Solar 101

Solar Frequently Asked Questions

There has never been a better time to go solar. For the first time in a decade, prices for panels have dropped dramatically. Federal tax credits for installing solar systems are at their highest ever, at 30% of the cost of the system. And our local utilities have t aggressive rebates to help offset the cost of going solar, often paying between 20% and 50% of the cost or more.

What makes a property a good candidate for solar? The most important factors that make your home a great candidate for solar include its orientation, shading factor, and roof space. The ideal direction for your panels to face is due south because it will receive maximum exposure as the sun travels across the sky from east to west. Southwest and southeast also work nearly as well while east and west will indeed work too but with just slightly less electricity production. Since solar panels are like long electrical circuits, if trees, power lines, or other obstructions shade even a fraction of a panel, production can be dramatically affected. Therefore it is very important to have little to no shading. Finally, it does take a lot of roof space to fit enough panels on your roof to make enough electricity to completely offset you bill, which is our ultimate goal. Ample roof space also allows us to use the most cost effective panels, which have dropped the most in cost. The amount of panels needed, however, depends on your actual electricity usage.

How do rebates work? We handle the entire rebate process for you, from applying for your rebate reservation to submitting your final claim form paperwork once the system passes inspection. Basically, utilities will soon be required by law to get a percentage of their electricity from clean sources. There is no way they could build that renewable energy infrastructure without spending incredible amounts of money. By giving you free money to help you install a solar system they are essentially enlisting you to help them. You benefit from a lower cost to install and free electricity for decades, while the utility gets to include your solar energy production in their renewable energy portfolio “quota”. The size of your rebate depends solely on how much and how well you produce power. Your rebate is an upfront payment for the electricity your system will produce over the next 20 years, as calculated by a program from the National Renewable Energy Laboratory.

Tax Credits? Each year the federal government creates a multitude of programs in which they would like us to participate in. Rather than provide cash rebates for participation, they allow taxpayers to reduce the amount of taxes they owe at the end of the year. This is a great way to stimulate activity and spending around these programs without incurring big upfront cost. There are lines on your 1040 tax return that allow you to claim these tax credits. Solar and Efficiency tax credits are claimed on Form 5695 “Residential Energy Efficient Property Credits”. Residential solar tax credits are applied to the amount of your solar system after the utility rebate is applied. Unused tax credits carry over until 2016. For business tax credits, the credit is taken against the entire cost of the system with rebate included, however, the rebate becomes taxable income. Credits carry over for 20 years. Credits are taken on Form 3468 “Investment Credit”. Importantly, these are not “deductions” that reduce your taxable income, but rather “credits” that reduce the taxes you owe dollar for dollar.

More Incentives for Businesses: There are additional incentives available for businesses who install solar systems, or if you use part of your home for business. They include a 50% bonus depreciation in year 1 with no carryover limits, refund of the sales tax paid on the equipment, and federal grant money in lieu of the 30% federal tax credit.

How do we get started? Our first step in the process will be to collect you last 12 months of electricity bills. We want to find out your total kilowatt hours (kWH) usage for the last year. Taking 12 months allows us to account for seasonal variation. When we know your annual kwH usage, we then build a system that will produce enough electricity to cover that usage 100%. A new law was just passed in October 2009 that will soon allow homeowner’s to receive an actual check each calendar year for any extra electricity production. Previously the utilities would only keep a credit for you, which if left unused, would be taken and sold for their profit.

Installation Process/Timeline: The solar process has been speeding up as more staff has been added to rebate reservation processing. After the Contract is signed, we overnight a copy with the Rebate Reservation Application to your local utility. We then wait until the Solar Administrator processes the Rebate Reservation Incentive Claim Form. We will receive this confirmation by email. At that time we arrange delivery of materials and begin the installation. Installation usually takes from 2-5 days depending on the size or complexity of the array. Once completed, there are 2 different Inspections required. The first is from the Department of Building and Safety, which can happen the day following installation completion. At this point we are able to “turn on” your system so it starts producing electricity! We overnight a copy of the approved “Finalled” Building and Safety Permit along with your Rebate Reservation Claim Form to the local utility, which tells them the installation has been completed. Once received, they initiate the second Inspection by their respective Solar Inspector. The Solar Inspector verifies the installation, shading, tilt, etc, and releases the payment of your rebate.  Mimeos will carry this rebate for you, so processing time will not affect you.

Will I have power during an outage or when the grid goes down? Since your solar system is still connected to the utility grid, if it goes down you too will lose power. The addition of batteries would only be necessary if you wanted power during blackouts or if you are not connected to the grid. Mimeos has installed several battery back up systems, so if you have critical needs or have power disrupted often, we’d be glad to discuss the added costs and benefits with you.

Mimeos Solar