4 year solar panel review – Are they still worth it? It’s been almost 4 years since I had solar panels installed on my house. To start comparing quotes and simplify insurance-buying, check out Policygenius: https://policygenius.com/undecided. Thanks to Policygenius for sponsoring this video! In general they’ve been performing pretty close to what was promised, but last year threw us some curveballs. I saw a pretty sharp decline in the amount of solar produced. Since my solar panels are nearing their 4 year anniversary, I thought it would be a good idea to revisit what I’ve learned living with solar panels in an area you might not think they’d be good for, as well as what happened last year. Do I still think getting solar panels was a good idea? Let’s see if we can come to a decision on this.
It’s been almost 4 years since I had solar panels installed on my house; which is located in Massachusetts. In general, they’ve been performing pretty close to what was promised, but last year threw us some curveballs that made me a little concerned. I saw a pretty sharp decline in the amount of solar produced. Since my solar panels are nearing their 4 year anniversary, I thought it would be a good idea to share what I’ve learned living with solar panels in an area you might not think they’d be good for, as well as what happened last year. Do I still think getting solar panels was a good idea? Let’s see if we can come to a decision on this.
I’m Matt Ferrell. Welcome to Undecided. I live in the Boston area and have been documenting what it’s been like living with a 9.49 kW solar panel system in a colder climate. My wife and I decided to get solar installed for two reasons: 1) reduce our electric bill and save money over time, and 2) get as much of our electricity from clean sources as possible. There’s no question where my electricity is coming from when it’s being produced on my roof. You could probably also include a third reason to the mix, my Tesla Model 3. Charging up your EV with electricity that you generate yourself is pretty cool. I guess you could say the idea of energy independence is enticing. My house has a few challenges. If you live in the northern hemisphere, it’s best to have a southern facing roof to maximize your solar production, but my house is oriented more east-to-west. That’s why I have panels on both sides of my roof, so I can capture morning and afternoon sun. The second issue is that my roof is pretty small. And finally, I have a fair amount of trees on the western side of my house that start to block the sun in the mid-to-late afternoon. Like I said, my house is a bit challenging for solar.
For the past few years my solar panels have reduced our reliance on the grid by about 54%, which is what we expected given my home’s issues. We’re still on track for the system to have paid for itself in savings by 2026 (it’s a 7-8 year payback), but there’s some wrinkles to that I’ll get to in a bit. First though, I’ve got to get into last year’s issues. We saw a pretty steep drop in performance in 2021, but it’s really important to give these numbers some context. If you don’t have solar, it’s easy to armchair quarterback and ridicule solar as a waste of money. Some of the comments I see most often on my solar panel videos bring up the misperception that solar panels degrade and die quickly. Others question the accuracy of solar installers telling you how much you’ll produce each year … sometimes for the next 10, 15, 20 years. Weather is going to be a huge factor in how well your solar panels work. The criticism is usually, if a meteorologist struggles to predict the weather a week out, how can you predict years of solar production. On that first point about degradation, it’s absolutely true that you’ll see a decline year over year. However, if you have quality made panels from the major manufacturers, those panels will last 30+ years. For these panels you’ll have warranties that guarantee minimal losses over the next 20 years, but that’s not end of life … that’s just the warranty period.
In my case I have LG solar panels on my home that are guaranteed to produce at least 88.4% of their original efficiency, which means you’re talking about a .5% drop each year. And that’s why I had to raise an eyebrow at last year’s numbers. My solar installer offered a 10 year production guarantee. If my panels produce less than 95% of their projection, they’ll pay the difference in the cost of electricity. They projected that we’d be producing close to 6,600 kWh each year for the first few years, but last year we produced only 6,479 kWh. The year before we produced 7,293 kWh. So comparing 2021 to 2020, we saw an 11% drop in production. So yeah, I was a little perplexed, frustrated, with a dash of concern. To add to that our electricity use had increased slightly because my wife started working from home due to the pandemic, and our electricity prices had risen … a lot. Back when we got the solar panels installed we were paying about $0.24/kWh. Now we’re paying about $0.30/kWh. On average we use roughly 950 kWh per month over the course of a year, so you’re talking about going from a potential bill of $228 a few years ago to $285 today. That’s when the data nerd in me kicked into gear and I started crunching the numbers to figure out what was going on. But before getting to what I found, there’s some other numbers worth crunching.
I’ve been asked on previous solar panel videos how much my home insurance went up with solar panels, and that really depends on your provider. My home insurance didn’t change at all with solar, but we’re planning on moving at some point soon, so we’ve been looking to see if there are some better deals for our home and auto insurance. When looking at your solar panel production, it’s important to not focus and obsess on the day-to-day numbers. There’s going to be an incredible amount of volatility day to day depending on the weather. Cloudy days, rain, snow, etc. It all depends, so you have to look longer term when assessing how it’s performing and if it’s worth the cost of the system. It’s the same reason my solar installer does a yearly guarantee. Take a look at my monthly numbers year over year and you’ll start to spot some clear trends. Summer is obviously going to be peak production because of the increased daylight hours and the sun being at a higher angle in the sky. During winter you have shorter days and a lower angle of sun. The yearly trend looks a lot like a daily trend. Very low production in the winter and none at night, and a swell during the summer months or middle of the day. However, something should jump out at you on this chart.
The 2021 numbers between May and September are dramatically lower than the years before it. I knew weather was going to play a role in how effective my panels would perform, but I didn’t expect such a huge swing to happen year over year. That’s when I pulled up the historical weather data for my area. If you overlay the amount of precipitation on top of the solar production chart, the correlation is pretty clear. Here in the New England area, 2021 was one of the warmest and wettest on record, especially if you look at the July, August, and September data. 2021 was the third warmest on record going all the way back to 1895. It was also the third wettest year on record and July 2021 coming in as the wettest month on record. Massachusetts typically sees about 4 inches of rain in July, but last year we saw an average of 10.3 inches. So the mystery was solved for why 2021’s production was so low. It wasn’t anything wrong with my panels, inverters, or other hardware. Thankfully, if you look at what we’ve seen so far in 2022, everything is back to normal. In fact, April’s production numbers were the best we’ve seen so far after four years of data. While you might think this challenged my belief in only vetting solar production numbers year to year vs. day to day, and that weather doesn’t really factor in too much long term, it hasn’t. 2021’s yearly number came in at 6,479.6 kWh with a prediction from my installer of 6,549 kWh. That prediction was off by about 1%, which really isn’t bad at all. The variability in seasonal weather conditions is factored into historical data that solar installers pull from to make their future production numbers. And from what I’m seeing, it’s pretty accurate … even though I’ve seen wild swings between a couple of years. 2020 was about 10.8% higher than predicted. They worked out the prediction on the conservative side of what we might see. And that brings me to the giant question of, “do I still think it was worth it?” If you’ve watched my previous videos on my solar panels, you’ll know that I’ve said in each one of these that the answer is “yes”. But you’ll also know that I always stress very hard that it’s going to depend on what your personal goals are.
Anyone that tells you that solar panels are worth it no matter what, should be ignored. And the same is true from anyone that says solar panels are a scam and will never work. Solar panels are just one method of producing electricity and don’t necessarily make sense for every person in every location and situation. For me, I live in an area without time of use electricity rates, but we do have net metering that pays back nearly a 1 to 1 credit on my electricity bill. So we bank some credits in the summer that wipe out our electric bills in those months and into the fall. And during the winter we’re primarily pulling from the grid like anyone else. We also have solar renewable energy credits (SREC). We’re getting $126.22 a month in SREC credits for 10 years, so we’ll be seeing $15,146 from that. That leaves us on the hook for $12,380 out of pocket for the cost of our solar panels. But then you have to look at the money we’re saving on our electric bill. We were spending about $2,600 a year on electricity, but we’ve been saving almost $1,500 a year with solar. And since our electricity prices have risen to $0.30/kWh, our savings has actually gone up a little bit. All of that rolled together is how our solar panel system will pay for itself sometime in 2026, and the panels should easily go another 20 years or more after that, so they’ll be producing free, clean electricity at that point. Again, I can’t say this enough, the warranty period is not the end of life for the panel. But here’s that wrinkle I brought up earlier about my specific return on investment. I’m not going to be living in my house in 2026. I’m not going to be living in this house a year from now. My wife and I are building a new, modular, net zero home this year and will hopefully be moving in early next year. That means we’ll be selling our current home with the solar panels before they’ve returned on the investment, which means we’re only about halfway into that payback period. Am I going to lose out on that money? Am I going to have a hard time selling my home with solar panels on it? On that first point, no, I’m not going to be selling my solar panels at a loss. A home’s value actually increases with solar panels. It’s not that different from doing a kitchen or bathroom renovation. And solar panels are very popular in my area.
According to a study by Lawrence Berkeley National Laboratory, which used data from 8 states over an 11 year time period, you can expect to see $4 per watt of installed solar capacity added to the value of your home. In my case, that could be a $38,000 increase. To me that sounds too high. But according to Zillow, they saw homes with solar panels selling for 4.1% more. And the National Renewable Energy Laboratory reported seeing an increase in home value by $20 for every $1 reduction in annual utility bills. That math would work out to about $30,000 for my house, which isn’t that far off from the first study. The bottom line: the more money your solar panels save you on electricity, the more it increases your house’s value. I won’t have to wait too much longer to find out if that holds true, so stay tuned to the channel if you want to hear how it went selling a house with solar, as well as a ton of videos around my upcoming house build. So do I still think getting solar panels for my home was worth it. That’s a big yes. For my goals, which was saving money on electricity over time and ensuring my power was coming from a clean energy source, it ticked all the boxes. Our system cost $20,727 after the Federal Tax Credit. By the time we leave this house, we’ll have received about $6,000 in SREC payments. About $1,500 a year in electricity savings, so add another $6000 on top of that. We’ll have whittled the payback down to about $8,000 by the time we leave. And if the $30,000 increase in value holds true, the return on investment will have been well worth it … but that wasn’t my only goal. Again, I did this for some energy independence and to ensure I was getting energy from a clean source.
Would I recommend that you get solar? That’s tricky because I don’t know your goals, where you live, or what costs are in your area, so you’re going to need to do that evaluation for yourself. But if you are thinking about it, don’t wait much longer. If you live in the US, the Federal solar tax credit is going to be dropping from 26% to 22% in 2023. Solar installers book up fast, so you really need to be scheduling installers now to ensure you get the panels installed before the end of the year. I’ve been getting quotes for my new house and installers are already booked up through August and into September. So start looking today and evaluating if it’s the right choice for you.
So what do you think? Do you want solar for your home?