WHAT ARE THE RISKS?

THINGS THAT COULD GO WRONG

The risks you incur when buying solar are too numerous and complicated to list in their entirety. Here are a few possibilities that might help you to think more seriously before you invest in solar.

• It could take so many years for you to recover your investment in solar that you would have been better off never making it.
• You could invest in solar and then have to move away from your house before recovering the cost.
• Your utility could lower your net metering rate, making it impossible for you to ever recover the cost.

FACTS THAT YOU MUST KNOW -- MISTAKES TO AVOID

THE AMOUNT OF YOUR CURRENT ELECTRIC BILL IS NOT THAT IMPORTANT

One of the mistakes people make when buying solar is thinking that there is a strong connection between how much electricity you use now, and how much money solar will save you. If your average bill is $200 a month, but you could make $300 a month by purchasing solar, why wouldn't you? It is true that your utility provider will probably limit the size of system they allow you to buy, and their limit will be based on your historical power consumption. But, if you can get a good return on your investment by selling as much power as possible back to the utility, why not do it?

In your mind, accept the fact that you will always be buying electricity, even if you have solar. You will buy less of it, but you will still buy it. Now, understand that solar will do ONLY two things for you. It will provide you with SOME of the electricity that you use, and will allow you to sell electricity. What you sell will hopefully be enough (or more) than what you pay for the electricity you must still buy from your utility.

YOU WILL ALWAYS NEED TO BUY POWER FROM ELSEWHERE

You cannot expect to make enough power to be completely independent of a utility provider. In the first place, there is this thing called "night" when you will not be able to produce power. You will need a utility provider to meet your needs at night. In the second place, there will be cloudy days (or weeks) when you cannot produce power. Even if you can justify the cost of a battery, you are at the mercy of the weather when there are several cloudy days in a row. Your battery cannot hold enough power to get you through these spells.

BUYING SOLAR DOES NOT PROTECT YOU FROM RATE INCREASES

Salesmen will tell you that buying solar will protect you from rate increases. That is true BUT ONLY WHEN YOU ARE USING WHAT YOU PRODUCE! On a good day, you might produce electricity eight to twelve hours a day. The rest of the time you will be buying it from your utility provider, AT WHATEVER RATE HE ASKS. You are not protected from rate increases after dark, on very cloudy days, etc.

LEASING IS NOT YOUR BEST OPTION

If you lease, there is no up-front investment. This is a huge advantage. And, if you lease, you do not get the benefit of the Federal and State tax incentives: they go to the leasing company. A lease will reduce the market value of your home, and make it harder to sell. That is caused by the fact that any buyer must agree to assume the lease from you, and they must be qualified to do so. Most people don't want to do that.

When you lease solar, the ONLY way you are saving money will be if your monthly lease payment and your monthly utility payment (added together) are less than what you would have paid for electricity without solar. Lets say your lease payment is $150 and your utitlity bill goes down by $190. You are only saving $40 a month in this example. It is not likely to be enough to offset the reduction in the value of your house when you sell.

IT IS HARD TO JUSTIFY THE COST OF A BATTERY

A really good quality battery (in todays technology) might last 5,000 cycles in perfect conditions. That is less than 15 years, and probably actually about 10. If that battery, installed, costs you $10,000 then you are paying $1000 a year for it - that is about $84 a month. Will that battery save you $84 a month. If your net metering rate is about the same as what you pay for electricity, then IT WILL NOT. If your net metering rate is very low, it might.

NET METERING IS UNDER ATTACK

Net Metering is the term used to describe an agreement between you and your electricity provider where they agree to buy electricity from you when you can't use it yourself. In other words, if you make 80, but only use 30, they will buy the other 50 from you. This is really the only way to make your investment for solar feasible. If you could not sell what you don't use, you woulld have to buy a battery and store it, and that would be VERY expensive.

Net Metering is under attack. If you don't get a contract from your utility provider that promises a certain rate for a certain number of years, you have no guarantee that your net metering rate won't go to zero in the future.

TAX CREDITS ARE TRICKY THINGS

In 2021, you are entitled to a Federal tax credit of 26% of the cost of your system. That is $7,800 if you pay $30,000 for your system. BUT, you can only get that money if you owe that much in Federal taxes (excluding self-employment). The same is typically true for State tax credits. It is also important to understand that you can roll the unused portion into the next year, maybe. If the Federal tax credit ceases in coming years, it may not be possible to recover any unused credit at that time.