4 Year Update – Are Solar Panels for Home Still Worth It?

This video is brought to you by policy genius. It’s been almost four years since I installed solar panels on my house, which is located in Massachusetts. In general, they’ve been performing pretty close to what was promised. But last year threw some curveballs that made me a little concerned, I saw a pretty sharp decline in the amount of solar produced.

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And since my solar panels are nearing their four year anniversary, I thought it’d be a good idea to share what I’ve learned living with solar panels and an area that you might not think they’re good for, as well as what happened last year. And do I still think that getting solar panels was a good idea? Let’s see if we can come to decision on Matt Farrell. Welcome to undecided.

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If you haven’t seen my previous videos on my solar panel installation, include links in the description so you can check them out. I won’t rehash everything that I’ve covered in those videos. But in short, I live in the Boston area and had been documenting what it’s been like living with a 9.49 kilowatt solar panel system in a colder climate. My wife and I decided to get solar for two main reasons, the first reduce our electric bill and save money over time.

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And the second get as much of our electricity from clean sources as possible. And there’s no question where my electricity is coming from when it’s being produced on my roof, you could probably also include a third reason into the mix, which is my Tesla Model three, and charging up your Eevee. With electricity that you generate yourself is really cool. I guess you could say I like the idea of energy independence. It’s kind of exciting. Now my house has a few challenges.

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If you live in the northern hemisphere, it’s best to have a southern facing roof to maximize your solar production. But my house is oriented from east to west. And that’s why I have panels on both sides of my roof. So I can capture the morning and afternoon sun. Not ideal, but it does work. The second issue is that my roof is pretty small. And finally, I have a fair amount of trees on the western side of my house that start to block the sun in the mid to late afternoon.

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Like I said, my house is a bit challenging for solar. But for the past few years, my solar panels have reduced our reliance on the grid by about 54%, which is what we expected given my home’s issues. Now we’re still on track for the system to have paid for itself and savings by 2026. It’s a seven to eight year payback period. But there’s some wrinkles to that that I’ll get to in a little bit. First, though, I’ve got to get into last year’s issues, we saw a pretty steep drop in performance and 2021.

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But it’s really important to give these numbers some context. If you don’t have solar, it’s easy to armchair quarterback and ridicule solar as a waste of money. In some of the comments I see the most often on my solar panel videos bring up the misperception that solar panels degrade and die quickly. Others question the accuracy of solar installers telling you how much you’ll produce each year, sometimes for the next 1015 or 20 years. And whether it’s going to be a huge factor in how well your solar panel system works.

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The criticism is usually if a meteorologist struggles to predict the weather a week out how can you predict years of solar production. On the first point about degradation, it’s absolutely true that you’ll see a decline year over year. However, if you have quality made panels from the major manufacturers that are out there, these panels will last for 30 or more years. For these panels, you’ll have warranties that guarantee a minimal loss over the next 20 years.

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But that’s not the end of life. That’s just the warranty period. In my case, I have LG solar panels on my home that are guaranteed to produce at least at 8.4% of their original efficiency, which means that you’re talking about a point 5% drop each year. And that’s why I had to raise an eyebrow at last year’s numbers I sold and solar offers a 10 year production guarantee. If my panels produce less than 95% of their projection, they’ll pay the difference in the cost of electricity.

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They projected that we’d be producing close to about 6600 kilowatt hours each year for the first few years. But last year, we produced only 6479 kilowatt hours. And the year before we produce about 7293 kilowatt hours. So comparing 2021 to 2020. We saw an 11% drop in production. So yeah, I was a little perplexed, frustrated with the dash a concern. To add to that our electricity usage actually increased slightly because my wife started working from home because of the pandemic. And our electricity prices had risen a lot. Back when we got the solar panels installed, we were paying about 24 cents per kilowatt hour.

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Now we’re paying about 30 cents per kilowatt hour. On average, we use about 950 kilowatt hours per month over the course of a year. So you’re talking about going from a potential bill of $228, just a few years ago, to $285. Today, that’s when the data nerd in me kicked into gear and I started crunching the numbers to figure out what was going on. Before getting into what I found. There’s some other numbers worth crunching. I’ve been asked on previous solar panel videos how much my home insurance went up with my solar panels. And that really depends on your insurance provider. But my home insurance didn’t change at all with the solar.

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Now back to what I found after digging into my solar production data. And when looking at your solar production, it’s important to not focus and obsess on the day to day numbers, there’s going to be an incredible amount of volatility day to day, depending on the weather. So cloudy days, rain snow, you get the idea. It all depends. So you have to take a longer term view when assessing how it’s performing. And if it’s worth the cost of the system. It’s the same reason why solar installer does a yearly guarantee.

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Take a look at my monthly numbers year over year and you’ll start to spot some clear trends. Summer is obviously going to be the peak production period because of the increased daylight hours and the sun being at a higher angle in the sky. During winter, you have shorter days and lower angle of sun. The early trend looks a lot like the daily trend, very low production in the winter, and none at night, and a swell during the summer months and middle of the day. However, something should jump out at you on this chart. The 2021 numbers between May and September are dramatically lower than the years before.

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Now I knew whether it’s going to play a role and how effective my panels would be and perform over time. But I didn’t expect such a huge swing to happen year over year. That’s when I pulled up the historical weather data for my area. If you overlay the amount of precipitation on top of the solar production chart, the correlation is pretty clear. Here in the New England area 2021 was one of the warmest and wettest on record. Especially if you look at the July August and September data. 2021 was the third warmest record going all the way back to 1895. It was also the third wettest year on record and July 2021. Coming in as the warmest month on record.

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Massachusetts typically sees about four inches of rain in July. But last year, we saw an average of 10.3 inches. So the mystery was solved for why last year’s production was so low, there wasn’t anything wrong with my panels, inverters or other hardware. And thankfully, if you look at what we’ve seen so far in 2022, everything seems to be back to normal. In fact, April’s production numbers were the best we’ve seen so far after four years of data. Well, you may think that this challenged my belief and vetting solar production numbers from year to year versus day to day, and that weather doesn’t really factor in too much long term.

It hasn’t 2020, one’s a yearly number came in at 6,479.6 kilowatt hours with a prediction for my installer at 6549 kilowatt hours. That prediction was off by about 1%, which really isn’t that bad at all. The variability and seasonal weather conditions is factored into the historical data that solar installers pull from, to make the future prediction numbers. And from what I’m seeing, it’s pretty accurate, even though I’ve seen wild swings, but within a couple of years 2020 was about 10.8% higher than predicted. They worked out the prediction on the conservative side of things of what we might see. And that brings me to the giant question of Do I still think it was worth it?

If you’ve watched my previous videos on my solar panels? You’ll note that I’ve said each one of these? The answer is yes. But you’ll also know that I’ve always stressed very hard that it’s going to depend on what your personal goals are. Anyone that tells you that solar panels are worth it no matter what should be ignored. And the same is true for anyone that says solar panels are a scam and will never work. Solar panels are just another method of producing electricity and don’t necessarily make sense for every person in every situation in every location. For me, I live in an area without time of use electricity rates.

But we do have net metering that pays back nearly one to one credits on my electric bill. So we bank some credits in the summer that wipe out our electric bills and those months in and of the fall. And during the winter, we primarily pull from the grid just like anybody else. We also have solar renewable energy credits, or SRP sees, we’re getting $126.22 a month in SRC credits for 10 years. So we’ll be seeing about $15,146 from that. And that leaves us on the hook for about $12,380 out of pocket for the cost of our solar panels. But then you have to look at the money that we’re saving from our electric bill. We were spending about $2,600 a year on electricity, but we’ve been saving almost $1,500 a year with solar.

And since our electricity prices have risen to about 30 cents per kilowatt hour, our savings has actually gone up a little bit. Now all of that rolled together is how our solar panel system will pay for itself sometime in 2026. And the panels should easily go another 20 years or more after that. So there’ll be producing free clean electricity at that point. Again, I can’t stress this enough. The warranty period is not the end of life for the panel.

But here’s the wrinkle that I brought up earlier about my specific return on investment. I’m not gonna be living in my house and 2026 I’m not gonna be living in this house next year. My wife and I are building a new modular netzero home this year and will hopefully be moving And early next year sometime, that means we’ll be selling our current home with a solar panels before they return on their investment, which means we’re only about halfway into that payback period. And we’re going to lose out on that money. Am I going to have a hard time selling my home with the solar panels on it?

On that first point? No, I’m not going to be selling my solar panels at a loss. A home’s value actually increases with solar panels. It’s not that different from doing a kitchen or a bathroom renovation, and solar panels are very popular in my area. Energy sage has a great article that details the impacts to a home value. According to a study by Lawrence Berkeley National Laboratory, which use data from about eight states over a course of an 11 year period, you can expect to see about a $4 per watt of installed solar capacity added to the value of your current home. In my case, that could be an increase of $38,000.

To me, that sounds a little too high. But according to Zillow, they saw homes with solar panels selling for 4.1% more. And the National Renewable Energy Laboratory reported seeing an increase in home value by $20. For every $1 reduction in annual utility bills, that math would work out to about $30,000 for my house, which isn’t that far off from the first study. The bottom line, the more money your solar panels save you on electricity, the more it increases your houses value seems pretty straightforward.

When you think about it, I won’t have to wait too much longer to find out how that holds true. So stay tuned to the channel if you want to hear about how selling my house went with the solar panels, as well as a ton of videos on my upcoming house build. So do I still think getting solar panels for my home was worth it? The big answer is yes.

For my goals, which was saving money on electricity over time, and ensuring that my power was coming from a clean energy source, it ticked all the boxes in our system cost $20,727 After the federal tax credit, by the time we leave, this house will have received about $6,000 in srbc payments, about $1,500 a year in electricity savings, so add another $6,000. On top of that, we’ll have what to pay back down to about $1,000 By the time we leave. And if that $30,000 increase in value holds true the return on investment will have been well worth it.

But that wasn’t my only goal. Again, I did this for some energy independence and to ensure I was getting energy from a clean source. What I recommend that you get solar, let’s tricky because I don’t know your goals where you live or what the costs are in your area. So you’re going to need to do the evaluation for yourself. But if you are thinking about it, don’t wait much longer. If you live in the US the federal solar tax credit is going to be dropping from 26% to 22% in 2023 solar installers are booking up fast, so you really need to schedule installers to ensure your panels get installed before the end of this year. I’ve been getting quotes for my new house and installers are already booked up through August and September.

So start looking today and evaluating if it’s the right choice for you. Now on that note, you should check out energy sage for great articles and reviews on solar equipment. I found them to be an amazing resource when researching my current installation as well as my next one. I also use energy sage to find my installer on my current house. If you live in the US check out my energy sage portal to find installers in your area and get quotes and full transparency.

This is an affiliate program so I do get a small commission if you use my portal. But regardless of that I love energy sage and find them a great resource. My favorite part of finding an installer through them is that you’re not giving up your personal information and phone number to get the illusion with dozens of calls. All the quotes are delivered to your energy sage account and are presented in a way that’s easy for apples to apples comparisons between the different installers.

I strongly recommend so what do you think you want solar panels for your home? Jump in the comments and let me know. If you’d like this video, be sure to check out one of the ones I’ve linked over here. And thanks to all my Patrons for your continued support. And welcome to new producers Michael Maxi, Greg MacWilliam and J and thanks to all of you for watching. See in the next one

4 Year Update – Are Solar Panels for Home Still Worth It?

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