Langlois, Debra

From: Comer, Ed <EComer@eei.org>

Sent: Sunday, September 21, 2014 12:53 PM
To: Reichel, Claudette Hanks

Subject: RE: completed draft pub

Attachments: Solar Guide edits.docx
Follow Up Flag: Flag for follow up

Flag Status: Flagged

Caludette. In anticipate of your travel schedule, I wanted to get you some feedback before you got on the plane so
hopefully you can read it while traveling.

lam attaching comments I received from Brian McCormack and a few additional general thoughts from me. Brian
tends to be precise but please take the comments as suggestions and always use your wording and approach. He
has a lot of comments early on but much fewer as he gets into it. The main concerns, which i share are more subtle
than the number of early comments suggest. There are two major conceptual points which I do agree with. 

One, we think it is useful for the homeowner to use the term "rooftop solar" to distinguish it from community and
utility scale. This probably more precisely identifies what the homeowner is considering.

Second, There are a few statements about the problems with fossil fuels that are hard for us Utility folks to endorse.
(and the statement about fossil fuel prices going is just wrong (gas prices have declined significantly) . I hope you
can make the same points about why people are attracted to renewable and solar without them.

Third, If you could find more example of community/utility sales of renewables and solar that would be helpful.

I want to look closer at the treatment of net metering. I think you struck the right balance, but given the sensitivity
ofthe issue to all sides I want to look mat it again.

PLEASE feel free to share the paper as it is now at the upcoming meeting. Getting a wide range of input is
important and these comments should not inhibit your doing that.

I am in the office Monday (with another major project) but call if you have questions or thoughts about this.

Edward Comer

Vice President and General Counsel
Edison Electric Institute

202 508 5615

202 258 2909 (cell)

 

From: Reichel, Claudette Hanks [CReichel@agcenter.lsu.edu]
Sent: Friday, September 19,2014 5:25 PM

To: Comer, Ed

Subject: RE: completed draft pub

I?ll be en route on Monday. I might be ableto call during my lunchtime layover. If not, l?ll try during a meeting break
sometime.

I can hold off on sending out the draft to colleagues until after we chat, if you like.

Claudette Reichel

225-578-2378

 

 House


From: Comer, Ed [mailtozEComer@eei.org]
Sent: Friday, September 19, 2014 4:12 PM
To: Reichel, Claudette Hanks

Cc: Autilio, Kathleen; Heil, Shandy

Subject: RE: completed draft pub

I have been swamped but have read it and am waiting some feedback from two colleagues. 1 know I have some
editorial and factual suggestions, but want to give them to you all at one time, so lam aiming for Monday. Hope
you have some time to chat then. ED

Edward Comer

Vice President, General Counsel
and Corporate Secretary

Edison Electric Institute

701 Avenue NW
Washington DC 20004

(202) 508-5615 (work)

(202) 258-2909 (cell)

(202) 508-5673 (fax)

From: Reichel, Claudette Hanks 
Sent: Friday, September 19, 2014 4:27 PM

To: Comer, Ed

Cc: Autilio, Kathleen; Heil, Shandy

Subject: completed draft pub

Hl Ed,

Yipee! I finished the draft, complete with the and the Questions to supplements.

It?s all in this one Word file. i made a couple of minor corrections in the main manuscript, so please replace the
previous file with this one.

Since I suspect you?re pretty busy, and I?m going to the EEBA conference next week, I will go ahead and send this
draft to some of my colleagues and bring it to EEBA to seek feedback.

Ifyou would like to share this draft with your people for their feedback, feel free. If you?d rather preview it and send
me your comments to address before sharing it with others, that's fine too. Your choice.

Again, I?m so glad you came to LSU at the perfect time for us to discuss it. That was really helpful!

Thanks again.

Claudette Hanks Reichel, 

Professor and Extension Housing Specialist LaHouse Resource Center Director

2858 Gourrier Ave.

Baton Rouge, LA 70820

ofc: 225?578-2378




 

 

 

 
 
  
 



aSolar Power for Your Home
Sonsumeris?uide

 

.  Formatted: Font: 18 pt 

 

Are you thinking about adding a solar energy system to your home to generate electricity? if so, this
consumer guide will help you explore important questions
and make agjgi 

     

 

 

 

 

 

 

 

 

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there are several
widespread home solar energy systems:

 

 

ear-MCost is the primary hurdle. A solar energy system that can power a home is expensive. In most
places in the USA, ,sola - still 213's 

.nrmm:
5 why. 



       

      



 

 

 

As a result, another source of power (such as an electric utility) or an expensive and bulky
battery storage system is needed to supply electricity -

 

 

 

   

Neighboring structures or landscaping can block access to enough solar exposur

 



 

- Solar access rights and reguiations vary widely. Many states and cities protect solar access rights,
but some local ordinances or homeowners association rules restrict installation of solar systems on
homes to maintain an established aesthetic standard.

be impractical to upgrade the system to take

is

0 After a solar power system is installed, it 
advantage of a newer, improved technology.

When should I add  

Efficiency First!

  

  

  

solar power ?to my home?

  

rs

 

Even with? a U. system is not the first step to
saving energy, money and the environment. Ifyour home wastes energy, then improving its energy-
efficiency should be  first priority. An energy-efficient home 

 



   
  

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good for the envnronment .,
 .. ..   

we.  

   

It doesn?t make good economic sense to install a $33.51 ystem until your home is energy-
efficient. Otherwise, you?re spending money to produce electricity that you would not need if the home
were more efficient. Investing in an effective home energy upgrade generally produces a greater return
on investment and typically costs less than a  ?solar system for the same reduction in
electricity use.

 

  

So, before you go 

Learn about the most effective ways in your climate to increase your home?s energy efficiency at
and .   a:   ?ft-:12: 
   Ez'sz'    fix: r:  For expert information on
high-performance home construction topics, explore the Building America Program Solution Center at
To optimize the efficiency of your existing or new home, get a customized home
energy check-up or rating by a trained home energy professional. You can find certified home energy
pros at? and 

  
  

 

. 

 

Return on Investment

After your home is made as efficient as practical, is the right time to consider;

 

 

      
 

 

..  . . how best to do By
system, you .
 electricity you nee

  

 

 

combining energy efficiency and a?

hall-v. aw w. a,  mu ax:

 

    
 

Whether you purchase or lease a it gusolar energy system, you're making a major, long term

investment and should analyze all costs and likely gains (return) 

 
 

I the available tax credits, rebates and incentives from all available sources;

0 the remaining initial cost (equipment, installation, permit fees) or costs (loan or lease
payments) for the expected equipment life or lease term;

0 maintenance costs (monitoring, inspection, cleaning, landscape pruning, removal to reroof, etc.)

0 your average annual electricity use and cost (now and in the future);

 

0 how much electricity per year the system is expected to produce,-

0 the rate you will receive from the utility company when your system produces more energy than
you use; and

0 how the PV system will affect your home?s market value.

It can be tricky to calculate the return on a solar investment, especially if leasing or financing a purchase.

Purchased home PV system payback periods can range from 7-20 years without incentives. incentives

shorten the time it takes to recoup the cost and "profit". As PV system costs decline; 
112:; increase. the payback period will shrink.

 

 

 

 

Find Incentives

  

A variety of incentives may be available to you that lower the cost of a
system, such as income tax credits, property tax exemptions, rebate programs 
agencies or utilities, incentives paid based on electricity production, grants, loans, net metering policies,
and others. They vary by state and city and may change or expire.

solar energy

 

Fortunately, there is an easy way to find them! Visit and browse the Database of State Incentives for
Renewables and Efficiency at to explore summaries of solar and energy efficiency
financial incentives, programs and policies available from the federal government, your state, some local
governments and large electric utilities 

   
 

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Examples from (in 2014)
1. Click on View Federal incentives, then on Residential Renewable Energy Tax Credit to see
information about the 30% federal tax credit available until December 31, 2016.
2. If you click on Arizona, then narrow your search to see Residential incentives Only, it reveals:

- a personal tax credit (for minimum 5 MW solar system, a state tax credit based on amount
of electricity produced annually for a 10 year period);

0 a property tax incentive (tax credit of 25% of cost up to $1,000);

0 a property tax exemption for 100% of costs of an installed solar s_yste_m;_ 

I an electric coop home solar loan program; and

0 numerous utility rebate programs for solar and energy efficiency projects.

3. if you click on Louisiana, it reveals a variety of state and local financial incentives, including the
state Personal Tax Credit for Solar Energy Systems on Residential Property. Until 2018, a state
tax credit (refunded even if in excess of taxes owed) of 50% the first $25,000 spent by the
homeowner to buy solar technologies, in addition to the 30% federal income tax credit.

0 Using the state and federal tax credits, a $25,000 home PV system can be purchased for less
than $9000, and a typical 3kW sized system could be purchased for around $5000.

0 However, if the solar system is leased, the leasing company receives a smaller tax credit.

 


purchase systems. Leased systems are being
taxed.

 

 

 

 

   



Whatis in 

PV Solar Basics

sat-solar energy system 

The basic unit of photovoltaic technology that converts iight to energy is the safer ceii. Muitipie soiar

cells are connected and seaied together to form 3 PV moduie. Soiar panels inciude one or more PV

moduies assembied as a pre~wired unit. in most systems, severai P?v? paneis are iini<ed to provide the

desired power capacity. The compiete set of panels that form the entire power-generating unit is caiied

the PV array. Most home PV systems are assembled as an array of muitiple paneis attached to the roof":
the :1 

   

. at, ., 
Scii?i? if s32: iz?  

 

  

PV system typicaiiy inciudes solar panels with a mounting system to attach them to the roof and one
or more inverters to convert the soiar energy from 
direct current (DC, the type from batteries} to 120 voit  "testament: segregate
aiternating current (AC, the same a i  
 say). A singie?
inverter system is sized for the entire array.

 

   

 

  

 

 

Micro-inverters are an alternative approach. Each
micro?inverter operates with a single PV moduie and
connects to other independent units. This ailows for
future system expansion and provides improved
installation and fire safety. it also avoids the possibility  7
of being compieteiy without solar power if an inverter   - -   
tails, and less expensive replacement cost than a singie inverter system.

   

The conversion of

2 ?sue . 

min-by the inverter consumes some of the produced energy.
-. Fonversion ioss can he eliminated 

r, ?ramp-u hum-U.
w. .

   
 

.

 a ?as

33:7: system; this may reduire additionai controi devices.

 

 

Types of RI Systems

The two basic types of residential PV systems are stand-alone, aiso known as o?-grid, and utility-
interactive, also known as grid-tied.

Off-grid or stand-alone systems are not connected to a utility power grid. They include a battery bank
that is large enough to power the home at night and during extended sit  
- This adds substantial cost and maintenance requirements to a PV system, but
can be a more cost-effective alternative to having new utility lines extended to remote locations. Off-
grid systems can also be designed to serve as a back-up power system in place of fuel burning
generators.

 

 

Grid-tied or utility-interactive systems are connected to the electric utility, and are the most common
and practicai system for most homes. The solar electricity produced is suppiied to the main electrical

 

 

 

Additional meters may be installed, or the original electric meter replaced with a ?smart? digital meter,
to separately measure power from the solar panels and electricity from the utility company. Some
meters can also measure time of use for variable rate structures.

There are several important benefits to grid-tied systems vs. off-grid:

0 They are iess expensive, safer and require less maintenance for the home owner.

 

Comment I think what is being referred 

to here is they?re saying you can run some of your
appliances on DC. Right?

 

 create a system of distributed generation many small scaie power piants - that help

 

 

 
 
 

new, gecko-vi
1: ?a'ss Lakisha

 

- It increases national energy security, because of the large number of power producers that would

 

have to be targeted to shut down the national utility gridr  .  Comment Idon?t think this is a true
statement. See the next sentence.

 

At this time, most grid-tied systems are required by the electric code to disconnect whenever there is a
grid power outage. This is a safety measure to protect power line workers. That means your solar
system does not provide power when the grid is down, contrary to what many assume.

Smart inverters that can sense a grid power outage and block transmission to the grid but allow the
home to use solar power are in development and may soon be commercially available. That would
provide a valuable back?up power system during daytime.

Net Metering

   
 

When a 

 system produces more power than is being used, surplus power is fed into the
utility grid. if

s-ihis surplus power

 

 

 

 

 

pre-d etermined rate.

Selling power to the utility company isn't always as beneficial as it seems. In some cases, customers pay
the retail rate for electricity purchased, but are paid or credited a lower wholesale rate for power they
supply to the grid. The wholesale rate, or avoided cost rate, is what the utility pays for other sources of
wholesale electric power. When this is the case, it may be more cost-effective to size a home PV system
to just reduce what you need from the grid and not produce excess power.

Net metering legislation.ng has been enacted by most states as a subsidy to jump~start
renewable energy development. Such policies require electric utilities to effectively "run the meter
backwards" when a customer?s PV system is producing more electricity than the home is using. With not
metering, you are billed for the net electricity for the billing period in other words, you pay the
difference between the electricity coming from the grid and the electricity you put into the grid. With
net metering, you receive the full retail rate for your PV-produced electricity (instead of the lower

 

 

Wholesale rateappeartocontradicteachother.

 

There is wide variatidn in state net metering policies:

 

0 Some state policies apply to all types of utilities and some to only investor owned a I  CommentiMBG}: Think anyone reading this
states that don?t require net metering may have utility companies that voluntarily provide it. it?? Maren?? 

 

- Net metering may vary by system capacity, system type, type of customer (residential,
commercial, industrial), and how surplus power is handled in a billing cycle. As'
energy "has grown; policies are evolving. 
current policies and rate structures wili always remain the same. It?s a good idea to evaluate your
solar investment if rate policies change.

   
  

    
   

   



  

- Some policies include net metering caps at a certain of a utility?s power generation, solar system
size or other limit. When the cap is reached, new solar system owners receive the whoiesaie rate for
their surplus power instead of the retail rate. Caps limit the subsidy for renewable energy to early
adopters. Retail electricity rates are structured to pay for the grid network (power lines and

5

 

distribution) as weli as power generation. Net metering customers use the utility?s grid network to
sell power to it, without supporting the cost of the grid.

0 Some states allow a feed-in tariff (FIT) where surplus power your system produced one month can
be applied to the next month?s electric bill. A may require the utility to purchase solar power at a
fixed price per kWh, usually over a fixed-time period. It may provide a payment for both the
electricity generated and associated environmental attributes or renewable energy credits.

gheck to find

 

 

 
Us. (35ng 313

your state and utility company?s current net metering policies.

Community Green Power Programs

if you'd like to support and use renewable energy without adding power generating technology to your
home, check to see if your utility company offers a voluntary utility green power or community solar
program. Customers can choose to participate and purchase electricity generated by renewable
resources such as solar, wind and methane gas from decomposing garbage. The rate per is
typically a little higher than the rate for fossil fuel generated electricity, but with no investment in home
solar equipment. Customer participation encourages investment in community renewable energy
systems that can more efficiently produce power than small home systems.

 

 

 

 

Types of PV Technologies

 

Solar Cells Traditional, first-generation solar cells are made from silicon The vast
majority of home solar panels now in use have cells.

0 cells are generally the most efficient type produce more power per cell). They
are also the most energy and time consuming to produce, so the most expensive. Their sunlight to
electricity conversion efficiencies tend to fali in the range of 13-20%, with life spans of 35 years or
longer. Technology advancements are increasing the potential efficiencies.

cells, made up of many smaller offer a lower cost, but they deliver lower
efficiencies in the range of 10-16%. You may need to cover a larger surface area to get the same
output you would get with a solar array.

Thin Film Solar Cells Second generation thin film solar cells are made from layers of
semiconductor materials so thin that they are flexible. The market for thin film PV has been growing.

Because of the flexibility, thin film solar ceils can be used in ways that rigid cannot. It can be
made to double as roofing shingles or tiles, adhesive sheets that fit within ridges of metal roofing, or
even as glazing of skylights and building facades. This offers an attractive building integrated option.

Thin film can be produced faster and is less expensive than ceils, but has a lower efficiency in
the range of 5-9% so more surface area is needed per watt of power. Future efficiencies couid increase
to 10-16% with technology advancements.

Despite the lower efficiency, thin fiim can use diffuse sunlight better than cells, are less prone
to overheating, and are more shade tolerant. That can also help improve output when the solar
orientation is not optimai.

Future Technologies There are other technologies being developed to harness the energy in
sunlight, such as using nanotechnologies or chemical processes. Such advancements could offer higher

efficiencies, lower costs or new uses in the future.L  . ?a Comment Interesting but not sure
- necessary. If they're trying to make the point that
the technology keeps changing they shouldn?t be

Where will my solar PV work best? so subtle.

A solar system works best and deiivers the most power where the most sunshine strikes its collection
surface. Mid?day sun produces more power than early morning and late afternoon sunlight. Of course,
sunny days produce more power than cloudy days.  i   

 

 

  

   

Placement of Your PV System

Orientation - Solar panels perform best if they are oriented toward true south. When that?s not
feasible because of the roof orientation or aesthetics, facing 45" east or west of true south reduces
energy output by less than Facing 90? off of true south reduces annual energy output by only 10?
20%. So, a roof that faces 5, SE or SW is fine, and a roof facing or may be acceptable depending on
your expectations for the system. Some utilities may offer incentives for west-facing solar placement to
increase output during late afternoon peak ?times.

 

 

Tilt A The slope or tilt of panels also affect performance. The optimal tilt is an angle equal to severai
degrees lower than the geographic latitude, but an exact tilt is not crucial. A 15" variation to suit a roof?s
pitch makes almost no difference in power output."  
the sake of simplicity and aesthetics, 
 parallel to the roof.

   
 

 

   

Tracking Arrays - The output of a PV system can be increased by having it track the sun as it moves
across the sky on a daily basis, and/or adjust its tiit to the seasonal solar path, instead of being fixed in
one orientation. However, tracking arrays are not generally recommended for home PV systems
because of the added complexity, maintenance, and costs compared to the energy benefit.

Shade - Shading can have a very large impact on the output of a PV system. Depending on the type of
cells, shade on 25% of an array could result in a 50% or greater drop in output. It?s important to examine
shading across the sun?s path not only in a day but also over a year. Many solar professionals use a
tool called a Solar Pathfinder to determine the annual shading profile of a
location to find optimal placement. Also consider what might create shade in the future, such as
growing trees or new buildings.

Your Geographic Solar Resource

Your location and the weather have a big effect on your solar energy output. For example, homes in the
Northwest US. may average only 3-4 hours of sunlight a day but those in the Southwest average 6.5
hours. Therefore, northwestern homes need a much larger (and more expensive) array to produce the
same power as southwestern homes.

Look into your area?s solar resource (how much
sunshine is available). The US. Dept. of Energy?s
National Renewable Energy Laboratory (NREL)
creates color coded maps that illustrate
approximate sunlight received in kWh/mZ/day.
(Visit and search "solar maps?)

HOW much and 
Sizing Your PV System

Sizing your home PV system depends upon a

combination of factors, including: the PV system?s efficiency, your location (solar resource), placement,
available roof space, your electricity usage, and your budget. You will need to balance how much you?re
willing to invest, with how much of your electricity use you want the PV system to supply.

0 As a starting point, we; 

 

thomitdic 59hr Resource a! the waited Sums

 

 

 

  

 

 

 

 

 

 

 

 

 

gasses.

 

 

 

:reiectricity use in kilowatt?hours (kWh) for

the past year (your demand). Check your electric bills or contact your utility company. Then you can
compare how much a new PV system is expected to produce (also in kWh) with your annual usage.

Check what you're paying per kilowatt hour (kWh). U.S. electric rates range from $0.05 to 50.20 per
.. .. 

   
 
 

 

 

 

Measure your suitable roof area. A small starter home PV system might need only 50 sq. ft. of roof
area, where a large output system may need 1,000 sq. ft. If your roof limits the size of your system,
you can choose high efficiency PV modules. If you have ample roof area, you may opt for a lower

efficiency and less expensive or more attractive thin film system.  we   
 3'

 
   
 

   it        

 

 

 

The NREL PVWatts? calculator
(pvwatts.nrel.gov)

 

This free online calculator can be used to help determine the energy production and cost savings of
a grid?connected solar system. It simulates houriy performance and estimates and annual
energy production in kilowatts and energy vatue. You may select your location and use the default,
or choose actual values for your proposed system size, electric cost, soiar array type, and pane ?tilt

angle. The calculator also utilizes weather data for your location.

As an example, a Phoenix, Arizona default calculation using a 4kW system with a 33.5 degree tilt and
electric rate of 8.5 cents/kWh produces a month-by-month estimate of solar radiation, AC energy
(kWh), and annuai electric bill savings of $500. A comparable calculation for Seattle, Washington
produces a bill savings of only $250;   

 

-  Comment Not sure this is needed.

 

 

 

Considering the above factors, a PV system design should take into account:

PV Power Rating - PV systems are rated with a peak DC power generating capacity measured in watts
or kilowatts A kilowatt is 1000 watts. It?s important to know that the actual operating capacity will

usually be less than the laboratory rated capacity, so that should be considered in predicted output.

Available Solar Resources ?The sun does not always shine at its peak intensity, and solar intensity is
reduced when the sun?s rays strike cells at an angle. To estimate the likely output of a PV system, a solar
professional uses peak sun hours which is the number of hours the sun must shine at peak intensity on a
PV array to equal the amount of radiation that was actually received by the array during the day.

PV Electricity Generation To estimate the energy output that a PV module will produce, the
expected operating power capacity (kW) is multiplied by time. There are free software programs
available to help estimate the electricity output of a PV system (kWh).

Installation Considerations and Tips
A PV array can be roof-mounted, ground mounted, or building-integrated:

Installing a ground-mounted array avoids one of the major drawbacks of a roof?mounted array -the
need to disassemble the array when the roofing needs to be replaced. However, that requires a site
without any nearby trees or buildings to the east, south, or west.

Most roof-mounted modules are installed on racks made of aluminum. Racks should
create an air space of about 3-4 inches under the array to help lower the PV module temperature.
Cooler modules produce more electricity than hotter modules.

0 if your roofing is worn or aged, :?replace it right before installing the solar panels to
avoid the cost of removing and reinstalling the solar system to reroof later.

 

- Consider your risk of high wind (especially in hurricane zones) and hail, and make sure the type of
material and its mounting hardware can withstand wind and hail hazards without damage?; 

 . 

 

 
 

- Rigid solar modules can be installed on most any type of roofing, but some types are
easier to deal with than others. Composition shingles are easy to work with; clay tile and slate are
difficult and risky. Solar panels can be attached to the ridges of standing seam metal roofing so
there are no penetrations in the roofing covering.

- There are expanding options for integrating thin film PV systems into the building itself. Solar
shingtes both blend in and have the benefit of offsetting the cost of roofing material. Adhesive PV
sheets can fit between metal roofing ridges, blend in color and require no penetrations in the roof.

Operation and Maintenance

Most home solar systems are designed to operate automatically, with little or no user intervention,
other than inspection and cleaning maintenance. You may opt for a monitoring system that aliows you
to see the system?s daily,

 

and annual production, and the resulting savings,

a  a:

 



 

 

External issues, such as encroaching shade from growing trees and dirty modules, are common
developments that can reduce energy output. Modules that are not periodically cleaned can have an
average annual energy loss of 

Trim tree branches and clean the array annually to maintain full solar power production.

0 Annually inspect for wires damaged by rodents, bird droppings on modules, weeds sprouting
between the module frames, broken cells, or other damage.

Internal problems, such as module or cell damage, can reduce system output. Sometimes these
problems are easy to spot, but often they are not. Each year, look for cracks in the glass, brown/burn

spots on the modules, burnt solderjoints on the cell grid, and signs of delamination and cell damage.
However, do NOT attempt to repair such problems yourself. Hire a qualified professional to diagnose
and repair the problem.

Who should I hire?

If you are buying a solar system, you choose your installer. If you are ieasing a solar system, the third-
party company will likely choose the installer. Either way, it?s crucial to choose carefully to ensure a
quality installation that will perform properly and not cause damage to your home or the equipment.
Investigate every company you are considering:

 

0 Search for local solar firms and through the Solar Energy industries Associations Comment [Ec9]: Do they have a listing? What
. . . . . . . . . 7
local solar industry assomations, recommendations from energy effiCIency organizations or your ab?utSEPA Eleqr'c mw?irAssn? SE'Atends
to be much more politically active than SEPA.
utility company, online referral and reView sates, and people who have solar systems.

 

- Look for reputable, professional solar suppliers and PV system installers with documented training
and field experience installing residential PV systems plus an electrical contractor?s license. PV
installers who are certified by the North American Board of Certified Energy Practitioners (NABCEP)
have passed a rigorous exam and demonstrated a. high level of training and experience '1
Contractors and suppliers who have been in the PV business a long time may be
more likely to be around in years to come to back up their product and installation.

- Verity the license or credentials of the installer or company you?re considering with your state?s
contractor licensing agency. Some states have licensing requirements specifically for solar
equipment installers. Check the Secretary of State office to see if required reports are up to date.

0 Find out if there are any judgments or complaints against the company submitted to the licensing
board and the Better Business Bureau and check the rating of the business. Read online
customer reviews for insights and patterns, but keep in mind that extreme and outlying reviews may
not be reliable. Check with your state licensing agency or local building official to find out about
local regulations and requirements.

0 Get written proposals from several companies with clear specifications, costs and estimated annual
energy production (and how it was derived). Ask questions and get details in writing. Ask for
customer references and taik to them. Never let a vendor rush or pressure you into a quick decision!

Get a written contract once you select your firm. Make sure it specifies ail needed components,
services and permits; the payment schedule and terms; a timeline for completion; a statement of
workmanship, warranties and guarantees; who is responsible for repiacement of any components under
warranty; and a lien waiver to protect you in the event suppliers have claims against the contractor.

It should state what your installer has for damage to your roof or any other structures
during installation, any consequential damages from installation, and any crew or public injuries from
installation. It should name the types of safety standards the installer will follow during instaliation.

If you are leasing a system, get in writing who is responsible to remove and reinstall the system when
roof repair or replacement is needed, and who should do post-installation roof inspection.

Know the permitting requirements in your locale and make sure the contractor you select completes
the permitting process. In some cases, it can be a time consuming process with a significant cost.

10

Some communities require a certain amount of your roof to remain uncovered by solar panels to ensure
firefighters can walk on, or cut into, a roof safely when venting smoke, flames or extreme heat from a
house fire. Your installer needs to be aware of locai building and fire codes to ensure compliance.

Warranties

Whether you buy or lease your solar system, the vendor or leasing companies should provide you with a
copy of the warranties. Read it very carefully and ask questions.

 

0 Warranty terms are typically for 10-25 years, but may have limitations. There may be manufacturer
warranties on equipment for varying durations that cover parts and labor, or just parts.

0 It may have maintenance and repair requirements of you and/or the leasing company.

0 Be sure you know who is responsible for fulfilling system warranties (installer, dealer, manufacturer
or leasing company) and understand what you need to do to enforce the warranties.

Ask about the contractor?s bonds and other financial arrangements that help ensure warranties are
honored. Remember, a warranty never guarantees that the company will remain in business. Find out
who to contact if there is a problem.

WhiCh is better for me buying or leasing?

Since a home solar energy system can cost anywhere from $5,000 $50,000big
deal! There are many Return on investment
considerations to weigh and After Recoup of System Cos;

8mm: cm Annual Electra ?are increase

different costs and benefits of
buying vs. leasing a home solar
system. Local and state incentives
and how they apply to a purchase
vs. leasing should be investigated
and factored into your decision.

 

 

 

When purchasing a home solar
system, you own it. The main
expense is upfront, so you may need to get a loan to finance it, and you are responsible for its
maintenance. A big advantage of ownership is that once your electric bill savings recoup the initial cost,
the remaining electric bill savings are all profit.

When leasing a system installed on your home, the leasing company owns it. You have little or no up?
front cost and you could start saving some money right from the start and as long as the energy
produced is enough to reduce your electric bill more than your lease payment. However, since
your lease payments continue throughout the lease term {typically 20 years), there is no payback point
where the purchase cost is recouped and your utility bill savings grow sharpiy.

Leasing a Home Solar System

A solar lease is third-party financing where the company pays the cost of building a solar system on your
home in exchange for a payment, usually with no money down. Some offer an option to make a
small down payment in exchange for lower payments. There may be a minimum credit score
requirement to be eligible for a lease. The lease term is typically 20 years.

11

Since the leasing company owns the solar system, the company gets whatever tax credits, rebates and
other incentives are available. These financial benefits and other factors enabie the company to set your
initial payments lower than your initial utility bill savings, and still make a profit.

The leasing company monitors and is responsible for maintaining and repairing the solar system. Some
provide the homeowner a means to monitor energy produced, savings, carbon emissions avoided, etc.

A lease is normally structured in one of two ways, although the label, solar lease, is often used
interchangeably for either type a solar lease (rental) contract or a purchase power agreement (PPA).

- With a solar lease you sign a lease contract (similar to leasing a car) and agree to a specified
payment schedule for the right to use all the power produced by the system. Your
payments are predictable, like rent. However, if the system produces less than the company
predicted, you still pay the full rent -- so your actual cost per is higher, reducing your savings.

 

0 With a PPA you agree to buy the power generated by the system at a set price per kWh. You pay
only for the electricity produced by the system and used by you. lfthe system produces less than
predicted, you benefit less than expected but your cost per for the solar power is the same.

 

IMPORTANT: With either type of lease, the contract typically includes an escalation schedule that
defines how the rental amount or price/kWh will be increased over time. It is usually in the range ofa
2% to 4% increase each year.

If the PPA rates or payments rise faster than the actual cost of power from the grid, your cost
savings per month decrease over time. There could be a potential for the solar lease payment to
eventually cost more than power from the grid. On the other hand, if electric rates from the grid rise
more than your contract escalation schedule, your cost saving benefit increases.

 

Be Cautious about Predicted Savings

Projections of your total savings over the term ofa lease are usually based upon a prediction that
the cost of electricity from the grid will rise at a rate higher than the contract's escalation rate. lf
the prediction is wrong, so is the estimated savings. Of course no one knows the future, so
predictions are just that predictions. A 20 year lease is a long time.

For example, a PPA may have an annual 3% increase in your payment rate, but base your predicted
savings on a 4.5% annual increase in the cost of power from the utility company for the next 20
years. Assuming high growth for utility rates inflate projected savings. If utility rates were to
actually rise less than 3%/year, your utility bill savings benefit would shrink over time.

Historically, the rise in utility rates has

Slowed over the last 20 years. Since U.S. Residential Electricity Price

cents per kilowatthour

 

 

   
 

2008, the national average increase 14 24%
has ranged from 0.3% to 3.1% per year. 12 20%
Although higher utility rate increases 10 15%
have occurred and are likely in some 8 v" "103% 12%
years and areas, such as the northeast 6

5.4% 3
3, 2.6% 

U.S., a low national average growth of 
electric utility rates is possible due to 
slower demand growth and lower fuel

COSTS.

 

4%

0%

0 i 4%
2008 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

i.7%

N-ih

     

 

 Annual growth (right axis)  Residential elasticity price   Price forecast

Source: Short-Term Energy Outlook, September 2014.
12

 

 

 

 

Ask for and evaluate the assumptions used as the basis for predicted savings and verify how the PV
system?s expected energy production was determined.

Additional Solar Lease Contract Provisions Energy Information Administration

A right to rescind the contract right to change your mind and back out after signing) within a specific
number of days after signing may be required in some states, or specified in some leases. For example,
in Louisiana, state law requires a three-day right of rescission in contracts resuiting from door-to-door
sales. Check your state's applicable law. (Consumer Alert: There have been cases of consumers signing
contracts when they thought they were only signing an acknowledgement of receiving information.)

Operation and maintenance requirements assigned to the home owner in a lease agreement may
include: tree trimming; panel cleaning; no modifications to your home that result in shading; prevention

and correction of any condition that can inhibit system operation; a functioning internet 

and, visual inspection and notification to leasing company of any system damage or concerns.

In the event of system malfunction, faulty installation or damage to your home, your contract should
require timely repair and state your rights when that doesn't happen. it should also state whether or
not there will be any suspension or reduction of montth payments when your system is not operating.
(Consumer Alert: Common complaints include damage to roofs, holes in walls or soffits, sloppy hole
repair, exposed conduit or wires, pooriy secured or fallen solar panels, unsafe work practices, and
delayed installation or repairs.)

Lease renewai and purchase provisions may allow you to buy the system or renew the lease for a
specific number of years at the end of the lease term. The contract may specify a minimum price or "fair
market value?, whichever is higher. Early purchase is typically allowed. (Consumer Alert: Find out how
the company will determine fair market value. With continuing advancements in solar energy
technologies, it can be difficult to predict the future market value of a solar PV system.)

Termination provisions should list circumstances when and how you, or the leasing company, can end
the lease. It should describe what is required if you sell your home, want to buy the system, have a
catastrophic property loss, or die. Look for provisions about your rights and remedies in the event the
leasing company ends the lease, goes out of business or engages in deceptive practices. The lease
should also detail what will happen if you default on the lease, or make late payments.

I If you sell your home with a solar lease:
0 The home buyer may need to meet the solar leasing company?s credit requirements and be

willing to assume the lease agreement and payments; or

0 you, the home seller, can move the solar lease panels to your new home (if located within
same utility district) at your expense; or

0 you pay off the lease and transfer the solar rights to your home buyer.

Some potential home buyers may be hesitant to assume a lease on a system that is not as efficient
as newer technology. Ask the leasing company if they offer an option to upgrade your solar system
when there are advances in efficiency during the term of the lease.

0 In the event of home owner default, leasing contracts may include remedies such as: requiring you
to return the solar system at your expense; filing for court action to enforce performance of the
lease contract; and seeking reasonable compensation. The company may also submit a negative
credit report to credit reporting agencies.

13

 

Comment ls itjust an internet
connection or do they require wifi {an additional
cost for some)

 

Most solar leases state that they will not take a lien on your home since the company owns only the
leased equipment. However, the company may still file a Uniform Commercial Code (UCC)
instrument, if needed, to assert ownership over the solar system. A financing statement is a
legal form a creditor files to give public notice that it has or may have an interest in the personal
property of a debtor and a right to take possession and sell certain assets for repayment of the debt.

0 In the event of leasing company default, your rights, remedies or limitations may include:
right to judge or jury trial; class action participation; attorney general action; arbitration or trial
allowed only in a certain jurisdiction; or attorney fees; limitations on damages; waivers of
certain rights. You may wish to consult a iegal advisor to ensure adequate protections.

Purchasing a Home Solar System

if you purchase a solar energy system, you can take advantage of the available incentives and programs
to reduce the purchase cost (see Find Incentives section). Be sure to examine the limits and details of
incentives before you select your system. It can be helpful to consult your tax adviser.

If you plan to finance the purchase, many states offer  ow~rate and zero down payment incentive loans
that can apply to home solar purchases. Check 

Some local governments may offer PACE (Property Assessed Clean Energy) financing programs that
make loans to consumers for renewabie energy or efficiency upgrades which are repaid through an
assessment on their property taxes. Concerns about how PACE impacts home owner mortgages is an
issue that stalled many PACE programs, but some cities and states are structuring the program to
address such concerns.

Another low?cost financing option is a home equity loan or second mortgage. Such loans obligate your
home as collateral, but they have lower interest rates than other types of financing and the interest may
be tax deductible, further reducing your finance cost. FHA, VA, USDA and other lending agencies may
offer specialized loan programs with favorable terms for renewable energy.

Sample Scenarios

These sample scenarios illustrate how you could figure out and weigh the costs and benefits of buying
vs. leasing a specific home solar energy system.

 

Buying a Home PV System? Comment lthink the examples should
7 7 7 
1. Joe?s electricity use averages about 1000 (or 1 kW) per month. apples.

 

2. The electricity rate he pays is $0.10/kWh, so his average bill is $100 (1000 
His average annual electricity cost is $1200 ($100 12 months).

3. Joe plans to buy a 3kW solar system that will cost $15,000 installed.
4. The system is expected to produce about per month, which is half ofJoe?s demand.

5. Joe is eligible for net metering so his average electric bills are expected to be cut in half 
reduced to $50/month or $600/year.

6. Joe plans to use the Federal tax credit of 30%, which lowers his purchase cost to $10,500 ($15,000
0.30 $4,500; then 515,000 4,500 $10,500).

7. For his purchase investment of $10,500 and utility cost savings of $600/year, it wouid take 17.5
years for Joe to recover his investment (10,500/600 17.5). After that, he "profits" $600/year for
the remaining life of the system. NOTE: lf his electric utility rate rises, his annual cost savings rises

14

 

too, and the payback period would be shorter. So if the utility rate rises to $0.30 in 20 years, he
profits $1,800/year by then and his payback period could be less than 9 years.

8. if Joe borrowed $10,000 at 5% interest for a 20 year term, his payments would be 
That?s $16 more than his initial utility bill savings. If the utility rate eventually increased to
$0.30 in 20 years, he would save savings $84/month (half of a $300 utility cost, or $150 - $66 

Jeanette lives in Louisiana, and has the same 1-5 costs and system size as Joe, 50:

6. She applies the 50% state tax credit (which will refund her $7,500), plus the 30% Federal tax credit,
reducing her purchase cost to $3000 (5 15,000 0.8 $12,000, then $15,000 12,000 $3,000).

7. For her purchase investment of $3000, it would take 5 years for Jeanette to recover her investment
(3000/600) and begin to profit. If utility rates rise to $.30 in 20 years, she profits $1800/year by then
and her payback period would shrink further.

8. lfJeanette borrowed $5,000 at 5% for a 20 year term, her payment would be $33/month. That nets
her an initial savings of $12/month. if the utility rate increased to $0.30 over time, her
savings would be $117.

Note: In reaiity, production, savings and payback from Joe and Jeanette?s solar systems would vary.
Maintenance expenses may be incurred, adding to the payback period. Electricity rates could rise, which
would increase annual savings and shorten his payback period; or if electric rates fall, savings would be
less and payback period lengthened.

When weighing buying vs. leasing, be sure you compare apples with apples i.e. the same type and
size system, thus the same solar energy output, in both financial scenarios. Consider the following:

0 Figure out the impact of all tax credits and other incentives on your purchase cost or how much they
would reduce your needed loan size. Determine whether any of the available incentives can stiil
benefit you if you lease (such as property tax exemptions).

0 Compare the cost of getting a loan vs. leasing the system for the same time span. A loan
will identify the interest rate and payment that you can easily compare. Factor in the effect
of your tax deduction of the interest portion of a home equity loan, if applicable.

0 if you might sell your home in the future, a purchased solar system tends to be an asset that
increases the home value and shorten-s time on the market. A leased system may be considered a
liability that the new owners would have to assume, and may complicate the closing process.

0 During the day, many home solar systems produce more electricity than the home is using. If that?s
likely, the availability of net metering could have a considerable impact on the savings you would
expect from the solar energy your system produces.

To consider leasing, you may expect your lease payments to be less than the cost of electricity from
the grid both initially and throughout the term of the lease. If the contract includes annual rate or
payment increases, determine projected payments throughout the full lease term.

 financing a purchase, you may be willing to accept a payment that is initially higher than
expected utility bill savings because your loan payments will not increase over time, so your bilI
savings will grow as utility rates rise. Then once the loan is repaid, payments stop.

 

 

 

 

15

The bottom 
Energy efficiency trumps all, and should be your first priority and investment in green living and

lowering energy costs. Then, this guide and the attached lists of Questions to Ask are designed to help
you make the best investment and choice for going solar at your home.

16

Solar Leasing vs. Ownership Calculators

It can be helpful to search online for solar leasing vs. ownership calculator websites or aps. Look for and
try a few that factor in and allow you to adjust assumptions and enter your information on loan terms to
purchaSe vs. leasing terms (including escalation rate) to provide a financial comparison. Be sure you
compare apples with apples! The calculator should include the following input factors:

PV Energy Output:
kW PV system size (kW power capacity)

annual estimated solar energy production (calculator may derive from your location and
system size)

annual output degradation (expected decrease in production/year typically 
Electricity Rates:
/kWh electric utility retail rate (what you pay for electricity from the utility)
/kWh solar power purchase rate (rate utility credits or pays for surplus solar energy)
Note: if net metering applies, solar power purchase rate is same as utility retail rate.
PV System Cost and Incentives:

PV system installed cost (equipment and installation; may be derived from an average
cost/Watt)

Federal tax credit (30% of system cost; applies leasing firm if you
lease)

State tax credit if you buy system (your state?s of system cost, subject to limits)

State tax credit to leasing company (your state?s of system cost, subject to limits)

Note: Calculator may assume state tax credit applies equally to home owner or leasing
company. Separate calculations are needed if the state credit is different.)

Rebates or other system cost reductions
Loan Terms to Purchase the System
payment
interest rate
years (to pay off loan)
Solar Leasing Terms
down payment

years lease term (length of lease agreement)

initial lease payment (for solarr lease; or for PPA, it may be calculated from PPA
rate/kWh solar energy production)

lease price escalation (annual increase of lease payment or PPA rate in lease agreement)

utility price inflation (predicted average annual increase in your utility company?s
electricity rate)



Other Economic Factors (optional financial calculations to determine investment value over time)

purchase price at end of lease (optional)

 

inflation rate (projected overall inflation rate for estimating long term investment value)
discount rate (an economic measure of how much future dollars are worth today

17

 

10.

11.

12.
13.
14.

15.

16.

17.

18.

19.

Questions to Ask
When Considering a Solar Energy System for Your Home

What energy efficiency improvements should be made to my home before investing in solar energy?

How much electricity did my home use last year? How much is it likely to use in the next year (considering energy
efficiency and household changes)? What is my average usage per month (estimate for next year)?

What is the current rate I pay for electricity (cents/kWh) from my utility company? What is my average 
electricity cost (estimate for next year)?

What is the history of electricity price changes for my utility company? What annual electricity inflation rate trend
is predicted by my utility company, state regulator, U.S. Dept. of Energy, local university or other reliable source?

Would my home be eligible for net metering? If so, are there system size limits to qualify? Could it change or expire
for me in the future? if I?m not eligible, what is the rate (cents/kWh) the utility will credit or pay for surplus power I
generate? Is the rate higher at peak load times (usually late afternoon)?

How much solar energy (kWh/month) would I like to generate with 3 PV system? Should my system be sized to
avoid producing more power that use (surplus)?

What incentive tax credits, exclusions and rebates are available that would reduce the cost of buying a home PV
system? What are their limits and requirements? When does each expire?

What is my area?s solar resource (average amount of sunshine per day)?

Does my community have any restrictions on placing solar panels on my roof? How much unshaded roof area facing
S, SW or SE is available? How much is available facing What is the roof slope? Should my roofing be replaced
before installing solar panels?

Would I prefer a thin film system that blends into my roofing, or a type of PV technology for higher
efficiency in less area? Can it withstand hall and my area's wind risk? What is the expected service life? What are
common problems with each type of system? What is the reputation of the manufacturer?

Does the system use one inverter or micro-inverters on each module? What is the inverter(s) expected life and
what will it cost to replace it?

What monitoring systems are available? What information do they provide? What do they require and cost?
What PV power capacity (kW) will fit on my available roof area (of the type I want)?

How much electricity (kWh) is it expected to generate (energy output) in the first year? How was that determined?
What is the expected annual degradation rate (reduction in electricity produced)?

What is the total installed cost of the PV systems i?m considering? What is the typical cost/Watt in my area? How
much will the available tax credits, exclusions and rebate solar incentives reduce my cost?

Are there any low cost solar loan programs available to me? If not, do I qualify for a VA, FHA, or HUD home
improvement loan? Or, could I qualify for a home equity or 2?d mortgage loan? What are the interest rate, down
payment required, closing cost, terms and tax advantages?

What is the payment to finance the net purchase cost (after incentives), with and without a down
payment? How does that compare to predicted utility bill savings both initially and as electric rates rise?

How many years will it take to recoup my net purchase cost (payback period)? What will my annual utility bill
savings be after payback? What is the equipment?s expected service life? What is my estimated total return on
investment (Use an online calculator.) Does the factor in general inflation?

What effect will a rooftop solar system have on my home?s market value in my location? How will it affect my
homeowner's insurance premiums? Will my property taxes change?

18

 

20. Will the firm quoting on the system install it or hire installers? What are the qualifications, certifications and
licenses of the installers? Are they bonded and have liability and workmen?s compensation insurance? How long
have they been installing PV systems on homes? How long have they been in business?

21. Have any complaints been filed against the vendor, manufacturer or installer with the state licensing board,
consumer protection agency, or the Better Business Bureau? Are their customers satisfied with their work quality
and follow-up service?

22. What does the warranty cover (PV panels, inverter, mounting rack, labor) and how long? Who is responsible to
make warranty repairs? What maintenance does the warranty require? Will a PV system void my roofing warranty?

23. Does the contract detail the system components, timeline for completion, payment schedule, a iien waiver, and
who is responsible for any damages, injuries and permitting? What are my rights and remedies if my home is
damaged, the installation is poor, or someone is hurt by the installation?

Additional Questions to Ask
When Considering a Solar Lease

When considering a solar lease, first ask the previous questions, then ask the following questions to help you com pare
the initial and long-term costs and benefits of buying vs. leasing for your home and needs.

24. Can I lease the PV system type, capacity and installer of my choice (Questions 10-11, 17-18)? If the leasing company
chooses, why is the selected system recommended?

25. What is the lease term (years)? What happens at the end of the lease? Is it renewable? don?t renew, who is
responsible for removing the PV system and restoring my home?

26. Would I rather pay a set amount each month (rental-type solar lease) or pay only for the soiar power my home uses
(purchase power agreement or Which method would likely result in a lower total cost over time?

27. What incentives will the leasing company receive? With a solar lease, am i eiigible for any incentives such as
property tax exclusions, or others that the leasing company cannot use?

28. What will be my payment or PPA rate (cents/kWh) for the first year? How does that compare to my
electric utility rate or average bill? How does it compare to a loan payment amount (Question 16)?

29. What is the lease annual escalation rate the payment or PPA rate will rise each year)? What will my payment or
rate become each year of the lease (payment escalation schedule)? When will it exceed a loan payment amount?

30. How does the lease escalation rate compare to my utility company's historical and predicted inflation rate
(Question What are the basis and assumptions of the leasing company?s projected utility inflation rate and total
predicted savings over the entire lease term?

31. Do I have a legal right to rescind (back out) the lease after signing it? if so, how many days is the right in effect?

32. What are my responsibilities in maintaining and operating the PV system? What are the leasing company?s
responsibilities? What do do if the system isn?t working or is damaged? Will my lease payment be
reduced or suspended when the system is not operating?

33. When my roofing needs replacement, who is responsible for removing and reinstalling the PV panels?

34. Under what circumstances can the lease be terminated (ended) by me or the leasing company? What can I do if the
company doesn?t maintain the system, goes out of business, or uses illegal or deceptive practices?

35. What happens if i can't make payments and default on the lease? What if my payment is late?

36. If i want to sell my home, what does the lease require from the buyer and from me? What if the buyer doesn?t want
to assume the lease? How will a lease PV system affect my home's marketability and value in my location?

37. ever want to buy the leased system, how is the fair market price determined? Can I buy it at any time?

19