For those of you that know me, I bet you’re surprised I don’t have solar. I’m the original bleeding heart tree hugger who loves technology and saving the world.
But… I moved a year ago (from a house that had solar, as did the one before it!) and it’s taken me a year of settling in to learn how this house works and ready to assess solar as an investment. So, being the research nerd that I am, I decided that 10 bids would be my baseline to make sure I got the full picture.
How to get good bid solar bids fast.
I started with people I knew who had gotten solar and were happy with it. My friends shared their companies and I checked out their yelp reviews. And because there was already trust established from my friends good experiences, I was happy to let their solar partners come take a look around at their leisure for any assessment they needed to do to provide the bids.
I then visited mighty Google and included “local” in my query so I could get some options for other companies that were established and had good reviews. Some of them had interesting tools and topics on their websites… so I continued to get educated. Now, with this, I had to be ready to put in time – since I didn’t know them, and they didn’t know me, I had to schedule time for them to come look at my house, my roof, my breaker boxes (one company went into my attic crawl space) and then I had to spend some face time, aka hard sell, time to hear their bid.
Finally, as part of my online research, I found a website that allowed me to put in my address, a utility bill, and I got 5 bids from a variety of companies, none of them local in the area, but some very interesting bids*.
What numbers were important after all.
System size in kW. This is the amount of capacity of the solar panels on your roof. This is driven by the number of panels, panel size, inverters installed, and the efficiency of those panels in generating electricity. (Are some panels more efficient that others… you bet!) Now, one of the main factors in determining this is; do you want to replace all of the electricity you’re buying from Utilities (ie 100% replacement) or just the expensive parts (aka Peak Power) Since I’m planning on getting “smart solar” (more on that later) I decided to shoot for 90% replacement size system.
Cost per watt DC/AC. This is the cost of the electricity that you will get from your system, and you’ll want to compare that bid to bid, and also against how much you’re currently paying for your utility provided power. *The interesting bids noted above, typically gave me bids with an an impressively low figure, but only because they were providing me with greater than 100% coverage as – ie, giving me a much higher total cost.
Total Cost/Net Cost. And here’s where rubber meets the road. What will I be paying out of pocket (or financing.) The total purchase price is the full cost of system, but since there is currently a 30% federal tax credit on solar purchases (at least through 2019….) plus additional local incentives, the net price is what many people do to calculate the cost per watt.
So…. those are what I call “The Big 3” in terms of numbers. But there are a few more figures I’ll call out as important. (Finance Nerd Alert warning….)
Return on Cash Invested. So in addition to doing the right thing by the environment (less dirty electricity) and your family’s peace of mind, you should know if you’re making a wise investment with your resources. So… assuming a cost of power increases (say 4% – which is conservative based on my utilities past rate hikes and wildfire-related costs to come) and rate of inflation (lets say 0%, but we can play with it.) – what is the return on your money?
With those parameters – my solar bids showed me I’d be getting a 17% or better return on my investment. (Better than my stock picks!) And assuming 5% inflation… I’d be looking at a 23% IRR (internal rate of return.) This is an amazing investment!
Net Present Value. You are considering use of a certain amount of cash – say $28,000. If you invested it for 25 years… what would the amount of that investment today net you over the lifetime? With the figures set out above this is looking to net me back $75K.
Cash Saved over Lifetime. How much money I otherwise would have ended up giving to PG&E assuming 4% rate of rate hikes (ha!). $250K. Wow. I had no idea.
The End Result.
Did you see the mention above about “Smart Solar?” Well, it turns out the referral from a friend was to this company, Golden Bear Solar, and they have a really refreshing philosophy.
They do *not* want to sell you more than you need, and they want you to be educated about how your house uses power.
To that end, they have licensed a really unique technology that is installed at the same time as your solar system and lets you see, at a very detailed level, where and when you use energy, so that you can be a better consumer. (Using less is the best way to reduce your energy cost, right?) A consumption monitor is really cool.
And Golden Bear is local (see more about the team here), has deep experience and a impressive warranty, friendly and experienced crews, and did a high touch, high quality job on my friends’ houses.
Check, check, check.
In fact, I got so keen on their solution, I got certified to help other people implement solar.
Next… to put down cash or get the (shockingly simple) financing. Spoiler?
If you have any questions about going solar…. let me know if you’d like help going down this path.