When we moved into our house on Long Island in 2013, we knew that we eventually wanted to go solar, but knew very little about it.  What we did know was that Long Island is blessed with one of the highest electric rates in the country (thanks in part to our six billion dollar dormant nuclear power plant), and that we were tired of paying bills occasionally as high as a car payment for one of the most basic needs of modern society.

As it turned out, what we didn’t know, and couldn’t know, could fill volumes.  I will cover our story along with all of the information we learned along our one year journey to having solar installed in the following pages.

In the Beginning…..

main_p4460The first thing we did after settling into our house was to identify areas where we could improve our energy efficiency.  Before considering solar, it’s a good idea to replace inefficient electronics like light bulbs or ancient appliances.  Literally days after moving in we replaced our thermostats with wifi enabled ones, and swapped out every incandescent bulb in the house with CFL’s or LED’s.  Our home has a considerable amount of overhead lighting, and the energy savings were noticeable immediately.  Replacing our recessed lighting with LED retrofit kits similar to these saved us money on electricity, and had the added bonus of allowing me to seal up the cans that were leaking cold air in the winter and hot air in the summer.

Next we called our power company for a “Comprehensive Home Energy Audit.”  This is a free service offered by many power companies.  A technician will come to your house and thoroughly check your insulation, test your heat and hot water efficiency, test your AC units if you have them, and using what’s called a blower door test (putting a massive fan in an exterior door to create whole house airflow) they can identify air leaks throughout the house.  I found the comprehensive part to be a little misleading, because I assumed they would also test my electrical systems to identify energy hogs, but they left that part to me.

A few days after the audit, I received a packet in the mail telling me my home’s scores, potential problem areas, recommended fixes and the name of the contractor that would be contacting me about resolving the issues.  Despite the audit not being completely comprehensive and it boiling down to a sales tactic, I highly recommend it because it’s free and it will teach you a lot about your house.

Because the audit didn’t cover our electricity usage, I ordered a Kill-a-Watt, which allows you to plug in any device that uses a 110V outlet (it doesn’t work for 220V appliances) and test its power consumption over time.  I went from outlet to outlet trying to find power hogs and we were shocked to discover that our always on desktop, with its 23″ monitor, 5.1 speakers and external hard drives was drawing more power than our entertainment center and kitchen combined!  This one device was costing us roughly $20/month to sit idle more often than it was being used!  Simply setting it to sleep after 30 minutes of inactivity has paid for the Kill-a-Watt ten times over.

The Solar Saga

In March of 2014, still knowing very little about solar, we contacted the first company.  It was a local company that offered both financing and leasing and they sent a very patient and helpful salesman to take a look at the house.  This was our first education in solar.  The first thing that we learned was that our rear roof faces South-South-East, which is an excellent exposure for solar panels.  If, like me, you never knew anything about this, the goal of solar panels is to maximize their exposure to the sun.  This means having as little shade on your roof as possible, and while a Southern exposure isn’t required, it makes a world of difference.  Chalk it up to dumb luck on my part, because we never took it into account when we bought the house.

The salesman had been in contact prior to coming out, so he had a proposed system size and layout as well as price estimates for buying or leasing our solar system.  We went into the meeting wanting to finance the system, but he was clearly pushing the lease option.  If we leased, our electric bill would be 15 cents/KWh plus the fee to be hooked to the grid ($11 in my case), which would save us 9 cents/KWh.  Instead of paying a monthly bill to PSEG, we would pay a bill to NRG.  We would have the option to buy the system after 5 years, and the value would be prorated  to reflect the age of the system.  The cost per KWh would increase by 2% annually, we would have a 20 year contract, and the system would be installed free of charge without us even having to insure it.  We would not be eligible for the 30% federal tax credit, as that would be signed over to the solar company, but we would be able to use as much of the NY State credit as we could to pay our electric bills for two years.  The leased solar system would not be our property, it would not add value to the house, and if we sold the house the buyers would have to take over the contract.

If we bought the system, we would finance the whole thing with a “green” loan from a bank in Providence.  We only had to pay for any electricity we used above our production, plus the aforementioned fee for being hooked to the grid.  We would still get a minimum $11 bill from the power company, but in a perfect world that would be it.  We would pay the bank our monthly loan payment, which would be less than our existing electric bill, and when the loan was gone after 15 years, we’d just be paying the $11/month.  The costs would be fixed, the panels warrantied for 20 years, the work warrantied for life, and the inverter warrantied for 10 years.  We would have to make sure our homeowners insurance covered the system.  Since we would own the system, it would become a part of the house and could substantially increase the home value.

Both choices had their pros and cons but we initially opted to move forward with the lease, and we were sent the lease agreement within a week.  This is where things got complicated.  My first issue was that I had contacted another large solar company based in New Jersey and they had told me that their lease was 13 cents/KWh with a 2% annual increase.  Not only was it 2 cents/KWh cheaper, but this was when something important dawned on me the sun and the solar equipment cost the same no matter where you live, so why does the lease price change depending on where you live?  The short answer is because the lease price is based on your current electric rates with your existing power provider.  To check my theory, I spoke with a family member who was also researching solar, but in Connecticut where his electric rates were much lower than mine.  He told me the same company had offered him 9 cents/KWh with the exact same equipment that I had been quoted!  This was one big strike against leasing that would later go on to cause a few more problems.

The next thing I noticed in the solar lease contract was that there was a table outlining the value of the system after X amount of years.  This was the prorating table I had been told about, and I was very interested in it because I had been lead to believe that after 5 years I would be able to buy out my lease at a discount.  I was shocked to see that after 5 years they valued the system at its full original price.  If I did want to purchase it at that point, I would no longer be eligible for the state or federal tax credits because they would have been used up during the initial installation.  So in effect, I would be paying double what I would have initially paid had I financed the system.  That strike was damning and I refused to continue with the lease.  I asked for the bank information so that I could set up financing.

As I mentioned, the financing was through a bank out of Providence offering green loans specifically tailored for solar and geothermal installations.  The bank issues you two loans, one is an 18 month same-as-cash loan designed to cover the federal and state tax credits until you get the money back, the second is positioned as a HELOC or second mortgage.  If you’re not familiar with a same-as-cash loan, they’re those 0% interest for 18 months loans that you see in appliance stores or when you do various small home improvement projects.  Everything is cool so long as you pay them off in 18 months.  After that, it’s a 24.99% interest loan including all 18 months of interest tacked on the back end.  Scary, I know, but they work out from time to time so that wasn’t too concerning.

The real predatory loan turned out to be the HELOC.  Given its positioning as a second mortgage, it would come with PMI that could never be removed.  It carried a 7.9% interest rate even if you had excellent credit, and there was a 12% closing cost on the loan.  Over the course of the loan, I would have paid almost the entire federal tax credit value to this bank.  It seemed absurd.  It was absurd.  We decided not to do business with the bank or the solar company.

This sort of thing continued for a couple more months.  I had the company from New Jersey come out, but they didn’t like leasing and their financing was equally insane.  I had another Long Island company come out but they had the same lease deal as the first company and didn’t like to sell systems.  I remain convinced that NRG has set up what look like mom and pop franchises all over the US in order to become a massive power company using your property as its generator.

At one point I decided to call SolarCity.  At the time, SolarCity was really pushing leases.  I know they have different options now, but leasing was their big thing so that’s what we talked about.  During the first call, I gave all my information and they sized a system for me.  About a day later the representative called back to do a webex where we went over the size and the price.  I was given a login so I could go over the whole presentation again with my wife later that night.  It was all very professional and the rep was fantastic.  The price was horrific at a locked 17 cents/KWh for 20 years, but I figured we would negotiate before I moved on.

A week or so later a different rep called me.  This one was clearly less experienced than the first and had the air of a pothead who wanted to change the world but wound up cold calling people for solar.  We went over the terms again and he said they did have a second option where I could pay 15 cents/KWh but the price would increase a 2% per year.  At this point I had a friend in lower NY working with them and he had been quoted a much lower price, so I brought it up and added my zinger that the sun and the system cost the same whether I live at my house or 40 miles west of my house, and asked why my cost was nearly double that of my friend.

I’d like to think that my call was recorded for quality assurance purposes because the rep lost his patience with me quickly after that.  His curt answers and snotty retorts indicated that lease rates are largely based on your current charges.  So if you’re lucky enough to already have a low electric rate, you’d get a low lease rate.  Our call was abruptly ended when he told me that if I didn’t want solar and I didn’t want to save money that I should stop wasting his time and hung up.  I made a note to email Elon Musk about the quality of his service reps and moved on.

The Goldilocks Zone

My first day with solar...cloudy of course.
My first day with solar…cloudy of course.

I eventually found my way to a promising company called EmPower Solar based in Island Park, New York.  I knew I liked them from the first time I spoke with the salesman on the phone.  He was direct, he was honest and when I asked him about buying or leasing he said “You pay taxes right?  Why not get your own tax money back and put it into the value of your house?”

Because of my previous experiences I was standoffish at first, but the more questions I asked, the more it became clear I was working with the right company.  The financing was accomplished through the familiar two loan process.  There was an 18 month same as cash bridge loan (it seems very difficult to get around this), and a loan through New York State at a fixed 3.5% for 15 years.  There were no other fees on the loans and no out of pocket costs at all.  This is important to note because when weighing leasing vs buying, leasing companies will always mention that there are no out of pocket costs to get started.  Well the same goes for financing, unless you feel like making a down payment to lower your monthly payments.

A week after the initial visit, I agreed to have a team come out to take measurements on my roof.  This included making sure the proposed solar array would fit, and measuring solar exposure.  It took about an hour for this process.

After about another week I received a call from the installer to set up an appointment to have an engineer go through the house to make sure everything was up to code as well as take more specific information for the final system design.  He inspected our electrical panel, checked the location for the inverter and checked our attic to make sure it would support the weight of the solar array.  Like the previous team, he came and went in about an hour.

EmPower took care of all of the paperwork, but there were many, many papers that had to be signed and notarized by me.  Having a notary in my office made this easier, but I could see how this would be a huge annoyance for anyone that had to keep going to find one.  Aside from the seemingly endless paperwork, very little happened for almost three months.  Unfortunately this is just part of the process.  It takes a very long time to get approval from all of the parties involved, including the local government and power company.

Our solar system was installed over the course of three days in mid-June 2015.  For the first two months of operation, we had to pay the $11 base fee to be hooked to the grid, our loan, and a smaller electric bill.  This is because in New York, we sell 100% of our power to the electric company and buy back what we use.  The power we generate but don’t use is credited to our account and we can use it at a later date.  After two months, we had produced more than enough electricity to cover our usage and our bill was the predicted $11+loan payment.

Payback

It’s been a long journey, started in 2014 and finally ending in 2016.  I have to admit I was skeptical about the tax credits right up until the minute my accountant calculated my tax refunds.  I’m happy to report that they are for real, and we did get the full amount that we expected, enabling us to pay off our 18 month same-as-cash bridge loan.  As for our electric bill, since that second month we have never paid more than $11 + our loan payment and still have just shy of two and a half months of electric credit built up.  In the end, solar has been everything I had hoped and I look forward to many more years of cheap, clean energy…

Now I want a Tesla!