Solar Frequently Asked Questions
1. How does a solar electric system work?
Solar Electricity or the Solar Photovoltaic (PV) System basically helps you in capturing the energy from the sun and use it in the form of electricity. The majority of people think of solar panels or solar energy when talking about solar electricity. On the contrary, in solar thermal systems like solar pool heating and solar water heating, solar electricity can provide uninterrupted electric supply to all of your appliances and devices. This power is generally much clearer and stable than that by an electric utility.
The majority of the systems installed today are called grid-interactive or grid-tied systems. This implies that the solar energy system is working along with the utility electricity to provide power to a home or business seamlessly. In such a system, you are not aware of the source of electricity (unless looking at a system monitor). You no more need to worry about any switches or user intervention. Rather the system itself works to reduce your electricity bill. In case your power consumption is more, it is provided by the solar energy system, and the utility company will provide it. But if you are producing more power than you need, the excess is delivered back to the utility grid, for which you get credit against your utility bill. This process is known as Net Metering.
2. Will solar panels increase my property taxes?
No. According to Wilson Tax Law,
In California there are basically two ways that your property taxes can be reassessed at full market value. One is when you sell or purchase the real property. The second is if you have new construction or have a major addition to the real property. There are numerous tax incentives both in California and at the Federal level to promote green energy. One such incentive includes the California property tax rules which were amended to provide an exclusion from classification as newly constructed for the construction or addition of an active solar energy system. Thus, if you install a solar energy system on your rooftop that will not cause your property taxes to increases because of new construction. The exclusion however was set to expire in 2015-16. The good news is that the exclusion has been extended and now applies to property tax lien dates through 2023-24 fiscal year. Under the new amendments the exclusion is repealed January 1, 2025 (formerly 2017). Therefore, active solar energy systems that qualify for the exclusion prior to January 1, 2025 (formerly, 2017) will continue to be excluded on and after that date until there is a subsequent change in ownership. See S.B. 871, Laws 2014, effective June 20, 2014. This is great news for anyone interested in installing a solar energy system because your property tax base will not be reassessed at fair market value and it will continue to increase at no more than 2 percent per year under Proposition 13. That is as long as Proposition 13 does not get repealed or amended.
3. Is there any sales tax on solar panels in California?
Partially yes. During California’s cap-and-trade program extension this summer, the legislature also cut the sales tax rate by around 50 percent for solar panels, wind turbines and other equipment used to generate electricity from sources other than fossil fuels or nuclear or hydropower facilities.
4. If I live in an apartment or condo, can I have solar electric panels?
Tenants in California can’t get the benefits of solar power unless the solar panels are installed, and the electric bill is in their name. There are many places advertising plug-and-play solar panels and other temporary solar solutions which you can carry with you while moving. However, all of them are neither effective nor legal. Solar panels connected to a building’s electrical system should be permanently installed according to the strict building and electrical codes for safety reasons.
You can go for temporary solar panels with batteries to power devices around your home, but you can’t connect it to the electrical system of your home, or sell excess power to the utility company. The solar regulation would be referred to as Virtual Net Metering, wherein you can install solar panels at another location, even at a property you don’t own (with permission, of course), and use the energy produced to offset your electric bill. This regulatory framework would not be easy to get into terms with the utility companies and is as of now nowhere in the list for California.
5. Can I use solar electric (photovoltaic) panels to heat my pool?
When it comes to the solar pool heating panels, solar electric panels are about four times less efficient in terms of absorbing energy from the sun. Moreover, they come with an exorbitant cost and are complex in heating pools with solar electricity.
6. What happens to solar electric panels at night or during cloudy weather?
At night, no energy is produced. It’s like solar electric panels go “to sleep.” If you don’t have a battery backup system, you must get your power from some other source like the utility company. That is fine as most of the solar energy systems installed these days are grid-interactive. They produce energy during the day, and send back any excess energy to the utility grid and to be saved for later use. When you need electricity, the utility grid delivers saved up energy to you seamlessly, and you are billed only for the net amount you use each month in a process called Net Metering.
During cloudy weather, your solar panels will produce less power, and you may need the utility company to make up the difference. This all happens without any human interaction required from your end, and it happens so seamlessly that you won’t ever know the difference even! What is important is how much energy you produce and how much you consume over a subsequent period, like months or year. The instantaneous power requirements of your home are not relevant. Therefore, you always have a reliable source of power and are only billed for the amount of energy you use in excess of what your solar panels produce over time.
7. What tax incentives are available for solar electric (photovoltaic) panels in California?
Solar electric (photovoltaic) systems in California are eligible for a direct tax credit of 30% tax. For instance, if you have paid $3,000 in income tax during a year and you install $10,000 worth of solar panels, you will be eligible for a $3,000 tax credit! You can even carry forward the unused credit to the future years. We recommend you to contact your tax professional to suggest you on solar energy purchases as the tax situations can be very complex. California’s legislature has recognized that solar energy systems offset fossil fuel and electrical usage, and has provided a sales tax exemption for solar pool heating systems. Additionally, solar electric panels will not raise the assessed value of your home, so your property taxes will remain the same despite the fact that you are adding value to your home.
8. Will my homeowner’s insurance cover solar electric (photovoltaic) panels damaged from hurricanes or storms?
Well, solar pool heating panels permanently installed on your home are taken as a part of the structure and are completely covered from damage under homeowner’s insurance policies. Since solar panels are structurally attached to your home, permitted, and inspected, they are essentially part of the home and are covered like any other apparatus system. However, we recommend you to get in touch with your insurance agent to be sure.
9. Will animals damage my solar electric panels?
Solar electric panels are very sturdy, made from tempered glass, aluminum, and a durable back sheet. There have been very rare occurrences, one or two out of thousands, where animals damaged the wires or the solar electric panels. Even in those cases, the individual wire is simply spliced or replaced, returning the system to working order. The cost of repairs is under $100, and your local installer will gladly perform this service for you.
As far as physical damage due to animals walking on panels, it can’t be an issue. They are very durable and can easily withstand the weight. The people who install solar systems step on the panels during installation and service. Thus, these solar electric panels are very durable and can easily withstand the weight and abrasion from animals.