Fort Worth often gets named in the Dallas-Fort Worth Metroplex of Texas, and the entire urban area is huge. It encompasses over 7 million people, which equates to over a quarter of the people of Texas. The city is almost the same size as Dallas in terms of area, but the population is lower. Hence the city is often overshadowed by its bigger brother to the East.
However, Fort Worth residents know they aren’t named in the Metropolis for nothing. The city’s economy boasts major employers of Lockheed Martin and the US Military. There are numerous museums and culture venues in the city, and of course there’s way less traffic.
In terms of solar, though, the cities are pretty similar. The lower population density does allow for some more single-family homes, so that opens up the city to more residential installations. Sunlight hours hit about 65%, so the area isn’t lacking sun exposure. That sun exposure means Earth’s personal nuclear fusion reactor, the sun, gives it plenty of free energy. That energy can be picked up by you if you install a residential solar panel system on your property.
Is a system worth your investment? Well, aside from saving the environment, you can thank competition and the Swanson Effect (see above infographic) for the fall in panel prices over the last few years. China has really ramped up production, in turn driving prices down considerably. That means installing a system is more feasible than ever.
It will still cost you about $20,000 to put in the average solar panel system. Of course, the size of your system, how much it generates, and the initial cost is going to be dependent on your property size and planned capacity. You don’t have to install too much, and the $20,000 figure is for a 5kW system. That should cover most energy needs you have, but you will have to determine exact requirements.
The $20,000 figure is awfully high for someone to install a system that will take years to pay off. So, first, let’s drop that price by $6,000. How, you ask? Well, it isn’t simply removing the cost – you get a 30% federal tax credit on any newly installed systems completed before the end of 2019. (The allowed credit falls after that). Furthermore, you don’t get to keep the money, you just get to pay less in taxes, so while not a true discount, it is a good incentive.
To help you along a little more, though, the State of Texas has a program known as the Renewable Energy Systems Property Tax Exemption, which lets you deduct the cost of the system from your property when you pay your tax bill. You can still list your property at the higher market price, but you won’t be paying as much tax on it. The state also allows (but does not require) net metering, which means you can sell some of your electricity back to utilities if you produce excess. The RPS (mentioned below) may also help you in that area. More on that later.
So, with our $20,000 example turned $14,000 example, how long will it take for you to recoup your investment? Assuming you use the average Texan energy bill of $128 (taken from ElectricityLocal.com), you will need to save your entire bill every month for a little over 9 years. It is almost 110 months. To put that into perspective, that is a slightly shorter time than it takes to pay off federal student loans on a regular payment schedule. You won’t have to stop there, however, because most systems are under warranty for at least 20 years, so you have more than half the life of your system left.
This very simply calculation does not take into account rising energy prices or maintenance. The former is pretty likely, and the latter is generally minimal. They may offset each other, anyway. If you are lucky enough to find a net metering utility, you can easily reduce your time-to-payoff. If you live far into the suburbs or exurbs, you may want to consider going into a joint venture with your neighbor (check on the legality of this before attempting!).
Even the reduced system price of $14,000 is still rather steep. So how should you finance it? There are three main ways people finance these projects: cash, credit, and leasing.
The first and easiest way is to use cash. You simply pay the entire cost upfront and you get all of the rights of the system and its production. You can sell the electricity, you can sell the equipment, you can improve it, you can do whatever you want with it.
Furthermore, there are no interest payments to increase your time-to-payoff. Cash is always the best way to purchase something – if you have the cash on hand.
Of course, most of us do not have $14,000 or $20,000 sitting around waiting to be invested on a capital expenditures project. In that case, you may want to consider credit. It works just like any other type of credit, and there are banks that specialize in solar panel install loans. You can usually get these secured with the house, property, or the system itself, so your interest rates shouldn’t be too high.
Furthermore, on secured loans, you can write off the interest from your taxes. So, while the interest payments make the system cost more over time and raise your time-to-payoff, the federal government at least lets you pay less tax due to the interest burden.
The last type of financing is leasing. Just as you lease a car, you can lease a solar panel system. The system will belong to a company and you will pay a fee to reap the benefit of the generated electricity. A specialized type of lease is also available: instead of leasing the equipment itself, you can agree to buy the generated electricity at a certain rate for a certain timeframe. Both types of leases often allow you to buy the system at some point in the future, so look into this if you want to eventually own the system but don’t want to pay interest to a bank.
Only you (and maybe financial and solar panel advisors) can determine the best way to finance your installation. You have to consider the expected energy production for your home, your financial state, and any applicable incentives like net metering and lease-to-buy programs you find.
How can society determine if the renewables trend is real? The Renewable Portfolio Standard (RPS). Many states have this metric that sets out, in law, how much of a state’s energy must come from renewables by a certain date. Not all states have such laws on the books, and some have voluntary goals. Texas has a mixture.
Texas passed its RPS in 1999 and mandated almost 6,000MW hours by 2015. There is a voluntary goal of 10,000MW by 2025, and this has been reached already. However, there is also a “carve out” in the RPS terms, which says 500MW of those 10,000MW should be from non-wind sources. That is important, because Texas is a huge wind energy producer. In fact, 96% of the renewables come from wind (the carve-out is 100MW short).
Getting solar panels and other types of renewables was not as easy as installing wind, so most of the energy comes from wind. But to reach the 500MW of non-wind energy, some utilities might still need to increase their solar portion. If you can find them, then you can probably sell your electricity to them to add to the solar panel requirement.
For better perspective, 1000kW make 1MW. Therefore, your 5kW system must be duplicated 20,000 times to make up the missing 100MW. You still have some time to install panels before the goal is reached and the incentives dry up.
Since Texas is such a big wind producer, often other forms of energy get overlooked. That’s not to mention that Texas is also a huge fossil fuel haven, so renewables may be viewed with some skepticism. However, Texas is not a terrible place to get a solar panel installation.
First, the solar panel energy concentration across the state is pretty good. In Fort Worth, you are in one of the least sun-intensive places in the state, but you are still in a better position than some of your northerly neighbors. Further, Texas at least has an RPS with a carve-out for non-wind, with 100MW still to go. Based on those two points, Texas is a good place to install your own system, and Fort Worth is not bad. Maybe not as good as the brutal deserts of West Texas, but you also aren’t in the woods of Maine.
Net metering is not required in the state, so in comparison to places like California, Texas is less aggressive in implementing solar panels. Net metering is allowed, though, so you aren’t totally out of luck. Just be wary of caps implemented by utilities, because you may not be able to get as much cash back as you expected.
Beyond the actual installation of the system, there are a few more things to consider. First is how much energy you want to use at night. There is obviously no sun at night, so you need to get energy from somewhere else. Battery technology has a long way to improve, but Tesla is now offering a battery system to go along with their roof systems. Batteries can’t provide as much energy as your entire system, but you also don’t use as much energy at night.
As for roofs, some people don’t like the old-school look of solar panels in a row. You can certainly still install ground-based panels, but the trend is looking towards roofs. They have better exposure, they’re out-of-reach of many animals and would-be vandals, and they take up no space on your grounds.
To encourage more mainstream adoption, Tesla has released four different designs that you can choose from. These designs give you a little leeway in appearance when deciding how you want your installation to appear.
Renewable energy is not the first thing that comes to mind when most non-Texans think of Texas. In fact, oil is probably one of the first things that comes to mind. Sun is another. So be part of the revolution that changes the nation’s image of Texas from a sun-drenched oil field to a sun-drenched green energy paradise.
The state has some decent programs and they at least have an RPS goal with a carve-out. Net metering is also allowed in the state. Green Mountain Energy is a major player in net metering, so see if they’re available near you – it may change in the future, so keep checking if it’s not available right now.
Fort Worth itself is not the sunniest place in the United States; it isn’t even the sunniest place in Texas. However, you are not necessarily in a bad position to invest in a solar panel system in Fort Worth. If you have your financials straight and you do your calculations, you will be able to see if solar panels will pay off for you. If not, you still have three years for the price to come down more before the federal tax credit falls.
In the next year or so, prices are going to fall more, so do your calculations and time your installation right.