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from rooftops to fields: the growing trend of solar panels

The ABC's of Solar

In general, here’s how solar energy in the home works: Sunshine comes into contact with roof-mounted photovoltaic solar panels, which comprise many cells made of silicon semiconductor material. This material can liberate free electrons from the photons in the sun’s rays. Conductors in the panels form an electrical circuit, where those liberated electrons course in a single direction, generating direct current (DC) electricity.

However, the power grid in the U.S. uses alternating current (AC) electricity - where those electrons move back and forth in different directions - because it’s more efficient for transmitting across long distances.

To solve this AC/DC conundrum, arrays of connected solar panels are connected to a solar inverter, which transforms DC electricity into AC, and can then power your home and devices. The more connected panels there are, the more electricity can be generated.

When you’re not using the electricity that’s being generated by your sunny rooftop panels or the solar array is simply making more electricity than you need, the excess electricity is channeled into the municipal grid, where it’s used by other customers.

A process called ‘net metering‘ keeps track of how much excess energy your home is producing, and you then receive credits accordingly - which helps offset the cost of your electric bill when you need to draw from the grid at night or on rainy days. 

Sunny Side Up

There’s a lot to like about solar home energy. Some of the key reasons you might consider doing a residential solar power deployment are:

  • Lower electric bills. This is a big one, and probably the main reason most people are attracted to such a project in the first place. Numbers vary, but some estimates show the savings could stack up to as much as $30,000 over a few decades of solar panel use.

  • Environmental benefits. Yes, the production process for solar panels necessarily generates some greenhouse gases. But once installed, they offer emission-free energy and could help your home reduce its carbon footprint by as much as one-fifth of what the average American home produces.

  • Tax incentives. The federal government and most states offer fairly generous incentives and tax credits to install solar panels and other green energy technologies. By doing your research and paying attention to the details, you could recoup perhaps one-third (or more) of your upfront installation costs.

  • Ease of use. Home solar technology is evolving rapidly, becoming more efficient and customer-friendly by the year. Unlike in the past, systems are now designed to last for decades with very little needed in terms of maintenance and other upkeep duties. 

Some Dark Clouds

Solar installations are not without their drawbacks - and the potential cons of solar can be considerable:

  • Steep upfront costs. The cash outlay to get panels and other solar energy equipment installed could be more than $20,000 - and that doesn’t include important peripheral technology, like the transformers needed for DC devices running from AC sources.

  • Reliability concerns. A common knock against solar energy is that it’s not always sunny. Folks who live in, say, Seattle or in northern climates with long and dimly lit winters should be prepared for weather related limitations. Even with the use of batteries , customers who live in cloudier climates will need to draw from the municipal grid more often.

  • Practical limitations. What if you invest a lot of money in a solar panel setup but then, for one reason or another, have to move to a new home? It’s not advisable to relocate equipment from one home to the other, nor is it always technically possible. But even if you’re certain you’ll be staying put, solar deployments are not small projects. They typically require at least 100 square feet of rooftop real estate for every kilowatt generated. If you don’t have that kind of space, solar may not be appropriate for you.

Ultimately, when deployed correctly and with a clear-eyed understanding of the pros and cons, solar panels can make for big savings on your monthly electric bill. Despite the high upfront costs of solar panel installation, the savings generated by a particular system could approach $75,000.

Caveat: Just how big those savings are depends on a lot of factors - chief among them the general cost of electricity in your area and the prevailing weather trends in your region. Online calculators on social energy websites can help you do the math and decide whether the effort makes sense financially. 

Batteries Not Included

Adding a storage component to your solar array is not required. Panels can generate electricity when the sun is shining, and when it’s not, you can draw power from the local grid (potentially at a discount if you’re participating in a net metering program).

Adding battery capabilities can significantly extend and expand the value proposition of your solar panel installation enabling on-site storage of excess energy to use during inclement weather or power outages.

While many solar customers might think of batteries as a perk or a nice-to-have add-on, they become more useful in areas where the commercial electric grid is unreliable or in regions prone to natural disasters. And that goes double for customers who might need to power well pumps or critical home health care equipment.

Batteries will typically last up to 15 years (less than the life spans of a typical solar panel set) so they’ll likely need replacing at some point. They also need mitigations in place to protect them from temperatures below 30° and above 90° Fahrenheit, as such extreme temperatures reduce their overall efficiency and performance. In general, a professionally installed, properly sized, and well-cared-for battery should be able to satisfy a home’s electrical needs for several days - even if the sun is hiding behind clouds the whole time. 

What the Inflationary Reduction Act (IRA) Might Mean for Your Solar Future

Another factor in the decision is that politicians are increasingly seeking to give solar a boost. Consider the landmark Inflation Reduction Act, which earmarks $369 billion for an array of clean energy and climate change provisions. Much of that money is aimed at developing the solar energy industry and technologies as well as at consumers who could benefit from investing in them.

As of this writing, the law provides for a residential clean energy credit that enables households to deduct 30% of solar energy spending from their federal tax returns over the next decade through 2032.

However, the ins and outs of the legislation can be confusing for consumers. Even the solar industry, which has every reason to cheer the law, has voiced some concerns about the potential complexity of the IRA’s provisions and has asked for greater clarity.

In addition, the new law created some supply-and-demand issues consumers should be aware of as they mull the prospect of going solar. For instance, the growing popularity of solar installations - and the increasing funds available to help pay for them - has led to a solar panel production slowdown that may go on for some time.. 

Finding the Right Solar Contractor

Another key issue is finding a reputable professional to make the conversion to solar power. Here again, supply constraints may mean delays if rising demand creates longer waiting lists for contractors.

As you conduct your search, there are some important qualifications to consider. Look for contractors with a documented track record of experience and who are properly authorized. When interviewing candidates, you’d ideally like to see that they are certified by the North American Board of Certified Energy Practitioners. Inquire how long the company has been in business (the longer the better); whether equipment warranties are offered, and for how long; and whether the installer uses its own team or makes use of subcontractors for the work.

You’ll also want to learn more about the make of the solar inverters and the panels themselves - ideally taking a look at the manufacturer’s spec sheet for the models you’re planning to install. You should ask about a power output warranty. Usually these promise 90% production after 10 years and 80% at 25. Equipment should also be guaranteed to last at least a decade without failing.


There’s no question that going solar is a big decision with big setup costs. But it’s one that could pay sizeable dividends each month if it’s right for you. Do your homework and choose equipment and installers wisely. Given the current push toward solar energy, it likely makes sense to at least look into the option to determine whether it’s time to “let the sun shine in." 


All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability, or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

This report was published by the VFO Inner Circle, a global financial concierge group working with affluent individuals and families, and is distributed with its permission. Copyright 2018 by AES Nation, LLC.




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