One of the free services I offer is taking a look at people’s solar estimates to give them an unbiased and informed opinion. And, surprisingly, almost all of them make the same glaring mistake that costs them thousands of dollars.What is it?
There was a time when the biggest mistake people made was not getting micro-inverters. But with the release of power optimizers that optimize each panel’s output with a single inverter, this has become less and less of an issue.
The most common mistake I see people making is getting a system that is larger than they need. And if you think of the reason why, it becomes obvious: the solar panel installers are the ones making the estimates and the larger the system, the larger their profits.
With incentives as high as they are, they can still justify maximizing your electrical output because your breakeven point only shifts by months or a couple years. And once you’ve mentally committed to a 6-year breakeven, an 8-year breakeven doesn’t sound significantly worse.
But you’re still looking at paying thousands more than you need to and those thousands can mean the difference between getting solar panels or not.
So how large a system should you get? If you ask the solar installers, they’d recommend a system that offsets a full 100% of your electricity. However, I would recommend a system significantly smaller than that, depending on who your electric utility is, or was.
First off, I don’t believe any of the utilities will pay you if your electric bill for the year is negative. You are allowed to keep the credits in your account or even donate them to another account, but they will not cut you a check. But please don’t take my word for it – you should contact your utility to confirm. I only know that this is the case for people who formerly had NStar and National Grid.
If you formerly had NStar, then you are eligible for the Time-Of-Use rate and should opt for a system that is between 70-75% of your annual usage. The additional 20% you’ll save from switching to the TOU rate will allow you to offset around 84-90% of your electric bill.
If you don’t have NStar and cannot take advantage of a TOU rate, then you should size your system to offset between 85-90% of your electric bill.
So why not go to 100%? Easy. Because as household appliances continue to increase in energy efficiency, you will use less and less electricity each year. So while you may not exceed 100% of your usage this year, it becomes a very real possibility 5-10 years from now, even as electric cars become more and more practical.
These are things most solar installers will not tell you, as they’re trying to get you to purchase the system that’s right for them, not the system that’s right for you.