Solar Panels

How Solar Panels Work

Solar photovoltaic (PV) panels contain individual cells that convert the photons from sunlight into electrical current. The combined electricity produced by multiple cells within a solar panel forms the total electrical power available from that panel. Several solar panels operating together are generally required to provide the electrical power required for use in your home. Solar panels, as the name suggests, produce electricity from the sun, and so that electricity is not available at night, or may be reduced under cloudy skies. Solar panels can be used with energy storage devices such as batteries that can store the electricity when sunlight is available, and then provide that energy for use later when sunlight is not available. This option may be expensive. With or without battery storage options, solar panels require “inverters” to convert the electricity directly produced by the panels into a different form that can be used in the home; and they also require controllers to ensure electrical safety of the panels and the connected devices in your home.

Things to Consider Before Installing Panels

While building a new home is the best time to design and orient it to take advantage of the sun’s rays, most homeowners do not have that luxury. If you do happen to be installing solar panels in a new home construction project, take some time to review the home’s orientation. The ideal home will let in the winter sun through south-facing windows to reduce heating bills while blocking the heat from the summer sun to reduce cooling bills. Other factors to consider in the likely event you will be installing panels on an existing structure are your solar resources, siting and sizing the system, the type of system you prefer (grid-connected or stand-alone), and electrical safety.

Make sure your home’s roof can support the weight of solar panels, and check to see how much sunlight your roof gets. If your roof is shady due to trees, or if you rent an apartment or home, you may want to hold off on retrofitting your home with solar panels. If your property doesn’t lend itself to a solar system, you can always pursue a shared or community solar program.

Take measures to reduce your home’s energy usage prior to installing solar panels – the amount of solar energy you will need to produce depends on how much energy you use at home. Make sure to do an energy audit and install energy efficient appliances before adding solar panels.

Who to Hire for Installation

Given the complexity and need for proper installation, it’s best to have a professional solar contractor install your system. When researching installers, find qualified and insured professionals that have been certified by the North American Board of Certified Energy Practitioners.

It’s usually best to obtain at least three bids for the solar system installation and make sure the bids are based on the same characteristics and metrics to enable comparison shopping. Bids should clearly state the following information:

  • The maximum generating capacity of the system—measured in Watts (W) or kilowatts (kW).
  • An estimate of the amount of energy that the system will produce on an annual or monthly basis (measured in kilowatt-hours).
  • The total cost of getting the system up and running, including hardware, installation, connection to the grid, permitting, sales tax, and warranty.

System Costs and Financing Solutions

The costs of home solar systems vary depending on how extensive the system is based on your home energy consumption, so the best route for determining the potential costs of a solar system for your home is to consult with an installer or use available solar mapping tools to assess your home’s solar potential. These tools can also provide you with the estimated system size, potential costs and savings, and local contractors. Below are several ways you can finance a solar panel system for your home.

Buying a system

By purchasing a home solar energy system, you are the sole owner of the system. The system will be connected to the grid by your installer, and it will need an interconnection permit from the utility. If your solar energy system generates more power than needed, you can sell excess electricity to the grid. If you need more electricity than the system provides, you will draw energy from the grid to make up for it. This is the best option to take advantage of tax credits and increase the market value of your home.

Leasing a system

If you lease your solar energy system, you pay to lease the system from a third party in order to use the electricity it generates. Solar leases often involve limited upfront investment and fixed monthly payments over a set period of time. Under a leasing arrangement, homeowners typically pay the developer a flat monthly fee for the equipment that is based on the estimated amount of electricity that the system will produce. Note that you may be ineligible for state or federal tax incentives by leasing.

Shared solar programs

Community or shared solar programs are a great alternative if your home does not have adequate roof space. A group of participants pool their purchasing power to buy solar into a solar system at a level that fits their needs and budget. The solar energy system can be on or off-site and may be owned by utilities, a solar developer, non-profit entities, or multiple community members. Consider this if you do not want to be responsible for system maintenance or are ineligible for federal and state tax incentives. You should contact your electric utility service provider to see what community solar options are available.

Power Purchase Agreements (PPA)

In a PPA, consumers host solar energy systems owned by solar companies and purchase back the electricity generated. The host consumer agrees to purchase the power generated by the system at a set price per kilowatt-hour of electricity produced over the life of the system. The purchase price of solar electricity is often lower than the local utility’s retail rate. In this scenario, the developer arranges for the design, permitting, financing, and installation on a consumer’s property at little to no upfront cost.

Utility Connections/Net Metering

Net metering is a system in which solar panels or other renewable energy generators are connected to a public-utility power grid and surplus power is transferred into the grid, allowing customers to offset the cost of power drawn from the utility. When homeowners generate electricity from their solar array, it reduces the amount of energy they purchase from their electric utility, which also lowers monthly electricity bills. If the solar system generates more energy than is consumed, any excess power is sold to the grid and can be deducted from monthly energy bills. Virginia’s current net-metering law covers residential systems up to 20 kW.

Tax Incentives

As you research whether it’s viable to install solar panels in your home, also look to see if your city or utility offers any rebates, tax credits, or other incentives that could reduce the overall cost of switching to solar energy. Learn more about available financial incentives in your area by going here. The federal government offers a Residential Renewable Energy Tax Credit for Solar Water Heating or Photovoltaic Systems, which gives qualifying taxpayers a credit of 30% of qualified expenditures for solar systems that are placed in service by 2019. Visit this page for more information on how you can qualify for this tax credit.

At present, Virginia does not offer state solar tax credits, incentives, or rebates, but offers property tax exemptions for installed solar systems. Property tax exemptions allow businesses and homeowners to exclude the added value of a system from the valuation of their property for taxation purposes. An exemption makes it more economically feasible for taxpayer to install a solar system on a residential or commercial property. Since the Virginia state legislature authorizes the property tax exemptions, be sure to check with an installer to see if your county or town offers such exemptions.

Required Permits

Check to make sure you are in compliance with state and local permitting rules and regulations. According to the Virginia Department of Environmental Quality, any renewable solar energy facilities with a rated capacity of 1500 megawatts or less are subject to the regulations for the Small Renewable Energy (Solar) Permit by Rule. For additional permits that may vary county by county, check this page.

Additional Resources