At the end of year five the meter reading was 98767, meaning we have produced about 1240 KWh more than we consumed over the past 5 years. The first three years we were slightly in the hole, as the meter read 00387, so the gain has come in the last two years. At the end of year four it was 99602 so we came out ahead by 835 KWh this year.
What is surprising about this is that this was our lowest year of production yet, producing a rounding error less than 9 MWh, whereas the first four years we did a little better than 9 MWh. We generated our 46th MWh on March 20.
Is this because the panels are losing their production capacity? Probably a little bit. They are guaranteed not to lose more than 1/2% per year after the first year. However, weather probably plays a factor as well. This past summer we were impacted by smoke from Canadian wildfires. This past February we had two back-to-back snows with freezing temperatures, so the panels produced no power for about 10 days. Just adding what would have been 80 kilowatt hours over that period back into our totals would be enough to get back over the 9 MWh mark.
We had built up enough surplus over the summer and fall that I was sure we would cover the winter deficit. We did cover through January, but the 10 day February shortfall used up the surplus and left us with a small bill (about $22) for that month. Fortunately, we are back in surplus again in March.
As a review, the way our billing works, the March/April bills produce a large surplus (days are longer, sun is higher, no AC) but this gets zeroed out at the end of the April billing period and we get a check in May for the supplier portion of this surplus. The utility keeps the delivery portion.
(Incidentally, the delivery portion has roughly doubled recently, from 2.5 cents to about 5 cents per KWh so electricity now costs about 16 cents per KWh – it was about 10.7 cents early in our journey).
This means we resume building a surplus to carry us through the winter (October – February) starting in May.
I sometimes get asked about the ‘payoff date.’ This is the amount of time until the savings from not paying an electric bill equals the cost of the system. Honestly, I don’t know when that will be as one factor is the current cost of electricity. As that increases, now up about 50% from when we went operational, that date shrinks.
I have rather focused on what the cost of electricity will be for us over the 25 year guaranteed life of the panels. By the way, they keep producing electricity in year 26!
Assuming our panels generate at least 200 MWh over the 25 year period (which seems conservative, as they have generated 46 MWh in the first five years) and assuming the SREC market supports a price of $50/MWh (this is not guaranteed at all – it is currently about $4/SREC in Ohio and over $300 in New Jersey and DC), and that our March/April surplus averages about $60/year, the total cost of the power our panels will generate will have cost us about 2-4 cents per KWh. That is a good deal.
Of course we will have to pay market rates for anything we consume above what the panels generate, but that is to be expected. As of now though, our electricity use continues to decline, as evidenced by the meter continuing to run backward, compared to the same month of the prior year. Should we get an EV sometime in the future, or convert our heat and hot water to electricity this will of course change.
Whether solar panels are a good deal are very much dependent on site location, federal and local $$ help with the project and whether there is something like an SREC market. For this project specifically, it seems to be a great deal.
Here is the comparative overview of the past 5 years on a monthly basis:
Our solar panels have been active for four years. In the first two years we used more electricity than the panels produced. I know this because I follow the electric meter almost obsessively. When the meter shows a low positive number, it means we are using more than we are producing, as of that moment in time since the panels went live. If the meter runs backwards (into the 99000s), then we have cumulatively produced more electricity than we have consumed.
I record the meter reading every March 26th around 1:30 PM, the approximate time we went live in 2019. Following are the readings and cumulative production totals at the end of each year:
Year ending March 26
Meter Reading (Kilowatt Hours)
Cumulative Production (MWh)
Annual Production (MWh)
2020
00455
9.67
9.67
2021
01098
18.77
9.1
2022
00387
28.1
9.33
2023
99602
37.25
9.15
After year’s one and two I had concluded that we should have installed a few more panels to be energy neutral. However, I also knew that over time we would probably use less electricity and that has proven to be true. We are now 853 KwH ahead (398 to get back to all 00000 + 455 above that.
Should we get an electric car or convert to electric heat/hot water (currently on natural gas), we would be under producing.
Under the current Maryland net-metering system, excess generation is paid out in May, based on the surplus KWh at the end of April meter reading. Since March and April are both good surplus months (days are longer, sun is higher, but no AC yet), this means the typical customer receives a check each May for the commodity portion of this surplus. Recall that the other major portion of a bill is the delivery fee. This is kept by the utility company.
There is one issue with this current system. Because the March/April surplus is paid out (albeit at about 2/3 the actual rate), we do not quite generate enough surplus May-September to carry us completely through the winter, although this year we came pretty close. This means we have to pay the full price for the energy consumed once our surplus is used up. Our first two winters this cost us about $135 each. We got better though in year’s three and four building up our summer surplus. These winters only cost us about $26 and $11 respectively.
A new law has recently passed the Maryland General Assembly that, if signed by the governor, will create an additional option, to accumulate this surplus indefinitely until the surplus is used up (for example by buying an EV) or until the account is closed.
Is solar a good deal in Maryland?
I continue analyzing our experience in light of the question, is this a good deal, and if so, for whom. Most people think in terms of payback time, which for us is looking to be about 10 years. Since the panels have at least a 25 year life span, this seems like a good deal if one has the money to install the system and one expects to stay in the home long enough to realize the benefit.
Another way to look at the problem is Total Cost of Ownership (TCO). My after tax cost for my system was $16,500 (This is documented in previous posts). To determine 10 year TCO we have to make some assumptions:
MWh generated : 90
SREC $$ generated: $4500 ($50/MWh)
May surplus re-imbursed: $600 ($60/year)
Subtracting the SREC payments and the May surplus checks from my after tax cost brings my 10 year cost to $11,400. Dividing this by 90 yields about $127 per MWh or 0.127 per KwH. This is about what rates are now. Will they go up over the next 6 years? I expect so, but I do not know.
Over a 25 year period, these TCO numbers look even better:
MWh generated: 200 (assuming a decline in output as the system gets older)
SREC $$ generated: $10,000 ($50/MWh)
May surplus re-imbursed: $1500 ($60/year)
This brings the cost down to $5000 for 200 MWh generated, which works out to $25/MWH or 0.025 (two and one-half cents per kilowatt hour). This seems like a great deal to me.
Note that we do not know how long the SREC program will exist or how the May reimbursement program will work – if we end up switching to the infinitely cumulative surplus, we could perhaps build enough surplus to power an EV for a long time, so these calculations are all subject to change. The point though is that the lifetime cost of the panels should be significantly less than the utility rates for the same amount of electricity.
In my Year 2 Report, I mentioned that we would have needed 2 more panels to generate more electricity than we consumed. That’s because the meter reading at the end of year 2 (March 26, 2021 at 1:30 PM) was 01098 and our worst panel had produced about 257 KWh/year.
What a difference a year makes. On March 26, 2022 the meter reading was 00387. This means we consumed 712 KWh less than we produced this year (1098 – 387). The 3 year reading for our worst panel was 778.2 KWh. So one more panel that was at least as good as our poorest producing panel would have put is in the black (the meter reading would have been negative).
Does this mean we produced 712 KWh more this year than last year? No. Here are the meter readings and total production for the first 3 years:
Meter Reading
Annual Total
Cumulative Total
0455
9.67
9.67
01098
9.1
18.77
00387
9.33
28.1
First 3 years of production
We produced a little more in year 3 than in year 2 (230 KWh), but the main reason for the improvement was a reduction in consumption (482 KWh). This reduction allowed us to build up a greater surplus going into the winter months so that we only had an electric bill for two months of the year, for a total of 200 KWh. The only reason we had these two bills at all is because BGE, our utility company, zeroes out the surplus after the April reading and sends us a check for the surplus supply amount we generate each March and April. This means we do not have enough credits by the end of the winter and so we have to pay for what we do not produce those last few months.
As you may recall from previous posts, the electric bill is divided into supply and delivery (and smaller amount for the meter charge and taxes). The delivery amount is about 3.5 cents per KWh.
Date
KWh
Rate (Supply)
Check Amount
5/20/2019
446
0.0879
39.20
5/22/2020
535
0.082809
44.30
5/24/2021
913
0.071446
65.23
Total
1894
148.73
Payment for March/April Surplus
I will not get a check for this year’s surplus until late May, but using .08 per KWh as an estimate for the supply rate and 300 KWh for the March surplus (300 * .08 = $24), we can guess that the total March/April surplus by the end of year 3 is about $173.
The $24 amount is interesting for the March surplus, as the cost for the 200 KWh that we got charged for in January and February (due to the zeroing out the previous March) was approximately $24 as well. If BGE did not zero out the surplus each year we would have essentially had no electric bill this year, except for the (approximately) $100 per year they charge for the meter (labeled as a customer charge).
Looking at this over the 3 year period, we used 129 KWh more per year (averaged out) than we consumed. This is calculated by dividing the meter reading (00387) at the end of year 3 by 3. Rounding a bit, using 0.12 per KWh or $120 per MWh, in theory we should have paid on average $15.48 per year, or $46.44 total over three years. In fact, because we are not compensated for the delivery portion of the March/April surplus, we paid more. Following is the approximate reconciliation:
Amount
Comments
Amount paid
$595
What we sent BGE over 3 years
Meter charge
$300
Approximate (varied from $8.22 – 8.75/month)
Net paid for electricity
$295
$595 – 295
Surplus BGE paid us for
$173
includes guess for March 2022
Actual bill for electricity
$122
$295 – 173
Delivery not reimbursed
$77
Approximate using .035 per KWh
Net should have paid
$45
Reconciliation of what we should have paid vs actual based on meter reading
So the amount we should have paid reconciles with the amount we actually paid. Effectively, the March/April surplus zero-out cost us an additional $2.14 per month.
How did we reduce consumption by almost 1/2 MWh? I’m not sure. Some of it was intentional. We found a few more bulbs to convert to LED. We set our thermostats a little differently, focusing on comfort at the end of the house we were in and reducing/increasing the setting at the other end. We took a couple of short trips, 3-5 days each and set the thermostat higher while we were gone. Finally, my wife required more sleep this year due to her health, and so she was generating less electricity while sleeping. I expected we would use less over time as we got older and as appliances got more efficient, but we have not replaced anything yet.
I have noted previously that the amount of solar energy we convert to electricity is highly dependent on how cloudy/rainy it is. Panels theoretically degrade slightly as the year goes on. However, we can see from this snapshot that more recent quarters sometimes produced more electricity than older quarters.
One last picture, to show that we had surpluses (or accumulated surpluses to zero out our bill in every month this past year but two:
One last note. As our annual production was over 9 MWh each year, we produced our 28th SREC on March 22, 4 days before the end of year 3.
Please respond with any comments or questions. I enjoy helping people decide if solar panels are a good opportunity.
(This post is now the latest in this on-going series. Here is Part 1).
The sales information on solar panels state that year two may see a loss of power produced of about 2%. Unfortunately, there is no way to tell if that occurred for our panels. In order to measure this, the weather would have to be identical each year, including the timing and density of clouds and rain. These two items play a much larger factor in how much this site produces.
This year snow was a small factor. Usually we have a warmer, sunny day after a snowfall. This year it snowed just ahead of the polar vortex that caused so much trouble in Texas and other places, so instead of melting off almost immediately, the snow stayed on the panels for several days, reducing output for those days.
Did I mention that my dog ate my homework? OK, enough excuses, here are the numbers:
Annual Electric Usage for March 27, 2020 – March 30 2021
Again we had 8 months of 0 billing and partial billing for 4 months. The sun does not provide much energy in the winter months.
Following are the meter readings at the beginning and at the annual anniversaries:
Date
Meter Reading
Accumulated Production
Annual Production
03/26/2019
00012
0
0
03/26/2020
00455
9.67 MWh
9.67 MWh
03/26/2021
01098
18.77 MWh
9.10 MWh
Data needed for calculating $ benefit of our solar panels. Readings taken at 1:30 PM on these days
The meter reading indicates that we are falling further behind (continuing to use more power than we produce.
Year 1: 9.67 + 0.433 means we used about 10100 KWh
Year 2 the meter went up 643 KWh over Year 1 (01098 – 00455). So year 2 usage is 9.10 + .643 = 9743 KWh. So we cut our usage by about 357 KWh for the year, but due to some combination of weather and normal 2nd year reduction, production dropped 570 KWh. Clouds got in the way.
Here is the full spreadsheet:
Two years of BGE electric bills after installing our solar panels.
Our cumulative spend for this period is $469.07. Subtract out about $200 for the meter costs (typically $8.32 a month) for an adjusted cost of $270.
BGE zeroes out any accumulated surplus based on the end of April reading. They pay us for the supply price of the surplus we generate in March and April. We will not have this number until late May. The cumulative total of the previous 2 checks was $83.50.
Assuming for the sake of discussion we get about $40 this coming May, these checks total about $123.00.
The price of electricity all in (supply, delivery, taxes) has actually gone DOWN since we installed our system. It was a little over 0.12 per KWh in year one and a little less than 0.11 per KWh in year 2. For a quick calculation, let’s use .1125 to see how much we have saved:
18770 KWh * .1125/KWh = $2112 – estimated value of energy produced.
Our last data point is the dollar value of the SRECs produced. To date we have received $895. In May we will receive $55 for the SREC produced in March, bringing this total to $950.
Approximate dollar value realized to date – $3185:
$2112 + $950 + $123 = $3185 – This is how much we did not pay ($2112) + real checks we got from BGE. Our installation cost after incentives was $16500. To date we have recovered about 19.3% of these costs (3185/16500). Because electricity costs have gone down (and perhaps because of those persnickity clouds) we are on track to recover our costs in a little over 10 years now.
The following chart shows that weather may play the most important role in power production:
Monthly Generation – Predicted vs Actual
Predicted
2019 Actual
2020 Actual
2021 Actual
January
487.8
326.78
302.78
February
607.3
516.92
376.02
March
944.8
848.07
1020
April
1095.4
949
1010
May
1231.5
1110
1150
June
1295.4
1260
1260
July
1284
1310
1320
August
1121.7
1130
1040
September
950.2
831
733
October
765.4
463
428.86
November
473.3
349
305.71
December
392.9
254
231.54
adjustment*
354
10649.7
8010
9170.88
*Note: April, May 2019 had some reading errors so totals are really higher
About 355 KWh readings not recorded properly
Predicted generation vs actual, by month
As noted above, April and May of 2019 had some monitoring errors (corrected by the company that collects the data) so these numbers are not necessarily comparable against 2020. It is clear that this past fall we had much poorer conditions than the previous fall. But then look at March 2021 – Much better readings than March of 2020 and much higher than the predicted number.
Last year I concluded that if we had installed two more panels that produced at least as well as our poorest producing panels we would break even. That still seems to be about true:
Two years of solar production per panel.
The worst panel shows a two year cumulative production of 513.62 KWh. The best panel produced 621.13 KWh during this period. So, 2 panels producing somewhere in-between would have broken even more or less.
As the surplus generated in March and April is paid off in May instead of crediting against the following fall/winter shortage, it would take another panel or 2 to avoid having a bill at all, except for the meter cost.
(This is the latest in an on-going series. Here is Part 1).
In my 9 month update I predicted the following:
As the days get longer and the sun gets higher, here are my predictions for the next 3 months:
January we will still be in the red, using more than we produce, but less than December. I am hoping we cut the December overage (475 KWh) in half.
February we will do even better, and I hope we cut the overage in half again.
That would mean we get billed for about 240 KWh in January and 120 KWh in February, or 360 KWh total.
In March I expect we will generate a surplus.
So, how did the year turn out, and how good were my predictions?
Not as good as I had hoped. I got January very wrong (240 predicted, 416 actual), was closer for February (120 predicted, 169 actual), but we did have a surplus in March. It was a very cloudy winter and as the song says, ‘clouds got in the way.’
The full year looks like this:
Annual Electric Usage for first year with Solar Panels
Total cost for the year was $233. About $100 of this was for the meter, which we would have had anyway, so the net cost was about $133. After factoring the $39 that BGE paid us in May (this is an annual payment that zeroes out the surplus each year), our cost was $94.
I logged our accumulated production on 3/26 at 9.67 MWh. Adding this to our meter reading, it appears we used 10,120 KWh and produced about 9670 KWh this past year.
Using 0.13 per KWh for an average cost of electricity delivered to our home this year, without solar panels our annual electric cost would have been 10120 * .13 = $1315.
This means our savings this year was $1315 – $94 = $1221.
Understand that each year’s savings may differ due to the amount of solar output, our consumption, the cost of electricity delivered, and the value of SRECS.
We will receive $455 for our SRECs (the check for the Jan-March quarter comes later).
This makes our first year’s net gain work out to $1221 + $455 = $1676. That is just over 10% of our net cost (after tax credits from the federal, state, and local governments).
All things being equal we are looking at a payback of around 9-10 years.
Since trends never continue perfectly any change in the above factors will change this date. But the panels are supposed to produce well for at least 25 years.
It appears the net cost of electricity delivered is trending down towards 0.12 per KWh, so the payback might turn out to be a bit longer.
Still, it is nice to have no electric bill 8 months of the year, a small bill for 2 months and a reduced bill the remaining 2 months.
Approximate Production After One Year
The picture above shows the lifetime production of each of my 34 panels. I remembered to take it a day or two after I hit the one year mark. There was also a software error in the application that captures this information, so in both ways this picture shows approximately what each panel produced.
The best panel produced over 318 KWh. The lowest producer was about 264 KWh. In general the best producing panels were at the top and on the right (east) side of the array.
It appears to me that if we had installed two more panels that were in this range, we would have broken even for the year (meaning we would have produced as much as we had consumed).
Please let me know if you have any questions about solar panels or any related topic you want me to cover.
We went live on March 26, 2019. Just got our latest electric bill for the period ending September 25th:
Six months in: no bill and a surplus of 599 KWh to date (months 2-6) – see next image below.
Over the summer, for the two months prior, our air conditioning usage caused us to use more than we produced, but barely. With this most current bill we made up for it and are back to generating all of our own electricity and supplying a little bit to our neighbors – not that they can tell of course.
Actual surplus is 599 + 446 – already paid for the 446.
We received a check for the 446 surplus generated our first month already, so that zeroed out the account. Adding the 599 for months 2-6 to month 1’s 446 means we have generated a surplus of 1045 KWh (just over 1 MegaWatt Hour) since we went live.
A few more numbers for readers who are so inclined. On Aug 29 we got our first check for our generation of 3 SRECs. SRECs, you may recall from earlier postings are Solar Renewable Energy Credits – one SREC = 1 MWh of electricity generated. This check was for the second quarter (April-June). It was $131.85.
On Sep 28 we just hit 7 MWh generated to date. For the 3rd quarter (July-September). This means we will get a deposit around the end of November for whatever price 4 SRECs are going for. The site srectrade tracks the daily prices, currently around $62 per SREC. Note that the broker gets $5 per SREC for their troubles and the price will undoubtedly change between today and when the transaction occurs, so it is hard to predict how much we will receive.
Our 6th month savings to date then is something like this:
BGE Payment for Month 1: $ 39.20 SREC Payment for Q2: $131.85 6 months of avoided billing: $800.00*
Total earned and saved: $971.05
*Avoided billing is an estimate based on amount of electricity generated (a little under 7 MWh) minus the surplus we generated (a little over 1 MWh). This means we used a little less than 6 MWh during this time, at a cost of about $135 per MWh (13.5 cents per kilowatt hour). We hit the 7 MWh mark Sep. 28th, 2 days after the 6th month billing period.
6*$135 = $810, so I rounded to $800.
The SREC payments will always be 1 quarter behind, so I will include the Q3 payment in another posting.
As we enter the darker days of fall and winter, our power generation will decrease, but so will our usage, so hopefully we will continue generating extra power. I am hoping that for the second half of our first year (Sep 26, 2019 – March 25, 2020) we are able to generate another 5 MWh, but it is not exactly under my control!
A shout-out to my salesman Daren Weatherby: we walked my site together and he pointed out the trees that would be an issue. The one he focused on was south and east of my roof and a decent distance away, but tall and with a wide spread of branches at the top.
I am an observer of how the sun moves over my house throughout the day and found it hard to believe this tree would matter much. How could this guy who was just seeing this for the first time, but with some years of experience selling solar systems know more than I, a 25 year owner of this property? Well, to some degree we were both right.
In the summer it does not have a great affect, as the sun rises quicker and more directly over my house. Now that we are in the fall though, the angle of the sun is lower in the sky and yes, that tree is filtering a significant amount of sunlight out for a longer period of the morning.
Hopefully over the next month or so these leaves will fall and the branches, being thinner up at the top of the tree, will have less impact. Still, props to Daren, as he knew what he was talking about!
If you work in the IT or Engineering fields you are probably well aware of the expression RTFM – Read the Fine Manual (google it for the more vernacular translation).
I am coining a similar term: RTFP – Read the Fine Print. No vernacular needed.
Truth is, I got this expression from my wife – the next three paragraphs are a (meant-to-be) humorous explanation of how this occurred.
In the Jewish tradition, a marriage has a legal document called the Ketubah, which is the document given by the groom to the bride that lists his obligations. It is written in Aramaic, my understanding of which is a bit rusty.
The Ketubah often comes up in those memorable discussions a married couple have whereby my wife explains to me that I will end up doing something she wants because, you guessed it, I didn’t read the fine print.
As in ‘Why am I the one who always has to take out the garbage?’ “It’s in the Ketubah,” she tells me. Apparently I didn’t RTFP.
Back to our main topic.
In previous posts I had mentioned that Anne Arundel County offers a $2500 property tax credit for installing solar panels. My salesman did ask me if I am paying that much in property taxes (which I am – but here comes RTFP).
I received the following letter from the county:
RTFP: taxes levied on the building, not the land,,,
In case you have not seen an AA County tax bill, it looks something like this:
Homestead Credit and Land value reduced the solar tax credit.
The portion of the bill attributed to my county tax starts at $3859. This first gets reduced by my homestead credit by $1465, leaving $2394. (The homestead credit limits increases in property taxes for primary residents, to avoid forcing owners from having to sell due to higher taxes – very beneficial to retirees on a fixed income.)
As the letter states, the tax is only on the building, meaning it is not on the land. Our house holds just over 59% of the value of our property. So the math looks something like this:
Initial Property Tax: $3859 Subtract Homestead Credit $1465 $3859 – 1465 = $2394 — remaining property tax Calculate Building to Total ratio: 243,600/412,800 = 0.59 rounded. $2394 * 0.59 = $1412 — the value of our solar credit
As the letter states, this is a one-time credit – no carry over into next year. So that is it. Because of the fine print, our county property tax solar credit is $1412, instead of $2500.
In other words, the price we will end up paying after incentives will be about $1088 higher than the roughly $15,400 we projected, or closer to $16,500.
Note that we did not lose anything here – this was always how the tax credit was going to work. The only change is in my less-than-perfect break even calculations. That number is a best guess anyway, and will only be revealed as we take this journey. The information on how this tax credit works was probably available from the county. My calculations are only off because I did not RTFP.
Two updates regarding previous posts:
The web site where you can track SREC values is here. The price has varied a bit in the last few months, rising as high as $67.50 for a couple of days, but settling in around $50 as I write this. It will be a few months before we receive our first check.
The July bill came in. We almost broke even this month, consuming 11 KWh more than we produced. This was subtracted from our roughly 1/2 MWh surplus to date:
AC is expensive: first month we used more than we produced – but barely
Googling ‘social benefits of solar power’ or something similar retrieves a large number of solar company articles talking about things like local jobs, less pollution, less fossil fuel generation, blah, blah, blah.
While there may be some truth to this, mostly it is an appeal to the tree-hugger in you to entice you to sign a contract.
To be clear, as outlined in previous posts, we installed our panels to help ourselves. We are lowering future budgeted costs to reduce the amount spent from drawing down retirement savings on these costs, perhaps if we so choose, to spend them on something else. When was the last time you heard someone express joy upon paying their electric bill?
This is nothing more than the invisible hand at work. However, as with most tax policy, the government has deemed it socially desirable to reward higher earning taxpayers for doing something they feel benfits society, in exchange for reducing their taxes. In effect, the government has added a few fingers to the invisible hand.
The combined Federal, State, and County purchase incentives account for over 42% of the purchase price for the system we bought. The combination of electric bill reduction to near zero (about $100 a year for the meter) plus the potential for $600 – $800 per year in income for the next 25 years, justifies the purchase in and of itself.
About that $600-800 number. This comes from estimating our production overage at 2 MWh per year (worth about $176 at today’s rates) plus the current SREC rate of about $50 per MWh * 12 MWh output estimated per year generates this yet to be proven number. Note that all items here are variables subject to change, so the cash flow is also likely to be volatile.
When I first started journaling this effort, SRECs were only worth about $15 each after brokerage fees. The Maryland legislature has since mandated an increase in renewable energy incrementally over the next decade or so, including an increasing amount from solar. The day the legislation passed, the SREC market in Maryland jumped to $55 ($50 net to owners after the brokerage fee). We will probably generate about 12 MWh per year.
SRECs trade in a marketplace subject to supply and demand. The utility companies buy SRECs in lieu of producing their own solar power – this is the demand. The supply of course are the rooftops (and any solar farms communities might deploy). If this legislation results in a large increase in deployed solar panels in Maryland the market price of SRECs will drop accordingly.
The paragraphs above explain how the government is incentivizing high earning taxpayers to install solar. That does not really answer the original question, what is the social utility of going solar – it just describes the economic price the various government units are willing to pay.
To understand the benefit to society in real terms, understand this very important fact about electricity – it is used immediately upon generation.
You may read about some battery storage systems in Australia or some water pumping schemes to move water uphill when demand and rates are low and flow it through generators when rates are high.
These storage or time of day arbitrage efforts are real but to date represent a small percentage of electricity generation. For the most part, as of today, electricity is generated and used. Or not. If the electricity is generated and not used it is for the most part wasted.
To complete the thought we will use a traffic analogy. Picture any of the various loops (beltways) that surround many of our cities. They may be 6 lane in some places, 8 lanes in others, maybe even more in some larger cities. No matter how wide they are, there is still a time of day when traffic is very dense and moves very slowly.
There is typically other times of the day (or weekends and holidays) when these roads are under used. An accident can realy mess things up, especially at rush hour. (Why do they call it rush hour anyway? – no one is moving very quickly – an oxymoron if there ever was one!)
It is impossible to build these roads to perfectly accomodate demand. Some highways are adding time of use tolls, HOV lanes and reversible lanes to accomodate and/or shape demand. These can help, but there are limits to what they can accomplish.
Electric utilities have their own time of day usage patterns. Demand rises as people rise in the morning, levels off as they go to work, increases again when they get home, and lowers greatly when everyone goes to bed.
Just as it would be economically and practically foolish/difficult to build enough highway capacity for the worst rush hour traffic, it is similarly economically and practically foolish/difficult for the electric company to build enough capacity to satisfy the highest demand.
Electricity plants (whatever their source) are expensive. So is electricity storage – maybe that will change but it is true today. So building enough to supply at the highest demand results in either:
generation of electricity that is wasted when no one wants it, or
building plants that sit idle much of the time.
Neither option is smart.
Instead, utilities generate enough of their own power to satisfy some reasonable amount of demand and then buy the rest of the electricity from external suppliers as needed. This is known as the spot market.
Spot prices can vary – as mentioned above, unused electricity is wasted. So when the larger market (beyond the local utility) is not demanding much electricity from external suppliers, the spot market is inexpensive.
Given all of this information, here are some ways that rooftop solar systems help utilities and their neighbors:
to the extent we are using our own electricity at times of high demand, the utility has that much less it needs to supply and therefore that much less it needs to buy on the spot market at high prices.
if we are generating more electricity than we need at times of high demand we are effectively supplying our neighbors with our surplus, as it goes back through the net-meter, reducing the amount utilties may have to buy fromthe spot market.
to some extent, these first two factors must be reducing the load on the wires from the nearest substation to our neighborhood, hopefully reducing the likliehood of transformers or other components failing.
to some extent, these first two factors are also reducing the likelihood of brownouts and blackouts, assuming they reduce the peak demand on transmission components.
in some markets the utilities can sell excess capacity to the spot market and will do so when the spot market is buying for a price higher than what they sell it their customers. So the electricity generated by rooftop solar frees up additional capacity for them to sell. This helps the utility make more money, which benefits its shareholders, but should have some impact on keeping rate hikes for customers down, either by amount or by frequency.
This line of reasoning supports something we did not do, but something utilities should encourage: installing panels on the west side of a house. One counter-argument to my reasoning above is that solar panels produce less as the sun is setting, when demand is rising. This is of course specific to certain times of the year.
If the sun is not setting until 8:30 or later, this is past the surge point, although to be fair, solar power is dropping off for me at 5 PM, though it continues at a lower rate until close to sunset.
There are two factors at play in our situation:
no west facing panels
generation 1 solar system – we have a large tree on the west side of our house that is close enough and large enough to provide the original solar power – shade, and lots of it. So as we pass 5 PM the ever lengthening shadows cover not only the west side of my house, but the southern roof where my panels are.
During times other than the peak summer days, when leaves are not on this tree and the sun sets more to the southwest, we are still providing power when people come home from work and at a minimum, we are not contributing much, if anything to the increase in demand.
In summary, install solar if you benefit economically from it. If enough people make this selfish decision, the community as a whole will benefit. All the other arguments about fossil fuel reduction, cleaner air, etc. are nice, but are not germane to helping you achieve your financial goals.
This is an ongoing set of posts about our experience going solar. For those of you reading this series for the first time, if you would like to start at the beginning, here is the link to Part 1. BTW, I have not figured out how many posts there will be. I keep figuring out more things I want to say about this.
The story so far: we signed a contract on 2/8/2019 and went operational on 3/26/2029. On June 14, 81 days in we achieved two interesting milestones.
But we will get to these milestones in a minute. First great words of thanks for the support of energysage.com for playing the part of educator and honest broker. (This link contains an affiliate code that pays me, at no cost to you, should you choose to use it).
Second, many thanks to the great folks at Solar Energy World, who sold us our system and have done a stellar job supporting it.
You may wonder what the big deal is regarding post go-live support?
They did all the paperwork they had committed to and they did it right. I should also thank BGE, our local utility and Anne Arundel county, as everyone cooperated to get this project operational in less than seven weeks.
I am also receiving communication from Sol Systems, the folks who are tracking and will be brokering our SRECs (Solar Renewable Energy Credits – see previous posts). The timing was helpful as the period we went live was sunny and very solar productive.
There is a web site and a phone app I use to monitor the production. They set me up with this even before the panels were live. The app depends on communication from the inverter. In effect a cell phone is installed in the system, though just for transmitting data (and receiving software upgrades).
One of those upgrades happened about a week after installation and caused an issue. The system would stop reporting information for hours at a time, sometimes more than a day. The folks at Solar Energy World maintained contact with me the whole time. They came to the house a number of times, even on the weekend to reset the system and get it functional again.
To be clear, there was never a malfunction with the panels. They never stopped producing energy and sending it to my house and sending the excess back through to BGE. They just stopped reporting what they were producing. Really they just stopped reporting the hourly/daily/monthly statistics. The actual production meter, located inside the unit, never stopped working. The problem for me was tracking what was produced.
I was not the only person experiencing the problem, other customers were as well. Solar Energy World had a meeting with the inverter manufacturer and it turned out to be a software bug. After a few tries, they finally came out with a stable version. The maintenance support guy came and installed it on my system and we have been getting data steadily ever since.
This post-installation support, resetting my system several times, and keeping in touch with me and getting a stable version installed was why I chose a full service local company. I feel like they did a great job.
Now, about those milestones
Check out the Lifetime energy box in the upper right corner of the picture above – sometime June 14th we passed 3 MWh of production! This was day 81 of operations. This was an important milestone in that this was the 3rd MWh this quarter and we should get paid for this a few months from now.
I wish this would scale. If we produced one MWh every 27 days (3*27 = 81), we would produce over 13 MWh per year. It is reasonable to assume that we will not produce as much during the winter months, when there is much less daylight.
The following picture shows our second milestone:
99005 – this means we have sent over 1 MWh back to our utility!
When we went live on March 26th, the meter read 00012. Since then we have produced more electricity than we have consumed. In fact, we have produced about 1 MWh more! (Read this like an odometer going backwards – from 00000, as we produced the next KWh, the meter went to 99999 – since then it continued backwards to 99005).
So some very simple, rounded math:
Total electricty generated by our panels in 81 days: 3 MWh Total electricity sent to our Utility in 81 days: – 1 MHh Total electricity used by us in 81 days: = 2 MWh (or 2000 KWh) Our KWh daily usage 2000/81 = 24.69 KWh/day
If we were to keep at this usage rate all year long we would only use about 9 MWh per year (24.69 * 365 = 9012). Of course the big air conditioning season is just ahead of us and we both like it cooler than most people, so our usage this summer will increase a bit.
On a humorous note, we just replaced the two light bulbs in our refrigerator (old ones were 40 watt each) with LEDs that are 1 watt each, but seriously, how often is the refrigerator door open?
Still, our rolling 12 months prior to panel installation showed us using 10.5 MWh per year, so maybe we will end up driving that down. This is one of those ‘time will tell’ items.
One last surprise
Our utility, BGE, pays any surplus production once a year in May. Since we went live March 26, our first billing period was through April 25th and we had a surplus of 446 KWh at that time. They sent us a check last month for this surplus:
In Part 2, Show me the Money, I predicted they would pay us less than retail for this electricity, as we were a vendor and they make money by buying low and selling high. I predicted this amount would be about .05/KWh or $50.0 per MWh.
As you can see from the check above, they paid us full supply retail, about .087 perKWh. This is motivating. The more we conserve, the faster the payback.
And finally, and proudly, here is our most recent bill, showing two months of no usage:
Electric bill first two months post-installation.
So 81 days in, I am a solid fan of our decision to go solar!
I have several thoughts on the next topic I want to write about:
The social utility of going solar (how it helps the neighbors and the utility company)
Some samples of daily graphs to show how much power we generate under different weather conditions
Some whimsical thoughts in the form of rewritten song lyrics about my changing attitude towards the weather. (this one may be the hardest)
If you have any ideas for future posts or other feedback, please leave some comments, or drop a note to tiedyeseniorfi@tiedyeseniorfi.com. Thanks!
In Part 4 I explained why we selected Solar Energy World as our vendor. This post is about the fantastic job they did end to end to get this system installed and operational. I tried to document each step and I am including the dates (where I can document them) to give you some perspective on how long a project like this can take.
Solar Energy World handled all steps of the process (except where a government person, e.g. an inspector or a utility person are required as noted below). This is not true of all solar power companies. Some of them consist of mostly a sales team with all other services, including installation, are contracted out.
The major steps occurred as follows:
WeSigned the Contract – 02/08/2019
agreed on a system and a price (with understanding that it might be modified when reviewed by the experts). In our case that was 34 300 watt panels.
payed the deposit (I used a credit card for the points)
Solar Expert comes to house, measures dimensions, takes photos, prepares report -02/19/2019
In any solar installation project the salesperson does the upfront work to qualify the customer, answer questions, create a preliminary proposal which is encapsulated into the sales contract and close the deal. From that point on a team takes over to shepherd the process to completion. It is possible for example that the specific installation details may need to change based on a number of factors and the contract indicates that a review will take place, a report will be prepared and a final sign-off will be requested from us.
The first person on the scene is someone who begins the process of validating that the number of panels agreed to in the preliminary design is valid and realistic. For this to occur, this person has to take some measurements. A sample from the report that was prepared based on these measurements is shown a few paragraphs below.
In our case, the guy who came had a great sense of humor. He measured the obvious south-facing roof section over our bedrooms and used a special camera that gets a roof based perspective of the sun – it is used to identify possible shade issues and to project how much sun falls on the roof at different times each year. He climbed onto the roof and took the pictures from several places at several angles.
When he was done, I asked if he was going to measure an additional section over my garage. He said that would be $100 extra. He waited a second, then grinned big. Almost had me.
The data collected by the guy on the roof is fed into a software program that prepares a report which is used to validate or modify the proposal mentioned in the contract.
The report that came back for us suggest that 34 panels was just about the right amount to cover our electric bill. My salesman reminded me that the software they used could not tell dark shade from light shade, so the results were probably a bit pessimistic. (A few more paragraphs below you will see one of the photos from this report.)
Dark shade? Light shade? To help explain this, let me propose this thought experiment: suppose I drape a towel over a solar panel – how much electricity can it generate? If you said zero, you are still with me. That would be dark shade. No light gets through.
Now if I take that towel and move it 100 feet up and towards the sun from my house, how much electricity will the panel generate? I don’t know, and neither does the software. Clearly the sun will move through the sky and light will filter around the towel, such that some light is always hitting the panel. That is what I am calling light shade.
While it may not produce the most it could if the towel were not there, it will always produce something. So the installed system is likely to outproduce the amount predicted by the report.
There are trees at the edge of my yard (about 50-100 feet and further from the house) that are perhaps as much as 80 feet or more tall. Some are thin scraggly pines and some have seasonal leaves. So depending on how high the sun is in the sky and whether it is summer or winter, there will be some filtering of the light, but most of the light should still get through. (I am finding this to be true by the way).
The contract estimated the proposed system would produce 9.7 MWh per year but after review, the estimate was upped to 10.649 MWh. I think they are still under but time will tell. As I showed in Part 2, we used about 10.56 MWh the twelve months prior to installation, so the proposed installation appears to cover us right at 100%.
Following is one example of the perspective from one part of my roof, showing how much sun should fall throughout the year and the effect of the distant trees – the yellow area is the sunshine, the green area the shade:
View of the sky from my roof and estimated solar amount throughout the year, as affected by shading. 100% would indicate no shade.
Contract is finalized, approved – 02/23/2109
I reviewed the report and approved the final design .
Permits, other paperwork filled out
There is a lot of paperwork that must be done prior to and even after installation and the folks at Solar Energy World did a great job. I don’t show dates for these items as they occurred through the life of the project, but the first two below were needed for installation work to begin. Some Items of note:
Construction Permit
Interconnection Agreement – for our utility company
Tax paperwork (for both state payment and county tax property tax credit)
Final inspection
SREC agreement – for payment of Solar Renewable Energy Credits post installation
Installation 03/08/2019 – they tell me it was record time. A slot opened up, they had all the equipment ready, they called me Thursday March 7, and the installers were on my premises on Friday, March 8th. Normally it is a month or more from final approval before installation begins.
The installation team consisted of 4 people. Two were up on the roof installing the panels and two worked on the inverter and all the electrical connections.
The guys on the roof were tied into harnesses and ropes they had secured to the roof at the outset. Everything about this installation was done with safety in mind. Nothing was left on the ground. This was an end-to-end professional job.
Note the safety harness – no one is falling off this roof!Hooking up the electronicsThe inverter, shutoff, and connection to our meter.
Testing, validation 03/11/2019 The installation is supposed to take one day but it snowed a small amount that afternoon so they were not able to test. They returned on the 11th to do their testing, which just took a few hours.
Final Payment – 03/12/2019 – I received a notice that my installation was substantially complete and I needed to make my final payment, which I did. Once that was received, Solar Energy World contacted my county to do the inspection.
Inspection – 03/20/2019
The county inspector confirmed both the outside installation and the hookup inside my power panel in the basement.
For those of you who may be curious about how the inverter is connected to our power panel, the inspector explained to me how the 4 wires that came into this panel were connected (1 ground, 1 neutral, and 1 each to the two 100 amp feeds coming in from the utility company).
More importantly, he passed the inspection!
Utility notification – 03/20/19 Solar Energy World sent the completed paperwork to our utility company.
Meter Installation – 03/25/19 – around 7:30 am we heard a knock on the door. Our utility person was on our porch holding the new meter. Amazingly, he was able to swap out the old meter with the new net-meter without us losing power. He set the new meter at 00000.
I asked him if I could turn the solar panels on when he was done – not yet, he explained – they still had to set up the billing properly at the utility company. They had to close out the old reading for a final bill on the old meter and start us on our new billing cycle with the new net-meter. This would happen after he returned to the office. In the meantime, I am chomping at the bit – we are this close (picture me holding my finger and thumb about a quarter inch apart).
Notification to turn on – 03/26/19
The next day I received an email permitting me to activate the panels. I was busy at work and did not notice it for several hours. When I finally read the email, I rushed home, asked my wife to come with me and together we threw the cutoff switch to the on position. By this time the meter had advanced to 00012, meaning we had used 12 KWh on the new billing cycle.
It was a sunny day and even though it was about 1:45 PM, we still got about 20 KWh that first day. By the next day we had rolled the meter back into the 99999s and have never looked back. We have been producing more power than we have been consuming most days since.
In my next post I will talk about some post-installation operational challenges and will show a picture of the completed system.
