Understanding the Ins and Outs of Solar Panels

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Going green, saving money, and a hands-on STEM (Science, Technology, Engineering, Mathematics) educational project are all potential positive outcomes of going solar—even in Michigan, including many parts of Ann Arbor

IRA encouragement

Thanks to the recent passage of the Inflation Reduction Act, there is growing interest in installing solar panels because they are now eligible for extra financial credit..

Proponents of solar energy point out that costs to install solar power have significantly gone down in the past 10 years, and the technology has improved. Furthermore, the Inflation Reduction Act increased the federal tax credit to 30% for the next decade. 

Lower costs, in the long run,

Bob Royce moved to Ann Arbor in 1981 and is currently the president of “The Understanding Group,” a digital design firm.  He has had his solar system for the past year.

“I’ve been waiting for the prices in solar to drop enough to offer a good return on investment, even in Michigan, where we lose quite a bit of production in the winter,” Royce said. “We expect to recoup our investment in seven years or so. Faster if the cost of electricity goes up. The panels are rated to maintain good output for at least 25 years, so we continue to benefit long after they are paid off. We have two plug-in electric cars, so the idea of charging them from the sun was also appealing.

Royce said he utilized Ann Arbor Solarize, a program to organize group purchases of solar panels at a discount. Royce installed a 13.5 kilowatt-hour (kWh) system in 2021.

There is a distinction between a kilowatt-hour (kWh) and a kilowatt (kW). KWh is a measurement of energy, whereas kW is a measure of power. 

The terms power and energy are often mistakenly used interchangeably. But energy refers to the ability to do work, while power refers to the rate of energy production or consumption. With the rate of energy, there is a time component. The related algebraic equation is, therefore kW * time = kwh. 1 kWh equals one hour of electricity usage at a rate of 1 kW, and thus the 2 kW appliance would consume 2 kWh in one hour.

Victor Volkman, who is a Software Engineer at Clarivate and has lived in Ann Arbor since 1988, was also motivated both to save money and to go green.

“Our installation finished June 10th, 2022,” recalled Volkman. “We believe electric rates will double in the next decade, and we also believe in doing our part to reduce carbon emissions. We’re removing about one ton of carbon from the atmosphere each month, according to Solar Edge’s calculations and Michigan’s mix of power stations. Seeing that my coworkers and friends were also headed in that direction seemed like a good motivator as well.”

Volkman attended several Solarize meetings from the City of Ann Arbor and also received competitive bids. He decided on Homeland Solar.

Project Sunroof as an estimate

The first step both individuals took to go solar was to get a Google solar survey.  Anyone can use Project Sunroof

For instance, our family is also considering going solar. We put in our address, after which it indicated that solar panels would still make sense in our city dwelling.

It stated we would have 1,289 hours of usable sunlight per year, based on day-to-day analysis of weather patterns. 951 square feet available for solar panels, based on 3D modeling of the roof and nearby trees. $10,000 saving estimated net saving of roof over 20 years for our home

Photo panels in a dense part of Ann Arbor placed on top of the garage. Photo by Donna Iadipaolo.

“We have a great roof for solar, so the next step was to shop for an installer,” Royce recalled. 

Royce contacted five places and got quotes from three companies, each of which proposed similar-sized systems and comparable technology.

Volkman’s roof was not as suitable for solar, so he used his yard instead.

“Since our roof geometry was not suitable for roof mounting, we had to clear a big area in our yard for two-row elf ground-mounted panels,” Volkman recalled. 

Excavation costs are then added to the cost of the project.

Different components to consider

“There are differences in the technology they use to convert power from the DC current generated by the panels to the AC current we use to power our home, which is called the inverter. There are a couple of competing inverter technologies on the market, and installers tend to align around only one.”

The battery system was also a big question for Royce, such as Tesla Powerwall.

Battery or not

“(The battery system) links into your system, and any excess power generated during the day is stored first in the battery before being sold back to DTE once the battery is full,” explained Royce. “Then, at night, you draw power from the battery instead of the grid until the battery is depleted.”

“People don’t use as much power at night, so a battery can provide enough stored energy to power the house any time the sun is not shining. Talking with our installer, we decided not to use batteries for a few reasons: 1) they are expensive relative to the rest of the system, so it takes about 50% longer to recoup the initial expense through savings, 2) battery technology is changing rapidly, and I expect pricing to come way down in a few years, and finally, 3) I have a reservation for a Ford F-150 Lightning and can use its battery to power the house.” 

Royce said one could expect to spend between $15,000 and $30,000 for a complete installation when buying the panels. And add $10,000 to $20,000 for adding batteries. For Royce, he said he anticipated a 7-year return on investment. 

“Due to the battery, we are 80% energy independent,” described Volkman. “During 8 a.m. to 7 p.m., we are self-sufficient and export about 14 Kwh back to DTE. From 7 p.m. to midnight, we run off the battery. From midnight to 8 a.m., we are back on DTE. If we had Net Metering, we would be 100% independent, but Michigan no longer has that, so we have to buy back some of our electricity we sent to DTE at a reduced rate.”

Volkman ended up with a very large system as well because they have two homes attached and also chose an extra large 16 Kwh battery, about twice the recommended size. His total cost was about $50,000, and he says he expects to break even in about 12 years.

“Most people will need some kind of loan to cover costs,” Volkman described. “We used MichiganSaves to get a non-collateral low-interest loan for 15 years.

STEM projects

Math and science aspects can help with the project, particularly if you do it yourself.

“You would need to understand residential power systems and all that entails, though you can do a whole lot with electricity without understanding the math and physics behind it all.”

He added if you have it all done for you without getting involved, you don’t need to crunch as many numbers.

“If you enjoy learning about things, I now have a better understanding of how electricity works and the difference between amps, volts, and watts,” Royce added. 

There are some clear math and science applications, for instance.

“You really need to understand the difference between amps, volts, and watts and especially watts-over time, Kilowatt-hours,” Volkman said.

Voltage is often considered to be analogous to water pressure. Volts represent the speed at which electrons pass a specific point within the closed circuit. An ampere measures electricity. A Watt is the rate of power flow that results from amps flowing through a volt’s electromotive force. Amps multiplied by Volts equals Watts.  V * A = W.

“You need to understand the time-value of money, which is to say compound interest. Basic knowledge of ratio and proportion—percentages,” Volkman added.

Compound interest is the interest on a certain amount of money calculated both on the initial principal and the accumulated interest from previous periods.

Ratios are mathematical expressions to compare units. A proportion is an equation indicating that two ratios are equivalent. The percentage is a fraction whose denominator is 100.

Royce concluded that there is clearly a plethora of STEM learning connected to solar power.

“You don’t need to understand how photovoltaic systems work to add solar, but it’s cool technology, a great context for learning physics, how light works, the sun…silicon manufacturing, supply chains, global competition… Then there’s electricity and batteries and large-scale power distribution. There is more than one science project there,” Royce said.