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Cheap Solar: Buy Half a System

Dear Solar Fred,

I admit that my family and I are energy hogs and spend $350 a month on our electric bill. I know if we size it right that we’ll see a payback in around 12 years, but right now, we don’t have enough home equity for the up front costs. Is there any other way to buy solar without settling for leasing?

Sincerely,

Pete in Palo Alto

Hey, Pete,

I have a good suggestion that may save you a lot of money and allow you to go solar. Instead of trying to offset ALL of your home’s electric bill, get your installer to size a system that will take care of 50% or 60% of your electric bill. There are a lot of money saving advantages to this. Obviously, you’re going to be paying less up front because you’ll be paying for less solar. That’s savings number one. But the real big savings may come in rate tier savings:

  • In many states–certainly in Palo Alto, California–there are different rate tiers charged for usage. The more power you use, the higher your rate jumps to a higher tier for that above average usage.
  • The lowest rate in your territory is about 11 cents per kilowatt hour (kWh) for the “base tier.” Everybody, including you, get this rate for a certain amount of usage.
  • When you use energy above this level, the utility charges you HIGHER rates. The next rate tier above 11cent is 25 cents/kWh–more than double. If you use even more, the rate jumps even higher to 35 cents/kWh. The utilities do this to penalize energy hogs like you and to encourage you to conserve. One way to do that: Go solar.
  • If you buy enough solar panels to offset your usage by say 50%, you’re sort of tricking the utility into thinking you use a lot less energy. In reality, your solar panels are generating enough to get you out of the higher tiers back into the lower tiers.

All this being said, it would still be a good idea to really cut your energy use through some basic energy efficiency.

Last modified: December 8, 2015

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