Solar Power Is NEVER Free!

Solar Power Is NEVER Free!

There are a couple misconceptions that the average Joe is being fed or led to believe about solar that simply are not true.  Both revolve around solar power being "free" in some way.  But, as with anything in this world, there is no such thing as a free lunch.  Let me explain.



The first misconception is that you can purchase a solar panel system for your home or cabin or RV and then you will have free energy for 20 years.  Or at least a very long time.  This is especially dangerous for homeowners that are purchasing grid-tied, rooftop solar panel systems for their residential home and being led to believe that they will have no power bill for 20-25 years.  I have yet to hear of a single system where that has truly been the case.

The reasons for that are numerous.  For one, the homeowner is at the mercy of the electric utility and the terms of their cogeneration agreement and/or interconnection agreement.  In order to install a grid-tied solar panel system, you have to agree to the utility's terms before they will allow the power you generate from being fed to their grid.  Years ago you used to be able to sell your excess power to the utility for the same price that you could buy it from them.  So it was possible to get a "net zero" electric bill by producing enough excess power during the day to offset the power you were going to have to use when there was no sun at night.  But those days are long gone and utilities now pay pennies on the dollar for your excess power, if they will even buy it at all.

Another reason is that there are maintenance and replacement costs to consider.  This is often glossed over during the sales process but solar panels need to be cleaned regularly (at least once per season) if they are going to come even close to generating their maximum power.  And if the shingles on your roof need to be replaced (which is guaranteed to happen during the 25+ year useful life of solar panels) then you will have to pay a solar contractor to come out and remove the panels for the roofers to do their work.  Then they have to re-install the system.  And lastly, the expected life of solar charge controllers and grid-tied inverters is about 10-15 years.  So, again, during the useful life of your solar panel system you are almost guaranteed to have to replace these critical components at least once.

Finally, when you go all in on solar you are essentially becoming your own electric utility company.  Part of what an electric utility company does is forecast for what is called "demand response".  Demand response is a complicated concept that involves estimating how much power your household needs on the highest demand day of the year.  Usually, this will be the hottest day of the summer but depends on where you live and your climate.  Electric utilities have to be very accurate with this projection.  They have to have enough electricity generation to cover that peak demand with some added cushion on top in case they get it wrong.  So how does this relate to a homeowner?  Just like the utility, a homeowner needs to accurately assess their peak demand to properly size their solar panel system if they intend to be energy independent or eliminate their power bill to truly have "free" energy.  Otherwise they will pay whatever the electric utility wants to charge them for any shortfalls.

But why does demand response have anything to do with solar not being free?  Because I have yet to see a residential solar panel system that got demand response right.  The solar contractor that designed and installed the system on your roof certainly didn't do that calculation.  They probably didn't do more than ask for your monthly power bill (which does NOT come close to giving enough information for this estimation).  I would love to be wrong here but I have not talked to anyone or gotten any emails or comments from people that never paid a cent for energy again after their initial install of solar and a lot of times it is because they didn't get this concept right.



The other misconception, and really outright lie, that is perpetrated by solar marketing is that you can get a system installed completely free.  Let me be very clear... there are no government or utility programs that will give you a solar panel system for your home regardless of your income level, ethnicity, or geographic location.  Period!

This lie is very tempting to believe because there are some good solar incentives out there for certain situations, such as the solar investment tax credit (ITC) from the federal government.  But incentives do not mean free.  They help encourage people to invest their money in a particular way.

If you are going to shop for a solar panel system for your home, you should be on high alert for scams and hidden costs.  If a solar installer is promising you a "no money down" solar panel system, for example, think about why.  The company exists to make a profit and is not going to lose money or even break even on your system.  So they are either stuffing your "deal" with a ton of profit on the back end, similar to what car dealerships will do with their monthly payment games, or they are collecting all of the incentives for themselves that you would get from the utility and government. 

For example, if you lease a system you don't own the panels.  So you are not eligible for any of the incentives.  Similarly, if you are entering into a "no cost" system with a solar power purchase agreement (PPA), you are agreeing to buy all of the power produced by the system on your roof, which you do not own, and the solar company gets all of the investment incentives.  Both of those are heavily in favor of the solar company, from a financial perspective.


The bottom line is, as always, there is no such thing as a free lunch.  There will be strings attached, incentives missed out on, hidden costs and maintenance, or other gotchas involved.  So do your homework, be educated, and take your time before making any decisions with solar!

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