Solar Energy FAQs
More City Light customers are showing interest in solar electric systems for their homes and businesses. Why?
- Solar electric systems are safe, reliable, pollution free, and use a renewable source of energy – the sun. Systems have no moving parts and are increasingly easy to install.
- The option of net metering, or interconnecting a customer generating system to the utility grid, makes solar electric systems more economically viable. When you generate more power than you need during a billing period, you earn an energy credit for later use.
- Federal tax credits and state renewable energy production incentives offer additional financial benefits for owning and operating a solar electric system.
Solar electricity is produced when sunlight reacts directly with semiconductor materials in solar electric cells, a process that frees electrons and creates an electrical current. Electricity is produced whenever the sun is shining, but more is produced when sunlight is intense (like on a clear sunny day) and direct (when the sun’s rays are perpendicular to the solar cells).Solar electric technology, which converts sunlight directly into electricity, should not to be confused with solar thermal systems designed to heat water.
People decide to buy solar electric systems for a variety of reasons. While many would not consider solar a good financial investment, it may make sense for others who wish to invest in a more sustainable future. Some are motivated to help preserve the environment and support the development of clean energy technologies. Others might consider solar electricity a property improvement. Whatever your reason, solar energy is widely thought to be the energy source of choice for the future.
Benefits of solar electricity:
- No fuel (no price risk)
- No water
- No noise
- High reliability
- Low maintenance
- Long life
- Modular and expandable
A solar electric system consists of basic components for generating and delivering electricity to your home or business. There are two fundamental types of solar electric systems: independent, or “off-grid” systems, and interconnected, or “grid-tied” systems. Only grid-tied systems are covered here since most customers will choose to generate electricity in parallel with the Seattle City Light distribution system.
Commonly used components are described below.
The basic building block of solar electric generation is the solar “cell.” Cells are wired together to produce a “module,” which looks like and is often called a “panel.” This is sometimes is confusing because panels also describe solar thermal systems for heating water. Solar electric modules range in power output from about 10 watts to 400 watts. Many recent residential applications use modules that are 300 watts or more to minimize the number of modules and amount of wiring required. A group of modules wired together form a solar “array.” Various mounting rails and hardware are used to attach modules to a building or other support structure and are often called “racking.”
In addition to solar modules, a solar inverter, solar meter, and alternating and direct current (AC & DC) power disconnect switches complete a solar electric system.
A solar electric system tied to the utility grid also requires an “inverter;” a power electronics device that converts DC power produced by the modules into conventional AC power. Modern inverters also provide important safety features to meet the latest National Electric Code standards, as well as monitoring and diagnostic capabilities. AC and DC power disconnect switches allow components to be safely shut down and isolated from the utility grid. These are increasingly incorporated into the newest inverter models. A battery backup system is optional in a net-metered system.
A separate utility-grade kilowatt-hour meter, or “production meter,” is also optional but is required to receive the State of Washington renewable energy production incentives, which is now closed to new solar customers as of 2019 (see questions below about incentives).
Cost depends on a number of factors, but for conventional systems mounted on a sloped roof, cost is fairly proportional to size ranging from $3 – 5 per watt of capacity installed. Thus, a typical 3,000 watt or 3 kilowatt (kW) system would cost $9,000 – $15,000 installed. Other cost factors relate to design complexity, system configuration, equipment options, and contractor expertise. Systems that integrate solar cells into roofing or glazing materials or require special equipment to install cost more. Local solar electric providers can provide you with estimates or bids.
Unlike electricity purchased month to month, solar electricity comes with an initial investment but no monthly charges. It’s like paying for a years-worth of electricity all at once. You’ll probably appreciate having lower electric bills as you harvest “free” electricity, but the initial expense of a system may be considerable. Financing may be an option to help spread out initial system costs.
With City Light solar programs and federal tax credits, the economics of solar become even more favorable.
Remember, if reducing energy costs is your prime concern, there are many energy conservation measures that offer shorter paybacks than solar. Visit City Light’s Conservation website for further information.
Dollar savings will depend on how much electricity is produced, when it is produced, and whether you qualify for additional incentives (see questions on incentives below). You can estimate how much electricity your system will produce using the following simple guideline for well-sited Seattle area systems:
For every 1 kW installed (1000 watts), the average Seattle-area installation can expect to generate 1000 kWh per year. For example, a 3 kilowatt (3,000 watts) system will generate about 3,000 kWh in one year.
Small deviations from “ideal” system orientation (due south) and tilt (degrees) will not affect annual performance more than about 5%. However, annual electricity production may vary by up to 20% due to annual variations in local weather.
You could also ask your solar installer for a written estimate of the average annual electricity production for any system proposed, which should take shading into account.
How much is that electricity worth? Seattle City Light net metering customers can reduce their energy charge to zero each billing period if they produce enough kWh to meet their needs. Net metering customers that produce more than they use receive retail value for their excess production. In other words, every kWh you produce in excess of what you need is worth the same value as a kWh you would purchase from City Light. Large Solar customers (greater than 100kW) will get a cash credit for excess generation valued at $.0316/kWh
Yes, the following incentives are available for City Light customers. Further information is provided in the Guide to Installing a Solar Electric System.
- City Light Net Metering – When you install your solar electric system (up to 100 kW AC) in compliance with City Light Interconnection Standards and sign an Interconnection Agreement, any solar electricity you generate that is not immediately needed goes back onto City Light’s grid, and is credited to your account at the retail rate. Meter readings by City Light record a customer’s “net” electricity use. At the end of any billing period, if your electricity production exceeds your consumption, a billing credit at current retail rates is applied to your next bill.
- Customers that permit and complete buildings under the terms of the Living Building Pilot will receive City Light net metering for solar installations up to 250kW AC. City Light customers not located in the City of Seattle that receive Living Building Challenge certification and affordable housing represent affordable housing designed to meet high energy efficiency standards will also receive net metering up to 250 kWh AC.
- City Light Large Solar program – If you install a system greater than 100 kW AC and up to 2 MW AC you will be compensated at the Large Solar Export rate for excess generation sold to the grid. Cash credits for excess generation provided to the grid during the prior month will appear on your next utility bill. There are some exceptions to customers that would otherwise receive the Large Solar Export rat, which are described above under the City Light Net Metering section above.
- Federal Tax Incentives – The federal Energy Policy Act of 2005, as amended by the Emergency Economic Stabilization Act of 2008, includes provisions for individuals and businesses to claim a 30% federal income tax credit for the cost of solar technology installations. Credit applies to the basis remaining after any utility or state incentives have been taken. Reference IRS Form 5695 for residential energy credits and IRS Form 3468 for business investment credits. Contact the U.S. Internal Revenue Service for further information.
- Renewable Energy Production Incentives – The Washington State Renewable Energy System Incentive program is closed to new solar customers. The rates for the state program are based on the fiscal year that the system is certified, project type, and made-in-Washington bonus. Incentive rates are listed in the chart below. This is a production-based incentive. City Light reports annual production of your system to the WSU Energy Program, the state’s program administrator. WSU then calculates your incentive for that fiscal year and shares this with City Light, who then distributes incentive payments. A fiscal year runs from July 1 to June 30. For the most current program information and dates, visit the WSU Renewable Energy System Incentive Program website.
Solar Incentive Rate Schedule
|Fiscal Year of System Certification||Base Rate - Residential||Base Rate - Commercial||Base Rate - Community Solar||Base Rate - Shared Commercial||Made in Washington Bonus|
Washington State has closed the Production Incentive to new solar customers after eraching the state-wide cap. Participating Washington utilities pay production incentives to qualified renewable energy generating customers (including community solar participants) within their service areas and earn a tax credit equal to the cost the payments. The state’s utilities pay production incentives to qualified solar-generating customers (including community solar participants) within their service territories and earn a tax credit equal to the cost of the payments. The tax credit that the utility may claim cannot exceed 1.5% of the utility’s taxable power sales. For details, please see RCW 82.16.130.
To get the most benefit from a system, a well-designed solar electric system has clear and unobstructed access to the sun for most of the day, throughout the year. You can make an initial assessment yourself, and if the site looks promising, your solar electric provider has the tools to trace the sun’s path at your site and offer a more complete assessment.
Is your site free from shade by trees, roof lines, nearby buildings, or other obstructions in the surrounding landscape? Remember that an area that is unshaded during one part of the day, may be shaded during another. Even small objects, e.g. a utility or flagpole, can result in significant shade losses. As little as 10 percent shade on a module can reduce output by as much as 80 percent.
Other factors aside, the best orientation (direction) for a solar electric system is south, where the sun spends most of its time, and therefore south-facing roof installations are most common. Roofs that face east or west may be acceptable but generate about 20% less electricity.
The amount of space needed by a solar electric system is directly related to the type and size of the system you purchase. One attractive feature of solar electricity is that systems may be sized for almost any application or power requirement. So, you should be able to find at least a small area that has good solar exposure. Of course, larger systems will provide a greater percentage of your annual electricity needs.
Most residential systems now operating in Seattle range in size from 4 to 7 kilowatts (kW), but smaller or larger systems are feasible. A 1 kW watt system might require as little as 80 square feet of roof area for 4 typical modules. A 10 kW system may require as much as 1,000 square feet.
If your area is limited, you might consider using more efficient solar modules, which provide more watts/unit of area but cost about the same per watt. System sizing is discussed further below and should also be discussed with your solar electric provider.
Roof type, slope and condition may influence the solar equipment you select. While a solar electric system can be installed on any type of roof, some roof types are simpler and less expensive to work with. Typically, composition shingles and moderate to low slopes are easiest to work with. Steep, slate roofs are most difficult. In any case, an experienced solar installer will be familiar with all roof types and installation techniques that eliminate any possibility of roof leakage. Ask your installer how the solar electric system may affect your roof warranty. If your roof is older and needs to be replaced in the near future, you may want to defer installation of a solar electric system to avoid having to remove and reinstall the system.
One trend in solar electric systems are solar-producing materials that can be integrated into the roof or glazing components of a building. Options include three-tab solar shingles, flat solar tiles with lap-joints, solar material that comes in rolls and lies between raised-seam metal roof sections, and thin-film solar wafers that go between two panes of glass but allow some light to pass. These materials are pricey but could offset the cost of conventional materials they replace.
You could examine electric bills over the past year and work with your solar electric provider to estimate the size of the system needed to achieve a certain percentage of your household’s annual electricity needs. This might be a good time to consider energy efficiency measures (appliance upgrades, etc.) to lower your electricity use and boost the percentage contribution of your solar system.
A battery system to provide back-up power in case of a utility power outage may sound attractive, but add cost and complexity to the system. Batteries will require regular maintenance and more frequent replacement than most other system components.
Consider the “economies of scale” that can decrease the cost per watt as you increase the size of the system. For example, many inverters are sized for systems up 2.5 or 3 kilowatts, and if your array is smaller, say 1 kilowatt, you may still end up buying the same inverter. Labor costs for a small system may be nearly as much as those for a larger system. For example, your solar electric provider is likely to offer you a better price to install a 2 kilowatt system all at once, than to install a 1 kilowatt system this year and another similar system next year, since multiple orders and site visits add cost.
Although there are some special programs available for financing solar and other renewable energy investments, the best way to finance solar electric systems for homes is through a mortgage loan. Mortgage financing options include your primary mortgage, a second mortgage such as a U.S. Department of Housing and Urban Development (HUD) Title 1 loan, or a home-equity loan that is secured by your property. There are two advantages to mortgage financing. First, mortgage financing usually provides longer terms and lower interest rates than other loans such as conventional bank loans. Second, the interest paid on a mortgage loan is generally deductible on your federal income tax (subject to certain conditions).
If you choose to install a solar electric system at the same time that you build, buy, or refinance your home, by including the cost of the solar electric system in your mortgage loan you can avoid additional loan application forms or fees. If mortgage financing is not available, look for other sources of financing, such as conventional bank loans. Remember to look for the best possible combination of low rate and long term. This will allow you to amortize your solar electric system as inexpensively as possible. The terms and conditions of your financing are likely to be the most important factor in determining the effective price of your solar electric power.
Solar electric systems purchased for business applications are probably best financed through a company’s existing sources of funds for capital purchases – often Small Business Administration loans or conventional bank loans.
There are many contractors to choose from, and while City Light does not endorse or refer contractors, Solar Installers of Washington maintains a list of possible qualified installers for your consideration. We recommend obtaining a minimum of three (3) bids.
Solar hot water systems save on energy costs because they use the sun’s heat to preheat water before it enters your conventional water heater. With a solar water heater, you pay less for the electricity or natural gas that you normally use to heat your water. City Light does not offer incentives for solar hot water systems. Solar hot water systems are similar to other home appliances and do not involve an electric utility interconnection process like photovoltaic cells require.
Compile a list of prospective solar electric providers. You might first consider those closest to you, because the contractors travel costs might add to your system price. Next, contact these providers and find out what products and services they offer. At minimum, find out the following:
- Is the company properly licensed? This usually means that either the company or a subcontractor has an electrical contractor’s license. The Washington State Department of Labor and Industries website includes tools for hiring an electrical contractor. You can look up if a contractor is licensed, bonded & insured, and if they have committed any infractions.
- How many grid-tied solar electric systems has the contractor installed? Experience installing grid-tied systems should be considered valuable but not mandatory. Since grid-tied systems are relatively uncommon (although this is starting to change), many contractors with solar electric experience have worked only on systems such as those that power remote homes far from the nearest utility line. These contractors may have experience with all aspects of solar electric system installation except the connection to the utility grid. Although grid-connection work is different from off-grid work, a reputable company with solar electric experience should not be eliminated just because it has not installed grid-connected solar electric systems in the past.Other forms of documenting installer experience might include: a solar contractor specialty license issued by a local building jurisdiction; certification by a group such as a state chapter of the Solar Energy Industries Association; or, a letter from a solar electric system manufacturer stating that the installer has experience and/or training necessary to install the system properly.
First, ensure that all of the bids are made on the same basis. For example, comparing a bid for a system mounted on the ground with another bid for a rooftop system is like comparing apples to oranges. Bids should cover the total cost of getting the solar electric system up and running, including hardware, installation, connection to the grid, permitting, sales tax, and warranty. Bids should clearly state the maximum generating capacity of the system measured in watts or kilowatts. If possible, have the bids specify the system capacity in “AC watts” under a standard set of test conditions, or specify the output of the system at the inverter.
You may want to obtain an estimate of the amount of electricity that the system will generate on an annual basis measured in kilowatt-hours. Because generation depends on climate – which varies year to year – it is unrealistic to expect a specific or guaranteed amount. A range of ± 20% is more realistic.
Warranty is an important factor for evaluating bids. Some rebate programs (none in Seattle) require that systems be covered by, say, a two-year parts-and-labor written installation warranty, in addition to any manufacturers’ warranties on specific components. The installer may offer longer warranties. Ask yourself, “Will this company remain in business to stand behind any manufacturer or installation warranties?”
Price should not be your only consideration. Often, you get what you pay for. Remember that a solar electric company is a business just like any other, with overhead and operating expenses that must be covered. It’s always possible that a low price could be a sign of inexperience. Companies that plan to stay in business must charge enough for their products and services to cover their costs, plus a fair profit margin.
City Light customers will need an electrical permit from the Seattle Department of Construction and Inspections (SDCI) or respective local jurisdiction, to meet City Light’s requirements for net metering (see information on net metering, below). An electrical permit is required to qualify for Washington State’s production incentive program. You may also need a building or land use permit depending on the size and complexity of the installation. Tip 420 by Seattle Department of Construction and Inspections (SDCI) is a good resource for learning more about permitting and installation requirements for solar electric systems in Seattle.
If you live in a community in which a homeowners association requires approval for solar installations, you or your solar electric provider may need to submit additional plans.
Typically, your solar electric provider will take care of all required permits and include the cost into the overall system price. However, in some cases, your solar electric provider may not know how much time or money will be involved in obtaining required permits. If so, this task may be priced on a time-and-materials basis, particularly if additional drawings or calculations must be provided to the permitting agency. In any case, make sure the permitting costs and responsibilities are addressed at the start with your solar electric provider.
Code requirements for solar electric systems vary somewhat from one jurisdiction to the next, but most are based on the National Electrical Code (NEC). NEC Article 690 carefully spells out requirements for designing and installing safe, reliable, code-compliant solar electric systems. Because most local code requirements are based on the NEC, your building inspector is likely to rely on Article 690 for guidance in determining whether your solar electric system has been properly designed and installed.
If you are among the first people in your community to install a grid-tied solar electric system, your local building department may not have approved one of these systems. If this is the case, you and your solar electric provider can speed the process by working closely and cooperatively with your local building officials to help educate them about the technology and its characteristics.
Net metering is a term for a billing program where customers can sell excess solar generation to the grid via their smart net meter, a meter capable of reading electricity flowing from the utility to the customer and vice versa.
kWh credits are the excess kWhs that a customer generated and did not use during a given billing period. These kWh credits are added to the customer’s account and applied as a credit on the following billing period. Most customers will accumulate kWh credits in the summer months and begin using any available kWh credits in the fall and winter.
If you have zero or negative kWh usage, you will not be billed energy charges and excess kWh will be added to your account balance as kWh credits for future use. If at any point later in the net metering year, more power is consumed than the system has generated, then at the end of the billing period, you will be billed energy charges for the kWh usage less any kWh credits available in your net meter balance. If there are not enough kWh credits to cover the total kWh usage in a billing period, then you will be billed for energy charges on the remaining billable kWh. The value of a kWh credit is the same as your City Light retail rate.
You can contact Seattle City Light by phone at 206-684-5516 or email at email@example.com
The kWh credits are for excess power generated that is returned to the electrical grid. Many customers will carry a zero-kWh credit balance most of the year and will only accumulate kWh credits during the summer months when more electricity is being generated than consumed. You will always use the electricity from your solar electric system first, so the kWhs that you generate and consume reduces the electricity that would otherwise be supplied by the utility and purchased by you.
Per state law RCW 80.60.030, on March 31st of each calendar year, any remaining kWh credits accumulated in the previous net-metering year will be granted to City Light without any compensation to the customer. Customers should be minimally affected by this reset. Large Solar Program customers participating in the Large Solar Export Rate do not accumulate annual credits.
No. The state incentive is paid based on your annual solar production and is separate from net metering.
Net metering is a utility billing program that measures a customer’s “net” energy consumption and allows for the accumulation of kWh credits when a customer generates excess electricity. Net metering lowers a customer’s utility bills. Separately, City Light, along with the WSU Energy Program administers the Washington state renewable energy production incentive on behalf of the state. Qualified customers receive an annual incentive check based on their systems totally yearly production recorded by a utility-grade production meter. The annual incentive is distinct from your net electricity usage and billing.
Net metering compensates customers for excess generation with kWh credits applied to their bill at the customer’s retail rate.Credits accumulate as a net meter kWh balance to offset future consumption charges. The kWh credits earned in the preceding billing cycle appear on the current customer bill.
The Large Solar export rate compensates customers for excess generation at $.0316/kWh (2020 rate). The cash credits do not carry over between billing cycles.
An energy charge is the cost per billable kWh of the net consumption (electricity purchased from the utility) under an applicable rate schedule. If a customer generates more than they consume in a billing period, then the energy charge and associated taxes will drop to zero and excess generation (negative kWh usage) will be added to the net meter credit balance or be credited at the Large Solar export rate, based on the customer’s program eligibility.
A base service charge applies to all residential customers and is associated with the cost of metering and billing a customer. Customers will see this fixed charge each billing period regardless of whether kWh usage is a positive or negative number, as shown on the statement. No statement will be billed less than the base service charge. As of January 1, 2018, the residential base service charge is about $11 per two-month billing period.
The production meter does not have any charges or usage listed under the production meter line item. The net billing meter will always be billed a base service charge and any applicable energy charges, which will be listed directly under the net billing meter line item. Please see the Solar Bill Guide for details.
Most City Light customers began seeing advanced meters installed in 2018. These meters give City Light the ability to read meters daily. This benefits customers as it provides more data that allows City Light as well as yourself the ability to track the power your system is consuming, as well as excess generation that is being sent back to the electrical grid. Net metering and Large Solar customers are not eligible to opt out of advanced metering. You can learn more about advanced metering online at http://www.seattle.gov/light/ami/
Warranties are key to ensuring that your solar electric system will be repaired if something should malfunction during the warranty period. Be sure you know who is responsible for honoring the various warranties associated with your system – the manufacturer, provider (dealer) or installer (contractor). Your provider should disclose the warranty responsibility of each party. Know the financial arrangements, such as contractor’s bonds, that assure the warranty will be honored. A warranty does not guarantee that the company will remain in business to honor the warranty. To avoid any misunderstandings, be sure to read all warranties carefully and review the terms and conditions with your provider. Under some solar rebate programs, dealers must provide documentation that specifies information on system and component warranty coverage and claims procedures.
Seattle City Light (SCL)
Energy Advisor, 206-684-3800, SCLEnergyAdvisor@seattle.gov
Net meter billing, 206-684-5516, SCL_NetMeterBilling@seattle.gov
Seattle Department of Construction and Inspections (SDCI)
Applicant Services Center – permit application and issuance, plan review
20th floor of Seattle Municipal Tower
700 Fifth Avenue, Seattle