Solar panel company pocketing govt subsidy cash intended for homeowners

posted at 10:01 am on July 12, 2014 by Jazz Shaw

The US government has been pushing the idea of home solar panels for quite a while now, giving the industry a significant, additional nudge when the current federal subsidy program was generously expanded in 2008. The idea behind this was that if homeowners wanted to save some money on their energy bill by using solar power, they could receive a 30% subsidy to help cover the costs. Sounds pretty sweet, eh?

Well, when the government is giving away taxpayer cash, plenty of people will line up to get it… and it’s not always those who were intended to benefit. This is apparently going on in terms of this solar panel subsidy scheme as well, with at least one company figuring out a way to profit from it. SolarCity came up with a plan where homeowners could lease the solar panels over the long term rather than having to pony up the cash up front. The sales pitch was that this would allow them to start earning those big savings on their utility bills right away, rather than having to wait to save up or pay off the cash to purchase them.

As the following report shows, this freed up SolarCity to pocket the government subsidy money since the homeowner never actually took possession of the panels.

SolarCity has been accused of taking advantage of subsidies from the US government. Instead of these subsidies going to the consumer, SolarCity has been claiming them. SolarCity takes away a 30% tax credit while leasing solar panels to its customers. Most customers are unaware of the complicated laws that regulate solar policies.

Solar City has come under frequent criticism of its unethical behavior in milking hundreds of millions of dollars in subsidies from the USA government. Its sister concern Tesla, run by Elon Musk, is also facing the same criticism. One of the biggest issue that has come up with Solar City is the fact that it claims a 30% tax credit on its solar installation which is meant for its customers. It takes away the 30% tax credit, while leasing the solar panels to its customers who may face high electricity bills and do not get any share of the subsidy. Most customers are ignorant about the complicated laws and regulations that make up the solar policies. They are happy with whatever small savings that SolarCity offers them. USA’s federal and state governments have a lengthy complex procedure for approving solar subsidies. Compared to USA, Germany has a streamlined fast procedure where the individual customers get all the benefits. Unlike Germany in the USA, the installers and developers like SolarCity have popularized the PPA and leasing model which allows them to make money while the customers usually get the raw end of the deal.

This is turning out to be a better deal for the installer than for the consumer it was intended to benefit. But surely somebody else must have their snouts up to the Washington trough. So who else is benefitting, aside from the “green technology” installers? Well, the Chinese seem to be doing well.

One of the largest solar-system installers in the U.S., SolarCity Corp., uses the LLC strategy and currently buys a majority of its solar panels from the low-cost Chinese supplier, Yingli. Thus when President Obama said that we must subsidize our solar industry to remain competitive with the Chinese, it would have been more accurate to say that we subsidize Wall Street to create employee-less corporations that buy and install Chinese solar panels in the U.S. Wall Street and consumers understand that free markets are borderless; Washington does not.

Just last week, the U.S. International Trade Commission found the Chinese solar industry guilty of “dumping” solar panels in the U.S. Tariffs are likely to be levied against Yingli and others. Here then, is a practical guide to the Obama administration’s nonsensical solar policy: Washington gives tax breaks to Wall Street to fund LLCs that buy solar panels from the Chinese to “help” the American solar industry, while the ITC threatens to levy a tariff on those solar panels, which would raise the price of solar energy to U.S. homeowners. In short, Wall Street pockets the money and consumers get higher solar-energy prices.

The deal actually manages to get worse for the homeowners if they plan on selling their homes. If they wind up in one of these long term solar panel lease deals (the “free” ones mentioned above), potential buyers are less than eager to sign on to the owner’s lease arrangement as part of the conditions for purchasing the home. The lack of savings keeps on rolling!

Once the subsidy genie is out of the bottle, it’s nearly impossible to put back in. And the cash is not going to the people who were supposed to benefit from it while they helped to save the planet. But don’t worry… Uncle Sam will send you the bill next April.


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Reason 2,987,011 that government should not be involved in this crap.

CW on July 12, 2014 at 10:06 AM

The crooks and liars in DC are suppose to be running the country, not ruining it.

Flange on July 12, 2014 at 10:09 AM

I bought my system, 3200W, four years ago from an ethical company. This leasing scheme sounded fishy to me from the get go.

Fauxrepublican on July 12, 2014 at 10:09 AM

Why Progressives are 100% on board with this is something I might never understand. They should be infuriated. But they don’t care and even want more of it!

visions on July 12, 2014 at 10:10 AM

Captain Renault moment number 10,342…..”I’m shocked…..”

jaywemm on July 12, 2014 at 10:12 AM

The govt takes more of our money than they really need to and then gives us a small subsidy to buy something we can’t really make practical use of. No small wonder a crook comes along and takes a bite out of an opportunity to steal

Kissmygrits on July 12, 2014 at 10:12 AM

Solar power has been around for decades and was never that popular even in Florida. If you put those panels on your roof, they have to be removed in order to have a roof replaced. This method of ‘renewable’ energy didn’t expand until politicians found a way to make money from it, the same as with windmills.

Kissmygrits on July 12, 2014 at 10:16 AM

More money wasted on BS.

sorrowen on July 12, 2014 at 10:17 AM

The latest iteration of the “You’re one of 10 home owners in your area who has been chosen to receive a free home security system” scam.

The company is both pocketing the subsidy money and getting rent-to-own money from the customers. Taking “double-dipping” to a level seldom seen outside of Washington, DC itself.

The fact that the Tesla company is involved does not surprise me. “Deep-eco crusaders” may generally be scientific ignoramuses, but they couple their fanaticism with the ethics of weasels, and an eye for the main chance which P.T. Barnum would have envied.

clear ether

eon

eon on July 12, 2014 at 10:18 AM

…but a couple of billion will go to fix the humanitarian problem at the border!… *wink*…*wink*

JugEarsButtHurt on July 12, 2014 at 10:25 AM

I was wondering why Sirius/XM has had a lot of lowbrow “get in on solar power before it’s too late” ads voiced by threatening sounding scam announcer #1 (what I refer to the commercial guy as, he only does scam commercials).

ConstantineXI on July 12, 2014 at 10:27 AM

Is this the Hope or the Change?

Tard on July 12, 2014 at 10:28 AM

Taxpayers get screwed, scam vendor stays in business, green technology is sold, government spends taxpayer money to make it all possible…

This is a FEDGOV success story! I expect this model to be followed nationwide and the program expanded.

ROCnPhilly on July 12, 2014 at 10:28 AM

Sweet deal…hey, enterprising business people give customers what they want….The solar part maybe you can disagree with, and the taxpayer money? maybe the law wasn’t clear enough.

bill glass on July 12, 2014 at 10:28 AM

The competition is already jumping in. There are companies advertising that they provide panels to *you* that *you* own and *you* get to keep the tax money, with no lease!

This problem can be handled, and is already being handled, easily in the private market.

Capitalism is self-correcting.

HakerA on July 12, 2014 at 10:29 AM

The fact that the Tesla company is involved does not surprise me. “Deep-eco crusaders” may generally be scientific ignoramuses, but they couple their fanaticism with the ethics of weasels, and an eye for the main chance which P.T. Barnum would have envied.

clear ether

eon

eon on July 12, 2014 at 10:18 AM

Prediction: Elon Musk is destined for prison.

ConstantineXI on July 12, 2014 at 10:30 AM

Elan Mosk is a big Democratic contributor. Here, Jazz spits into the wind, for nothing will happen. It’s only conservatives who get Government ire nowadays.

unclesmrgol on July 12, 2014 at 10:31 AM

Dear clueless gubmint,

I also run a secret solar panel operation in my backyard. I promise it’s providing many green jobs. Send me a few million dollars. I can be trusted.

P.S. The NSA can tell you how to get in touch with me.

kpguru on July 12, 2014 at 10:35 AM

This reminds me of the CFL situation. Congress, supposedly in an effort to ease demand on the nations electrical infrastructure passed legislation banning incandescent light-bulbs. this legislation also was supposedly intended to bolster the fledgling American CFL industry. Well, as we all know by now, what really happened is that we were forced by law to bring toxic and hazardous compact fluorescent lamps into our homes, potentially exposing us to mercury poisoning should one of them break, and the Chinese just like with the solar panel industry dumb their CFL’s on the American market to the point that they killed the American CFL industry.

Yes for congress, right? Because after all, they are killing the American manufacturing industries that Americans refuse to kill themselves.

oscarwilde on July 12, 2014 at 10:45 AM

Lazy stuff Jazz.

Solar City bought the panels, not the homeowner. Why shouldn’t they enjoy the depreciation? Lease financing. The homeowner enjoys lower electricity bills.

If you live in a place with decent sunlight its a very good deal over twenty years. There is nothing stopping homeowners from buying the panels themselves.

lexhamfox on July 12, 2014 at 10:46 AM

Im sick o the phrase “Wall Street pockets the money”
That’s Hooey…an attempt to generalize bad behavior to all companies.
“Wall Street pockets the money”–really? How did, say, Hallmark greetings, benefit from this scam?
It’s an attempt to smear all business by what appears to be a left wing (German?) reporter.

Doc Holliday on July 12, 2014 at 10:46 AM

Remember when we thought Klinton signed a LOT of pardons right before slithering out of office?

Just wait.

Tard on July 12, 2014 at 10:46 AM

I see the subsidy gravy train is working exactly as planned. The demorats , in exchange for campaign contributions, are really helping that middle class they so fervently cherish.

NOMOBO on July 12, 2014 at 10:48 AM

I long for the days of ethical government under Warren G. Harding or U.S. Grant.

Heck, in Plunkett of Tammany Hall the author distinguished between honest graft and dishonest graft.

rbj on July 12, 2014 at 10:50 AM

The scheme is merely a cover story to conceal intended graft. Nothing more than old line crony capitalism.

I’ve been palinized so none of this sort of bull surprises me.

platypus on July 12, 2014 at 10:58 AM

While the subsidy is stupid and the company’s behavior is unethical, there is nothing illegal in it. Car dealers do it all the time.

Rix on July 12, 2014 at 10:59 AM

I long for the days of ethical government under Warren G. Harding or U.S. Grant.

Heck, in Plunkett of Tammany Hall the author distinguished between honest graft and dishonest graft.

rbj on July 12, 2014 at 10:50 AM

I was thinking something along that very line just the other day. though in truth the thought I had was, what a blessing it would be if we could go back to having a system ONLY as corrupt as Tammany Hall.

oscarwilde on July 12, 2014 at 11:01 AM

Uhhh … “let ‘em eat cake” ?

listens2glenn on July 12, 2014 at 11:10 AM

I never liked the solar subsidy programs because you could only access the subsidies if you used a government-approved solar installer. That smelled like a huge graft opportunity to me when I had been installing my own solar panels myself. The whole system seems to be set up to benefit cronies. (As are most Democrat government ideas.)

Socratease on July 12, 2014 at 11:14 AM

The whole single-family solar industry is a farce.

Most people do not live in areas that benefit greatly from solar energy. Fewer have single family homes that are oriented effectively (by compass direction) and fewer still have enough roof area to make a real dent in their electric usage.

The lifespan on solar cells is roughly 20 years. Most solar packages large enough to supply only 30-40% of a home’s electrical needs require at least that length of time to repay even the subsidized loans. They’ll also drive up the cost of a home at resell.

There may be some long-term savings for businesses (department stores and the like) with large, flat, relatively unoccupied roof surfaces that can support large fields of cells and whose power is largely for low-wattage, high-amperage lighting, but single family, pitched roofed dwellings will most likely never realize any savings.

BKeyser on July 12, 2014 at 11:21 AM

It really is amazing to me that there are people(liberals) who want the government to control everything possible.

The Notorious G.O.P on July 12, 2014 at 11:21 AM

This problem can be handled, and is already being handled, easily in the private market.

Capitalism is self-correcting.

HakerA on July 12, 2014 at 10:29 AM

The “buyer” is the company that is leasing and doing the homeowner a favor by wading through the red tape and raising their audit potential by taking the tax credit.

What I don’t see in this article is does the buyer, who is subsidized by the taxpayers, factor a discount into the lease? Stated more simply, “if there was no tax subsidy, would the lease terms be 30% higher?”

If not, then any other company, as you have pointed out, could come in and under-cut them. Scams only work when the public is ignorant and stupid, no competition, or the State forces the Public to buy the product.

Reuben Hick on July 12, 2014 at 11:22 AM

A couple of counterpoints here.

Full disclosure first. We recently leased a solar system from one of SunCity’s competitors, a company that offered a more competitive price and more favorable lease options. We did quite a bit of research comparing the merits of leasing, purchasing or sticking with our local utility company and, when all the facts and figures were in, leasing was clearly the superior option.

Now as to the counterpoints.

The first point I’d like to make is that we are enjoying an immediate 32.5% reduction in our monthly electric bill.

Second, a solar system purchased from the right company at the right price (that largely excludes SolarCity) is not an impediment to selling your home. It is a value add because the energy costs to live in the house will be significantly less. When it is time to sell you may need to interview Realtors to find one capable of educating a buyer’s agent (and the potential buyer), but that’s not a great hurdle to overcome.

On an aside, the cited Bloomberg article is short-sighted re: energy cost inflation. Bloomberg overlooks the fact that a relatively short duration between installation of a leased system and sale of the home turns the lease into a significant value add in the form of a significant hedge against energy cost inflation. In our part of the world energy costs typically escalate 2.5% to 3% per year. Five years out (the time horizon we worked with) our electric costs, fixed by the lease, will be 15% lower than they would have been had we stuck with the local utility. The savings will be even more dramatic should the EPA get its teeth into the major source of electrical power in the Southwest – a coal fired plant in the Four Corners area.

Granted, the sample victim Bishop may have had to discount his home by 10% but that is more likely due to the fact that Maricopa, AZ is not a red hot real estate market than it is due to the solar system he’s installed. Chances are the offers would have streamed in at exactly the same rate had he not had a solar system. (In addition, he could have paid off the solar system from the proceeds of the sale had there been sufficient equity in the home. He would have taken the hit, but that’s part of the risk:reward ratio one calculates in these sorts of things)

Summarizing the aside, the Bloomberg article does not, upon consideration, advance your point.

Third, as a lessee, the government subside DOES accrue to my benefit. It lowers the cost to the lessor, which is conveyed to me when the capital costs are calculated and the lease rate is determined. I’m surprised you missed this. The federal subsidy “buys down” my lease costs up front, lowering my monthly lease payment. Again, the consumer needs to shop carefully in this regard, but I think it is unfair to accuse the lease companies of simply “pocketing” the money. The market is too competitive to permit that.

Fourth, leasing offers a number of advantages over outright purchase among them are: maintenance and monitoring; free replacement of the inverters when they fail (these have a service life of approximately 10 years and run $3k to $6k each, depending on your system), insurance against theft and damage by weather (Solar City’s lease did not include this, so once again – shop!), new “smart” thermostats in the home (our leasing company installed the Nest in our home).

Finally, at the end of the lease the lessee ends up owning the equipment for a dollar. The lease actually says that the lessee can purchase the system at FMV when the lease has ended. If not, the lessor has to remove the equipment and restore the home (roof & etc.) to status quo ante. This is going to run them $5k to $6k to remove all the equipment and restore the home. So offer them a buck for it and if they don’t accept the offer, tell them to take it away.

Now, the real culprit in this mess is the federal government, not the leasing companies who take advantage of the system that the stupid feds created. After all, isn’t this simply capitalism and market forces at work?

The real lesson here isn’t that solar leasing companies are greedy SOBs. They are, so there’s no news here.

The real lesson is two-fold: (1) Don’t believe every blog post you read without checking the facts; (2) the government should stay the heck out of the energy business.

microfiction on July 12, 2014 at 11:22 AM

Solar power today is much like using paper buckets to dip up “free” water from a lake.

Yes, its possible; yes, the resource is both free and renewable, but the process by which you harvest that resource is wasteful, costly, inefficient and uses MORE (both of the same and different) resources to harvest those freebies than simply using conventional methods to get your resource.

It only makes “sense” when OPM (AKA tax rebates & subsidies) marginally cloak reality.

Dolce Far Niente on July 12, 2014 at 11:24 AM

whose power is largely for low-wattage, high-amperage voltage [277v] lighting,
BKeyser on July 12, 2014 at 11:21 AM

Ooops. Fixed it.

BKeyser on July 12, 2014 at 11:33 AM

Solar power has been around for decades and was never that popular even in Florida. If you put those panels on your roof, they have to be removed in order to have a roof replaced. This method of ‘renewable’ energy didn’t expand until politicians found a way to make money from it, the same as with windmills.

Kissmygrits on July 12, 2014 at 10:16 AM

Another problem is the huge number of penetrations of the roof needed to support the panels and accompanying material, which can lead to leaks that lead to rotten roof sheathing.

Re Florida, I am not aware of what the salt in a coastal application would mean to the panels’ lifetime, and installation on a tile roof could get messy. In even a mild hurricane, each whole panel would become a frisbee.

slickwillie2001 on July 12, 2014 at 11:36 AM

Most customers are ignorant about the complicated laws and regulations that make up the solar policies.

The law of INTENDED consequences. See Obamacare, Dodd Frank, etc.

PattyJ on July 12, 2014 at 11:38 AM

slickwillie2001:

Another problem is the huge number of penetrations of the roof needed to support the panels and accompanying material, which can lead to leaks that lead to rotten roof sheathing.

This isn’t a problem if you have competent installers. Another good reason to be a careful consumer.

But this isn’t a show stopper.

microfiction on July 12, 2014 at 11:47 AM

Jazz, you don’t happen to have similar info for the healthcare industry do you? Pertaining to electronic health record?

Lots of the same type of scenario going on there.

lineholder on July 12, 2014 at 11:50 AM

I’m a subscriber to Solar City. My electric bills this year, six months so far, total $157.16. My May bill was only $10.10. I have seen the savings promised by Solar City. My electric consumption has been reduced by two thirds.

There may be some truth in this article. As a solar citizen, I don’t see it. My up front cost has been very minimal, reasonable. My monthly savings have been big. I would surmise that many commenters here haven’t experienced the benefits of solar power. I am a Republican voter and have been most of my 58 years.

peter the bellhop on July 12, 2014 at 12:03 PM

peter the bellhop:

I’m a subscriber to Solar City. My electric bills this year, six months so far, total $157.16. My May bill was only $10.10. I have seen the savings promised by Solar City. My electric consumption has been reduced by two thirds.

What is your monthly lease payment? You need to factor that in to account for your true monthly electrical costs. $10.10 is what you paid the electric utility for the privilege of being connected to their system. That’s not the full cost of your electricity.

microfiction on July 12, 2014 at 12:07 PM

I paid a discounted up front price. I have no monthly expenses from solar city. No monthly bills other then from my electric provider.

peter the bellhop on July 12, 2014 at 12:09 PM

My up front cost divided over the 180 months of the lease would be just a little over $15 a month. I got a second install done for a little over $7 a month for 240 months. My net consumption has been reduced by two thirds. Two summers ago, here in Dallas, my summer electic bills, four months, totaled $369. I’ve thoroughly enjoyed my solar experiences with Solar City.

I enjoyed reading you comment Microfiction. You brought in some very hoid points.

peter the bellhop on July 12, 2014 at 12:19 PM

Good points…

peter the bellhop on July 12, 2014 at 12:21 PM

Although I am opposed to government subsidies of solar power, I am quite willing to take advantage of them while they exist. It’s a way of getting back a small portion of my tax money being taken from me by the government. If lack of subsidies made solar power more expensive for me, or uneconomical altogether, so be it. But in the meantime I’m not going to turn down the solar tax credits any more than I would turn down a refund on my taxes at the end of the year, or refuse to drive my car on a government-paved street. And unlike the author of this column, the fact that those subsidies go to Solar City (or in my case their competitor Verengo Solar) rather than directly to me personally doesn’t really change the equation. Money is fungible, and the subsidies lower the cost I pay to Solar City or Verengo for electricity compared to what I’d pay if the subsidies didn’t exist or if I owned and installed the solar panels myself.

I consider solar power to be a risky investment, so I prefer to have Solar City or Verengo be the panel owners, thereby bearing all of the upfront costs and maintenance costs and market risks. For me there is no downside: I just pay less money than I had been paying for my electricity. (My solar panels have been operational for about a week now, and I estimate that I’ll save about $110 this month over my normal Southern California Edison bill.) How the author of this column can construe that as a raw deal is beyond me. Are these solar panel companies ripping me off by pocketing more of the savings and tax credits than if I did it myself? Not as far as I’m concerned, not when you factor in the risks of how well a relatively new technology like solar panels will perform over a twenty year life span along with financial considerations of otherwise having to pay up front or borrow money to do it on my own. I ended up going with Verengo largely because they offered a cheaper rate per kWH than Solar City or several other similar companies with identical business models. This market-based competition limits the rates they can charge (and their profit margins), and circumvents the heavily tiered rate structure from government-regulated utility companies like Edison.

dpwiener on July 12, 2014 at 12:26 PM

Here here ^^^^^

peter the bellhop on July 12, 2014 at 12:31 PM

Capitalism is self-correcting.

HakerA on July 12, 2014 at 10:29 AM

Except that ‘self-correcting’ doesn’t describe what was going on and needing correction in the first place.

Midas on July 12, 2014 at 12:34 PM

Another problem is the huge number of penetrations of the roof needed to support the panels and accompanying material, which can lead to leaks that lead to rotten roof sheathing.

There is *roofing* company where I live doing solar installs. Their commercials touch on this exact point. They point out that as roofers, they know how to care for your roof.

HakerA on July 12, 2014 at 12:47 PM

Capitalism is self-correcting.

HakerA on July 12, 2014 at 10:29 AM

Except that ‘self-correcting’ doesn’t describe what was going on and needing correction in the first place.

Prediction: Elon Musk is destined for prison.

ConstantineXI on July 12, 2014 at 10:30 AM

Not if he keeps greasing all of the right Democrat palms.

Midas on July 12, 2014 at 12:48 PM

Anthony Watts of “Watts Up With That” put solar in his house (for the economics of it, not environmental reasons.) He bought his from Costco and explains it all here:

http://wattsupwiththat.com/2013/03/23/an-update-on-my-solar-power-project-results-show-why-i-got-solar-power-for-my-home-hint-climate-change-is-not-a-reason/

HakerA on July 12, 2014 at 12:51 PM

This is 4-5 year old news. The other crime in this are two. First solar cells have a finite life of 15-25 years from manufacturing. Many of these “Companies were buy up old inefficient cells and using them. Many of these only had 10-15 years life remaining. They were also limited by the technology to about 40% efficiency. That made it a triple rip off. The new cells of today have about a 15-25 year life, are running about 60-80% efficiency and cost less then what these “Companies” were charging. If that ain’t a crime enough, these companies forced out of business many of the honest installers that refused to play the game.

Five years ago I built my dream house. I thought that it would be a good idea to have solar cells. The general “Companies were asking from $20,000 to $30,000 to do the job. Felt that was a tad high so I went on line to look up the manufacturer of solar panels. Could get new more efficient panels for about $1,400.00, paid a roofer about $500.00 to install and an electrician about $400.00 to wire. That is about 10% of the cost for a better system.

About those guarantees? See if you can find those companies to day. Our government has just become a giant RICO scam.

Why is this just becoming news today?

jpcpt03 on July 12, 2014 at 12:57 PM

I HATE Solar City. I’ve heard their commercials here and they are unbelievably snotty and condescending, and it’s been obvious for quite some time they are scamming the taxpayers and expecting us to be grateful for it.

Andy in Colorado on July 12, 2014 at 1:01 PM

New solar panels have a performance assurance of 90% or above for the first 10 years and above 80% for the next 15. Our first install were South Korean Kyocera panels. The second were these Yingli panels mentioned. Both are producing well so far. My roof was redone a year before we went solar. There’s no sign of any leakages.

peter the bellhop on July 12, 2014 at 1:15 PM

Any krautkopf stupid enough to put solar panels on his house deserves to be fleeced, and good.

It’s too bad that it’s liberal Democrat crony capitalists doing the fleecing, but it’s blue-on-green crime, so pass the popcorn

And cut the subsidies – to solar and everyone else.

Adjoran on July 12, 2014 at 1:57 PM

Solar City and Tesla are developing a grid attached system with battery backup that’s the best of both worlds. Should the grid go down, right now, we’re sol, no electricity. With what’s being developed, the backup battery kicks in powering the inverter allowing your roof to produce until dark, then providing some electricity over night with hopefully something left over to power the inverter in the morning…till the grid comes up.

peter the bellhop on July 12, 2014 at 1:58 PM

The real trick to seeing an ROI on solar is to avoid the ridiculously expensive electronics.

Solar is advertised as not being good for heating, but best suited for lighting. That requires very expensive charge controllers and grid tied pure sine wave inverters. None of this is truly necessary. Someone above stated money as being fungible. So is energy. I can run three 34 Voc panels in series, for 100 volts and 720 watts. A regular extension cord could run the 7.2 amps. Hook this up to a resistance heater. In summer, an electric hot water heater in series with your regular water heater (or just replace one element (the bottom one) if you already use an electric). Using a 120 volt element rated 2000 watts, you will heat the water at

UP TO

70% of the 2000 watts (but you’d need 1400 watts of generating capacity for full effect). (applied voltage^2/rated voltage^2 = 70%). Use the hot water for showering and laundry while it’s sunny. This part is necessary to keep from generating high pressures in your water tank. (remember, no thermostat) Voila. Easy. And fairly cheap.

In winter, hook it up to a couple incandescent light bulbs. Use a couple 300 watt 120volts wired in parallel. At 100 volts DC those bulbs will run for 15 years. Prepaid heat for your house.

Are you producing lots of energy? Hell no. But the install is stupidly easy, and pays for itself far faster than if you feel the need to replace all your energy costs.

And they’ll hit you with “maintain the grid costs” even if you choose the latter.

WryTrvllr on July 12, 2014 at 2:09 PM

The whole single-family solar industry is a farce.

Most people do not live in areas that benefit greatly from solar energy. Fewer have single family homes that are oriented effectively (by compass direction) and fewer still have enough roof area to make a real dent in their electric usage.

The lifespan on solar cells is roughly 20 years. Most solar packages large enough to supply only 30-40% of a home’s electrical needs require at least that length of time to repay even the subsidized loans. They’ll also drive up the cost of a home at resell.

There may be some long-term savings for businesses (department stores and the like) with large, flat, relatively unoccupied roof surfaces that can support large fields of cells and whose power is largely for low-wattage, high-amperage lighting, but single family, pitched roofed dwellings will most likely never realize any savings.

BKeyser on July 12, 2014 at 11:21 AM

.
Excellent post! A few other things to ANALYZE before doing anything with solar:

1) The lease option may be declared illegal since assignment of tax subsidies is a coin flip on how the IRS rules on it. Exam the contract carefully for verbiage stating “in the event any terms of the lease are declared void, the lessee will be responsible for making full payment for the actual cost of the installed system within X many days”.

2) The efficiency of current solar panels means they are 2 – 4 times MORE expensive on a cost per kilowatt hour than the utility rates. The TAX subsidy has actually kept the cost to the consumer way UP since the solar system companies base their marketing on the 30% – NOT on lower cost for the panels, which they are keeping as additional profit.

3) The actual mean time to failure on the solar panels based on ACTUAL data is suggesting the current panels are going to crap out between 9 – 12 years of use … NOT 20 years. Check the legalese for WHO pays replacement costs for failed panels and HOW the depreciation of the value of the panels is calculated in terms of credit the home owner receives for the failed panels.

4) This the BIG ONE to REALLY WATCH. Solar panels have ALL kinds of nasty, environmentally unfriendly chemicals and compounds in them. Last I checked a few months back, there was ONE pilot solar panel recycling facility in the United States. The interviewer asked the plant manager what there current capacity was – his answer, “Oh a few hundred panels per month.” …He wouldn’t estimate a cost per panel because it is a pilot plant (which is a fair statement). EVERY solar panel produced by the current mass production technology WILL HAVE TO BE RECYCLED when it stops functioning. The cost of recycling is GOING to fall on the possessor of the solar panels (don’t forget, solar leasing companies can just declare bankruptcy and disappear with the wind) As of this moment in time … NO ONE can give you an ESTIMATE of what the recycling will cost but YOU are still going to have to pay for it.

Lest anyone suggest I am anti-environment, within my family (all liberals) I am the acknowledged “true green” partially because I helped found a civilian recycling group while I was in high school and because I have always insisted on looking at the “total cost and impact” of ANY green solution.

We don’t recycle anything but metals because from a “total cost and impact” basis – there is NOT one recycling operation in the United States that does not cost more and result in more energy usage than the eco-nuts dreaded “landfill”. That stat came from a Frontline report on PBS a few years ago when they started out to do a report on “the most successful recycling efforts in the United States”- I’ll give them this- they reported the INCONVENIENT TRUTH … but I doubt they could get away with that these days.

PolAgnostic on July 12, 2014 at 2:40 PM

Government subsidy ?? Surely it’s a Tax Payer provided subsidy, government has no money of its own (other than what it prints up.)

lel2007 on July 12, 2014 at 3:00 PM

If you live in a place with decent sunlight its a very good deal over twenty years. There is nothing stopping homeowners from buying the panels themselves.

lexhamfox on July 12, 2014 at 10:46 AM

The tax break was intended for the final consumer. Every solar power company I researched claimed the tax break was, for the final consumer.

Holy hell you really bust your butt for this administration. You’re reduced to shill.

hawkdriver on July 12, 2014 at 3:23 PM

hawkdriver on July 12, 2014 at 3:23 PM

OR, you could put the money into equities with the DJIA bumping 17000.

WryTrvllr on July 12, 2014 at 3:28 PM

The government subsidy was a one time $1550.00. Something, but not a very big number.

Getting a little on every home allows for each home to get a benefit on their side of the meter. Big projects often have appearance problems, cause a blight on our landscapes. Single or multi-family residences often will see benefits quickly. Small projects mean our grid companies don’t need to expand their power production, just maintain it. They can take their expansion monies to R & D for the next greatest energy source, whatever that will be.

My approach to all things solar has been to slow my meter down. It has. Who’s laughing at a $10.10 monthly bill in Texas? I am all the way to the bank. This month I’ve already produced over 300 kWh’s! Take my word for it. Leasing works….nobody has mentioned. Whenever you produce excess electricity, you become a producer and will be paid the wholesale rate for your contribution to the grid. Mine is at $07.5 per kWh.

peter the bellhop on July 12, 2014 at 3:29 PM

My up front cost divided over the 180 months of the lease would be just a little over $15 a month. I got a second install done for a little over $7 a month for 240 months…
 
peter the bellhop on July 12, 2014 at 12:19 PM

The government subsidy was a one time $1550.00. Something, but not a very big number.

peter the bellhop on July 12, 2014 at 3:29 PM

 
Maybe not a big number, but $1550 is 35% of your up front cost ((180*$15)+(240*$7)) though, right?
 
But like you said, it’s not a big number, so it’s no big deal to end the subsidies.

rogerb on July 12, 2014 at 4:21 PM

hawkdriver on July 12, 2014 at 3:23 PM

Just pointing out the obvious. In the case cited by Jazz Solar City is the owner of the PV. They pass on the tax benefit to investing parties who financed the deal. It is a complicated business model but very successful at bundling the risk and the pricing mechanisms in an efficient way to benefit consumers.

More energy choices & sources is good for the US.

lexhamfox on July 12, 2014 at 4:48 PM

Reason 2,987,011 that government should not be involved in this crap.

CW on July 12, 2014 at 10:06 AM

If this was really profitable no government subsidy, sourced by taxpayer money, would be necessary. Leave innovation to the private sector, and if you build it right, people will come.

hawkeye54 on July 12, 2014 at 5:08 PM

More economical and inexpensive energy choices & sources is good for the US.

For me, the jury is still out on solar power. I am not convinced.

hawkeye54 on July 12, 2014 at 5:10 PM

ON its OWN without SUBSIDIES

Solar SUCKS!

So does WIND

Obamatrix on July 12, 2014 at 9:24 PM

RICO for all. Not just the companies but the Congressman that let it happen and the people that protected them for the past 5 years. Start putting these criminals in jail. Our government has been so laced with crime and we just look the other way. These congressman are just as big criminals
As anyone else.

jpcpt03 on July 12, 2014 at 11:08 PM

Yingli panels cost $225 each for a 245 watt panel. They work rather well so far. I’m not subsidized but for the initial $1550.00.

Vertical wind turbines can also slow your meter and relieve your high electric bills. they have a smaller profile, usually less than 6 foot across and can be mounted in town. One may see them at a neighborhood school. One 400 watt VWT can generate about 40 kWh’s a month, enough to pay for your lights for a month. Add another to relieve another appliance or two.

peter the bellhop on July 13, 2014 at 12:50 AM

For the reasons cited above, COAL is the only PROVEN solar technology which actually produces low-cost energy. It gathers the energy collected by vegetable matter and releases it in the form of heat. Power plants using this technology operate 24/7/365: something which neither solar cells or windmills can do.

Solar cells have been and always will be a sham: they cannot even survive without replacement for the time necessary to recover their initial cost. Windmills were obsolete 100 years ago…for good reasons!!! None of these phony “solutions” could exist without phony accounting which ignores distribution costs and without using the government to steal money from the truly productive parts of society to subsidize this foolishness.

landlines on July 13, 2014 at 2:05 AM

Yingli panels cost $225 each for a 245 watt panel. They work rather well so far. I’m not subsidized but for the initial $1550.00.

peter the bellhop on July 13, 2014 at 12:50 AM

Out here in the midwest, $1550 will buy a whole year’s worth of electricity for the average household. How do you think you’ll recover this cost?? And what about the distribution and other costs you are causing for others?

landlines on July 13, 2014 at 2:09 AM

My up front cost divided over the 180 months of the lease would be just a little over $15 a month. I got a second install done for a little over $7 a month for 240 months…
 
peter the bellhop on July 12, 2014 at 12:19 PM

 

The government subsidy was a one time $1550.00. Something, but not a very big number.
 
peter the bellhop on July 12, 2014 at 3:29 PM

 

Yingli panels cost $225 each for a 245 watt panel. They work rather well so far. I’m not subsidized but for the initial $1550.00.
 
peter the bellhop on July 13, 2014 at 12:50 AM

 
Yes, we know, you only had close to half of of your initial outlay subsidized.
 
But again, I agree that it’s “not a very big number” so clearly the subsidies aren’t needed.

rogerb on July 13, 2014 at 6:19 AM

Out here in the midwest, $1550 will buy a whole year’s worth of electricity for the average household. How do you think you’ll recover this cost?? And what about the distribution and other costs you are causing for others?

landlines on July 13, 2014 at 2:09 AM

I also live in the Midwest. I pay 25$ per month for each meter. That’s called distribution costs. I also own some solar panels. So far so good. If they make it 20 years, I will be smiling. Remains to be seen. How does my owning solar panels increase your distribution costs more that if I had not built this house? I own several meters.

And I bought my system outright. Not grid tied. No subsidies. Pay almost nothing during the winter to heat the basement when we shut down the house.

WryTrvllr on July 13, 2014 at 9:00 AM

than if

WryTrvllr on July 13, 2014 at 9:00 AM

I’m not subsidized but for the initial $1550.00.

Uhm, that is still a subsidy Peter. If the government subsidized home computers they would still be $2k for an average desktop instead of a quarter that price.

I don’t hate solar, I think it has plenty of good applications but there are a lot of people trying to justify the scam they bought into and help perpetuate. In many cases you’re better off going to CFL bulbs or now LEDs to reduce costs along with better appliances. Of course ever since we’ve had the “green star” type movements power companies raise rates because people use less juice (when the EPA isn’t shutting down plants anyway).

oryguncon on July 13, 2014 at 11:42 AM

I’m not subsidized but for the initial $1550.00.

Excuse me, but you neglected the cost of power lines and the additional equipment required to handle two-way power transmission for miniscule amounts of power, regulations which unfairly subsidize solar by requiring power companies to pay for un-needed and un-schedulable and hence un-needed and largely unsuable power. This is in addition to the money which you pocketed for the subsidy, which comes directly out of my increased electric rates.

Your equipment will never last 20 years: you’ll be lucky to get 5 years out of a photocell panel. Sunlight (yes, sunlight DEGRADES photocells!), dirt, hail and other storms, lightning, etc. are all factors.

Solar can never compete with centrally-generated 24/7/365 power unless you are in an isolated area 100 miles from nowhere, and only need power during the day.

My up front cost divided over the 180 months of the lease would be just a little over $15 a month. I got a second install done for a little over $7 a month for 240 months…

peter the bellhop on July 12, 2014 at 12:19 PM

The fact that you ALREADY had to do a “second install” is further evidence that solar is illusionary “unicorn fart power.”

landlines on July 13, 2014 at 11:42 PM

We are going solar. Prior 12 months ave 17.5 cents kW. For every kW produced they will charge me 12.5 cents. It will take 13 years for me to pay 17.5 cents as it goes up 2.99% a year. No upfront costs. It it drops in production I still only pay for what it’s creating. With the option to purchase at any time which goes down each year and takes subsidies into account.

Phishmelt on July 14, 2014 at 1:04 PM