Solar FAQ: Answers to All your Questions

How Does Solar Work?

Active Electricity Production
- Solar Photovoltaic (PV) technology has come a long way. Early PV was utilized to power digital calculators. PV systems can now be found on many homes and businesses. A PV Solar Panel takes the suns radiation and processes it through a semiconductor to produce a Direct Current (DC) electrical charge. This can be used immediately, or you can utilize batteries to store it for later use. To power your home, the DC current (either stored or produced) is inverted into standard AC current. This is done by utilizing two power inverters which are set to simulate Alternating Current patterns. The power then enters your Service Panel through the service disconnect and is either used by electrical appliances and lights in your home, or it is returned back to the utility’s electrical grid to power someone else’s home. When it is returned to the grid, you receive a credit on your electric meter.

Passive Water Heating (Solar Thermal) & Cooling
- Solar Water Heating – The sun’s heat is absorbed through a solar heat collector and runs through a “heat transfer system” to create hot water. It can be used immediately or sent to storage for later use. This type of solar energy is most efficient during the day. The water can be used to heat a house, such as radiant floors (piping under the flooring to keep the floors warm). It can also run a heat exchanging system to cool your house (like a refrigerator)
- (UC Merced’s prototype Solar Air Conditioning).

Economics & Incentives

Federal Incentives
- The Energy Act of 2005 passed by the U.S. Congress provides homeowners a federal tax credit equal to 30% of the cost of a residential solar electric or solar domestic hot water system. Paragraph 1603 of the American Recovery and Reinvestment Act provides a one-time grant in lieu of the 30% tax credit for commercial systems.
- An accelerated corporate depreciation schedule is allowable for solar photovoltaic systems – for more information please refer to Internal Revenue Service Tax code Section 149, Publication 946 and Internal Revenue Service Form 4562 addressing Depreciation and Amortization.
Programs and Incentives offered by local Utility Companies
- The California Public Utility Commission (CPUC) approved the California Solar Initiative (CSI) on January 12, 2006. The CSI is a $2.167 billion program that provides incentives for solar development over an 11 year time frame. Incentives are still available in some utilities.
State Property Tax Exemption
- The California Revenue and Taxation Code section 73 provides a property tax exemption for photovoltaic solar energy systems installed. Qualifying solar energy systems are defined as those that “are thermally isolated from living space or any other area where the energy is used, to provide for the collection, storage, or distribution of solar energy.”
- Please note a current list of state and local programs is available at The Database of State Incentives for Renewable Energy.

Increased Home Value
- One study has indicated that for every $1,000 reduction in annual operating costs from energy efficiency, a home’s value is increased by $20,000. Other independent studies attach a more conservative value. Our software analysis tool, assigns in most cases the increased value is the same as the original system installation price.
Hedge Against Rising Electricity Prices
- Once you have invested in your system, you will be co-generating power with the utility grid. You will then be less susceptible to increases in energy costs on the power you purchase for the life of your system. Electricity rates have historically increased by approximately 6% on average each year for the past 30 years.

Benefits of Solar Energy

Federal Incentives Environment – Zero Emissions! Solar power produces no emissions unlike much of today’s utility-supplied power. Once the system has paid for itself, which only takes a matter of years, decades of clean sustainable power will be enjoyed at no charge!
For every megawatt hour of solar electricity produced the Earth is spared the pollutants of over 1500 pounds of greenhouse gases like CO2, SO2, and NOx. Based on a small residential solar powered system (2.5kW PTC), that works out to almost 3 tons of greenhouse gas avoidance per year, or 75 tons over 25 years. Solar power is clean, abundant and fully renewable. It has been scientifically concluded that solar energy if captured completely for 1 hour could provide the world’s energy needs for 1 year.
Economic Benefits – Because solar power reduces our dependence on the Utility companies it also reduces the need to build new conventional peaking power plants. There is approximately 5000 megawatts of energy potential currently available by utilizing the space on existing roofs of homes and small businesses in California. Turning even a small percentage of that potential into solar power generation would reduce or eliminate our need to build new power plants for many years to come.
Complementary to Utility Power – Solar power correlates well with the daily load patterns of utilities because the power is available when it is needed most – during daylight hours when utilities are subject to their peak loads and more specifically late morning to early evening in summer months during high air conditioning loads.
Low Operating Cost – Once installed photovoltaic cells operate continuously for decades with few ongoing operating costs. They generate electricity through a wide range of temperature and light conditions.
Reliable – With no moving parts and a warranted life for PV panels of 20 to 25 years, solar PV systems are highly reliable and require little routine maintenance.
Increased home value – According to the American Solar Energy Society a solar system increases a home value by $20,000 for each $1,000 in annual reduced operating costs.
Hedge against rising utility prices – Once you have invested in your system, you will be producing power independently. You will then be less susceptible to increases in energy costs on the power you produce for the life of your system. Over the past 30 years, energy from power companies has increased an average of six percent a year.
Tax Credits -Up to 30% for commercial and residential solar systems.

More Solar FAQ'S

How do I compare prices among different solar contractor bids?
Compare apples to apples such a price per DC watt (total contract price divided by the DC array size (number of panels multiplied by the per panel watt size). Find out if the quote includes carrying the utility rebate. My competitors have been successful at times with confusing proposals. Insist on ARRA (American Recovery and Reinvestment Act) components (panels and inverters). Beware of third world country products as they may not stand behind their warranties. APG prefers SunPower & SolarWorld panels as well as SMA & Power One inverters.
Is my roof right for solar?
A solar power system can be installed on virtually any roof surface; the most limiting factor is shade. South facing roofs offer the most annual production, while east and north will produce much less energy. However, west-facing roofs produce more power during “peak" times when power can be more expensive. This is important for utility customers who can take advantage of time-of-use metering (PG&E customers). APG Solar suggests that customers with older roofs consider replacement prior to installing solar panels. APG Solar can replace roofs as well as install solar.
Can my roof support the weight of the solar array?
Solar panel and mounting equipment add very little weight to your roof. In most cases the solar power system will add an additional 3 lbs. per sq. ft. of weight to the roof. Virtually all modern construction built after 1970 is designed to support loads far greater than this.
Are there special loans for installing residential & commercial solar power?
Contact APG Solar for the most recent list of lenders. (click here to go to Financing Your Solar Project)
Is solar electricity really a good investment?
Your solar electric system will protect you against annual increases of conventionally generated electricity from your utility company as well as provide for ownership of your electric generation. APG SOLAR can assess your specific needs, calculate exactly what your return on the investment will be, and estimate the amount you will save over the life of the system (based on average electric rate increases).
Is utility power really cost-effective?
Your utility company charges are based on tiered rates. In addition, you are billed for transmission, surtax fees, etc. Utility rates are constantly increasing, and have increased on an average of 6% annually during the last 30 years. As you pay your utility bill you do not gain equity in an asset. Paying for utility power is the equivalent to renting your home instead of purchasing.
How long until my system realizes net savings?
If you lease your system, it is possible to experience savings the month after your system is online. If you pay cash or finance your system, as recommended (and your system design is full load), you may experience net savings as early as the first year. How? Instead of paying your monthly utility bill, you will make monthly loan payments for your PV system, this loan payment could be equal to your average annual monthly utility bill (depending on your rate and term). Systems generally have a payback period somewhere between 4 – 11 years. Your exact payback will depend on your electrical usage, current electric rate schedule, solar performance, and the cost of your system. In general, the larger your electric bill the greater the return on investment and the faster the payback.
How does solar electricity benefit Utility Providers, our Government, and the environment?
Your system will reduce the demand on existing fossil-fuel power plants and their distribution networks. It will reduce dependence on foreign oil, and reduce pollutants and global-warming emissions (a 3 kW PV system will eliminate approximately 7,000 pounds of annual CO2 that would have been emitted had the electricity been generated conventionally).
How much does a solar electric system add to the value of my property?
According to a study conducted by the Lawrence Berkeley National Laboratory of California home sales, “the analysis finds strong evidence that California homes with PV systems have sold for a premium over comparable homes without PV Systems." That premium tends to be $3.90 to $6.40 per watt of capacity but is most often $5.50 per watt. The bottom line of the study was that the investment in solar, appears to be comparable to the increased property values at time of sale. Even better news is that as of right now, the value of your solar system is excluded from property tax assessments for existing property owners due to Proposition 7 (1980).
Will my property tax base increase?
Despite the fact that your property value will increase, there is legislation that prevents your property taxes from increasing from installing solar components. In Nov of 1980, the people passed Proposition 7 which redefined solar energy systems. No longer were they considered “newly constructed" for the purposes of property taxes. California Revenue and Taxation code codified this change in section 73.
Can I really offset my loads & eliminate my monthly utility bill with a properly designed/installed solar energy generation system?
Provided you have enough physical space (roof or ground mount) for a full load array design, proper orientation, good performance, & sunshine you can own a photovoltaic system that will produce as much electricity as you use. However, you can expect charges from PG&E in the name of transmission, distribution & surcharge fees. Note* continue to expect natural gas billing
Why should I borrow money to pay for solar?
You must pay a monthly utility bill for energy. You are already essentially financing an indefinite, variable rate loan from your utility company. Installing a solar power system allows you to refinance this loan at a fixed rate and term, pay less every month, and have your loan payments go towards ownership of a valuable asset.
Will the utility company really pay me for my solar electricity?
Yes, as of January, 2011. However, they will purchase power from you at the wholesale rate. As a result, it is recommended to design your system to meet your current electricity needs and not more.
What happens to the solar electricity that I do not use?
Any excess solar electricity produced will go back into the grid through your meter, running it backwards. You are credited for each kWh produced at the same rate that you would be charged.
How will my PV system perform on a cloudy day or at night?
Generation is reduced on cloudy days but it will still receive ambient light. Your solar electric system will still produce electricity, however at a reduced level. During the nighttime, there will be no production.
Are the rebates for real?
Yes, many rebates have been fully exhausted, but some utility rebates are still available and will pay for a portion of the installed cost of your solar system.
Will my solar electric system provide heating?
No, there are two types of “solar” collectors, electric and thermal. Electric systems are only hooked up to the electrical panel (breaker box) in your home. APG Solar does also install solar thermal heating systems if you are interested and have enough roof space and sun exposure.
Do I need a conventional generator?
You do not need a generator if you are installing a solar electric system. A generator can be integrated to work with solar to power your house as a backup energy provider in the event the grid goes down. APG offers all major brand generators in various sizes and fuel requirements for your generator needs.
What loads or appliances can I power with my solar electric generation system?
All appliances and loads receiving power from your metered load center will enjoy the benefit of your solar electric generation system.
Do I need batteries with my installation?
No need for batteries when you are connected to the local electric utility supplier. The utility grid serves as your battery bank when you are consuming more power than your solar system will generate or when using power at night. In the event you do not have access to the local utility then you will need a bank of batteries.
What are the major components of a solar electric system?
Major components will be solar panels, sometimes referred to as modules and the inverter or inverters. The rest of the components sometimes referred to as BOS (balance of system) are racking, overcurrent protection, conduit, and wiring.
How does solar electricity work?
Sometimes referred to as Photovoltaic electricity, light energy from the sun is transformed into electricity within silicon semiconductor cells. These cells are placed most commonly on substrate within a framed aluminum enclosure covered with a low iron tempered glass lens called solar panels. Depending on the type/quality of the cells as well as the wiring configuration will determine their DC voltage and current output. The output of these panels are wired to an inverter which changes the DC voltage and current to AC which can now be connected to your metered load center.
Are there any tax incentives?
Homeowners may claim 30% of the contract price as a Federal Income Tax credit (after the utility rebate amount, if any, has been subtracted out). Commercial customers can take that same credit in the form of a 1-time payment authorized by paragraph 1603 of the American Recovery and Reinvestment Act (also referred to as a treasury grant). However, this provision is scheduled to expire December 31 2012. Commercial customers may also depreciate additional amounts in compliance with Section 179 in the United States Internal Revenue Code.