How to Save on Solar Panels

Is it possible to use solar energy to power your home? Many homeowners are interested, but may not know where to start. Going at it alone can be a steep learning curve. “Community Solar” has grown in popularity as an alternative to installing solar on your own roof if for some reason that is not feasible. But there’s another option: partnering with Solar United Neighbors to learn about the advantages of solar energy and to score great deals on projects by buying in bulk.

Founded in 2007 in Washington, D.C., Solar United Neighbors has offices in 11 states and operates similarly in each one of them. The organization gathers together neighbors who are interested in solar energy and offers informational sessions followed by a well-honed process that allows you to save money by purchasing panels and installations as a group.

Savings for a Solar United Neighbors group can range from 10 to 30 percent off prices an individual homeowner would receive from installers. “That’s a rough range because there are a lot of factors involved based on input from the groups,” says Virginia Rutter, Minnesota program director.

So how does a homeowner get involved in the organization? They can gather together like-minded neighbors or tap local governments or nonprofits interested in energy while reaching out to Rutter’s Minnesota office, or one of the other state offices.  “We really rely on local partners with outreach to find interested people and bring them to our events and let them know about our group,” Rutter says. “We have an information session with me walking people through what rooftop solar is, what the technology is, how it works, how our process works, as well as the economics.”

Partners who have brought in homeowners include nonprofit organizations, environmental commissions, city administrators, universities, banks, and government agencies. After the information meeting, interested homeowners can sign up free to join Solar United Neighbors and request that Rutter provide a free initial review of their homes’ rooftops.

Using digital tools, she conducts the review and lets them know if they are good candidates for solar. Those with trees covering roofs may not be a good fit, Rutter says, but if conditions change, so might their ability to host solar panels. Those who have solar-ready roofs and interest in solar energy can then signal interest with the appointed timeline.

Rutter creates different groups geographically. Larger cities, for example, may have several Solar United Neighbors’ chapters in Minnesota, while a smaller city might have just one. Each neighborhood organization has its own user group where people can ask questions and raise issues. That’s part of the attraction. “You’re getting support from Solar United Neighbors and your neighbors,” Rutter says. “I’m there throughout the process to help if your installer is not calling back or if you’re not calling back your installer. I can help move things along and help people feel confident about the technology and the installer. We’re trying to create that solar community in the space, so we have events alter that bring together solar supporters.”

The Process

Once people express interest, a committee is formed to select an installer. A survey Rutter uses asks group members what they value most—examples include price, equipment quality, warranties, installer experience, and whether an installer is local. Those data points will be used by the selection committee to determine the final choice. “Some want more quality, some want the lowest price,” she says. “Installers want to meet the preferences of the groups—and not all select on price.”

Rutter then sends a request for a proposal to solar installers. Solar companies like working with United Solar Neighbors, she says, because clients are pre-screened and educated on solar energy and its benefits. The sales cycle is dramatically shortened, though Rutter tells installers the project is a “general opportunity” because participants still have the option of backing out. Installers must answer a series of detailed questions about pricing, service, hiring practices, local experience, whether they have worked in the community, and other matters.

Rutter calls references for installers and makes sure they are properly registered with state authorities. “We want installers to cover their costs and earn a profit, but we also want participants to understand how the prices were determined,” Rutter says. “We’ll ask if a homeowner has a particularly steep roof, or needs an electrical panel upgrade, or how much more a high-efficiency panel will cost.”

Each group member receives from installers an individual proposal based on their home size, electrical usage, and budget but based on the group price.  Then the selection committee will meet, often for three or four hours, to choose an installer for the group. The average size of a project is 5 to 7 kilowatts (kW), which, according to the National Renewable Energy Laboratory (NREL)’s PV Watts® Calculator, would produce about 8,000-kilowatt hours (kWh) per year in places like Minnesota and New York City, and about 10,000 kWh per year in Southern California.

Though cooperative buying saves money, not all groups save at the same rate. Groups preferring higher quality will likely save less overall but end up with systems that last longer and provide more energy, Rutter says. Generally, from 33 to 46 percent of homeowners who start the process in Minnesota and had solar-ready roofs end up installing solar, she says.

Those who leave the program may decide to choose their own installers, she says, or they may not have found financing. For others, the timing wasn’t right or life, basically, got in the way. “It’s involved, and there are things I can’t do for people,” she says. “It’s a variety of things.”

Participants who opt to make their own deals with installers are welcome to do so because it helps spread solar to more customers, she says. Solar United Neighbors offers a guide to customers to do it on their own. (Clean Energy Resource Teams, a collaborative statewide organization, also has a useful Solar Energy Technology Resources site.)

Homeowners who install panels still have a few years to take advantage of solar investment tax credits. This year (2019), the tax credit remains 30 percent, allowing homeowners to write off 30 percent of the cost of a solar project. In 2020, the credit drops to 26 percent, and 22 percent in 2021 before dropping to 10 percent. “As long as you have a tax appetite you can use the tax credit,” she says.

Once the panels are installed, the electricity generated is used by the homeowners, with any excess sold to local utilities at what’s called “net metering rates.” Customers “can send back energy to the grid they’re not using during the day when they’re at work, where it will be used for the benefit of their neighbors,” Rutter said. “We work in all the utility areas of the state. Installers can deal with all the technical details of selling excess power.”

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The Numbers

How much might a project cost? A 5 kW installation would likely cost around $15,000. The 30 percent tax credit drops the cost to $10,000. Savings on energy the first year will amount to roughly $750 – or much more. And net metering may provide another $450. Payback is 10 to 11 years, while over a 25-year period – the length panels last – saving and profits could reach $20,000, according to SolarNation.

“The energy production depends on location and the size of the installation, because the more panels you have, the more electricity you’ll be getting from them,” Rutter says. “Some participants eliminate their utility bills through the energy they generate for their homes and from net metering reimbursements.”

 In 2018, its first year in Minnesota, Solar United Neighbors helped 58 families in Minnesota go solar, creating collectively more than 380 kilowatts of power. The neighborhoods were in cities as large as Minneapolis and as small as towns in Kandiyohi County. “It’s exciting to see all these groups go solar,” she says. ”In Bemidji, we had 14 signed contracts, in Minneapolis 17, in Mahtomedi 25 and in Kandiyohi we’re still signing people up. Mahtomedi has 80 people! There is so much interest in solar across the state. These communities have all been very welcoming.”

The Bottom Line

Solar United offers a downloadable “Go Solar” Guide on its website, and the services are free to homeowners. So if you live in Colorado, Florida, Indiana, Maryland, Minnesota, New Jersey, Ohio, Pennsylvania, Texas, Virginia, West Virginia, or Washington, D.C., it’s worth checking them out—it could be a great way to kick start your journey towards producing your own clean electricity!

Article by:

Frank Jossi

Based in St. Paul, Frank Jossi is a journalist, editor and content strategist. He covers clean energy in Minnesota for Midwest Energy News and writes frequently for Finance & Commerce. His work has appeared in more than 70 local, national and international publications.