Solar panels are becoming more and more popular. What started out as a trend in places like Florida and California has spread all over the country. Solar panel energy is popular, not just because solar power is”clean” or “green” but also because solar panel technology provides safety, security, and comfort.
Tesla has long been known for being at the top of the electric vehicle market. In 2016, Tesla acquired SolarCity, which was the nation’s leading installer of solar panel systems. Since then, Tesla solar has consistently been among the leaders in the solar power market with products such as the Solar Roof and the Tesla Powerwall.
Solar energy basics
Solar energy systems have their pros and cons. They’re great in a lot of ways, but there are limitations too when it comes to solar panel installations.
The basic concept or solar energy is simple: a solar panel captures energy from the sun, and your home can use that energy instead of paying for electricity from the public grid. A solar panel is a great solution if the sun is shining, but what happens if it’s cloudy outside? How do you generate power at night?
These are big questions because, typically, people are going to use more electricity at the times when your solar energy system isn’t generating much, if anything. If you are out of the home all day, your solar panels might be working hard, but for what purpose? Then at night, when you’re ready to adjust the thermostat, cook dinner, turn lights on, watch TV, etc., you might not be generating the energy you need. What then?
Tesla Powerwall and Generac PWRcell: leaders in energy storage
It would be nice if you could just save your excess solar energy for later. Many companies have energy storage and home battery systems, but the technology is still in its infancy. Currently one of the biggest drawbacks to home energy storage is the cost, but there are also limitations with capacity and size. Some companies are overcoming the size and power constraints, but those units are among the most expensive.
The Tesla Powerwall is widely considered to be one of the best systems available. Tesla has a higher capacity and continuous power rating than other systems, while still maintaining a small profile. PWRcell by Generac is physically larger than Tesla but can be expanded with additional battery modules to make it more powerful than the Tesla Powerwall. Tesla and Generac, however, will both run over $10,000. Other companies such as Enphase and LG also make home battery systems, but while these are more affordable than Tesla and Generac, they are not as powerful.
Net metering and selling your excess solar energy into the grid
The cheaper alternative is to enroll in a solar buyback program. Many electric providers have come up with plans to help customers who use solar energy. When your solar energy installation is generating more electricity than you use, you can essentially sell it back into the grid. Later, when you are using more than you generate with solar, you can draw what you need back out of the grid. Different providers have different ways of calculating the cost of the energy that you buy and sell, and there are also different ways of crediting the money back to your account. The providers, themselves, can give you information on how they do this.
This is an obvious benefit to the solar customer, but it also helps out the utilities and the grid itself. In the middle of the day, demand on the grid is usually at its highest. During the summer, this is especially the case because of people turning up their air conditioners during the heat of the day. However, in general, demand is going to be highest during business hours.
Basic options for solar power – Traditional panels and Tesla
Option #1: Traditional solar panels
People are probably most familiar with traditional solar panels. Although they can sometimes be installed on the ground, for residences, they are usually installed on top of your house. To many people, however, these can seem like an eye-sore.
Option #2: Tesla solar panels
Tesla solar has their own solar panels, which are designed to be more pleasing to the eye. The concealed edges make the Tesla’s panels look more natural as a part of the roof, and they help prevent debris and animals from getting under the panels. Tesla panels also have no visible grid on the panels themselves, giving them a smoother, more minimalist look. Perhaps the biggest difference, however, is their ability for Tesla panels to be connected to the Tesla Powerwall, their energy storage technology. This allows a Tesla home to be powered by stored energy, even when the grid power is out and the sun is down!
Option #3: Tesla solar roof
By far, the most natural-looking solar option is the Tesla solar roof. With photovoltaic cells built into the shingles themselves, Tesla solar transforms your roof into a solar unit without having anything mounted on top of it. Tesla solar tiles are also stronger and more durable than most of the materials typically used for solar units, providing your home with all-weather protection. As with Tesla panels, this system is also integrated with the Tesla Powerwall technology.
Solar panel installation
In addition to the solar panels themselves, you will need additional hardware to get your solar energy installation up and running. Whether you’re using traditional solar or Tesla solar, the two main parts necessary for solar panel installation will be a solar meter and an inverter.
- Solar meter – When your solar panels produce more energy than you use, you can feed the excess solar energy back into the local energy grid. The provider will offer you credits towards the energy you use from the grid when your system isn’t producing enough (like at night or on cloudy days). To keep track of how much energy you are adding versus how much you are using, the provider will need to install a special meter that moves in both directions.
- Inverters – A solar panel produces energy in the form of direct current (DC). However, the electric appliances in your home run off alternating current (AC). To convert then energy from your solar panels into usable AC energy, you will need a solar inverter (PV inverter).
Traditional solar panel prices vs. Tesla panels and solar roof
Solar panel prices vary, but for traditional panels, you can generally expect to pay about $2,500 – $3,000 per kw of solar capacity. Keep in mind that the price of the panels, themselves, is only part of the total cost. Additional hardware (including the solar inverter mentioned above) will be needed, and then, of course, there are always the installation fees. For an average-size home, you can probably expect to pay $15,000 – $20,000 for a solar unit.
Tesla solar panels are actually a little cheaper, averaging about $2,000 per kwh of solar capacity. Tesla solar has four different system sizes, and Tesla’s costs range from $8,200 – $32,800. However, Tesla offers a unique plan where you can rent the Tesla’s panels for a monthly subscription fee. This fee includes installation and maintenance by Tesla themselves. You only have to pay an extra $2,500 to have the panels removed when you cancel your service with Tesla (which you can do at any time).
A home battery can add another $5,000 – $10,000 to this cost. Note that Tesla solar has recently started bundling their solar installations with the Tesla battery systems. While you used to be able to buy one without the other, this is no longer possible. Tesla does, however, offer discounts for buying multiple Tesla Powerwall units.
Tesla’s cost for a solar roof is going to depend on the complexity and design of your roof, but it will certainly be significantly higher, likely more than twice as much as solar panels. Tesla’s roof might be a reasonable investment if you are already planning on replacing your roof–or if you are building a new home. However, unless you had planned on getting a new roof anyway, the more cost-effective option would probably be having panels installed.
If you are considering a solar roof from Tesla, you might keep a couple things in mind (beyond the initial investment):
- Solar tiles from Tesla are about 3 times stronger than a traditional solar panel. Therefore, it is a lot less likely that Tesla solar roof tiles might be damaged by wind, hail, or other factors. However, if a storm is severe enough to cause damage to Tesla’s solar roof, the cost of repairs to a solar roof will be significantly higher than they would be otherwise.
- Solar panels can be installed, moved, or removed at any time, with relative ease. Tesla’s solar roof, however, is more of a permanent modification to the house.
How long does it take for solar panels to pay for themselves?
The short answer is about 6-10 years. However, a lot of factors go into calculating the point at which you will break even for the cost of the solar installation.
- Price of the system – This is the price of the solar panels (or roof), along with necessary hardware, installation, etc. This amount will depend primarily on the capacity of the solar installation, but also on your location and the solar company you choose.
- Incentives and rebates – These can be in the form of federal, state, or local rebates, tax credits, etc.
- Electricity usage – The more electricity you use, the bigger the system you will need to offset the costs. At the same time, higher usage will ultimately create more opportunity to save money, and this means less time that it will take for you to break even on your solar investment.
- Electricity generation – Ideally, you want a system that matches your usage as closely as possible. If you buy too big a system, it will generate far more solar electricity than you can use. You will pay more for a bigger installation, only to waste a large part of what you are producing. With all this waste, it will take a lot longer for those solar panels to pay for themselves. On the other hand, if your system isn’t big enough, you are not saving all the money you could. Your initial investment will be lower, but the system won’t be able to generate enough solar electricity to make much of a difference.
Assuming that your generation and your usage are fairly well balanced, it should be relatively easy to estimate how long it will take for your solar installation to pay for itself. It’s simply a matter of dividing your initial investment by the total yearly benefits.
First, take the total cost of the system and subtract the incentives and rebates you will receive. If your panels cost $20,000 installed, and you receive $6,000 in solar rebates, your initial investment is $14,000. Then calculate your total annual benefits. This is the cost of your electric bills (assuming you generate as much or more than you use) as well as any other ongoing savings, credits, or incentives. Finally, divide the investment by the benefits. If your investment was $14,000 and you save $2,000 per year, it will take 7 years for the panels to pay for themselves. After that, your making a profit by making your own electricity!
Texas ranks #2 in the nation for cumulative solar capacity. Texas solar has grown year-by-year, in part because of the state’s many solar incentives.
- AEP Texas – Solar customers in AEP’s service territories can receive up to $5,000 in rebates for their homes or $56,250 for their businesses, depending on the capacity of the system that is installed.
- Oncor – Oncor has residential and commercial rebate programs for solar customers. The amount of the rebate varies according to several variables.
- Austin Energy – The city of Austin offers a solar rebate of $2,500 for customers who complete their Solar Education Course. In addition to this, they have a solar buyback program that pays residential customers 9.7¢ per kwh for electricity fed back into the grid. Commercial customers can receive 4.7¢ – 6.7¢ per kwk depending on the size of the installation.
- CPS Energy – San Antonio’s supplier offers $2,500 in rebates for residential solar customers, and a premium of $500 for projects that utilize local modules. For commercial solar projects, they pay 40-60¢ per watt of capacity with a premium of 10¢ per watt for those using local modules.
- City of Sunset Valley – This supplier services customers just outside of Austin, and they offer rebates of $1 per watt, up to 3 kw (max $3,000) in addition to the rebate from Austin Energy.
- Property tax exemption – The value of your home can increase the appraisal of your home. The downside of this is that, with a higher property value, comes higher property taxes. To counteract this, Texas offers a tax exemption for the difference in value created by the solar panels.
- Exemptions from HOA regulations – Various Homeowners’ Associations (Property Owners’ Associations) have bylaws which restrict certain alterations and additions to the members’ properties. To make sure residents aren’t prevented from installing a solar energy system for their homes, the Texas legislature passed a bill that says HOAs cannot impose this as a restriction.
Federal tax credits
In addition to Texas’ incentives, the Investment Tax Credit (ITC) is a federal tax credit to encourage solar installations. The amount of the credit changes by year, but for an installation by December 31, 2019, the credit was 30%. Any system installed by December 31, 2022 can be credited 26%, and anything installed in 2023 is eligible for a 22% credit.
There are a couple of key limitations for the federal tax credit. First, you can add the cost of your home battery system when you claim the credit, but only if it is charged by solar power alone. If the backup is charged from the grid, you can claim the credit for your solar panels, but not of the solar batteries. Second, you can also receive the credit for a Tesla roof, but the credit won’t be for the full value of the roof. The credit can be applied to solar panels, but a solar roof is also… well, a roof. The exact amount on which you can get the tax credit will vary depending on your roof’s size and design, but generally speaking the credit will be in the same range as a traditional solar installation.
For battery storage, 10 years seems to be the standard warranty length.
For solar panels, however, it’s a little trickier. With almost any solar panel company, warranties are based on what they call degradation. Over time, a solar panel is less and less efficient. For the first year, the average degradation is about 1.5% – 2%. This means that, at the end of the first year, the panels are only going to produce about 98% of the solar energy they did when they were first installed. After that, the degradation rate goes down to about 0.5% per year. At the end of 10 years, therefore, most panels will operate at about 93% efficiency. After 20 years, it would be around 88%.
The warranty from Tesla is a little vague, only saying that the Tesla panels will operate at at least 80% for 25 years. The two problems with this are 1) This is a lower efficiency than most other panel systems, which would be more than 85% after 25 years. 2) The way it is written, the Tesla panels could operate at 80% efficiency after only the first year, and they would still within the terms of the Tesla warranty. Granted this is not likely to happen, but it is undeniably a strangely written warranty for Tesla.
An important consideration when looking into solar panels is the company’s reputation for customer service. This can make a crucial difference with any company, but when it comes to solar panels it is especially important. If your solar panel system is not working right–or not working at all–you are literally losing money for every minute that passes. If the company is slow to respond to your calls or emails, if they take their time scheduling an appointment to come and troubleshoot, they are costing you money. As is always the case, some companies have a better track record with this than others. Be sure to check customer reviews and testimonials for information on any solar company you are considering. Remember that your up-front cost is not the end of the story. When you invest in solar panels, it becomes a long-term relation with the company. Make sure it’s a company worthy of that relationship.