I just read an interesting article that motivated me to convey some thoughts and experiences on solar panels.
It’s exciting to see the progress solar power and panels have made in the last decade – more affordable and more efficient. I visited a remote village in Northern, rural India where no power line reached… but to my surprise, they had a communal solar panel in the middle of the village to, yes … charge their cell phones. Solar farms are popping up in open spaces – I saw a huge one recently on a drive to Las Vegas. When I visit my home town of San Francisco and look out over a view, it seems more homes had solar panels than ones that do not. I’ve sold new homes that now have solar panels as part of the purchase package – what home owner doesn’t love almost free energy! And I’ve now interviewed three companies to hear their pitch for solar panels on my own home.
While I’m all for solar power, saving the planet, and money if possible, my experience was a little discouraging. I hope that you might get a few tid-bits from my own journey.
It seems that purchasing panels is still not very popular, as the out-of-pocket expense out weigh the benefits/savings. Some might argue, like buying a hybrid car, “You don’t buy it for the saving, rather for the planet.” There are also many incentives in California that go along with the purchase of solar panels. The federal government gives tax credits (write-offs) for owners of solar panels. And, there are a bunch of local incentives to look into if you are going to purchase panels. Like a car, there are avenues and incentives to finance the purchase of solar panels too. This attracted me, because it seemed that one could save money on power, then eventually own the panels. However, I was also informed that the life of the panel’s efficiency is only about 20-25 years, which just so happens to be the life of the loan. Take the time, look into the kick backs for your area, do the math and then make a decision. Purchasing may be the right path for you?
Leasing the panels is another option where you pay a set amount (lower than your average monthly utility bill), but I found that a “power purchase agreement [PPA]” seems to be most popular route offered. Leasing and the PPA are similar in that there’s little to no money out-of-pocket. With the PPA, it’s as if you are agreeing to a fixed utility rate (lower than your average monthly utility bill) and allowing the company to use your roof to harvest solar power. The company I spent the most time with asks for a 20 year agreement.
At the end of the day, while I love our planet and believe solar power and panels are a great move, I decided against it for now. Here are the issues I came against:
- The numbers did not work for me on the purchase route, nor any other route. Many told me ahead of time, “If you have SMUD (Sacramento Municipal Utility District) then it doesn’t make sense,” due to how inexpensive our power is. With the PPA I would have save about 2 cents a month. This does not give me any incentive to save energy either. The PPA company gets all of the incentives in this scenario.
- My roof may need replacing in the next 5 or so years. I would be charged about $500 extra to have the panels removed while the roof was replaced. They would not budge on this or work it into the deal. I did not want to bear this extra cost.
- Lastly, I hated the sales tactics. The big push seems to be part reality and part fear base… “Energy cost will be going through the roof in the near future!!!!! Sir, do you want to pay triple what you are paying now?” Are rates going up? Who’s to say? Do you trust the guy selling panels? Maybe, but I definitely do not like the fear-base sales technique. Also, the sales person was extremely friendly and helpful, even when I said I was not sure… he kept saying, “Just keep moving forward, you can say ‘no’ at any time.” When I finally said, “Not at this time,” he got really pushy and aggressive, trying to make me feel like the bad guy for backing out. That actually helped me “break up.” There are plenty of solar companies out there that offer great service and similar product. Don’t feel bound to one.
Again, I have friends and associates that it’s worked great for, and I love the idea. For me, it’s not the right time. What experience have you had? What am I missing here? Surely my experience is not all-inclusive.
Picture from my trip to India in 2015, with small solar panel on roof.
Enjoy,
Keith Klassen – Real Estate Broker
916.669.9030
Sacramento Real Estate Reflections 
