Home editor's blog on going solar Solar before the EV the way to go for many

Solar before the EV the way to go for many

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editors-blog-entry3We’ve written before about whether prospective solar-charged drivers should purchase a home solar system or an electric vehicle first.

If your goal is to cover 100 percent of your household electricity and 100 percent of a year’s worth of electric car miles with electricity produced by your solar system – or something pretty close to this, we concluded in our first installment that you probably would be better off waiting to buy a system until after you’ve had an electric car for about a year.

That’s because with an EV in place before you go solar, you can increase your home electric use to meet the 100 percent rules to which many utility rebates are unfortunately tied. Under many 100 percent rules, if you build a solar system that produces more than 100 percent of your annual household electricity use, you forego the entire utility rebate, which can cover 30, 40, 50 or even 60 percent of the cost of the system.

We’ve changed our mind on the advice we offered about nine months ago to wait to go solar until after you purchase an EV.

It’s not that simple.

Below we offer a range of things to consider when deciding whether to buy the solar system or the EV first. The scenarios we list are primarily aimed at prospective ‘100-percenters’ -- those seeking to power all of their yearly electricity home consumption and all of their annual driving in an EV with their home solar system.

Scenario No. 1: Wait to buy the solar system until after you get the EV

  • When to do this:
    If utility rebates are tied to annual household use – with 100 percent being the typical, but not only ceiling for solar system output – and you want to be a 100-percenter and cover 100 percent of your home use and 100 percent of your EV use with your PV system, you may want to wait until after you’ve had an EV for a year before you go solar. To check out the specific conditions of your utility rebate in terms of a system output cap, go to dsireusa.org and look up your state, and then your utility to see what rebates (if any) are available and what the specific terms of the rebates are.

Scenario No. 2: Buy the solar system first, then get the EV – the simple case

  • When to do this:
    If utility rebates in your area are tied to total system size (10 kW = a typical cap) rather than to annual household electric use, you definitely should strongly consider buying the solar system now. Utility rebates have a tendency to go down over time and you could lose out on substantial savings if you wait until EVs come to your area before you go solar. EVs are about six months away from arriving on much of the West Coast, parts of the East Coast, and in Arizona and in Tennessee.
    tesla-solar

    A Tesla Roadster under a solar carport. [Photo Credit: Tesla Motors]

    However, for the rest of the U.S., you may be looking at a one-and-a-half to two-year wait before you can purchase an EV. Waiting to go solar as rebates fall could cost you a lot of money. Take our example. When we signed a contract in July of 2009 with REC Solar for a 5.59 kW system, our utility, Xcel Energy, was offering a per watt rebate of $3.50. That rebate has since dropped to $2.75 per watt. Meanwhile, installation and solar panel prices have not fallen enough to make up the difference. To put things into perspective, our system – for which our out-of-pocket costs were around $8,500 – would have cost us nearly $13,000 if we bought the system after the Xcel per watt rebate dropped from $3.50 per watt to $2.75 per watt.

Scenario No. 3: Buy the solar system first, then get the EV – the more complex case

  • When to do this:
  • We don’t want to over-complicate things. Nor do we want to contradict what we just noted in Scenario No 1 above. This noted, if you want to be a 100-percent Sun Miler™, you may want to strongly consider buying the solar system before the electric car no matter what, even if a utility rebate for your system is tied to 100-percent of current annual household electricity use.

    Unfortunately, the complexity of solar systems themselves cloud the picture. The solar inverter, which ranges in cost from about $2,000 to $6,000 or more, is the most expensive part of a solar system. An inverter is tied to the system size and output. If you put up a system, say a 4.1 kW system which covers 100 percent of your current household electricity use and later -- because you want to be a 100-percent Sun Miler™ when you get your EV -- you need to upsize that system to say, 5.59 kW, or 6.1 kW, you may have to replace the inverter to do so. This will cost you thousands of extra dollars.

    Fortunately, with good planning, you might be able to get around this problem. For instance, you might be able to install an inverter with a 5.59 kW system that allows you to build out to a 7.1 kW system without the inverter having to be replaced. We did this.

    Micro-inverters are another, quite possibly better, option if you want to put solar up now and get the EV later. These are inverters attached to each individual solar panel. Not only do they help your system produce more electricity, but micro-inverters also allow you to build your system one panel at a time – without having to deal with complicated central inverter size issues.

home-solar-bank-moduleGrounding it in our own example
In Colorado Xcel Energy territory (with utility rebates linked to a 120 percent household, not a 100 percent, annual household use cap), and, given our own specific, but by no means completely unique household roof orientation situation (large, un-shaded, south-facing roof area) and energy use situation (comparatively low – because we really work at it), going solar before getting the EV clearly made sense.

Because we didn’t wait to go solar until we got an EV -- with the exception of the pricey Tesla Roadster, EVs are most likely at least one and a half years from arriving en masse in Colorado -- we may have hit the rebates at just the right time. The $3.50 per watt Xcel rebate we snagged coupled with the 30 percent Federal Tax Credit means our 5.59 kW system cost $8,500 out of pocket. Again, that same 5.59 kW system would probably cost us at least $11,000 now, and quite possibly as much as $13,000.

In addition to this, because our system is sized pretty much right at 120 percent of annual household use, we’re banking future Sun Miles™ – excess kWh that we’ll use to power our future electric car -- at an excellent clip. In just eight weeks, we’ve amassed 1,187 extra kWh of electricity. That’s enough to power an EV about 4,800 miles (1 kwh = about 4 miles). In fact, if you take 20 mpg and $3 per gallon as the baseline, in two months with solar, we’ve already saved $712 in future auto fueling costs!

Waiting doesn’t pay
Had we waited almost two years in order to get the electric car before the solar system, here’s what we would’ve missed out on:

  • a $3.50 per watt Xcel rebate;
  • two years worth of home electric savings equal to about $1,500;
  • banking what could be close to 20,000 Sun Miles™, or the equivalent of $3,000 worth of gasoline savings;
  • in total, about $10,000 worth of savings!

Our situation is not everyone’s. However, I suspect there are quite a few people who are in a similar position. And, if you are, our strong recommendation is not to wait on the solar system until you get the EV, but to buy it now – if you can afford it.

dgThe affordability question is one I haven’t really addressed much, and I don’t have space to do so here. However, if you look at the whole picture, you’ll discover that solar saves the majority of homeowners money. That’s because the money you invest in solar provides electricity for 20 to 30 years – with no electricity rate hikes. And the savings get bigger, and add up much more quickly, if your solar system doubles as a fueling station for an electric car.

If upfront costs are a stumbling point for you, you might be able to do a solar lease (leasing is now available in nine states in the U.S.). With leasing, you put no money down and typically pay less per month than you do now for electricity. Plus, you can realize a long-term electricity savings of tens of thousands of dollars over the span of 10 to 20 years.

In some cases it may make sense to wait two years, buy the EV, and then put up solar. In many other cases – probably most of them – it makes more sense to go solar now, and get the EV later. The two primary reasons for going solar first are: a) rebates are likely to be higher now than they will be later; b) you could be potentially banking extra kWh right now for future use in an EV you purchase later.

However, you’ll need to thoroughly assess your own individual situation, taking into account things like utility rebates, system output caps tied to those rebates, your roof orientation and roof space, your household electricity use, your willingness to reduce electricity consumption in your home, and finally, last, but perhaps, first, your overall cash flow situation, before deciding whether to get the solar system or the EV first.

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