incentives to go solar?
A. There is currently a federal tax
credit of 30% for any qualifying residential or commercial solar
system. This tax credit is slated to expire at the end of 2016.
The Federal (MACRS) and State accelerated depreciation deductions
can also significantly reduce the final cost of a system used
for commercial applications.
Q. Will my property
taxes go up if I install a solar energy system?
A. In California the value of your
property may not be re-appraised by the County Assessor's Office
for solar related property improvements, at this time.
Q. Are there any
other incentives or programs available to help me afford a solar
energy system?
A. It depends upon where you live.
Some municipally owned utilities have established their own programs
and some credit unions and banks have special loan rates. For
a comprehensive list of incentives, rules and regulations affecting
solar energy go to http://www.dsireusa.org/index.cfm?EE=0&RE=1.
Q. Why is there such
a variation in prices?
A. Although any solar component that qualifies for
the CEC rebate must meet certain minimum criteria, there are
wide variations in the way PV modules are made and assembled.
Some of the modules recently entering the American market are
made in Asia and are less expensive than European or US brands.
Also, the cost of installation varies upon whether or not you
hire a contractor that uses employees or temporary labor and
subcontracts the installation. If you use a firm with an established
reputation, one that has employees, carries workman's compensation
and liability insurance, you may pay a little more for "peace
of mind." Frequently, a firm that has just recently entered
the solar arena may offer discounts to gain market share or experience.
The California Energy Commission and the Public Utilities Commission
do not check the history or background of its participant "contractors"
before listing them. As long as its state license is valid a
company will be "approved." Although the solar equipment
listed on its website is "approved," the CEC &
the PUC in no way endorses any of the vendors on its list. The
old rule, "Caveat Emptor," definitely applies when
you select your installer and equipment.
Q. How much do I save?
A. The savings will depend on the size of your solar
system and the amount of electricity you would normally have
consumed. A 2kW PV system which is replacing electricity at 30
cents a kWh might save $1,125.00 per year (CEC Consumer Handbooks
"Buying a Photovoltaic Solar Electric System," p.7
or "A Guide to Photovoltaic System Design", p. 8 and
9). Rates in California are increasing dramatically - so savings
will also increase proportionally. The highest tier in Edison
territory has reached 32 cents, not including state and local
taxes.
Q. How long does
it take for a PV system to pay for itself?
A. It is more instructive to think
of solar as an investment that yields an annual return, much
as a bank savings account provides interest. A solar PV system
may generate savings that would equal an annual Return on Investment
(ROI) of 7% to 15% per year at today's electric rates. These
savings is not taxed as would be the interest earned from a bank
savings account. Thus you would have to find a bank account or
investment yielding 14% to 28% to equal the return on a solar
electric system. No matter what ROI your system would generate,
this is ultimately a choice about how you will be buying your
power - not whether or not you will be paying for it!
You may prefer to pay the utility bill forever, or you may choose
to become your own utility with solar PV, instead. For more information
on payback, please go to our page "The Economics of Renewable
Energy."
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