Why I Am Not Buying Tesla Solar Panels or Solar Roof For My House Yet
Tesla has plans to make Tesla Energy as large as its automotive business. Read this article to learn about some of Tesla's recent successes in the energy market.
The a US Tax Credit to middle and upper-income taxpayers is 26% in 2020. If you don't make enough to use the tax credit yourself, you use a company that takes the tax credits and rents or leases the panels to you and passes on most of the benefit. This is scheduled to go down to 22% in 2021 and to 10% for 2022 and beyond. This would be a reason to buy solar sooner rather than later if it wasn't for 2 countervailing factors.
- Solar has dropped an average of 16% a year in price (16% a year compounded for 10 years is an 82% fall overall) for the last decade. It is hard to predict whether it will fall more or less than that in the next decade, but there are tremendous research and development in solar worldwide and I don't think we are at the bottom yet. These price reductions could more than make up for the reductions in tax credits scheduled to happen.
- Joe Biden is currently ahead in the US polls. If he is elected president, he has proposed increasing incentives to "The deployment of clean energy". Of course, he will need Congress to approve any change in law, but it is likely the tax credit will either stay at 26% or be increased if Biden is elected in a few months.
I live in Florida and will go over their incentives. I encourage you to check out your state's situation by clicking here for Energysage's website and scrolling down to your state and clicking it.
Florida has net metering at this time. This means that the utilities pay you full retail price for the power you put back on the grid during the times your solar produces more than you need (i.e. in the day when it's sunny, but you might be away from your home working) so they when you come home from work and use electricity when the sun has set, you have credits for you to use.
At some point in the future, net metering will probably go away, because it is a bad deal for utilities. But while it is the law, it is great for consumers, since you don't have to get a battery to store your solar energy until you want to use it. The utility acts as your battery "for free." In general, if you produce more power than you use in a year, the utility will either pay you nothing for that extra energy or pay you a low wholesale rate. For that reason, it is usually a bad financial decision to buy more solar capacity than the power you expect to use on an annual basis.
I live in Tampa and am a customer of Tampa Electric. They recently sent me a notice that because of the big drop in energy costs (related to the Covid-19), they would be reducing electricity rates.
In my situation, this cut my already low 8 cents a kWh rate to about 6 cents a kWh. According to Paylesspower, that is lower than the average for any state in the country. In states like California, Connecticut, Massachusetts, Rhode Island, and Hawaii, with rates from 20 to 30 cents per kWh, solar has a much faster payback.
For example, in California, a 4 kWh system is expected to produce 16 to 21 kWh a day of electricity, worth about $3 a day, $90 a month, and $1,080 a year, according to Tesla's site.
Since this system only costs about $6,000 after incentives, it pays for itself after about 6 years and is expected to produce about $29,000 in savings over the 25 life of the system. In Florida, the same 4 kWh system is expected to produce a little less (14 to 18 kWh) a day. The average Florida rate is 12 cents a kWh. so that is about $1.80 a day, $54 a month, and $648 a year. It is expected to pay for itself in 9 years and generate about $14,000 in savings over its life. Now for my utility, that 16 kWh would only save me 96 cents a day or $29 a month or $346 a year. That lengthens the payback to almost 18 years. That is not very compelling. I am looking for a payback in less than 10 years. I may get solar even if the financial payback is poor for environmental reasons.
Your Individual Situation
Another thing to consider is how long you plan to stay in your home. In a perfect world, the home appraiser and home buyers would pay you the true worth of your solar investment, but we don't live in a perfect world. In some areas of the country, buyers and home appraisers value solar at less than its worth. This means if you plan to move in a few years, you would be betting on the industry changing to give you the fair value for your home. I think it is a likely the industry will change in 5 years, but if you plan to sell earlier that than, you should investigate how solar is viewed in your area.
The last thing that I am considering is my new home warranty. I live in a new home and I have a one year home warranty. If any roof issue appears in the first year, they will be fixed for free by my home builder. If I install solar before the year is up and a roof issue appears, they won't cover it, but instead, blame the solar company for the issue. So for that reason, it is best I don't do anything for at least 9 more months.
I hope hearing about the variables I weighed in considering solar help you make a more informed decision. I included some helpful links to help you with your research. If you decide to buy Tesla Solar, make sure you ask a friend that has a Tesla car or solar for a referral code to save a $100 off your installation. If you don't have any friends that have a referral code, use mine.