Solar 101: Frequently Asked Questions
What should I know about solar before I invest?
Before you invest in solar, you need to consider cost, reliability, warranties, maintenance just to name a few important topics. There are many third party solar providers that will claim solar is more affordable than what you are currently paying for your power. Be careful.
You also need to decide why you might want solar power: Do you want to save money? Do you want to be prepared in the case of a power outage? Do you want to make the air cleaner? Or do you just want to impress your friends with an ostentatious display of conspicuous consumption? The answers to these concerns are detailed below.
What is the true cost of solar?
Solar is subsidized by federal and state governments through tax credits. Local city government may participate in the subsidies as well. Federal tax credits are currently offered at 30% off the gross cost of the overall solar array. State tax credits vary from state to state. Currently, Utah offers a one-time tax credit of $2,000. The cost of the solar equipment, installation, and maintenance is borne by the buyer (homeowner.) If financed, be careful of the “no money down” or “12 months interest free” plans. Many of these types of financing options, if not refinanced in a certain period of time, will charge high interest rates for equipment that is depreciating in value.
What does my tax liability have to do with investing in solar?
Not all consumers that want solar power can qualify for the tax credits offered through the Federal and State government. The tax credits offered to the public are based upon the tax liability of the consumer. If a consumer does not have a tax liability, or if their tax liability is not large enough, they may have to amortize the credits over an extended period of time. Talk to a tax accountant or tax advisor to make sure you can receive the full value of the tax credits that are offered.
If I invest in solar, will it eliminate my power bill?
Not everyone can eliminate their power bill. A number of factors play an important role. When considering roof top solar ask the following questions to third party solar providers: Do I have enough roof space for the panels to eliminate my power bill? Does the energy I generate from the solar panels eliminate my Facilities Service Charge found on my power bill? What size of solar array do I need to eliminate my power bill? Consumers will quickly find that it will take a significant amount of solar panels to eliminate your power bill because Dixie Power rates are among the lowest in the nation. In most cases, Dixie Power members would have to invest in a huge solar array that would not fit on their roof to eliminate their power bill.
What if the power goes out, will my solar power still work?
Since the most economical way to have solar is through a “net metered system”, (you receive your power source from the grid) when the power is out your solar panels will not be working. This means that if the consumer wants to be prepared in the case of a power outage, they must also purchase backup systems (battery) that can easily double the cost of solar. Batteries usually have a short life span (3-5 years) until the consumer must purchase and replace them, which adds to the cost again.
A third party solar provider advertises “no money down”. What should I know about these lending options?
Be careful. Many third party providers will advertise multiple ways to finance solar power. Many of these financing options will only delay payment for the solar array. These financing options, if not refinanced, charge high interest rates, thus affecting the overall true cost of solar. It is important to realize that consumers need to keep things in perspective. Do you really want to mortgage your home and other assets you own in order to receive the benefits of solar power?
Who is responsible for maintenance and cleaning the solar equipment?
If purchasing solar from a third party other than Dixie Power, you are responsible for the upkeep and maintenance of the equipment. Be cautious of statements like, “maintenance free” solar arrays. The panels will get dirty, which will affect the overall performance of the system. To keep solar panels generating electricity they must be cleaned off with a clean damp cloth each and every month; so you would also have to make sure you keep access to your rooftop installation.
How does solar compare to coal generation power?
Dixie Power receives its power from a number of different resources. Coal, hydro, solar, and geothermal power are among Dixie Power’s energy portfolio. Surprisingly, hydro power is the same cost as coal power today. If you are considering solar power for your home, you will pay more for solar than what you currently have.
Why should I buy solar from Dixie Power instead of third party providers?
There are five main reasons to buy solar from Dixie Power instead of third party providers. Lower cost, no tax paperwork, no installation costs, no loans, and no maintenance are just to name a few reasons.
Can I transfer my solar if I move?
In almost all cases when buying roof top solar from a third party, the consumer cannot transfer their equipment to another residence. Even if it were possible, the consumer would spend more time and money repairing the roof and possibly voiding any warranties of performance or installation. With Dixie Power’s Solar Program, you can move anywhere Dixie Power provides service to its members and still enjoy the benefits of solar. If you were to leave Dixie Power’s system, you can simply discontinue your subscription to Dixie Power’s solar power program.
What is my rate of return if I invest in solar?
This is one of the most important questions to ask a third party solar provider. Solar makes more financial sense when the power rate is higher. For example, Dixie Power rates are among the lowest in the nation. Currently, Dixie Power’s rate is about 6 cents per kWh. That is half of what other power providers charge in the area. Dixie Power has maintained a consistent rate for 20 years and continues to make preparations to keep rates as low as possible for the years to come. Don’t be surprised if your rate of return exceeds 20 + years, depending on the size of the solar array. It’s important to note if the payback on any investment is longer than the life expectancy of that investment, the rate of return is negative.
Will Dixie Power reimburse me for any power I haven’t consumed?
No, so there’s no need to buy more than you can consume.
Will the air be cleaner if I install solar panels on my house?
No, Dixie Power’s portfolio of power supply are all clean resources that contribute nothing to our regional haze issues. Even Dixie’s coal fired power, located near Vernal, Utah, is filtered and scrubbed to produce a small fraction of any emission levels allowed by the EPA.
Does installing solar power reduce demand on the grid and postpone the need to build future generation and transmission?
No, solar power does not reduce the demand on the power grid, and so does not delay any required investments in generation or transmission. Solar panels generate electricity from mid-morning to midafternoon; the grid peaks in the early morning and in the early evening, outside the brief window of solar generation.