All Forum Posts by: Andrew Smith

HOAs cannot legally prevent any homeowner from going solar anywhere in the Country.

https://www.govtrack.us/congress/bills/112/hr1598/text

 Not currently.

My $0.02 and I am in the solar industry for full disclosure.

If there truly was a level playing field, solar and renewables would be winning hands down. Grid parity was reached 5 years ago nationally. Depending on sources of information, fossil fuels and energy derived from them receive at the very low end $1.5 trillion in subsidies annually to a high end of $5 trillion. That doesn't factor in the human cost of death and injury of men and women in uniform protecting fossil fuel supply, or death and injury from localized pollution and environmental damage.

When you factor those true costs in, solar and renewables win hands down. However, because of the non-level playing field, rebates and subsidies are in place to encourage adoption. One person's subsidy is another person's investment. If NASA had not paid extortionate amounts for the original microchips, we would not be on this forum now.

California making solar mandatory for new construction is a response to the obvious. We are as a species moving towards renewables. It makes sense for economic, employment, manufacturing cost, environmental and national security reasons. When the World's 5th largest economy does this, other States and countries will follow. It is an inevitable journey to renewables no matter what we think or how much we really "dig" coal.

So what is the impact? Well it will increase CA's solar adoption at an accelerated pace. Currently at around 7.6% adoption, that will quickly hit 10% which history shows is a number that spurs mass adoption. For the homeowners "forced" to buy solar with a new home, they pay up front to save many fold over the years from reduced or eliminated utility bills. For existing homeowners, they will need to make a decision whether or not to bring their properties in line with new construction to compete on resale price. It is likely that many will, especially as rebates and net metering mean there is no out of pocket to do so (in most cases). Fannie Mae allows a full appraisal value of an owned (but not leased) solar system.

However! "Mandatory" and "Incentive" do not work together - no one pays us to wear seatbelts. I think this measure - especially as it moves across the US - will lead to an accelerated decrease in the Federal tax credit - currently 30%. Also as benchmarks are reached in terms of adoption, utilities can renegotiate net-metering rates to pay less for the excess produced by a solar system. 

In short then, the conditions to go solar now are certainly as good as they are ever going to be. It will be "good" in future, but I believe increasingly not as good as now.

In California and I believe every State, there are laws in place regarding the efficiency of new construction - insulation, double glazed windows etc. They are paid for up front by the homeowner who then benefits from reduced utility bills. This mandate for solar on new construction is no different to that, other than it is a true investment in owning your own power rather than renting it from a "public" utility.

The main down side of this increase in renewables is the "duck curve". This is the upsurge in power required when solar is not operating after dark. In order to meet that demand the utilities have to keep powerplants running to ramp them up. They cannot just switch them on, so they bear a cost in over-production. The solution to this is in storage. That is the weak link in renewables now. True daily use batteries for economic home use are a year or two away from mainstream. For utility scale, even further. Investment (subsidy) would accelerate this technology and manufacturing to make storage economical. It's happening in the private sector, but a NASA type investment as happened in computing would be awesome.

As far as "Govt telling us what to do", well I've been in LA for 25 years. Anyone that has been here for any length of time will tell you about the massive positive impact of clean air legislation. Sometimes Govt involvement makes sense and I think we'll look back on the CA solar mandate as one of those times. The fact that major manufacturers like Volvo are eliminating fossil fuel powered vehicles is a great indication also of where CA and the rest of the World is heading in that regard. 

If you lease a solar system you cannot use it to appraise value to your home. If you own the system either as a cash payment or by zero down finance then Fannie Mae allows that system to be appraised as added value.

In terms of "return", in almost every case, a homeowner is paying less per month overall than they were before going solar. That depends on things like current average power use, roof orientation etc. Every home is different. If you eliminate a utility bill and replace it with a bill that is less than you were paying before without coming out of pocket to do that, that's pretty much instant ROI. If you paid cash for a system then the systems take somewhere between 7-10 years to be cash flow positive, but then you truly are using "free" power that you produce at that point. Paying a utility is renting power, buying a solar system is owning power. I am in the solar industry.

 I'd say it's more akin to someone having to pay for environmental efficiency requirements such as double-glazed windows, insulation etc. Adds to upfront cost but saves the homeowner many times over through reduced energy costs while being for the "greater good" or reducing the need to build $400 million carbon-producing power plants that homeowners pay for at every end.

 How so?? The "disease" is a dependency on a damaging commodity-based, archaic energy grid. There is literally no single good reason to not advance renewable energy - economic, national security, employment or environmental. The true "symptoms" of the disease are the croney-funded obstructive policies such as we've seen in Nevada and Florida.

Well I think it's fantastic on many levels. The 5th largest economy on the planet made solar mandatory on new construction! The ripple effects of people adding solar to their homes to keep up with that is huge as it will be as other States/Countries follow suit.

I think on a practical level (and yes I am in the solar industry), is that anyone considering solar now should jump on it. When things become mandatory, there is much less need to offer incentives - no one pays us to wear seatbelts. As this ripples though, it's impossible to imagine the Federal tax rebates won't diminish.

Also, none of the utility companies are complaining about this. Why? Well it means that the quotas of solar adoption will happen faster so the utilities can renegotiate net metering rates. Expect to see those becoming less as more solar is adopted.

I know some will hate California for it, but I absolutely think it rocks that California is leading the World on the inevitable journey to renewable energy. 

Hi @Account Closed,

I'd be happy to look at the property and give you some numbers to see if solar made sense. It would depend on how much you want to offset and the property's ability to produce (roof orientation etc). I sent you a connection request if you'd like to get an idea.

Actually @Russell Brazil I'd say you were correct. I disagreed when you implied it was always derogatory to add solar as that simply wasn't the case.

The facts are that Fannie Mae allow for a full appraisal of a solar system IF the system is owned outright or financed for ownership. They do not allow appraisal for leased systems.

Other factors come into play for sure not just within a market but between markets. Long-term financial gain for having eliminated a utility bill most certainly adds value to buyers. Between or within some markets that gain may be offset by the perceived aesthetics of solar. Solar systems are being installed at an ever increasing rate though so the latter will diminish as a factor as more and more of the neighbours go solar. MD is in the region of 0.1% adoption. Same for PA. When those numbers hit 10% adoption the conversation will be very different as it is here in CA (about 7% adoption).

So the facts are that an owned system adds value to a home if it's in some form of ownership as Fannie Mae allow for full appraisal. This value may be increased or decreased with other factors such as prevailing utility rates (big, small or no savings with solar), market adoption rates and localized solar "attitudes".

Hi @Lena Kendall It will be a simple process to divide the cost up in the same way - pro rated. As mentioned, you could charge more for the share of the rent and take care of the solar payment. I would have them sign some kind of "reasonable use" clause. You will get a monthly statement from PG&E and an annual "true up" where you will pay for any overage on the power you used, or they will send you a check for any credit they owe you.

I sent you a connection request and if you'd like I can put together some numbers so you can see if it makes sense and see what the property qualifies for.