Maryland Solar Co-op FAQs

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1 Solar Basics How do solar panels work? Photovoltaic cells convert the energy from the sun into electricity and are arranged together to form solar panels. The inverters then convert the electricity generated by the panels from direct current (DC) to alternating current (AC), in order to power your house. Residential solar systems are almost always connected to the power grid. When the sun is shining and you are not using too much power in your house, the excess energy generated by your panels is sent to the grid. When there is not enough sun to meet your energy demand, you take energy from the grid. By connecting to the grid you are ensured that you ll have power to your home at night or on cloudy days. What makes up a solar system? Photovoltaic (PV) systems are made up of photovoltaic cells, AC/DC inverters, a racking system, and sometimes a battery for energy storage. PV cells PV cells are interconnected to create modules and panels. The most frequent panels for residential installations are crystalline silicon panels. The number and size of panels on your roof will depend on your electricity usage and, more importantly, the size of your roof. Inverters - There are two types of inverters: central inverters and micro-inverters. Central inverters receive all the energy generated by the panels and convert it to AC, while micro-inverters are connected to each panel, converting the electricity from DC to AC immediately. Central inverters are usually located at ground level near the main electrical service panel, and a wire that connects your panels run from the roof to the inverter. Central inverters optimize energy conversion for the entire system, but if one panel is shaded it can bring down the performance of the rest of the system. Micro-inverters, on the other hand, work individually with each panel and if one panel is shaded it does not impact the production of the other panels. Micro-inverters help maximize the production of each panel and can increase power production by 5 to 25% compared to central inverters. Some micro-inverters offer online monitoring that allows you to see how your panels are performing. More detailed info about inverters is available here. Racking system How your solar system is mounted on your roof will depend on several factors. There are a number of different racking system options, including ballasted systems, beams attached to the walls, and others that connect to struts on your roof. Installers typically decide on the best racking system to use based on your roof type and structure. What's the life expectancy of this system?

2 The life expectancy of a solar panel is 25 years or more. There is very little that can go wrong with a solar panel short of physical damage. In fact, all panels pass Jet Propulsion Labs Block V tests, which are: o Withstanding 125 m.p.h. wind loading; o Surviving one inch hail at terminal velocity (52 m.p.h.); o Thermal cycling at temperatures beyond what you will find here on Earth (short of tossing them into molten lava!!). There are no moving parts to wear out and solar panels don't consume any fuel. As long as there is enough light to cast a shadow on the ground, they will produce electricity. They are so reliable that almost all panels come with 25-year warranties. What are the warranties? The panels have a power production guarantee for 25 years, while the labor is warrantied for 5 years (this can vary depending on the installer). The inverters are guaranteed for at least 10 years. What are the operations and maintenance requirements for solar systems? Solar systems have no moving parts, so they do not need much maintenance. Occasionally squirrels will chew on the wires that run from the panels to your electric box, but this is easy to repair if it does happen. Because Maryland gets a fair amount of rain each year, you do not need to clean or wash your panels. In the event of snow, we recommend you do not try and remove snow from your roof. Because the panels are dark, they absorb heat and will melt the snow from your roof quickly. Your panels have a lifetime of years and will remain under warranty for 25 years. If you opt to use central inverters, which are warrantied for 10 years, may need to replace them after years. We don t anticipate this being a large expense for you in the future, as central inverters currently cost less than $1,000 and the cost will fall significantly in the coming years. Micro-inverters, while a bit more expensive upfront, increase system production, and are warrantied for 25 years. What is net metering? With solar on your roof, some days you use more energy than you generate. Other days, you generate more energy than you use. Fortunately, you ll always get credit for the electricity that your solar panels produce, even if you re not using the electricity at that moment. The reason is because we have policies that allow for net metering. Net metering is the electricity version of unlimited roll-over cell minutes. It allows residential solar energy generators to offset their energy consumption with their energy production. Essentially, when your solar panel is producing electricity, your electric meter runs backwards. When you re using lots of power your

3 electric meter runs forward. At the end of the month, your final electric bill is your total usage minus the electricity that your solar panels produced. Monthly Electric Bill= [Total amount of electricity used] [Electricity produced by solar panels] In MD, net excess generation (NEG) of electricity (you produce more electricity than you use) is generally carried over at the retail rate for 12 months. Compensation for any NEG remaining in a customer s account after a 12-month period ending in April of each year is paid to the customer. Do we get enough sun to go solar in Maryland? Absolutely we receive almost as much solar radiation as Miami does annually. The National Renewable Energy Laboratory collects and publishes data on the average solar radiation for the entire US and we receive plenty of solar in the County. What happens if the grid goes down? Grid-tied or interconnected solar PV systems typically do not have battery back-up systems. If a power outage occurs, your solar PV system will automatically shut down to protect utility workers. Once the grid comes back online, your solar system will also turn back on. Is solar right for my home? We will need to check the roof of your home for structural soundness, orientation to the sun, shading, and other details. Unfortunately, solar doesn t work for every situation. Even if your home isn t in a good spot for solar, though, we ll keep you updated as new options become available. Should I repair/replace my roof first? We typically suggest that if you plan on replacing your roof in the next 5-10 years that you do so before/in conjunction with a solar installation. Since the panels will last at least 25 years and it may cost several thousand dollars to remove and re-install the system, it s best to have a roof underneath your panels that will last as long as the solar system itself. The panels will actually help extend the life of your roof as well, since they will take the beating from the elements instead of your roof. The best time to go solar can actually be when you re replacing your roof! This is because part or all of the roof replacement costs may qualify under the 30% Federal Tax Credit, though you should talk to a tax professional about this. In the past we ve seen roofers and installers that anchor the solar system into the new roof, so that the roof acts as the supporting structure for the solar system. Talk with your roofer about coordinating the solar installation with the solar installer. How large should the system be to power a typical house? It depends on how much energy you use and how big of a system you end up buying. Most people are limited by the size of their roof. Generally, a system on a typical house will produce about 30-60% of your

4 electric needs (assuming an average consumption of 850kwh/month). When you get your customized proposal at the end of this process, you will get a bid that maximizes the amount of solar that fits on your roof and supplies up to, but not more than, 100% of your average use. Your proposal will also include a projection of the amount of electricity your system will produce. These projections are very accurate they are based on several decades of testing by the U.S. Department of Energy. Who installs the systems? Once we have about 25 people signed up for the co-op, CPN will issue a request for proposals (RFP) on behalf of the group. This RFP will request that area installers provide bids to the group. The Co-op will then form a Selection Committee to review the bids and select a single installer to complete all of the projects. Anyone in the Co-op is welcome to participate in the Selection Committee. CPN will provide technical assistance throughout the process, but the final installer decision is made by the Co-op. Can I do solar hot water too? Unfortunately the co-ops are only for solar electric (PV), not solar hot water (thermal). Co-op Basics What is a solar co-op? A co-op is when a group of neighbors work with community partners to install solar electric systems together. By using the collective buying power of the group, each participant saves on the cost of their system. The group will go through the process of purchasing solar electric systems together. Through a competitive bidding process, the Co-op will select a single contractor to install systems on all of the homes. Each participant owns their own system and will sign their own contract with the installer. Who are Community Power Network and MD SUN? Community Power Network is a DC-based nonprofit that helps communities go solar. We got started in 2007 when a group of Mt. Pleasant neighbors got together and formed the Mt. Pleasant Solar Co-op to go solar as a group. Since then we ve been organizing neighborhood solar co-ops, doing policy advocacy, and helping other groups get started around the country. Our goal is to help all communities in the country harness the benefits of renewables! We have lots of technical experience with solar in the region and currently run state programs in DC, MD, VA, and WV. MD SUN is a state project of Community Power Network and works to extend the benefits of solar power to every part of Maryland and to all residents. We work through grassroots organizing, policy engagement, and ratepayer advocacy.

5 We assist a diverse array of homeowners, organizations, and others in Maryland to save money through solar power by providing free technical assistance and other organizing support. Our mission is threefold: 1) Help Marylanders start their own community-based renewable energy projects by providing resources, technical assistance, case studies, and connections to other practitioners. 2) Help citizens influence policy by providing support for strategic planning, fundraising, list building, petitions, and other tools. We share success stories and connect people to experts. 3) Create a network for existing community groups to connect, collaborate, and grow. In addition to providing up-to-date information on community-based renewable energy, we also offer a set of tools and resources for MD SUN partners to use. Why should we participate in a solar co-op? Going solar as a group has many advantages: 1) Forming a group with other members of your community allows you to pool your collective purchasing power and leverage a competitive bidding process to receive the best possible price and terms of installation which best fit your group s needs. 2) By grouping participants in a particular area together, the installers have less travel time and fewer costs, resulting in a better price for the group. 3) Coming together as a group means we have more negotiating power with installers and can get a better price. 4) Understanding all of the details of solar and solar financing can be confusing. By going through the process as a group you can get your questions answered and feel confident that you re getting a good deal and a quality solar system. 5) CPN has a lot of experience helping people in Maryland go solar. We also aren t affiliated with any specific installers. Our role is to serve as a consumer advocate, so we make sure that you get the best deal possible. How does this co-op purchase work?

6 Step 1 and 2: Attend an info session and join the co-op The first step is to attend an info session and learn more about the co-op. At the meeting CPN will explain how solar works and answer any questions you might have. Those who are interested in moving forward then sign up to join the co-op via an online form. This signals your interest in going solar, but is not a binding commitment to participate in the bulk purchase. In this first phase, the goal is to recruit at least 25 co-op members. Step 3: Get a Roof Review Once you sign up via the online form, CPN does a preliminary screening of your roof via Google Earth. This is to see if you have any shading from trees or other structures, the size and shape of your roof, and its orientation towards or away from the path of the sun. If your home isn t a good fit for solar, CPN will let you know. Steps 4 and 5: Solicit Local Bids and Select an Installer Once the group has recruited about 25 participants, CPN will issue a request for proposals (RFP) to area installers on behalf of the co-op. The co-op will then form a Selection Committee to review the bids and select a single installer to complete all of the projects.

7 Step 6 and 7: Get Individualized Proposals and Sign Contracts Once selected, the chosen installer will reach out to all participants to schedule a home visit. That installer will meet with each participant in order to provide an individualized proposal that lists the size and cost of a solar system for your specific house (the cost will reflect the group discount). If you decide to move forward you then sign an individual contract with the installer to have the system installed. Step 8: Systems Installed Once you ve signed your contract with the installer, they will begin filing the permitting and interconnection paperwork with the government and the utility. After the paperwork is approved, the installer can begin installing the panels on your roof. Installation typically only takes a few days! Step 9: Celebrate!! Once the co-op members have had their systems installed we will celebrate with a party! Paying for Your System What are the available incentives for solar? Besides the environmental incentive of owning your own renewable energy system there are a number of financial incentives that make solar PV affordable. 1) Electricity savings: Over its year lifetime, a system will generate thousands of dollars worth of electricity. You will be connected to the grid and net metering will allow you to seamlessly use your own power or grid power whenever your own is not available. Net metering allows you to roll over any excess value you produce. The value of the electricity you produce depends on the size of your system and the price of electricity you are replacing not how much you use. 2) Federal Tax Credit. You get back 30% of the total cost of the system BEFORE other incentives. You still have to pay up front for the system but when you file your taxes you will receive a 30% CREDIT (not a deduction) from the federal government. 3) Solar Renewable Energy Credits (SRECs). The easiest way of thinking about this is whenever you generate solar electricity from your system, you are also generating an abstract green value of your electricity. Through law and regulation, this abstract concept becomes worth something called an SREC. Every time your system produces 1,000 kwh of electricity, you get one SREC. The value of SRECs are determined by a number of factors. These include state laws, market supply and demand, and penalties to utilities. When demand is high, so are SREC values. On the flip side, when supply is high, SREC values decline. With the state laws and penalties to utilities as

8 a guide, SREC prices fluctuate on an open market, just like the stock market. Check out our info sheet on MD SRECs on the co-op web page. 4) Solar co-op discount. Participating in the bulk purchase lets you save on the total cost of the project. The installer gives you this discount upfront just for participating in the group. What exactly is the cost of going solar? Here is a breakdown of the cost of a solar system, using example 3kW and 5kW systems. Your price may be different depending on the size of your solar system and whether or not you need to finance the system. Example Cost, not actual bid 3kW System 5kW System Cost before incentives $13,500 $22,500 Bulk Purchase Discount (~ 1/3 of system cost) [-$4,500] [-$7,500] *Solar Renewable Energy Credit Upfront Payment [-$900] [-$1,500] Initial upfront cost $8,100 $13,500 Federal tax credit (30% of system cost) [-$2,700] [-$4,500] MD Residential Clean Energy Grant [-$1,000] [-$1,000] Estimated electricity savings in one year [-$465] [-$775] Total Cost (after one year) $3,935 $7,225 * Based on Sol Systems February 2014 pricing. We like to think of solar power as an investment like any other. You should determine the upfront costs, calculate the benefits, and figure out how long it takes to see a return on your investment. Turns out that solar is a great bet. Your solar investment provides a better return than most savings accounts or CDs, typically returning 5-6% through utility savings. The value of your system will increase as electricity rates rise, because the upfront cost of the system will never go up. Is there a cost to participate in the co-op? There is not an additional cost to participate in the bulk purchase program beyond the cost of purchasing your solar system. CPN charges the installer a $500 development fee per completed project, but this fee is paid by the installer, not you (the homeowner). It also typically does not impact the cost you pay for solar, since working with the co-op means installers save a significant amount of money on advertising and recruiting new clients. They then pass those savings onto the group. CPN is also 100% installer neutral. Our role is as a consumer advocate, so we do not give preferential treatment to any specific company.

9 What are the current expiration dates for the Federal Tax Credit? The Federal Tax Credit is scheduled to expire at the end of For more information on all incentives the website is exhaustive and has links to the IRS code and all legislation. What are my financing options? The prevailing opinion is that in the long run, it s financially better to pay for your system up front and reap the benefits over the long term. Many installers offer financing opportunities, low interest loans, or can help you secure a home equity line of credit to cover the upfront cost of your system. However, if you re not able to do that, there is another option. It s commonly called leasing but what it really is is a power purchase agreement (PPA). With a PPA, a solar company will install a solar system on your house. You do not receive any of the incentives described above. No grant, no tax credit, no SRECs. But, you also don t pay anything for the system and the system is owned by the company that installed it. You then sign a year contract with the company agreeing to buy the energy that the solar panels produce. You buy whatever your system generates and whatever else you need you buy from your utility (you get a split bill). For example, right now PEPCO charges about 14 cents/kwh for electricity, while a PPA company will charge you about 9 cents/kwh. But, that 9 cents/kwh will likely increase over time depending on the escalator that is included in your PPA contract. Typically the price increases at about 2-3% per year. One major advantage of a PPA is that the company is 100% responsible for the equipment. Depending on how you think energy prices will go and whether you have any savings the economics of a PPA sketch out a little bit different for each individual. If you can t take advantage of the tax credit the PPA could be the perfect option for you. Overall, it s is usually a better rate of return to purchase a system if you have the upfront cash available, but going solar via a PPA is not a bad decision. What if I have a shady roof or live and apartment or condo? Your options are presently somewhat limited in Maryland. If you have a common area that is on its own meter, you could install a solar system just for the common area. If you have a single boiler in your condo for hot water, your condo association can install a solar thermal system. A company called Skyline Innovations that will install a system at no cost and then charge you for the heat the system generates. This cost is purported to be less than gas/electricity. Legislation that would have created a pilot program for community solar in Maryland was defeated in committee in Annapolis this past March. Despite this setback, MD SUN intends to continue fighting for the right of tenants, people with shading roofs, and those renting to homes to share in the benefits of solar power in our state.

10 In the meantime, check out our community financing solar page. If you re interested in getting help in developing a community solar project, we would love to work with you. If you are interested in supporting community renewable energy legislation in Maryland, please contact us at solarteam@mdsun.org and share why you support community solar. We greatly appreciate any support in our future efforts to pass the common-sense legislation in Maryland that has already been demonstrated successfully in other states. Have more questions? Check out MDsun.org and sign up for the MD SUN listserve. Chances are someone on the listserve has already had your question so you might already find the answer by searching. If not, you can post it and within minutes a member of the group will probably reply. Of course, you can always us your co-op s address, or at solarteam@mdsun.org.