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.
Myth: Net Metering Still Exists in Arizona
Reality: Net metering was a policy that provided a one-to-one retail credit for any solar electricity that you sent back to your utility. In September 2016, regulators voted to end net metering. Plans to end net metering were implemented for each electric utility, with Tucson Electric Power ending net metering last in Southern Arizona in September 2018.
Customers with a solar reservation submitted to their utility before net metering ended were “grandfathered” into net metering rates for 20 years from their installation date, but all customers going forward will use “net billing.” In this system, solar customers pay retail rates for energy that they use, but are paid an “export rate” for any energy sent back to the utility. This export rate is about 50-80% of retail rates, depending on the utility.
Although some of the specific export rates have changed, our post Is Your Arizona Solar Installer Telling You the Whole Story? shares much more information.
Myth: Sizing Solar Electric Systems in Arizona is Simple
Reality: With the end of net metering, solar sizing got a bit trickier. The amount you pay for energy you buy from your utility (retail rates) is different than the amount they pay you for energy you send to them (export rates).
When a solar electric system makes clean power, that energy can go directly to the loads in your home or business, saving you buying expensive electricity at retail prices. This is called “self-generation.” But if you don’t need that clean power as it is generated, it will go to the grid, and you’ll be credited at the lower export rate. To better understand, see the image below.
Because of this difference, your solar installer should use a modeling program to estimate what’s happening with your energy use and generation for each minute and hour of the year. This modeling will carefully estimate the amount of electricity you use from the grid, amount of electricity that is self-generation from solar, and the amount of electricity that is exported to the grid.
For Tucson Electric Power customers, solar customers are required to use a time-of-use rate, which will also change how much you pay for energy from the grid.
Myth: You Don’t Need to Worry About Energy Use Data to Size a System
Reality: You remember that guy in your high school class who just never wanted to do the homework? Some solar installers are like that. They don’t want to bother getting energy data, or want to model how you’re expected to use energy after you have solar installed.
The problem is that without your hourly energy data, it’s not possible to have a solid understanding of how energy will flow in your home with solar. Without that knowledge, we can’t know your likely savings. So if energy data is available from your utility, make sure your installer obtains it. See our post for more info on getting data from TEP.
What if you can’t get energy data from your utility? It’s still possible to make a rough estimate. We use your monthly energy data, then use modeling software to synthesize hourly energy data based on a typical home or business in your areas.
Myth: The Way I Use Energy Won’t Affect My Savings if I Have Solar
Reality: Wrong! Not only does how much energy you use affect your bills, but how you use energy will also affect your bills. Because you’ll pay more for energy that comes from your utility than they’ll pay you for energy you send to them, the more energy that is “self-generation,” the more you’ll save.
Self-generation is when you use energy from your solar electric system as it is made. To increase self-generation, you’ll want to use electricity during the day, when your solar electric system is producing energy. For example, you might consider running your dishwasher, washer, or pool pump during the day.
For TEP and Unisource customers, you’ll also want to pay attention to when you use energy from the utility, because you’ll be on a time-of-use rate. With time-of-use rates, you’ll pay more during peak hours, which vary between utilities and times of the year.
More self-generation means more savings!
Myth: If I Install Solar, I’ll Stay on the Same TEP Rate
Reality: Most residential TEP customers are on what they call their “Basic” rate plan. With this plan, you pay a fixed charge each month, no matter how much electricity you use. You also pay a per-kWh charge for any energy you use.
When you install solar on your home served by TEP, you’ll have to move to a “time-of-use” rate. With a time of use rate, you’ll pay different prices for energy you use during “on-peak” hours and “off-peak” hours. The cost varies from about 10.7¢/kWh to about 14.7¢/kWh. If you use energy during on-peak hours (3:00pm-7:00pm in summer; 6:00am-9:00am & 6:00pm-9:00pm in winter), you’ll pay more than during off-peak periods.
Note that for SSVEC and Trico, you are not required to move to a time-of-use rate.
Myth: A Bigger Solar Electric System is Always Better
Reality: When you’re installing a solar electric system, it’s understandable to want to go bigger. It’s true a bigger system will produce bigger savings—but at what cost?
With current rates in southern Arizona, systems should maximize self-generation of electricity for maximum savings. If a system is made larger, it will increase the amount of electricity that is exported to the grid at a lower rate, unless you are able to change your energy usage patterns to use more energy from solar. So you’d be paying for installation of a larger system, while receiving less benefit from the increase in system size. Not a great financial decision! Most customers are better off choosing a system to offset between 60-90% of their electricity use.
There are some cases where it makes sense to oversize your system. For example, if you plan to buy an electric vehicle soon, or increase the size of your home, or will have more people living in your home, you’ll want to plan ahead with a larger system.
Myth: Installing Batteries Allows for Smaller Solar Electric Systems and More Savings
Reality: Nope! As long as the laws of physics hold, this is a nonsensical myth! Let’s get to the heart of this. Batteries are not 100% efficient. You’ll only get between 80-90% of the energy you put into them, the rest is lost as heat during charging. You’ve probably experienced this with your cell phone or laptop when it was charging. So batteries require more solar to make up for these losses, not less.
Batteries allow you to store energy for use later, reducing the energy that you’ll buy from the utility. But will batteries save you more money than solar without batteries? Not in southern Arizona! Let’s take an example. TEP customers pay about 11.5¢/kWh on average for energy they buy. If they send solar energy back to TEP, they are credited 8.68¢/kWh. So saving energy in batteries can save you 2.82¢/kWh.
But batteries cost a lot. Although prices have been dropping, the cost of batteries alone can be between 30-75¢/kWh, not even counting installation! So you’d pay at least 30¢/kWh for the privilege of saving 2.82¢/kWh.
Do you want batteries because you want backup for when the grid goes down, or because you want to keep your energy onsite, or because you love the technology? Great! We can definitely help with that. If you install batteries in southern Arizona to save money, you’ll be helping prop up profits for an uninformed or unscrupulous solar installer, but it won’t help your bottom line!
Many Myths Ahead
We’ve still got a lot more to share on solar myths. In future posts, we’ll talk about installation & environment, batteries & energy storage, using & maintaining your system, and off-grid systems. There’s a good chance we’ll find even more myths!
If you’ve seen other myths or have questions, please comment below. We’d love to hear your feedback.
