Board 8 > So, uh, I'm thinking about going solar

(+) Yeah! (+)

Hypothetically. I'm still trying to figure this all out, so if anyone has any advice, I'd love to hear it. Ever since I bought my house four years ago, with the awareness I'd need to budget for the roof, I've had it in my head to do this, but recent talks about slashing federal tax credits prompted me to look again. Someone had a topic about solar a couple years ago, and I tried to pay attention then, but from my own research at the time, there were so many terms and so much stuff that confused me that I just shut down, overwhelmed.

Fast forward to a couple days ago, and I gave my information to a neutral party that finds contractors, and after giving them some additional info, five quotes instantly materialized for me. So, like, I'm floored that they had that kind of turn-around. But a guy from the site called me like an hour later, before I knew the quotes were there, to ask if I had questions, and I'm like...uh...can we talk tomorrow after I look at these? It's a giant pile of information, though, and very little of it that I understand beyond the ones with dollar signs in front of them.

So tomorrow, I'm gonna talk to the guy and I hope I have half a brain to ask about the things I need to know.

I have a moderately small, south-facing roof, with no particular concerns with the power company and no EV. I'm sure I can "save money" long-term (if one ignores the interest on the money invested) and it offers protection against black-outs, but environmental factors are my biggest motivation. None of the quotes discuss replacing the roof, and they're all in the $20k range, plus another $10-15k for a battery. I know it's advised to look for a company that appears like it'll still be around in 10 years, but everyone's offering at least a 25-year warranty. (less on the battery)

.

Here's a few things I'm gonna ask out loud here, for any who have experience:

• Any bad experiences/pitfalls to watch out for?
• Any terms I should pay especially close attention to?
• Do you have a battery/do you think a battery is important?

Avoid Sunrun, Ive only heard ridiculously bad stuff about them.

https://twitter.com/EyeonOhio/status/1060946841200746496

https://gamefaqs.gamespot.com/a/user_image/8/1/1/AAD2RAAAEaqz.jpg

azuarc posted...

it offers protection against black-outs

Worth noting this isn't necessarily true, particularly if you're hooked up to the power grid so you can sell back power to the city (assuming your municipality lets you do that). Make sure you ask about that. Though if you get a battery, it shouldn't be an issue (I assume, I'm not that familiar with batteries).

https://gamefaqs.gamespot.com/a/user_image/8/2/4/AAS3NhAAEarA.png

Solar installation companies are widely known for their horrendous working conditions. Installers are forced to work till they burn out then get replaced with zero fucks given to their mental or physical well-being. This isn't necessarily a reason not to get solar, nor does it mean you'll get a bad result on the consumer end, but try to do your homework on the negative reviews of whatever company you want to go with and keep it in mind with your decision making.

Yeah, I'd be cautious with who you work with. Some companies can be really pushy and will try to rush you.

We want to get a battery eventually but they are pretty fucking expensive (and we had to replace the roof as part of the project), so currently we are doing without.

One thing I'd keep in mind is that solar credits CANNOT be used to get a tax refund. They can only decrease what you owe in taxes. My understanding is that you have 10 years from installation to claim these, but not sure.

VintageGin posted...

Yeah, I'd be cautious with who you work with. Some companies can be really pushy and will try to rush you.

We want to get a battery eventually but they are pretty fucking expensive (and we had to replace the roof as part of the project), so currently we are doing without.

One thing I'd keep in mind is that solar credits CANNOT be used to get a tax refund. They can only decrease what you owe in taxes. My understanding is that you have 10 years from installation to claim these, but not sure.

Correct, the current tax credits for solar are non-refundable, so you will only benefit if your income is high enough to have enough tax owed.

And even if you have a tax liability that can be reduced by this credit it still isn't guaranteed because credits get applied in a certain order and that order does not necessarily benefit you. This is especially evident if you have children.

The order that credits get applied is generally:

1) The non refundable child tax credit
2) Other non refundable credits
3) "Payments" which includes Federal withholding, Miscellaneous tax payments you sent in (people who expect to owe will often send in four quarterly payments) and then Refundable credits (which can include the child tax credit if there was any leftover from step 1)

So in a scenario where you have 3 kids ($6,000 of child tax credit), and based upon your income your tax (before credits) is $7,000.

Now you might qualify for $10,000 of residentially energy credit, so you'd think "great I can use 7,000 this year, and 3,000 next year!". In reality your child tax credit will get applied first, reducing your remaining tax to $1,000, and then you get to use $1,000 of the energy credit and roll over 9k. In that scenario you've still reduced your tax before payments to $0 so you're still getting all of your withholding back which is nice, but you'd have gotten a larger chunk of change back immediately if you were allowed to use 7k of the Energy Credits to reduce your tax to 0 and then use the child tax credit to increase your refund by 6k instead of decreasing your tax by 6k.

(edit: This entire scenario is wrong, at least for this specific credit. See following post)

I see this problem often, especially with the Adoption Credit. There are many preparers who don't know this so they calculate their refund as though the credits got applied in any order of their choosing, rather than the specific order determined by law.

(#NotOfficialTaxAdvice #DoYourOwnResearch)

The best thing you can say about it is that it gives you an opportunity during the year to take opportunities that will cause you to earn more money without worrying so much about how it's going to be offset by higher taxes because you've essentially already paid off that potential tax with the credit you have waiting on the sideline. (And if you keep your withholding high you'll get a nice chunk of change back from that too!)

Correction, I just double checked the order and it's actually as follows:
(Source: https://www.irs.gov/irm/part21/irm_21-006-003r)

21.6.3.4.1 (10-03-2022)
Nonrefundable Credits Procedures
Nonrefundable credits are applied in the order that they appear in this section, unless stated otherwise in the specific credit section, form instructions, or publication:
Form 1116, Foreign Tax Credit (Individual, Estate or Trust)
Form 2441, Child and Dependent Care Expenses
Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits)
Form 8880, Credit for Qualified Retirement Savings Contributions
Form 5695, Residential Energy Credits
*Credit for Other Dependents
*Child Tax Credit
Form 3468, Investment Credit
Form 5884, Work Opportunity Credit
Form 6478, Biofuel Producer Credit
Form 6765, Credit for Increasing Research Activities
Form 8586, Low-Income Housing Credit
Form 8830, Enhanced Oil Recovery Credit
Form 8826, Disabled Access Credit
Form 8835, Renewable Electricity, Refined Coal, and Indian Coal Production Credit
Form 8844, Empowerment Zone Employment Credit
Form 8845, Indian Employment Credit
Form 8846, Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips
Form 8820, Orphan Drug Credit
Form 8874, New Markets Credit
Form 8881, Credit for Small Employer Pension Plan Startup Costs and Auto-Enrollment
Form 8882, Credit for Employer-Provided Childcare Facilities and Services
Form 8900, Qualified Railroad Track Maintenance Credit
Form 8864, Biodiesel and Renewable Diesel Fuels Credit
Form 8896, Low Sulfur Diesel Fuel Production Credit
Form 8904, Credit for Oil and Gas Production from Marginal Wells
Form 8906, Distilled Spirits Credit
Form 8907, Nonconventional Source Fuel Credit (carryforward only)
Form 8908, Energy Efficient Home Credit
Form 8910, Alternative Motor Vehicle Credit
Form 8911, Alternative Fuel Vehicle Refueling Property Credit
Form 8923, Mine Rescue Team Training Credit
Form 8932, Credit for Employer Differential Wage Payments
Form 8933, Carbon Oxide Sequestration Credit
Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit
Form 8834, Qualified Electric Vehicle Credit
Form 8941, Credit for Small Employer Health Insurance Premiums
Form 5884-A, Employee Retention Credit for Employers Affected by Qualified Disasters
Form 8994, Employer Credit for Paid Family and Medical Leave
Form 8881, Credit for Auto-Enrollment
Form 8801, Credit for Prior Year Minimum Tax - Individuals, Estates, and Trusts
Form 8839, Qualified Adoption Expenses
Schedule R, Credit for the Elderly or the Disabled
Form 8910, Alternative Motor Vehicle Credit
Form 8936, Qualified Plug-In Electric Motor Vehicle Credit
Form 8396, Mortgage Interest Credit
Form 8859, Carryforward of the District of Columbia First-Time Homebuyer Credit
Form 8834, Qualified Electric Vehicle Credit
Form 8912, Credit to Holders of Tax Credit Bonds

So the Residential Energy Credit is one of the few that DOES get applied before the Child Tax Credit. (But Adoption Expenses is still after. RIP)

Only input I have is to realize that you will have to pay to have them reinstalled when you get a new roof.

If you are going to need to replace your roof in 2-3 years you should probably just wait

Colegreen_c12 posted...

Only input I have is to realize that you will have to pay to have them reinstalled when you get a new roof.

If you are going to need to replace your roof in 2-3 years you should probably just wait

The plan was to do the roof first. It's advised in some places to do them at the same time-ish.

There is absolutely no way in hell I'm putting solar panels on the current roof. If I had to somehow choose new roof with no solar or solar on old roof, it'll be the former.

I just got mine turned on.

It's often a no brainer for everyone involved. The solar companies try to sell you hard because they make a ton of money off it, but so do you so it's ok. You just need to make sure the warranties are good and backed by a reputable company. 25 year warranty backed by a 10 year old company is worthless. Most installers do use warranties from old companies like certainteed though.

You do need a new roof or they won't install it. You might be able to get some deals when installing a new roof though, get it all bundled. Most roof companies do solar installs nowadays. But they are not necessarily the best.

You have to look at the solar panel quality offered, the price per W overall, and the warranties on materials AND on installation labor (they are separate).

The tax credit can be rolled over like 3 or 5 years or something so you'll definitely use it all. Nothing to worry about there. It's 30% credit for the next 10 years so no rush either. Just the loan rates might go up soon.

Get the longest loan you can and find an energy-specific bank which gives lower rates. Make sure to calculate the real APR on the loans - they advertise numbers like 3.5% but if you factor in the loan premium it's more like 6% compared to the cash price. Still a great deal for the loan, butlrr marginal than it seems.

Another big thing for profitability is SRECs. For every kW in your system you can get about 1 SREC a year or more if you're in a good spot. Those sell for $50 and will go up over time. That can make solar profitable in the first year.

Basically everything financial is a gamble, so what you're betting on is:

• Inflation will be higher than your loan rate over time
• Gas prices will go up over time
• RECs will grow in demand as states go for more carbon neutrality

If any of those are true, you'll profit.

Thanks, solar dog

Wow, I've never been the source of a series of meme topics before. Thanks, guys! =p

Anyway, thank you to anyone who provided (or will provide) input. I did a little minimal research last night, and there's still a ton I don't know, but at least I can hopefully steer the conversation where it needs to go. Notably I need to ask about just how important a battery is for me because it feels like it might just be dropping a dime on a feature that isn't super important.

On behalf of my friend who used to do solar installs, make sure you absolutely fuck up the electrical system when you get a new roof. Reverse the polarity of your outlets, ground them to random metal on the roof, have random sections of high voltage, etc.

My father would roll over in his grave. He was an electrical engineer, a tinkerer, and a radio hobbyist. I could not possibly exaggerate the number of antennae we had on our house and in our back yard.

OTOH, if I had all those antennae, that would probably be equally obnoxious to the installer. Shame I didn't keep any of his radios, I guess.

I have a $450k solar field. It saves me about 35k in electricity a year and my annual payments towards it are around 22k. Also check to see if your state has a closed SREC market as I get about 8k a year selling those credits. Make sure you get the tax credit of 30% of install cost too. That saved me about 135k. I got a USDA grant for a quarter of the project but I don't think you can apply for that for a home install.

Samurai7 posted...

I have a $450k solar field. It saves me about 35k in electricity a year and my annual payments towards it are around 22k. Also check to see if your state has a closed SREC market as I get about 8k a year selling those credits. Make sure you get the tax credit of 30% of install cost too. That saved me about 135k. I got a USDA grant for a quarter of the project but I don't think you can apply for that for a home install.

what the fuck

ChaosTonyV4 posted...

what the fuck

I own a small business and I converted it entirely to green energy

Oh wait, you own the RV park, right? Thats cool as hell.

ChaosTonyV4 posted...

Oh wait, you own the RV park, right? Thats cool as hell.

Yes that's correct. I'm surprised someone remembers that.

wow, that's impressive.

And yes, SRECs are an option in PA.

azuarc posted...

wow, that's impressive.

And yes, SRECs are an option in PA.

I'm also in PA. It's not a bad state for srec market.

As a new Solar user myself, I can offer you this. Don't expect to save money. You'll actually be paying more for both Solar and whatever little electricity you do use than you would with just electricity alone, at least for a few years.

It's an investment. As the cost of electricity rises, you'll eventually start to break even, and then at some point you'll finally start paying less, but it will be a long time coming. Even with rebates, my family is still paying a hefty sum each month in both our solar loan and whatever electricity we need to use off the grid.

There are plenty of benefits for having Solar, but don't think that saving money is one of them, at least not immediately.

Oh no, I make no pretense of such. Most of the quotes I have are around 20k, and have a "profit" of 25-40k after like 20 years. If I took that same money and invested, I'd likely have gained 200% profit by the end of 20 years since that only takes ~5.5% interest.

It will pay for itself eventually, so I'm not just "frivolously" throwing money at something for the sake of the environment, but making use of renewable energy is my primary intent.

Samurai7 posted...

I'm also in PA. It's not a bad state for srec market.

In Virginia we use the PA market for SRECs. It seems like the best place on the east coast for it

BakusaiTenketsu posted...

There are plenty of benefits for having Solar, but don't think that saving money is one of them, at least not immediately.

My system should profit year 1 (just barely) due to the high value of SRECs covering the grid fees. I'm in a very good spot for solar though, getting around 1200kwh/yr per kw. If your spot is less efficient then the value curve is much slower.

But yeah, those profit curves usually assume NO inflation of gas prices. I've seen 1 that have a model where you could pick between 0 and 2% yearly gas price inflation. But in the last 3 years it's been like 5% yearly. An outlier sure, but gas is not getting cheaper anymore.

Im not interested in solar without a battery and solar batteries are madly expensive

Thinking Im just going to hold out while battery tech continues to improve

Grid-as-battery is objectively the best option if you're already connected to grid, unless your grid is terrible like Texas

foolm0r0n posted...

Grid-as-battery is objectively the best option if you're already connected to grid, unless your grid is terrible like Texas

Sure, assuming the grid still works.

I think one of the appeals of solar is in a catastrophe you could still have power. If the grid is down it does nothing for you

I considered that, but then I realized that you're basically banking on a massive natural disaster or surviving armageddon. I'm not going to plan around the apocalypse, and whether or not Mother Nature wrecks your shit is dependent on where you live. I suppose if you live in, say, hurricane alley, it might be worth discussing. Hurricane Isaac blew up this way and devastated the area, leaving us without power for close to a week, but in these parts we call that a hundred-year storm. It's a pretty expensive investment to save yourself the comfort of having power for a few days. (And my street was one of the last to get power restored because our power lines were going to take the most work to put back. Most people were up and running much quicker.)

If you're the kind of person who would like to have a bunker or tons of ready-to-eat rations in case society completely collapses, then sure, it probably fits your mentality such that you would 100% want to do that. Otherwise, not so much. Batteries are mostly for if you live somewhere where you can't use the grid as battery because you don't receive any credit for selling your energy, because then at least you can use your own energy at night.

Or at least this is my minimal understanding of the subject. Please correct me if I'm underinformed.

azuarc posted...

I considered that, but then I realized that you're basically banking on a massive natural disaster or surviving armageddon. I'm not going to plan around the apocalypse, and whether or not Mother Nature wrecks your shit is dependent on where you live. I suppose if you live in, say, hurricane alley, it might be worth discussing. Hurricane Isaac blew up this way and devastated the area, leaving us without power for close to a week, but in these parts we call that a hundred-year storm. It's a pretty expensive investment to save yourself the comfort of having power for a few days. (And my street was one of the last to get power restored because our power lines were going to take the most work to put back. Most people were up and running much quicker.)

If you're the kind of person who would like to have a bunker or tons of ready-to-eat rations in case society completely collapses, then sure, it probably fits your mentality such that you would 100% want to do that. Otherwise, not so much. Batteries are mostly for if you live somewhere where you can't use the grid as battery because you don't receive any credit for selling your energy, because then at least you can use your own energy at night.

Or at least this is my minimal understanding of the subject. Please correct me if I'm underinformed.

Don't worry. In a contest of knowledge, betting against plum is the smart move. Everything you said is right and even if it wasn't his post still doesn't make sense

masterplum posted...

I think one of the appeals of solar is in a catastrophe you could still have power. If the grid is down it does nothing for you

That was the marketing in the past, to make up for the fact that it wasn't cheaper than regular grid gas. Especially since solar doesn't do anything for grid dependency on its own, so I don't even know how they sold that. I guess it helps in daytime during sunny days but that's it.

Now it's cheaper than gas so there's no extra reason you need. Of course you can add a battery, but that's only a big deal for like 5% of people or less.

I would even say the best way for a typical user to get full blackout protection would be to use solar with grid, and have a gasoline generator for the rare times the grid is down during the night.

Way cheaper and technically more climate efficient since you're almost never using it.

Battery is good for the future/for the environment though, right? The more people who have batteries, the more power consumption at night will be renewable.

Only if we get to the point where renewable is out-producing the needs of the grid overall. (I suppose there could be logistical issues with standard electricity production being able to meet demand if the solar input was inconsistent, but we're still not very close to that.)

As it is, excess production just powers someone else's house, and then you use off the grid at night.

Britain as a whole has had days where 100% of the grid's power comes from renewables, so some places are already at that point.

The other problem I have is I am in Florida, I don't especially plan on living here forever, and I am worried a hurricane would kill all of my panels.

If I move somewhere else I'll probably install it

But I live in the US.

While I understand the argument you're presenting, and how that shouldn't be completely shut down by the statement that where I live simply isn't there *yet,* I think we both know better.

Eh, California's had 100% renewable days too. We're a long way off from 100% renewable in general, but 100% renewable days are definitely a thing.

foolm0r0n posted...

In Virginia we use the PA market for SRECs. It seems like the best place on the east coast for it

I'm pretty sure NJ and DC have better SREC markets, but they are completely closed I believe. Meaning you can only sell SRECs produced within their markets.

MacArrowny posted...

Battery is good for the future/for the environment though, right? The more people who have batteries, the more power consumption at night will be renewable.

If the alternative is fossil fuel grid at night then maybe, but it's not clear cut because the grid is existing infrastructure with sunk cost already, and manufacturing batteries is super expensive environmentally. Something like 20% of an EV's lifetime carbon footprint is in the battery construction alone. And we very likely will not be using our current batteries long-term since we'll find better chemistries, so if we can't find a good recycling process for these batteries, the waste becomes even worse.

If the alternative is nuclear-based grid then there's almost no way for batteries to be better. But who knows if we'll get that in the US.

Samurai7 posted...

I'm pretty sure NJ and DC have better SREC markets, but they are completely closed I believe. Meaning you can only sell SRECs produced within their markets.

Oh yeah I heard about the DC market. Holy christ they go for $420 each... I sure as hell would want panels if I were in DC. Not many places to install them there though.