Frequently Asked Questions
Take some time to learn a little more about solar energy and how it can work for you. Click on the questions below:
- What is a photovoltaic (PV) system?
A photovoltaic (PV) system converts the sun's light energy into electricity by producing direct current (DC) in the PV panels. The DC current may be stored in batteries, or sent to an inverter, which converts the DC current to alternating current (AC) for immediate use or grid distribution.
- What is a grid-tied system?
A grid-tied PV system's output is directly linked through your meter to the distribution lines that normally provide you with electricity. In this way, the grid both effectively "stores" any excess power produced by your PV system, and supplements power when your demand for electricity is greater than the supply your PV system produces, thus avoiding the need for batteries. As an option, you can choose to install a grid-tied PV system with batteries that will both allow you to send excess power to the grid, while providing backup power for your critical loads in the event of a power outage.
- What is net metering?
In a grid-tied PV system, electricity can flow through your meter in either direction, depending on the amount of electricity your system is producing and how much electricity you are using. At times, your PV system may produce more electricity than you need, and you will "bank" or be credited with power for later use. At other times, you may need to draw supplemental power from the utility grid, drawing on previous credits. Net metering keeps track of the net difference between the grid-supplied electricity you use and the surplus generated by your PV system. When you generate more power than you use, you'll actually see your electric meter spin backward! Visit the Financial Center for more information.
- Will a grid-tied system work during power outages?
Due to safety regulations, a grid-tied PV system will automatically shut down during power outages. If continued power is essential, you can invest in a battery backup system or generator. Grid-tied systems with battery backup are available, although they will increase the installation costs, maintenance and decrease performance efficiency.
- Why should I buy a PV system?
There are excellent reasons to invest in a PV system: A PV system produces clean, reliable energy that reduces your load on the utility grid. With a PV system, you will decrease or eliminate the amount of electricity you buy from the power company, and provide a hedge against future price increases. Often, the cost to finance a PV system is comparable to the cost of the power it will offset. The equipment will last for many years, is low-maintenance, and will appreciate the value of your property.
- Is my home a good site for a PV system?
A site is most suitable for a PV system if there is clear and unobstructed access to the sun for at least six hours during the middle of the day. Shading from trees, buildings or other vegetation will compromise the performance of a PV system. Usually, the most ideal site is a large roof area with good southern exposure, although other orientations may also work. If the roof is not suitable, a PV system may be mounted on the ground. Although the cost may be higher, it will be a good tradeoff if there is an increase in the amount of sunlight available for the PV system.
- How many panels will I need?
The number of PV panels needed depends on your electricity demands and system design. If you have an energy efficient home, energy efficient appliances and an "energy conservative" lifestyle, it's possible to meet up to 100% of your electricity needs with a 2.5 kilowatt grid-tied system. More often, a grid-tied PV system will produce 15% - 50% of a customer's electricity needs on an average annual basis. Generally speaking, PV system designs are a balance between your energy demands, available installation area and your budget. If the PV system design includes battery backup, you will need about 20% more panels to provide the same amount of energy.
- How much area will my PV array need?
On average, one square foot of a south facing roof can generate 10 watts of power, or 100 square feet per kilowatt. For example, a 2.5-kilowatt system will require approximately 200 - 250 square feet of space.
- Where will the PV panels be mounted?
Usually, PV panels are placed on an existing roof, using an aluminum mounting structure. If the roof is not suitable, PV panels can be mounted on the ground, using a freestanding support structure. Pole mounts are often used for smaller arrays, such as those used for well or pond pumping systems but can be adapted to larger systems.
- Do I need sun trackers for the PV panels?
Sun trackers can provide up to a 30% increase in performance by capturing early morning and late afternoon sun. However, they also increase installation expense and require additional maintenance. With net metering, the objective is to maximize the kilowatt-hours produced over the course of a year, and not on a daily or seasonal basis. Sun trackers are not needed for large grid-tied arrays, which are almost always fixed-mounted on a roof or ground support structure, and oriented for maximum year-round production without the need for re-orientation.
- How long will my PV system last?
Aurora Energy typically uses PV panels with a 20 to 25-year limited warranty. Although panels have a useful life expectancy of more than 40 years, it is normal for panels to slowly degrade as they age causing some decrease in output. This rate of degradation is typically about 0.5% per year. We have personally seen PV panels more than 50 years old still producing power silently and cleanly just from sunlight! Inverters, like other complex electronic components, have a limited life span and most likely will need to be repaired or replaced within 10-to-15 years. Aurora Energy provides a standard warranty on workmanship and materials and is available to service ongoing manufacturers' warranties. Even with the cost of service and repairs, which are very minimal, the systems are very reliable and cost effective.
- What financing options are available to me?
Nearly everyone seeking financing for a PV system has success. The best way to finance a PV system for your home is through a mortgage loan that includes a primary mortgage, second mortgage or home equity loan secured by your property. If mortgage financing is not available, look for other sources, such as conventional bank loans. Some lenders recognize the savings offered by a PV system and will make every effort to qualify you for a loan, since they know you are simply transferring your electricity payment to them rather than the utility company, and will not be increasing your net monthly financial burden. Aurora Energy does offer a 90, 180, and 360 day Same As Cash program to our customers. Visit the Financial Center for more information.
- Shall I Lease a Solar System or Own it?
These days, you can buy into solar power much like you own a new car. Owning a solar system has the greatest long term savings, but requires a big upfront investment (or via some form of financing; e.g. a home equity loan). If your credit score is high enough to finance, then buying is always the best option. You may see immediate savings too, but after your payback period is complete, you will enjoy free electricity for the life of the system.
A solar system dramatically raises your home's value. But if you lease a solar system, you've created a debt liability that a potential home buyer will probably not want to assume. And if the potential home buyer wants nothing to do with lease legally binding debt or can't qualify for the lease assumption, then you'll have to pay a hefty penalty to break your lease agreement.
With a solar lease you won't get the Federal Tax Credit and Maryland Solar Energy grant because you do not own the solar system. The leasing company will get credits and will own the system that you'll be making payments on for the next 15 years. This is another reason why residential solar lease companies want you to let them use your roof.
- How much does a grid-tied PV system cost?
Many factors determine the final cost for a grid-tied PV system, such as: system size, type of mounting system, roof material and pitch, wiring runs and various other installation details. At present, a typical roof-mounted PV system costs from $5 to $7 per watt (DC input) before rebates and tax credits. For example, a 5-kilowatt, grid-tied system typically costs about $25,000 to $35,000.
- What is the payback for a PV system? Is it cost-effective?
The variables affecting the payback of a PV system include: system size, future electric rates, available rebates and tax credits, loan amount and financing rate, system output and performance, among others making it hard to determine the exact payback. It's better to ask if the system will save you money.
With interest rates at a 40-year low, refinancing or using your home equity line of credit are smart ways to pay for a PV installation. Your loan payments will be about the same or slightly higher than the electricity costs a PV system will offset. Quite often the additional cost of owning a PV system is approximately what it would cost you to switch from regular to premium fuel for your automobile.
When you invest in a PV system your monthly payment will help increase the equity in your home rather than simply disappearing to the local utility. Plus, interest paid on your loan is tax deductible, allowing you to pay for the system with pre-income rather than post-income tax dollars. If electric rates skyrocket, the financial benefit of your PV system will increase dramatically since your loan payment will remain the same.
If the system is installed on a business, the federal government offers a 10% investment tax credit and accelerated depreciation. If you sell your property, all or most of the installation cost will be recovered since a PV system will increase your home's value. In short, the investment benefits of PV systems are outstanding!
- What are Solar Renewable Energy Certificates (SRECs)?
Solar Renewable Energy Certificates (SRECs) or Solar Renewable Energy Credits are a form of Renewable Energy Certificate or "Green tag". SRECs exist in states that have Renewable Portfolio Standard (RPS) legislation with specific requirements for solar energy, usually referred to as a "solar carve-out". SRECs represent the environmental attributes from a solar facility, and are produced each time a solar system produces one megawatt-hour (MWh) of production.
The additional income received from selling SRECs increases the economic value of a solar investment and assists with the financability of solar technology. In conjunction with state and federal incentives, solar system owners can recover their investment in solar by selling their SRECs through spot market sales or long-term sales, both described below.
- Who sets SREC prices?
Typically, there is no assigned monetary value to an SREC. SREC prices are ultimately determined by market forces within the parameters set forth by the state. If there is a shortage in SREC supply, pricing will rise, resulting in an increase in the value of the incentive for solar systems and an intended acceleration in solar installations.
As SREC supply catches up to SREC demand, pricing will likely decrease, resulting in an intended deceleration in solar installations. Over time, SREC markets are designed to find the equilibrium price that encourages enough installation to meet the growing demand set forth by the RPS. Generally speaking, SREC prices are a function of (1) a state's solar alternative compliance payment (SACP), (2) the supply and demand for SRECs within the relevant state, and (3) the term or length over which SRECs are sold.
- What other issues may need to be considered?
It is a good idea to find out about:
- Required approval from a homeowners' association, including covenants, conditions, and restrictions (CCR's) that may exist
- Permit problems or illegal structures or issues you anticipate if a building inspector visits the property
- Roof condition, including need for (and cost of) repair or replacement before installation
- Need for (and cost of) removing trees or other vegetation that may shade the PV system area
- The likelihood of your PV system's visibility raising any issues with neighbors.
- How do I get started?
If you think a solar energy system is right for you, take the time to send an e-mail or give us a call at 410-268-3088. We'll ask you some questions about your project, your site and your energy goals. We'll set up a site visit and set you on the path towards energy independence!