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Will Solar Make My Electric Bill Zero?

We all see the ads on Facebook, Youtube, or Instagram that promise “zero electric bills with solar,” or that homeowners can “eliminate their electric bills.” You’re probably wondering–is this too good to be true? Although it’s technically possible to design a solar electric system to reduce your bill to virtually zero, it’s a bad idea. Read along to learn why.

A solar electric system in Tucson

Solar is a great investment. But many solar companies are either misinformed or deliberately obscure how solar savings actually works in Arizona. They confuse consumers and set up unreasonable expectations of what solar electric systems will do.

A recent ad from Facebook making the claim you want to eliminate your electric bill with solar (information redacted to protect the guilty)

Net Zero Solar has been installing solar electric systems in southern Arizona for almost fifteen years, and several of our owners and employees have twenty-plus years of experience in renewable energy. We want to share the real deal on solar savings and solar sizing, so that you don’t get taken for an unexpected ride. 

We’ll share how solar saves you money, explain some strategies for properly sizing your solar electric system, and explain some reasons you might want a system to produce more electricity than you currently use.

How Solar Saves You Money

A home with a solar electric system operates in three different ways, depending on how much electricity you are using in the home, and how much the solar electric system is producing.

First, at night or during cloudy times, you’ll import electricity from the utility grid, and you’ll pay the retail rate for the electricity. For Tucson Electric Power, that retail rate averages about 15¢ per kilowatt-hour, or kWh.

When the solar electric system is generating electricity and you need that electricity in your home, you’ll use the energy from the solar immediately, and you’ll avoid buying expensive electricity from TEP. This is called “Self-Generation.” Depending on how many electrical loads you have on in your house, you may also import some energy from the grid at the same time.

Last, if you have “extra” electricity from your solar electric system that you aren’t immediately using in your home through self-generation, you’ll export that energy to your utility. But due to utility pushback on customer-owned solar electric systems, you won’t be compensated for that energy at retail rates, even though it will be going directly to your neighbors, and TEP will be charging your neighbors retail rates for that electricity. Instead, you’ll be credited at an “export rate” that’s significantly lower than retail rates. For example, TEP’s current export rate is 7.03¢ per kWh, or about 45% of retail rate. Other utilities in southern Arizona have even lower export rates. Trico’s current export rate is 4.093¢/kwh, SSVEC’s is 4.202¢/kWh, and Unisource has an export rate of 8.39¢/kWh.

But what will your bill be? The export rate system means that with solar on your home, you save money and reduce your bill in two ways. Self-generation brings the greatest savings–you’re avoiding buying expensive electricity at retail rates from TEP, where you pay for the electricity plus taxes and fees. Exported energy does provide you a financial benefit, but it’s much less, because you’re only compensated at the much lower export rate.

At the end of your billing cycle, TEP will charge you for all the electricity you imported from them, including 8-11% taxes, and some additional fees, and a monthly basic service fee of $10-12. Then they will provide you with a bill credit based on the energy you’ve exported.

Let’s look at a day for a solar customer with a 1,100 square foot home, a heat pump, and an electric car:

A solar homeowner’s electricity use, solar production, and energy imports & exports for a day.

The graph shows energy consumption (orange), solar production (blue), and energy imported (gray above the line) and exported (gray below the line). You can see that the electric car is charging overnight, and the solar produced a lot of electricity during the day. For this day, the customer imported 15.4 kWh electricity, costing them about $2.51 with taxes. They self-generated 8.1 kWh of energy, saving about $1.32 on their bill. And last, they exported 27.4 kWh, which reduced their bill by $1.92. Even though the amount of energy they exported is about three times more than the amount of self-generated energy, the bill savings from exported energy is only 145% of that from self-generated energy. We see that maximizing self-generation is the goal for maximum savings from solar.

How does this look on a monthly basis? In a recent month, a similar homeowner’s solar electric system produced 608 kWh. They consumed 552 kWh in energy, importing 397 kWh from the grid, and self-generating 211 kWh. They exported 448 kWh to the grid. Even though their solar produced more energy than they used, they still had a power bill:

$12.23 in basic service charges and meter fees
$45.66 in per-kWh energy charges
$18.64 in surcharges and taxes
-$31.50 in credit from exported energy
$45.03 total bill amount

Solar is certainly saving these homeowners significantly, but it’s complex–savings changes as a home shifts between self-generation, grid use, and energy export at each moment. So, it’s important that solar installers and consumers understand how export rates work, and that solar installers carefully model expected solar savings and bill amounts. More on this in the next section!

Different System Sizes, Different Savings & Bills

Each home has a different energy use pattern of how many kilowatt-hours they use each hour of the year. This can change based on the size of the home, if anyone is at home during the day, the age of the heating, ventilation, & air conditioning systems, how a homeowner sets their thermostat, how well the home was constructed and insulated, the age of appliances, and many other factors.

This is why we ask all our potential clients for annual hourly energy use data (often called 8760 data, because there are 8760 hours in a year) to be able to provide you an accurate estimate of the savings from solar and your estimated electric bills after solar.

We need to figure out for each hour of the year how much energy you’re importing, exporting, and self-generating with your solar electric system to be able to propose a system that meets your energy needs and goals.

On our proposal, you’ll see a lot of information. Let’s look at a sample home using the average amount of electricity used by a TEP residential customer, and some of the information we show on our proposal. First, you’ll see a graph that depicts the energy used each month, plus the solar production:

Energy use and solar production for an average TEP residential customer

On this graph, the blue bars represent the energy used each month, and the orange represents the solar production. For most months of the year, the solar produces more electricity than is used in the home.

Next, check out this image, which shows that solar is producing 102% of the electricity used in the home each year, and that self-generated electricity represents 42% of the energy the solar electric system makes:

Solar offset & self-generation information

And now, let’s look at the estimated monthly bills, which drop annual electricity costs from $1,621 to $517:

Monthly bills for a homeowner with a solar electric system

When we look at the total bill column on the right, we see that for most months, this homeowner would pay a small bill of $15-30. But for the summer months with higher energy use from air conditioning, they would have bills in the $60-90 range. For the system above, it would take the customer an estimated 7 years to recoup their investment in solar, also called a “simple payback.” That’s a great deal–especially for a system with major components that are warranted for 25 years  and are expected to last even longer!

But what will happen if we adjust the system size to produce less or more energy? Increasing energy production will decrease the percentage of energy that’s self-generated, and increase the percentage of energy exported, making the investment less favorable. Let’s look at what happens to simple payback times as the system size is decreased or increased, for the same energy consumption from above:

We can see that as the system size increases relative to the energy consumption as we move to the right, the percentage of self-generation (red line) decreases. This means that the percentage of exported energy increases, and results in a system that provides a less favorable financial return for the homeowner, increasing the time to recoup their investment (blue bars). Smaller systems that produce around 80-100% of energy use could have a simple payback period as low as seven years, while larger systems that produce 160-190% of usage could take 10+ years to reach simple payback.

Let’s bring it all together, in a table showing some analysis what different system sizes do for this average customer:

We’ve already discussed the relationship between system size and simple payback. But also consider the annual savings versus the net cost after tax credits, which show that there are diminishing returns when a system is oversized.

For example, if this homeowner wanted to install a system to “take their electric bills to zero,” we could propose an 8.14 kW system, which would reduce their annual electricity costs from $1,621 to $16. It would produce 160% of their annual usage, but would take an extra three years to recoup their investment, would take their rate of return from 12.5% down to 7.7%, and would cost them almost $6,000 more, even after tax credits! Not a great plan!

Additionally, Arizona utilities technically don’t allow systems to be sized over 125% of annual usage. Practically, because oversized systems provide discounted electricity to utilities, some may ignore this rule.

At Net Zero Solar, we generally like to design and install systems that produce 80-100% of the electricity annually used. As you can see, the 4.44 kW and 5.18 kW systems provide the best rate of return on your investment and keep installation costs lower.

We’re happy to install larger systems to account for future loads, just as long as clients truly know how everything works, and realize it’s not the best choice financially.

Why Do Solar Installers Promise Zero Electric Bills and Oversize Systems?

We see two main reasons that solar sales and solar installation companies do this. Many solar sales companies are disconnected from the realities of residential solar. Their salespeople who are knocking on doors in your neighborhood are mainly compensated on commission, and have little or no experience living with solar. After selling the job, these salespeople take their cut, and pass the installation onto contract installation companies who are focused on volume of installation, not quality or long-term service.

Both sales organizations and contract solar installers have a strong motivation to oversize the system, primarily because it increases their profits, even if it is a poor deal for consumers. These folks tend to knock on doors, bid high prices for oversized systems, embed significant costs in for any loan products, and disappear after the sale is complete. 

The other reason is that in the past, it was more practical to reduce your bill closer to zero. Solar customers prior to October 2018 had an option to use what’s called “net metering.” Net metering provided a 1-to-1 credit for energy sent back to TEP, meaning you’d be billed each month for only the net energy you used. For some homeowners on net metering who have a solar electric system that produces as much energy as they use annually, they may pay only $15-25 each month in basic service charges, but no more. As discussed above, with net-billing export rates, this doesn’t happen anymore.

Good Reasons to Choose a Larger System

We’ve explained why it’s generally a poor decision to oversize your solar electric system, but there are some cases where it makes sense.

With export rates, the amount your utility will pay you per exported kWh remains fixed for ten years. But if you add to your solar electric system during that ten year period, you’ll be “bumped down” to a lower export rate. So if you plan to add significant electric loads or increase your electricity use in the next few years, it might be better to go big in the beginning.

Some of the common reasons we see electricity use increase in a home are:

• Working at home or retiring

• Adding an electric vehicle

• Building an addition or adding a pool

• Changes in heating or air conditioning costs from changing thermostat settings after installing solar

• Changing from gas cooking to induction cooking

• Changing from gas heat to a heat pump

• More cooling days with hotter summers

It’s also possible to have energy use drop over time, if a homeowner does energy saving upgrades such as better insulation, newer heating and cooling equipment, newer appliances, or a heat pump water heater.

So how do we determine how much more energy you might use in the future? It will be an estimate in any case, but here are some thoughts and resources to consider about increases in energy use:

Working at home or retiring: This is hard to estimate, as each person or family’s energy use patterns are different. If your electric utility provides you with access to your daily energy use data online, you can look at your weekend or holiday usage across various times of the year, and determine how much more energy you use when you’re home. Being at home during the day often gives you more opportunities to use your solar energy as it’s generated, increasing your savings.

Adding an electric vehicle: Many electric vehicles will specify how many miles they will go per kWh of energy. For example, a small electric vehicle like a Nissan Leaf or a Tesla Model 3 will typically travel 3-4 miles per kWh. If you plan to drive 12,000 miles per year, you can divide 12,000 by 3, and estimate that this EV will use around 4,000 kWh of electricity each year, or about 333 kWh each month. For more detailed calculations which take into account a specific electric vehicle, your mix of city/highway driving and other factors, see this calculator from the Department of Energy.

Building an addition or adding a pool: For an addition, ask your architect if they are able to model expected electrical use. For a pool, find out from your pool contractor what pool filter pump they plan to use, how many watts it uses, and how many hours it will run. You can use this calculator to find daily kWh, and then calculate monthly or annual energy use.. If you plan to heat your pool with electricity or even with a heat pump water heater, this will use an enormous amount of energy. Ask your pool contractor to provide you with monthly estimates of energy usage for any pool heater.

Changing to induction cooking: Induction cooktops or stoves are more efficient than either gas or standard electric stoves by 15-20%. If you currently have an electric stove, switching to induction will reduce the amount of electricity you use. If you currently cook with fossil gas, check with your induction stove or cooktop manufacturer for an estimated kWh per month or year that your new stove will use.

Changing from gas heat to a heat pump: Your HVAC contractor should be able to provide you an estimated annual electricity use based on your local climate conditions. You may also find this heat pump calculator helpful in determining estimated energy use. One thing to consider is that with a new heat pump, your air conditioning is also likely to be more efficient if your current unit isn’t new.

Your Feedback and Questions

Thanks for reading this far! We’d love to hear your thoughts and questions in the comments section below. If you’re interested in installing solar for your home, please explore our website.

Solar Power Myths, Part Four: Using and Maintaining Your System

We’ve explored myths around solar savings estimates, incentives & tax credits, installation, and more. In this last part of our series, let’s run through some of the persistent misconceptions about using and maintaining a grid-connected solar electric system.

A solar electric system on a flat roof.

Myth: Installing Solar Means I’ll Have Power When the Grid Goes Down

Reality: Unfortunately, standard grid-connected solar electric systems are not designed to generate electricity if the grid goes down. Each microinverter or string inverter must see the proper waveform, voltage, and frequency from the utility before it operates. 

This is for safety, so that the solar electric system doesn’t send electricity onto the de-energized grid, injuring utility personnel. It is also because utility-interactive inverters are not designed to produce their own grid signal, and they cannot support the surge in power needed to start electrical loads.

Want power when the grid goes down? You’ll need batteries. Stay tuned, though. Enphase Energy is working on a new product that will be able to supply some power to loads during the day when the grid is down without requiring batteries.

Myth: I Will Have to Keep a Close Eye on a Solar Electric System

Reality: Modern grid-connected solar electric systems require very little attention from the user. When the sun is shining, they produce energy, and yield savings for you! 

Your solar installation will have a monitoring system from Enphase Energy, which will allow you and us to keep track of system performance. If something goes wrong, both the installer and homeowner will receive an alert email, so any problems can be quickly resolved.

Myth: I Will Have to Change How I Use Energy if I Get Solar

Reality: This one is a bit more complicated. We usually estimate your solar savings based on your current energy use. This means you don’t have to change how you use energy to realize the estimated savings.

But if you are able to shift your energy consumption to when the sun is shining, that will save you more money. Similarly, shifting energy use out of peak times for TEP, Unisource, and APS customers will save more money.

You can learn more about how solar saves you money in our post Is Your Arizona Solar Installer Telling You the Whole Story?

Myth: I Won’t Have a Power Bill If I Have Solar

Reality: Sorry, despite the bleating of pernicious ads on Facebook, solar doesn’t mean you’ll never have a power bill. Every customer connected to the grid will have a monthly “basic service charge” of $10.00-25.00, plus taxes and fees.

Depending on your particular energy usage profile, you will likely also still pay some monthly charges for energy for each kWh used, especially during months where your air conditioner or other large appliances are running a lot.

To properly size your system to meet your desired savings, it’s especially important to use your real energy use data, if you have it. This hourly energy usage information is called “8760 data,” because there are 8,760 horse in a year. Some utilities such as TEP or Trico allow you to download this information on their customer portals. We invite you to read more about solar electric sizing myths.

Electrical Load Center and Downstairs Solar Equipment

Myth: Solar Electric Systems Require a Lot of Maintenance

Reality: If properly installed in the first place, solar electric systems don’t need much maintenance at all. As part of our installations, we complete a detailed inspection about a year after installation, making sure all fasteners are retightened, and the system is functioning well. We rarely find anything that needs to be corrected.

Some online marketers push solar module cleaning services, but modules are mostly self-cleaning with summer and winter rains. Only in extreme cases of dusty locations or significant bird excrement is additional cleaning required.

Over time, owners of rooftop solar electric systems should make sure that they complete any required roof maintenance, and occasionally visually inspect the solar electric system.

Myth: If I Need to Replace My Roof, Removing and Replacing My Solar Won’t Be Expensive

Reality: Unfortunately, removal and replacement of solar electric systems can cost several thousand dollars. Although it’s not too hard to remove the systems from the roof, reinstalling them on the roof is about as much work as a new installation, requiring many hours of labor.

We’ve seen claims from national installers such as “SunnyMetropolis,” that they will remove and reinstall systems for a nominal fee, like $500. We have not seen that happen in practice. In fact, we regularly receive calls from homeowners who used national installers for their system, but those installers cannot remove and reinstall their systems in a timely manner or for the promised cost.

Myth: Solar Panels and Conversion Equipment Don’t Last Long

Reality: The high-quality LG Solar modules we install are warranted for 25 years, and are expected to last much longer. The Enphase Energy microinverters we pair with the LG Solar modules also have a 25-year warranty. Even though there’s not much that can go wrong with a racking system, the Unirac SolarMount equipment we use also has a 25-year warranty

We would challenge you to find any other electrical or electronic products with a 25-year warranty! And just because the warranty is 25 years doesn’t mean these products won’t work longer–we have seen solar modules that are over 35 years old that are still producing plenty of power. 

A solar electric system on flat and tile roofs.
A solar electric system on flat and tile roofs.

Enough Myths (for now)

With the end of this four-part series, we’ll move to other topics. If you want to explore more myths, check out our previous articles in the series, which are linked below:

Thank you for reading! If you have any additional questions or thoughts, put them in the comments below.

Solar Power Myths, Part Three: Installation & Environment

We’ve now explored myths around Savings, Estimates, Incentives, and Taxes and about Sizing Your Solar Electric System. In this third part of our series on misconceptions and misinformation about solar, we’re going to talk about the actual installation of solar electric systems, as well as how they relate to the environment around us.

Proud owners of a solar electric system in Tucson!

Myth: Solar Will Damage My Roof

Reality: Not if it’s installed correctly! Any home improvement done poorly can damage your home, from a new water heater, to insulation, plumbing, or yes, a solar electric system. So it is important to understand how your solar installer will connect racking that holds the solar modules to your roof structure.

We use sturdy, industry-standard methods to connect solar racking to the roof, with an appropriate method for each roof type. For built-up flat roofs, this means connecting a steel standoff to the roof trusses using stainless steel hardware and sealant, then adding an all-metal flashing with sealant underneath, and roof repair fabric and sealant on top. 

An in-progress tile roof installation using tile hooks from Quick Mount PV.

For tile roofs and asphalt shingle roofs, we use high-quality, sturdy tile hooks and composition shingle mounts made by Quick Mount PV (you can see installation videos on the linked pages). For metal standing seam and metal trapezoidal roofs, we use products from S-5! For membrane roofs, we can work with your roofer who can properly seal standoffs after we attach them to the structure.

Myth: I Can Install Solar Even If My Roof is in Poor Condition

Reality: Nope! Some installers will want to rush you into installing solar on a roof that needs repair or replacement. This is a bad idea. When you do decide to replace your roof, you’ll have to pay thousands to remove and re-install your solar electric system. Instead, get your roof replaced or repaired before installing solar.

Myth: Solar Means I Have to Upgrade My Electrical Panel

Reality: It depends. If you want a large solar electric system, your existing electric panel is in poor shape, you want to add batteries, or you don’t have space for a solar breaker, you may need to upgrade your electrical panel. But for most people installing a grid-tie solar electric system in Southern Arizona, this will not be necessary. For more information, see our recent post, Why Do I Need to Upgrade or Replace My Electric Panel?

A home electrical load center. Plenty of room for solar and future electrical loads!

Myth: All Solar Installers Install the Same Way

Reality: Methods and quality of work can be very different from installer to installer! Some folks jump into the solar industry thinking that solar is a quick buck. In their wake, they leave poorly designed and installed systems, that won’t perform well, and can damage your home. Your installer should be able to explain how the systems are installed, and have the licensing, training, and experience required to make sure your solar electric system will last for 25+ years. 

Quality solar installers have usually been in business for a few years, and/or have highly experienced employees. Net Zero Solar has been installing solar for over eleven years, and many of our team members have been in the industry for over fifteen years. Chad & Louis are NABCEP Certified Solar PV Installation Professionals. We’re also proud that we spend time and money to continuously improve our installation process.

Myth: Solar Panels Aren’t Clean Energy

Reality: Solar panels are a clean, long-lasting source of energy. Most modules have warranties of 25 years, with expected lifetimes longer than that. Silicon solar modules (like the LG Solar products we install) do not contain toxic compounds. But because the manufacturing process often uses toxic substances, it is important to source from manufacturers that have a good environmental safety record.

Another easily disproved myth is that solar modules use more in energy and materials than the energy they will produce over their lifetime. This is absurd. In fact, the energy payback time for most solar modules is between 6-24 months.

We do believe that solar modules should be reused or recycled if at all possible, so we use the services of Recycle PV Solar as needed.

Myth: Solar Panels Are Ugly

Reality: We don’t dispute that there are some poor looking solar installations out there, tilted up at strange angles (we tend to refer to these as “fish gill installations”), or strangely sprinkled on rooftops. But given just a little bit of know-how, solar installations can be aesthetically pleasing clean power producers!

It’s also important to compare solar to other sources of energy. Just because you don’t see the negative effects in your backyard doesn’t mean they aren’t ugly sources of energy! The coal mine, uranium mine, or natural gas well that fuels electricity generation for your home exists, even if it’s in somebody else’s backyard. 

We live in a beautiful part of the world! Good looking solar installations help keep it that way!

Myth: Solar Roof Tiles Will Change the World!

Reality: Whether it’s a shady Facebook ad, or an emotionally immature billionaire in trouble (again!?) with the SEC for his tweets, somebody always seems to be shilling for solar roof tiles. A solar electric system that integrates into the roof and looks great! It’ll save money because you don’t have to buy roofing! 

Not so fast. A multitude of manufacturers have tried various solar shingle and tile products over the last couple of decades. None have been commercially successful. Many have had engineering problems, like poor performance in our hot desert climate. Although it’s now a few years old, this article from Eric Wesoff (a highly experienced industry journalist) shares some common sense on the subject. 

This solar roof product installed in Tucson was only producing about 50% of expected energy in the mid-2000s, due to poor ventilation practices that lead to very high cell temperatures.

More Myths: The Mythening

Yeah, we’ve still got more solar myths to explore over the next couple months. We promise, we’ll share about other topics soon. But before then, we’ll tackle myths about using & maintaining your system, and off-grid systems.

We had also planned to discuss myths about batteries & energy storage, but most of them have been covered on our new Batteries page.

If you’ve seen other myths or have questions, please comment below. We’d love your feedback!

Net Zero Solar’s Approach Regarding COVID-19

As everyone adjusts to our new realities based on the COVID-19 pandemic, we want to give you an update on what we at Net Zero Solar are doing to help flatten the curve, and reduce infections for those who may be most harmed. For extensive information on the pandemic, visit the COVID-19 page from the CDC.

Our first goal is to ensure the safety of our customers and our team members. We are regularly cleaning surfaces in our office and vehicles with appropriate products. Each person on our team has paid sick time, and has been instructed to stay home if they feel sick—especially if they have any symptoms associated with the coronavirus. If they feel sick, they will seek appropriate consultation and treatment from medical professionals, and not return to work until they have recovered. Our team is also limiting our contact with others outside our work hours.

We are working hard to keep our team healthy and fulfill our commitments to our customers. We’re also not standing this close to others anymore!

At present, we are continuing installations and service, with some modifications to our procedures. We also continue to provide solar proposals, but are limiting contact between our sales staff and customers. Read on to learn more.

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Solar Power Myths: Part Two, Sizing Your Solar Electric System

Last week, we started this series by exploding solar myths around savings, estimates, incentives, and taxes. As we continue, we want to dig into the myths around deciding what size solar electric system you need.

With changes in how home and business solar customers are compensated for energy they send to the grid, we’ve seen a lot of disinformation out there. Not so surprisingly, this incorrect information seems to benefit solar installers without many ethical scruples, not consumers. 

We love installing solar, but we know that choosing a solar company is like entering a long-term relationship. Honesty, understanding, and clarity are really critical! So before you decide to tie your home to a solar company for many years to come, learn about some more solar myths.

A solar electric system in northeast Tucson.

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Solar Power Myths: Savings, Estimates, Incentives, and Taxes

With so many Arizona homeowners choosing to install solar electric systems, we’ve also seen the rise of many misconceptions about how solar electric systems will work for consumers. In this first installment of a multi-part series, we’re sharing some of the mistaken ideas we’ve heard, focusing on the quotation process and financial aspects of solar installation.

A residential solar electric system in Tucson.

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Hate solar telemarketers? We do too!

I arrived home after a busy workday, and sat down for dinner. My phone rang. It wasn’t a number I recognized, but it was in my home area code. When I answered, a telemarketer we’ll call “Sam” introduced himself.

Red Flag #1: Promises of “free” solar energy

Sam launched into his script: “Do you know that right now, you can receive up to $10,000 in incentives and grants in Arizona to make your home more energy efficient, for zero down?” The game was on. The object? To act ill-informed enough that he wouldn’t hang up on me, and would share more about his questionable business practices.

Lead generation and telemarketing companies often promise “free” solar electric systems that will “save hundreds each month.” Solar can be a great investment, but it isn’t free. Solar leases may save you a few bucks a month, but they usually contain surprises in the small print, and make poor assumptions about future energy rates. Solar loans are better, but still have a cost of capital embedded somewhere. If it sounds too good to be true, it probably is.
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