Lies_about_solar_energy
Last update 09/06/2022

Lies about solar energy

Diego Garcia

Diego Garcia

Being part of the Solar Energy industry for the past 4 years and sick of the lies and misleading information about the real benefits of solar energy panels for residential usage, I decided to write this article.

Especially in the last months, due to the pandemic, more than 90% of business development efforts for solar installers are now in digital advertisement.

I advise and build customized solar projects for over 15-20 homeowners per week, every week. Very often they ask me questions regarding misleading information they receive as a consequence of having been identified by normal algorithms of target adds on social media and search engines.

These ads are being produced by from those companies that are taking advantage of the evident booming and growth in solar needs for homeowners.

We have created this article with the purpose of clarifying some of the false statements that create an impulse on average homeowners, and give a false motivation or expectation, which these companies themselves have never met, resulting in bad experiences and outspoken testimonials about how solar damaged their lives or how they were victims of “sales dogs” creating an impulse for them to purchase.

 

LIES ABOUT SOLAR ENERGY PANELS FOR HOME

SOLAR IS FREE

The first of the lies about solar energy is saying that solar is free.

Well, first… generally nothing is really free in this world, probably smiling or hugging is, but when it comes to solar energy, normally it is not.

The radiation from the sun is free and it is a guarantee for the next 5 billion years according to NASA.

However, in order to capture that radiation you may need to have a device that is able to transform that radiation into energy, they call it: solar energy; because the real source is the sun’s radiation.

So, you need to have some sort of equipment that is either purchased or leased, which means it is not going to be free.

Whenever you see companies advertising that solar is free, that is because they are using the fact that the sun radiation is free, and sometimes when a homeowner decides to purchase solar and they get loan approval with zero $0 money down, it’s “kind of” FREE, they did not feel the financial impact to disburse any money upfront or increase the monthly expense.

So, if it is not affecting your budget and you don’t have to pay anything upfront just get approved, they can advertise it as financially kind of free or they just write ads saying solar is free because the solar energy is coming from a free source that is the sun.

 

NEW SOLAR PROGRAM AVAILABLE

The second and very common lie about solar energy is about solar programs.

There are few new programs available in the area you live in. There are basically two ways to have solar: 1) purchasing 2) leasing. If you purchase, you can: buy cash or finance. If you finance, you have two options: regular financing or PACE [1] program.

Regular financing is most likely always available, you just need to have your credit in good shape, and you will be approved for the loan.

In the PACE program, which is another type of financing, where you use the equity you have on your property, there are more changes when it comes to the newly available territories that can qualify for the program but it’s not a huge change rate for it to be announced all the time.

In reality, when you see an installer advertising a newly available program in your area, this is most likely because they have targeted your zip code, with the average household income required to be approved for any of the financing options they have available.

It may also be that the higher the average square feet per house in the area, the higher the energy consumption usually is, which means more solar panels to sell.

 

GET PAID FOR SOLAR ENERGY

The third of the lies about solar energy is a very big statement and we are going to write another complete article just on this subject, however, when you see these ads or marketing statements it’s because either the company will increase the ultimate purchase price of the solar array in order to be able to pay you x amount “sign in” bonus.

Of course, there are regular discounts for military, veterans, and first responders, but when you specifically see advertisements on getting money because you sign for solar. Normally, the solar company will be increasing the price per watt [2] to recover that customer sign in bonus.

In the end, the customer will pay for this sign in bonus on top of the solar system cost, adding value to the total loan amount and adding interest for this loan if financing for 10, 20, or x amount of years they’ve chosen.

The nature of the business is that you are hiring a company to install your solar system, why should they pay for you to hire them?

It’s similar to going to the movies and getting paid for watching them. Unless you are an actual professional film critic, it really doesn’t make sense to pay for it. Get a good company with top-tier technology and a local presence to serve you for the following years.

The other situation when a solar contractor advertises about getting paid for solar energy is related to the money they tell you that you can expect from the regular Utility company (Duke, OUC, KUA, TECO…) and this is very different from state to state, and for every utility provider.

Is it possible to get paid for solar energy?

From our experience, if you are receiving payments because you install a bigger solar system than what you actually need, probably you are being paid at a ¼ of what you initially pay for the energy you use.

In central Florida, after reviewing many homeowners’ electric bills from different providers for years, we know the overall cost including connection fees, energy cost, fuel cost, transportation cost, maintenance cost, local, state and federal taxes, securitization fees, etc.; it’s ranging between 11 cents per watt to 15 cents per watt.

When you get paid, they pay you between 3 to 4 cents per watt, they usually pay you on a yearly basis (you won’t receive a check based on a monthly statement), and they will balance out the energy you pull from the grid and the energy you push to the grid via the bidirectional meter [3] to do it.

From our perspective the residential solar industry is design for the homeowner to eliminate the electric consumption, paying lower cost per watt from the solar array, but it is still too young and it is facing many political and legal barriers [4] for a homeowner to be able to make serious money from their solar array as a source of income.

This happens because technology usually develops first and legislation follows new legal needs.

 

SECURE YOUR FEDERAL TAX CREDIT

Be careful with the fourth of the lies about solar energy. We have to disclaim that for tax credits you should contact a certified public accountant CPA or the person you trust doing your tax preparation or personal accountant in order to receive better advice on this matter.

Solar installers are not experts when it comes to confirming if you are or will be eligible for a tax credit.

The government has in place a residential energy credit that should be claimed through the Form 5695 [5]. During 2019, this tax credit was 30% of all investments in renewable energy for homes and for projects install during 2020, this credit is 26%. The expectations are high for the following years because this has been changing from time to time.

If you are eligible for the tax credit this means that you are going to receive a financial benefit or “discount” on your tax bill, you must honor federal tax obligations.

In our experience only 60% of homeowners are eligible and this happens because of many variables, including: annual income, deductions, composition of the household, dependents, changes on tax laws, etc.

Purchasing a solar system because of the tax credit

Our advice is if you are purchasing a solar system because of the 26% tax credit, please talk to your CPA first and then acquire the system knowing with more certainty whether you are going to receive the benefit.

Be aware that when they make the estimate for the monthly payment, almost all the financial institutions when they make the estimate for the monthly payment assume you are eligible for the credit and that you will be paying towards the principal of the loan before 18 months that amount to sustain the same monthly payment.

Ask your consultant how much the monthly payment will be in case you don’t receive the tax credit.  Compare apples with apples.

solar energy panels

If you enjoyed this article, help us share this content with your friends and family through social media platforms, and please follow us at @GoCleverEnergy on Facebook and Instagram to get more information about Solar Energy.

If you want to do business with honest and professional solar energy experts please book your virtual solar consultation at: www.gocleverenergy.com or call  407.274.1531 to get more information.

lies about solar energy

 

By:

Diego Garcia – Energy Specialist

Clever Energy

 

[1] Property Assessed Clean Energy (PACE) program.

PACE removes the barriers of high upfront costs and provides low-interest financing to help residents and business owners looking to modernize, mitigate wind damage and improve the energy and water efficiency of their property.

The program, approved by the State of Florida for local communities to implement, uses approved third-party administrators that provide funding through a special assessment levied on the property.

As a result, the loan stays with the property and allows the assessment to transfer when a home or building is sold. Payments for the assessment are made through annual property taxes.

This assessment can be amortized over a period of five to 20 years, which allows for the cost savings resulting from the improvements to be used to pay back the amount owed.

Currently, more than 60 cities and counties throughout Florida have enabled PACE financing, including Leon and Escambia Counties, City of Kissimmee and Miami-Dade County.

[2] The price per watt is an industry standard were the solar installer estimates the number of watts the customer needs to be install to offset the electrical consumption at home that is measure in kilowatts per hour.

Example: a home solar system could be an 8.5 KW System, this means they have 8,500 watts system size install in their house that is able to produce 1,000 kwh per month.

[3] The term bi-directional metering refers to the fact that the meter can measure the flow of electricity in two directions. … If more electric energy is produced from the system than the customer needs, the additional kilowatt-hours are measured, fed into the utility’s electric system and utilized by other customers.

[4] Any solar installer is required to install on-grid systems connected to the grid, off-grid systems are not approved by city and utility inspections and are not authorized to request permitting.

[5] Visit the official Internal Revenue Service official website (IRS) and search for Form5695 or visiting this link https://www.irs.gov/pub/irs-pdf/f5695.pdf

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Get a professional and honest solar quote

Diego and Jennifer, lead a team of solar experts with +7 years experience in over 22 different states in America. We would love to help you switch to solar the right way!

Get a professional and honest solar quote

Diego and Jennifer, lead a team of solar experts with +7 years experience in over 22 different states in America. We would love to help you switch to solar the right way!

jenn y diego foto final

Get a professional and honest solar quote

Diego and Jennifer, lead a team of solar experts with +7 years experience in over 22 different states in America. We would love to help you switch to solar the right way!

Get a professional and honest solar quote

Diego and Jennifer, lead a team of solar experts with +7 years experience in over 22 different states in America. We would love to help you switch to solar the right way!

jenn y diego foto final

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