While shopping for a laundry machine at Home Depot, my wife and I came across a SolarCity Tesla Solar Panel booth asking if we are a home owner and if we want to switch to solar power for our home. When my wife and I purchased our peninsula home back in 2015, we immediately jumped at the chance to convert our energy to solar because (1) we did not mind being early adopters of solar technology (we live in the Silicon Valley after all) and (2) SolarCity was giving away $400 gift certificates to Home Depot which we used to buy the laundry machine for the house. A rare win-win situation in life that we had to seize!
California solar-energy mandate
For California residents (like myself), starting in 2020 the California Emissions Committee has passed a solar mandate requiring that all newly constructed homes be built with solar panels. California now becomes the first state in the nation to mandate solar-energy installations on most single-family homes as well as multi-family residential buildings up to three stories, including condos and apartment complexes (citation CNBC). It would not be surprising to learn that other sun drenched states will soon follow such as Arizona, Texas, and New Mexico.
SolarCity is cheaper than PG&E by $0.07/kWh
SolarCity provides options to either purchase or lease solar panels. At the time in 2015, SolarCity had a program called Power Purchase Agreement (PPA) which meant SolarCity would cover the cost of installation and perform maintenance on all equipment related to the solar panels on my roof in exchange for me buying power from SolarCity at ~$0.16/kWh. This was an easy decision to make since Pacific Gas & Electricity (PG&E) sells the same amount of energy to me at about ~$0.22/kWh so a savings of $0.06/kWh. However, because I do not own batteries to store the solar power during the day I have to pay about ~$10/month to PG&E as part of their Net Energy Metering (NEM) program to use their power grid.
The NEM program by PG&E works as follows:
- Each billing cycle (1-month), PG&E will track how much energy I am collecting from my solar panels and how much energy I am consuming. Any difference remaining is tracked per billing cycle via a ledger located on my billing statement where NEM charges are about ~$0.13/kWh.
- After 1-year, PG&E will perform a reconciliation of the NEM ledger. For 2019, I collected a surplus of -983 kWh of energy of which PG&E will pay me about ~$0.03/kWh in the form of a credit on my next billing.
- Obviously PG&E is arbitraging energy from me with this plan due to the fact that they are not paying me the full ~$0.22/kWh that they charge non-solar customers plus the $10/month power grid fee.
- In summary, I pay SolarCity ~$0.16 for 1 kW of energy collected on my solar panel while PG&E pays me ~$0.03/kWh for any surplus energy after 1-year so they can sell it to a non-solar customers for ~$0.22/kWh. Plus I am paying PG&E about ~$10/month to store my solar energy.
- In order to come out ahead in this game I need to either store the power in batteries (via the Tesla PowerWall) or ensure I use all the solar energy that I collect with no surplus which will probably be easier once I install air condition on the house next summer.
One question I have not figured out is if I should purchase my solar panels from SolarCity once the lease expires in about 20 years. Would love to hear from my readers what have been your experiences with solar power and if you have any advice for me about buying used solar panels after 20 years of wear and tear? On my roof I have installed 14x solar panels rated at 260 Watts each that max out at 3.64 kilo-Watts of power.
my 14x solar panels rated at 260 Watts each
