How to Save Money by Adding a Solar System to Your Home or Business in 2026 - 2027��Eric Krock
Last updated 28 May 2026
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Disclaimers
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Will I save money if I add a solar system to my home or business?
In most cases, yes. You can do the math on how much:
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Estimated savings are calculated in terms of CURRENT PG&E electricity rates
Who in this audience thinks that over the next 10 years, after adjusting for inflation:
If you expect PG&E real (inflation-adjusted) electricity rates to go up, your savings will likely be GREATER than what solar installers will estimate!
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Source: SimplySolar
Am I eligible for a federal tax credit?
The individual homeowner federal tax credits expired 12/31/2025.��However, there’s still a federal tax credit that’s usable through end of 2027. Some installers (Simply Solar is one) can pass those savings on to you by structuring your solar installation as a “prepaid Purchase Power Agreement.” That’s very different than the typical PPAs offered by companies like SunRun.��For details in the SF Bay Area, contact dfrank@simplysolar.com.
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Basics to Know
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Units
Solar panels are sized in watts (W) at peak production. (e.g. 440 watt JA Solar panels)
→ Remember: “Solar panels generate watts. Light bulbs consume watts!”��Solar system is sized in kilowatts (kW = 1000 watts) at peak production (e.g. 33 panels * 440 watts / panel = 14.52 kW)��Battery storage is sized in kilowatt hours (kWh) (e.g. one primary 13.5 kWh battery and one 13.5 kWh add-on battery module)
→ Remember: “How many kilowatts can my battery provide for how many hours?
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“Solar panels only produce rated power for 4-5 hours per day”
That’s true. Each solar panel will only produce its rated �maximum power for 4-5 hours per day. So:
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“Solar panels produce no power at night”
“Solar panels produce less power in December / January”
That’s true. At night, you run off your battery. If necessary, you can draw power from the grid to power your home and/or to recharge your battery (when your daily home power demand is greater than your daily power production including what the battery can store).
That’s true. During those months, you’ll use more power from the grid. Your goal is to save money over the year as a whole, not to be self-sufficient every single month.
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Preparation for a Solar Project
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First steps
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First steps (cont’d)
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Think about how much power you will use in the future
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chat_gpt research prompt on solar system sizing
SAMPLE PROMPT:�I want to put solar panels on the roof of the home that I own at [FULL ADDRESS]. The home has [CONDITIONED SQUARE FOOTAGE] of conditioned living space cooled by a HVAC and heated by natural gas. My goal is to power the home and recharge EVs as much as possible off solar power. My average monthly electricity bill from pg&e has been $447/month over the last 12 months. I have a [EV YEAR, MAKE, MODEL] that I will drive [ANNUAL HOME MILEAGE] miles per year that I will recharge at home. 3 years from now we will replace my spouse’s internal combustion car with an EV. She drives [ANNUAL SPOUSE MILEAGE] miles per year and will charge it at home.
What size solar system should I put on my roof in kw? How much battery storage should I get in kwh?
What do you expect the total system to cost? What will it reduce my monthly average electricity bill to?��NOTES:
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Figure out how much power you’ll use for Electric Vehicles (EV)’s / Plug-in Hybrid EV’s
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chat_gpt research prompt on estimating EV power usage, heat pump heating
SAMPLE PROMPTS:�
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Consider how large a system you want to get
By default, solar installers will size your system (solar panels + battery) based on your last 12 months of usage.
If you expect to need more panels and battery in the future, you may want to buy a larger system now.
You can “oversize” your system by up to 50% vs. current needs so long as you have legitimate expected future usage to support the oversizing.
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Estimating electricity usage per month over car and home electrification (this is analysis overkill)
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Example
By default, solar installers recommended 11.4 kw of solar panels and 13 kwh of battery for my 1760 ft2 home which had HVAC with gas heat, 2 ICE cars, gas hot water heater, and electric range.
But I knew I wanted to convert my ICE cars to EVs, gas hot water heater to heat pump electric, and HVAC with gas heat to heat pump system over time.
And I knew the federal tax credits are going away.
So I chose to get 14.6 kw of solar panels and 27 kwh of battery, with federal tax credits covering 30% of the total cost, so I’m prepared for future* electric conversions.
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* One ICE car died while I was thinking about getting a home solar system, so I replaced it with an EV and was able to include power for that EV in my system size calculations. We’ve since bought a second EV.
How Can I Afford This?��Example: Paying for a 7.48 kW System with a 13.5 kWh battery using a 6.25 % solar loan
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You will SAVE money with solar and a battery!
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Source: SimplySolar
You will SAVE money with solar and a battery!
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Sources: SimplySolar; StarOne solar loan calculator at https://www.starone.org/solar-loans
You will SAVE money with solar and a battery!
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* Actually you’d owe slightly less based on the payments you’d made towards loan principal already; this is a simplified illustration.
Sources: SimplySolar; StarOne solar loan calculator at https://www.starone.org/solar-loans
What that 7.48 kW system would look like
Example system has three strings positioned on the home to provide power over the course of the day.��If you have only one sun-facing portion of your roof, all the panels can be placed there and they’ll charge the battery when illuminated.
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Source: SimplySolar
And remember, you can get more cash by selling excess power!
The above analysis focuses only on reducing what you pay to buy electricity. You can also sell excess power back to the grid.
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Legitimate Concerns
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“I have an old 100 amp electrical box with no available slots to add a solar system inverter”�“I only have a 100 amp PG&E drop and PG&E says I must upgrade my connection to get a larger box.”
Your solar installer (or an electrician of your choice) can replace an old electrical main panel with a new, larger 200 amp electrical main panel. Or, they can add a subpanel.
This upgrade becomes part of your total solar system cost and is also eligible for the 30% federal tax credit.
When you upgrade to a 200 amp main panel, if you don’t have a 200 amp utility connection, you may need to upgrade your home connection to a 200 am PG&E drop at the same time.
Solar installers can help you think through these issues. ��NOTE: Only do this if you have to! Expenditures for solar system must be paid by 12/31 to qualify for federal tax credit!
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“My roof is old and needs to be replaced.”
True. It doesn’t make sense to install a new solar system on a roof you’ll need to replace within a few years.
So, replace your roof (using a home improvement loan if necessary) with an energy efficient Cool Roof and then install solar on the new roof.
Or, have your solar system installed by an installer such as SimplySolar who will contractually commit to remove and replace your solar panels one time at no charge when you need to replace your roof between years three and ten of the contract. ��NOTE: Only replace your roof right now if you must! Expenditures for solar system must be paid by 12/31 to qualify for federal tax credit!
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“I’m planning a remodel. Doesn’t make sense to put on solar right now. I’ll wait until after the remodel.”
I made this mistake. Knew I’d do a remodel in the future so I never put on solar until 2025. What I now understand is that:
OOPS! I should have put on solar panels in 2005 and saved a ton of money in the last 20 years! Moral of the story: ask your solar installer about future remodel plans and what it would cost to remove/replace panels, but install a solar system now!!!
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“I don’t have cash for the up-front payment.”
This can be solved in multiple ways:
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“I don’t have cash for the up-front payment.” (cont’d)
Financing options, continued:
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“I may not stay in this house long enough to reap the benefit of installing solar”
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chat_gpt analysis of converting monthly electricity bill savings to home value
Prompt: I'm illustrating how putting a solar system on a home should increase the home's value based on the expected electricity bill savings. In the example, a 7.48 kW solar system with a Tesla Powerwall 3 battery costs $38,382.00 up-front and saves the homeowner $362.82 per month on electricity. At current home mortgage interest rates, when the buyer can pay an extra $362.82 per month, how much larger a 30-year mortgage can they afford to take out?
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chat_gpt analysis of converting monthly electricity bill savings to home value (cont’d)
To determine how much more a homebuyer could afford to borrow with an extra $362.82/month, we need to calculate the present value of those monthly payments over a 30-year mortgage at a given interest rate.
💡 Formula Used:
We use the formula for the present value of an annuity:
PV=P×1−(1+r)−nrPV = P \times \frac{1 - (1 + r)^{-n}}{r}PV=P×r1−(1+r)−n
Where:
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chat_gpt analysis of converting monthly electricity bill savings to home value (cont’d)
📌 Assumption:
Let’s use a current average mortgage rate of 7.0% APR (can adjust if you have a specific one). So:
r=7.0%12=0.005833r = \frac{7.0\%}{12} = 0.005833r=127.0%=0.005833
Now plug into the formula:
PV=362.82×1−(1+0.005833)−3600.005833PV = 362.82 \times \frac{1 - (1 + 0.005833)^{-360}}{0.005833}PV=362.82×0.0058331−(1+0.005833)−360 PV≈362.82×151.73=$55,071.65PV \approx 362.82 \times 151.73 = \boxed{\$55,071.65}PV≈362.82×151.73=$55,071.65
✅ Final Answer:
At a 7.0% interest rate, an additional $362.82/month in electricity bill savings would allow a buyer to afford about $55,072 more on their 30-year mortgage.
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“Solar won’t work if your roof is shaded.”
Answer: it depends on how much your roof is shaded. Solar installers can use satellite (or if necessary, drone) image data to accurately assess how much effect shading will have on the power production of solar panels on your roof.
On simple solar panel strings, power production may be limited by the production of the least-productive panel. That’s why you put in place multiple strings in different locations at different angles.
If you have a somewhat shady roof, you can use on-panel inverters (such as those from SolarEdge) to eliminate the “least productive panel” bottleneck problem.
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Example of a shade map
Solar installers can automatically estimate the shade on your roof from satellite photos and position solar panels to balance power production over the course of the day.
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Source: SimplySolar
False Arguments Against Installing Solar Systems
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“Solar doesn’t save you money”
Nonsense.
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“If you think solar will save you money, you’re believing the lies of solar installers.”
I don’t trust solar installers. I trust:
Also, get at least two bids and compare them.
You can also get an independent assessment from Silicon Valley Clean Energy
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“With NEM3, solar no longer makes sense.”
What’s true:
Reality: That doesn’t mean you can’t save money with solar. It just means you need to have a battery so you can time-shift usage, storing power in the afternoons when you make extra electricity and buying any grid power you need at the cheapest daily rates, which are midnight - 3 p.m. if you’re on a solar rate plan.
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Buy and Own Your Solar Systems or Use a Power Purchase Agreement (PPA)?
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Arguments for and against Power Purchase Agreement
Arguments for:
Arguments against:
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chat_gpt research prompts for PPA
SAMPLE PROMPTS:�How does a power purchase agreement work?��give me a comparison of a ppa vs. buying/financing my solar system��
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DIY Solar?��(and why not to do this)
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Install a solar system yourself (or with minimal help from an electrician)?
It is possible to install a solar system yourself (maybe with some help from an electrician to avoid electrocuting yourself in the main panel). You can even buy cheap used solar panels from Canadian Solar in Oakland that may produce 90% of rated power. Why I chose not to:
→ I chose to have it done by professionals in two days and to pay for the work via federal tax credit and loan paid down via PG&E electricity bill savings.
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chat_gpt research prompt on DIY solar
SAMPLE PROMPT:�if i install solar system diy, does it qualify for federal tax credit?��
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How to Pick a Solar Installer
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My approach to picking an installer
Develop a list of candidate companies:
Then, evaluate the companies on your list:
Narrow down to a short list of companies with lots of ratings and high average ratings.
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Sample first email to short listed solar installers
I would like to get a bid from you on solar panels + solar battery.
I own a [HOME SQUARE FOOTAGE] square foot single family detached wood frame single story home at [FULL ADDRESS]. It has a low-pitch asphalt roof in excellent condition with 20-30 years left to run on its warranty. Almost no shade of roof. $471 electricity (only) PG&E bill averaged over last 12 months. Just purchased our first EV. I likely will replace other ICE car to an EV as well this year. I want to install 11+ kW of solar panels on my roof and at least one home battery to support load shifting and provide power when PG&E goes down.
I plan to take out a solar loan to pay for this and pay down system cost over time with savings. I have Tier One credit and can arrange own financing from StarOne Credit Union.
I’m still investigating optimal sizing for solar panels and battery. Please size the system assuming I have two EVs because we'll probably replace our second car with an EV this year. I plan to replace conventional gas/electric HVAC with heat pump based system in future when HVAC fails. I plan to replace gas hot water heater with heat pump electric this year to capture the federal tax credit for that. Therefore I lean towards potentially oversizing the solar panels a bit vs. what a customer might install by default and would like to understand your baseline proposal as well as the cost of additional solar on the roof and extra battery capacity on the margin.
I have a 200A PG&E drop, the largest main panel I could buy in 2022 during a renovation, and a 100A subpanel.��I have attached my most recent PG&E bill and my electricity and gas usage data for the last 12 months.��My phone number is [PHONE NUMBER]. I look forward to talking with you. Thanks!
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Meet in person with each solar installer sales rep and then with their designer
Things to verify:
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Meet in person with each solar installer sales rep and then with their estimator/designer
More things to verify:
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Get at least three bids
Round up the written bids
Negotiate. Use lower bid for leverage.
But don’t go with a provider if:
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Don’t overpay for solar!
One scenario you want to avoid is paying an above-market price for your solar system.��Use EnergySage to familiarize yourself with lowball “bottom of market” bids, typically from lower-rated firms.��Get multiple bids from highly-rated firms to cross-check.��Highly-rated installers don’t get high ratings by overcharging people. So pick a firm with many online ratings and a high average rating!
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Don’t underpay for solar! �REMEMBER: “low bid” may mean HIGH COST!
The second scenario you want to avoid is working with a fly-by-night firm that screws up the job and fails to get it done and working promptly.��So pick a firm with many online ratings and a high average rating!
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What I Ultimately Chose
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My choices
Note: This is a larger system than installers would normally recommend. But I was planning for full home electrification: second EV, heat pump water heater, and heat pump heating/cooling.
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Getting a Solar Loan
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StarOne Credit Union Solar Loan Key Features
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How to Work with your Solar Installer
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Preventing problems
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Post-Installation Action Items
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Final steps
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Final steps (cont’d)
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What About the Self-Generation Incentive Program? (SGIP)
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SGIP is suspended right now for lack of funds
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Ongoing Maintenance
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System maintenance
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Other Things to Consider
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Having a home battery also gives you power during power outages and after earthquakes
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Photo by Shefali Lincoln on Unsplash
If you replace your roof, get a Cool Roof that can reflect 50-90% of heat back into space for 5-15% more up-front!
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Source: chat_gpt
Buy a new or certified pre-owned EV!
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How solar system and EV savings work together
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Source of savings | Savings Amount / Month ($) |
Electricity savings | $361 |
No more gas for Volvo | $263 |
No more gas for Camry Hybrid | $60 |
No more oil changes ($130 each time * 4x/year) | $44 |
Monthly Volvo Maintenance | $100 |
Monthly Camry Maintenance | $100 |
TOTAL SAVINGS: | $906 / month |
Don’t overlook potential savings!
Check out all these sources of incentives, savings, rebates, and credits:
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Make sure to stack your incentives together!
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chat_gpt research prompts on stacking PG&E and Silicon Valley Clean Energy incentives
SAMPLE PROMPT:�I am a residential homeowner and will add solar panels to my roof and a home battery shortly. If I sign up for both the PG&E DSGS program and the Silicon Valley Clean Energy NEM-SVCE programs, how do the two programs interact?��What residential level 2 charging equipment qualifies for both PG&E Residential Charging Solutions Rebate and silicon valley clean energy rebate?��
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Additional incentives and rebates are available for people on lower/fixed incomes!
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Summary
If you put solar and a battery on your home and pay for the entire cost using a 6.25% solar loan, you will:
WHY IS EVERY HOMEOWNER NOT DOING THIS RIGHT NOW?!?! DO YOU LIKE PAYING MORE MONEY FOR ELECTRICITY THAN YOU HAVE TO?!?!
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