Upgrading to solar energy: two homeowner experiences

In our Q&A we learned firsthand insights, including one key mobilizer: the Residential Clean Energy Credit. Through 2034, the U.S. government is offering households a tax credit to cover up to 30 percent of the cost of installing rooftop solar and battery storage (which might be some of the reason for those projected increases we noted above).

Kyle: Our primary reason for installing the solar panel system is to protect us from future energy price increases and produce (most) of our own power (which is good for the environment).

Vince: I wanted to become less dependent on energy companies and more reliant on renewable energy sources on my own power grid. It allows me more household income for other things in a future of inflationary energy prices while lowering my energy bills. And I want to be part of the solution in helping the environment.

Kyle: We installed an 8.8kw rooftop solar panel system in late September 2023. This system is estimated to produce 90% of our energy usage over the course of a year.

Vince: I had REC Group Alpha Pure 410AA solar panels and Enphase IQ8A-72-2-US solar panels and inverters installed in March 2023. The system is tier one, the top of the line in solar panels and the energy it produces deteriorates at the lowest percentage on the market, meaning it will only lose 0.3% of its power every year. In 25 years, it will still generate 92%-plus of its power today.

Vince: Joe Biden’s increase in the federal tax rebate and local Ameren Power Company rebates motivated me. The federal tax rebate increased from 22% to 30% with the Inflation Reduction Act. I had also recently invested in a house that has no surrounding obstacles for sun and faces directly south; my previous house needed a 13kw system, but my new house needed almost half of that to generate the same power.

Kyle: Three driving factors helped us decide that now was the right time (for us) to purchase the solar panel system. First, our local power utility announced a 40% price increase for energy usage. Second, like Vince, we were motivated by the tax credit (we also qualify for a 10% Energy Community Tax Credit—so we will end up getting 40% back on the total cost of the system and install).

And third, my wife and I plan to stay in our home for at least 15 years (until our daughter is out of college). I calculated the ROI on this system and it will take 8-10 years to pay for itself. So it made sense for us. Even if our plans change down the road, solar panel installation is shown to increase the value of a home by $20 for every $1 reduction in yearly utility bills (in our case, that would be about $36,000 if you calculate our yearly costs at $1,800 and multiply them by $20).

Kyle: I had two primary concerns during this process. To install rooftop solar, you have to penetrate your roof to mount the racking system. This made me really nervous because we've had a leaky roof before and I didn't want to have that again! I did research on how these racking systems work to get myself comfortable with poking holes in our 3-year-old asphalt shingle roof.

Cost was also a major concern for us. I got a couple estimates and compared my quotes with others I know who have rooftop solar to ensure we were getting a fair price. There are also utility loans available to help cover the cost of the system and installation. The downside of any loan right now is high interest rates, so we plan to pay that loan down early to save on interest.

Vince: I had questions: was I going to be in this house for 25+ years? And was my roof sufficient for a solar job? What was the maintenance cost and complexity of solar panel management? I thought through those questions to make sure it was worth it.

Vince: I met with six solar companies. Going with a company that was established and won't be going out of business was huge in identifying a solar company that would respect their work and warranty 25 years down the road. I also sought top-tier equipment and fair market prices.

Kyle: I did some research into the type of panels that we were purchasing and was happy with the recommendation from the solar company we worked with. I would have loved to go with a solar shingle option but it doesn't seem like the technology is at scale yet and these options are drastically more expensive than rooftop panels.

One thing to note is that we chose not to put a battery backup system in yet—we don't feel that battery storage is cost-efficient enough to purchase at this time. However, I'm sure sometime in the future, we will add this component to our system to protect against power outages.

Kyle: Yes! I learned how solar panel systems are installed and tied into our existing electrical system in our home.  I learned a lot about how solar panel systems are sized and priced. I didn't know that the 10% Energy Community Tax Credit was even available until I started getting estimates .

I learned that our power utility operates on one-to-one net metering, so any power we produce cancels out any power we use. To measure this, we had to have a bi-directional power meter installed (producing power essentially spins our power meter backward); we are credited for any overproduction and this will help supplement underproduction during the winter months.

Vince: Solar panels don't save you much until you pay off the equipment. You pay the same amount today, but it is allocated to your lower energy bill and equipment loan/investment. You start really saving money when energy companies increase prices and your sun-powered energy stays the same, and most energy companies raise their rates every three to five years on average. With that in mind, you start saving a ton of money once you pay off your solar equipment.

For me that’s 11 years to pay off all the solar equipment if I don’t make any additional payments to my monthly allotment. So, from year 12-50+ years I will live off the sun instead of purchasing energy from the grid. Many months of the year I will pay a flat fee of $9 for my Ameren energy hook up to the grid. In the summer months I might pay $30-50 because I’m consuming more than I produce in my net 30 day monthly time period.

My system came with an app that shows me every panel and its operating efficiency. It allows me to easily notify my installation company to come check the system under warranty.

Vince: I’m hoping to purchase an electric vehicle in 2024. The pro is that with solar panels on your house there are even more savings when pumping your car with the sun’s rays from your roof instead of gasoline. My family pays about $300 a month in gas on average. That will go down to about $30 a month using our solar and/or the power grid to charge our vehicles. That’s close to $130,000 over my lifetime (if I live another 40 years) in gas savings!

About 35% of your solar investment will be electricians and getting your house up to code. This is included in your project, but I was surprised by how cheap the actual panels are because the big cost is installation and getting connected to the power grid and within code.

Kyle: Unfortunately, we are still waiting on the "permission to operate" notice from our power utility, so until this is received, I cannot turn the system on. I am expecting this system to produce 90-100% of our electricity and have plans in place to reduce our consumption to get closer to that 100% goal.

Vince: In Missouri, any additional power you provide to the grid cannot be sold back to your household. Meaning, you should design your system to not create more power than you consume. Federal and state laws cap your solar systems at 90% capacity to protect homeowners investing in solar systems that produce more than they consume. During the hottest months I pay about $30 less a month than I did before (you generate the most power when the sun is hitting your panels the longest). However, during the colder months I don't generate as much power so I spend about $30 more a month than before my solar panels. It evens out to about the same as before, until I pay off my equipment. Once I pay off my equipment I will pay $9 a month (fee to hook up to the Ameren power grid) in the winter months and pay more in the summer when I consume more energy. I will only be paying about 5% of my energy consumption to the Ameren energy company.

Kyle: The advice I would give to those considering adding rooftop solar is, do your research! Here are some considerations:

• Do you qualify for the 30% solar tax credit?
• Does your rooftop face a direction where the solar panels will have southern exposure or east/west exposure?
• Do you have any tree cover that would limit the sun from hitting your roof?
• Does your roof need to be replaced anytime soon? If this is the case, I would do that project first.
• Does your HOA (if applicable) allow rooftop solar? Make sure to get approval before signing any contracts. Note: if they don't approve, federal law supersedes HOA bylaws, so you might be able to do it anyway.
• Do you plan to live in your home long enough to pay the solar loan off (or for the system to pay for itself)? Note: Solar system loans can transfer to new homebuyers, but this will need to be disclosed when selling your home.

Vince: If you can install solar today, the quicker you will save tomorrow. I recommend everyone get a quote tomorrow on a solar project. It may not make sense for your situation but if the numbers check out and it will help you financially, why wait? The sooner you invest now, the more savings you get over time. It’s all a numbers game when it comes to solar.

I would do it again but probably install a battery all at once at the initial install. Because I know with having an electric vehicle in the future, a battery will be something I will want to invest in and probably another solar panel because I will start consuming more power once I am charging electric vehicles. Most of the expense in the installation is already covered in the initial set up so adding a battery and panels in the future isn’t as big as an investment as you’d think. However, I should have got it all one at one time to make it easier.