Want Solar Energy? HERO Program now in Concord, CA.

Have you heard of the HERO Program? Our California team got wind of it for the first time about ten months ago when cities in the Northern California region were rapidly becoming available. We quickly became a HERO Registered Contractor to begin to take advantage of it's financing in our local installation areas. What is HERO? HERO is a government-sponsored program which enables a homeowner to finance home improvements related to efficiency and green products. HERO provides low fixed-interest rates and payment terms up to 20 years that are then paid back through property taxes.

We've been installing HERO financed solar projects in northern California for the last eight months. What do we know so far? So far, so good! Our clients love the simplicity of the program. We see it killing off the most popular option for financing a solar project, the solar lease. A Solar Lease can be an option for homeowners who want to see a smaller monthly energy rate, the drawbacks are that the homeowner cannot take advantage of the 30% federal tax credit... they won't own the system and the lease is tied to the homeowners personal credit. If the home is sold there is a transfer necessary and terms vary depending on the leasing company.

I think that where HERO destroys the solar lease is in the sales cycle. Payment plans are familiar and recognizable, it's a traditional loan term. The difference is that the HERO loan term is paid back through the homeowners property taxes, keeping the homeowners personal credit and lending liability out of the financing equation. The house is getting the financing in this process, so the homeowner's credit score is not a requirement. If the homeowner wants to drop their PG&E bill down to $0, we will install a solar system big enough to replace it entirely. Replacing their PG&E bill with slightly higher property tax payments lowers their monthly home expenses. Not only these tax payments much less than sticking with the utility, but they are fixed for the loan term. Financing solar energy with HERO shields a homeowner from inflation and rate hikes that the utility company promises them otherwise. In a typical consultation, once HERO is explained to a client, I can see the interest almost immediately. "Sounds awesome! So what do I need to do next?" is what they usually ask me. It's really a no brainer, and if you can't purchase your solar system cash it might be your best financing option. Whatever you do, don't lease your solar system until you check HERO or your local PACE program out.

5 benefits when going solar through HERO

  1. $0 due upfront - There was nothing the homeowners had to pay out of pocket .
  2. Save on electricity - Offsetting the utility bill with solar energy adds up to huge savings over the life of the system.
  3. Increased home value- Solar systems have great system resale value. Giving a huge advantage when they sell their house since the system is OWNED not LEASED.
  4. Get the tax credit - 30% tax credit available until 2016. 30% of the system cost can be used to pay down the loan balance. You only get these available credits and rebates when you purchase your system.
  5. Performance warranty - 10 year workmanship warranty and 25 year performance warranty with solar modules.

With HERO now available in Concord, CA we will be pushing a canvassing program to notify homeowners about this opportunity and conduct site evaluations for homeowners. HERO actually stands for home energy renovation opportunity. In Concord, CA your electric bill must be at least $70 a month to benefit from the "no money down" using HERO. Meaning if you average $70 per month with PG&E, you can utilize the tax credits and first years savings so that the HERO program doesn't cost you a dime out of pocket. If you're paying over $150 a month then it gets even easier; give us a call right now.

Find this article interesting? We're on target to install over 200 residential solar systems in Concord, CA in the year 2015 and you should be one of them! Don't live in Concord? Check to see if HERO is in your city by contacting us today.

Understanding Monthly Payments With A Solar PPA

For those who want to go solar but don't have the capital for a solar panel installation or the tax burden to claim the incentives, leasing a solar system/making a power purchase agreement is an option to consider for getting solar panels installed onto your home. Actually, it's the most popular option right now, in California over 70% of homeowners who go solar sign up with a PPA provider such as Solar City, Sungevity, Sunnova etc. and many don't pay anything out of pocket. That's right, no upfront costs to switch services, ZERO DOWN.

What is a PPA or Lease? A PPA(power purchase agreement) is a 20-25 year agreement with you and a third party energy provider. The PPA provider buys the solar system for you, pays a contractor like us to install the system, and they charge you monthly or upfront for the energy it will produce. They basically sell you the energy the solar system produces for your home. Sounds weird? But by doing this your energy costs will be less than buying all your electricity from the utility. Financing a power plant on to your roof is just cheaper to do than what it costs the utility to distribute dirty energy to you through the grid.

During the term of the agreement, the PPA provider is responsible for monitoring and maintaining the solar system performance and provides full coverage for any damage due to vandalism, earthquakes, hail the size of softballs, pretty much anything as long as it wasn't your fault. It's solar energy as a service. It's now how you buy the majority of your electricity. They make money, you save money and the utility loses a customer.

PPA's are very easy to sell to homeowners, most of them requiring no upfront cost at all. As long as you have a good enough credit score and own the home you're good to go solar with a PPA. Here's how a typical PPA sales pitch works.

"You're currently averaging $200 a month in electricity costs to the utility. If you keep paying this Mr. Homeowner, you will be paying an average increase on this bill of 6.7% or more a year, based on utility rate hikes and inflation history. You're wasting so much money on dirty energy Mr. Homeowner. By going solar with our PPA, we can start saving you $40 per month by offsetting these utility costs as these payments are locked in at a fixed rate. Will monitor and maintain the system for the next 20 years of this service and based on these calculations you should expect to see savings of this many thousands of dollars. This is only being offered now as we get to claim the Federal Tax Credit, since we're buying it, which makes this a viable investment on our part and this service may go away when the tax credit expires. Oh my it's 2014 already! There is not much time. This is your chance to quit buying your energy from the utility Mr. Homeowner, you can buy it from us for a much lesser rate which will save you thousands of dollars. Think of the possibilities you can create with those kinds of savings Mr. Homeowner. Remember, you don't have to pay anything upfront for the installation cost, this is as simple as changing your service provider. We're changing you from Yahoo to Google. Just sign right here. Thank you for doing business with us Mr. Homeowner."

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The Solar Panel Installation Cost

What the homeowner wasn't told in this PPA service sales pitch was the total cost of the solar system installation, he was just pitched the monthly payment as it looked way more affordable compared to his current utility bill. Or, maybe he was told the installation cost for a cash purchase but was priced for sales and marketing purposes. If the solar system was highly priced it would make monthly payments with a PPA much more attractive to do. However, if the PPA provider is buying and installing the solar panel system at that price, Mr. Homeowner is now the one making monthly payments back to the PPA provider based on an overpriced solar system. Even though the PPA payment is less than his current utility bill, he could have saved thousands of dollars more if he objected the total installation cost. Remember the PPA provider has to make their money back during the 20 year term.

The PPA monthly payments are usually calculated on energy production but are structured so they see their return on investment for the initial installation cost. If you're looking into doing a solar PPA, just make sure you see the total cost of the system. Find out what the average cost for solar panel installations are in your area. Do the math and if your proposed solar system installation cost is over $5.50 per watt chances are you should get another bid.

Solar Power In California Is Worth It

Is solar power worth it? Putting aside the environmental benefits and all the feel good green stuff, many homeowners in California are on the fence about this from a financial perspective. Actually, a lot of homeowners don't even know how effective solar power is for offsetting costs of living.

So is solar power worth it? Yes it is! For those who have the capital to invest, solar power is the most low risk-highest return on investment you can make in California today. By simply looking at the finances and comparing what is currently being offered by banks and other traditional forms of making money, solar power is extremely attractive. We hope the following helps you better understand why people are making the switch to solar.

First, solar only benefits you financially if you own your home or business. Second, roof space and sun exposure is the most important factor. If your roof is covered in shade you'll either need to cut down some trees or have enough land where you could install a ground mount. Solar systems only work if they have direct sun exposure. The azimuth of your available roof space is also important determining how much energy a solar power system can produce for you.

So if your roof is clear of shade and you have enough available roof space, let's take a look at these numbers. The video below is a brief explanation of financial benefits a solar power system can provide you.

Financial benefits of solar compared to other investments

To put the massive amount of money saved by going solar, lets put other forms of investing into perspective. The poorest return you could get is probably one out of a certificate of deposit(CDs). These on average right now are around 1%. Make fun of those who keep their money under their mattress but the returns on CDs do not even keep up with inflation rates, neither do most savings accounts. If you're looking at the rising costs of transportation and health care, then it really doesn't make sense at all for those who are considering investing a lot of money here. Or any at all.

A more attractive form of low risk investing is putting your money into S&P 500 companies. The S&P 500 on average over the last 50 years has had a 9.9% compounded annual growth rate. For every $1,000 invested you make $99 a year, statistically speaking. However, for all earnings on these investments you have to pay a capital gains tax which reduces the internal rate of return. These companies are great low risk investments but always keep in mind gross earnings on investments are 30% less after taxes.

Now when considering investing in a solar power system in California lets take a look at the alternative of doing nothing which is sticking with the utility. Depending on what you are currently paying now for electricity you could expect to spend hundreds of thousands over the next three decades. To figure this out, take what you're spending annually to the utility for electricity and multiply that by 25 years. Take that number and multiply it by 2 and you have a conservative ballpark electricity cost with compounded inflation over the next 25 years. Wow!

Solar power system internal rate of return

So what is the internal rate of return for a solar power system. It all depends on the total cost of the initial investment, the size of the system and how much energy costs it offsets with the power it produces(quality of equipment). In states like North Dakota where electricity from the utility is cheap, solar is a terrible investment. But check this out, the state average in California for an internal rate of return is 12% for solar power systems. That's better than investing the same amount of money into the S&P 500! Not only that but the money you save/make off those kind of returns is tax free! You do not pay capital gains on offsetting your energy costs with a solar power system.

In the video above we claim we can give you a return of 18% or more in California. This is because we use top quality equipment at a lesser installation cost compared to average installers in California, many who charge top dollar for cheap imported solar modules and equipment.

Solar power investment incentives

The biggest solar power incentive is the 30% federal tax credit which expires in 2016. These kind of stellar returns on investment are not possible without it. As explained in the video, if you install a $25,000 solar power system your initial investment of going solar is $17,500 after the tax credit, increasing your returns.

You also have to take into consideration the current net metering program with PG&E, which is 1-1, kWh for kWh, dollar for dollar with no extra charge. As demand grows for solar energy these programs will change whether it's a higher connection fee to the grid for solar energy producers or a wholesale price they determine for selling you energy back. You never know. You want to get grandfathered into the current net metering program asap! As any changes with how net metering works for new solar customers can decrease your maximum savings compared to going solar right now.

Is solar power worth it for you?

We think the above should have convinced you that you should at least find out more about your situation. Every home is different. There are a lot of things that actually come into account when evaluating the worth of solar for an individual situation, such as:

  • Increasing your home or property value
  • Ability to charge an electric car for free(even more savings)
  • Reducing your carbon footprint
  • In complete control of your cash flow(unlike unstable financial assets)
  • Ability to add onto the solar system when needed(saving you more money)

Just do it.

Solar Energy Security With The Electric Car

With rising oil and gasoline prices, Americans are fed up with several factors connecting their transportation needs to gas powered vehicles. Price fluctuation, ongoing maintenance costs, constantly searching for the cheapest fuel pumps, many are considering an electric vehicle (EV) as a viable alternative. Any solar powered home now offers a closed loop connection to energy freedom by powering your car with leveraged cheap energy generated by a homeowner's PV solar system.

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Modern lifestyle has been so connected to gasoline powered vehicles, that over the past century consumers have now come to expect to spend hundreds of dollars per month on just their transportation costs. Importing oil threatens both our national and economic security. As a nation, we let more than $1 billion go to foreign countries to finance our oil needs. This is money that sometimes goes to enemies who pose a threat to our country. An electric vehicle would empower Americans to source this fuel “domestically.” However, an electric car is typically charged by energy drawn from your utility and oil still makes up a small percentage of the country’s electricity fuel mix.

Alternatively, many homeowners are contemplating IF an investment in additional electric PV panels can power their car with clean, green solar electricity and SAVE MONEY? 

So how much solar energy would you need to generate to power your electric car? Let’s use some simple math. American consumers drive on average of 12,000 miles a year. The Nissan Leaf, Chevy Volt, and Ford Focus E use about 1 kWh for every 4 or 5 miles driven. Therefore, you would need to generate between 200 and 250 kWh per month from solar electricity. In California, this would equate to approximately 2.5 kW of installed solar capacity (DC STC), or about 10 250-watt standard REC modules/panels.

If it costs $5.5/watt to install a 2.5 kW solar system... we can roughly set your system investment to $13,750. Let's minus off our 30% tax credit to around $9,625 or to be safe we'll round up to $10K. Keep that in mind now, $10K dollars would afford you around 12,000 annual miles of driving for at least 25 years (our panel warrantee) and ultimately offering 300,000 total guaranteed miles of driving. 

So let's say we get 30mpg on our current gas powered car, that's 10,000 gallons of gas we'll have to buy over the course of those 300K miles. Even if gas prices hold flat for the next 25 years at $3.85/gal, our total gas bill will be over $38,000! Effectively saving enough money to buy another electric car with our $28K savings! Just by adding inflation and the assumption that oil will become higher in price as is gets more scarce, this savings could effectively be exponentially higher.

The Nissan Leaf starts at $35,200 minus a $7,500 tax credit means your total car investment is around $27,700. But wait, since the car is electric we won't need those pesky oil changes 300,000/5,000 = 60 oil changes at $50 a pop is another $3,000 saved. Maintenance is also drastically reduced as electric cars have very few moving parts and generate little heat. No transmission, clutch, radiator, electrical parts heating up and cooling down to go wrong over the years will increase the vehicle's life span. It has been shown in many road tests that with regular tire and battery maintenance* an electric engine in a car can easily last over 500K to perhaps 1M miles! How is that for re-sale value?!! 

Bottom line, if you even estimate your worst case scenario of only warranted solar production, you can still bank on a $30K savings over the life of the system, factor in inflation and scarcity with the gas prices and this only goes up from there. Now added the piece of mind that you are producing your own energy to move your car and all of it comes from a clean renewable source.

Want to learn more about electric cars, check out our electric cars article here.

*Electric car batteries are currently warranted for 10 years or 100,000 miles. But the nice thing is that the manufacturer will take the old battery to recycle and give a credit to trade in for a new set when it's time to purchase. Assuming the technology keeps getting better, batteries in 10 years will be longer lasting and cheaper than ever.