ColoradoConsumer’s Guide

to Buying a Solar Electric System

Cover photo: Installing a photovoltaic system on the roof ofthe BigHorn Home Improvement Center, Silverthorne, CO. (Paul Torcellini, NREL/PIX06682)

ContentsBackground

❑ What is a solar electric, or photovoltaic, system? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1Investing in a PV system

❑ Why should I buy a PV system? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3❑ Is my home or business a good place for a solar system? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3❑ How big should my PV system be, and what features should it have? . . . . . . . . . . . . . . . . . . . . . . .4❑ How much will my PV system save me? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5❑ How much does a PV system cost? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6❑ Are incentives available to help reduce the cost? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7❑ How can I finance the cost of my PV system? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Selecting a PV provider❑ Who sells and installs PV systems? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8❑ How do I choose among PV providers? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8❑ How do I choose among competing bids? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9❑ Is the lowest price the “best deal”? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

Before connecting a PV system to the grid❑ What about permits? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11❑ What about insurance? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11❑ How do I get an interconnection agreement? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11❑ How do I get a net-metering agreement? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12❑ What about utility and inspection sign-off? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13❑ What about warranties? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

Getting help . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

Page

This Consumer’s Guide was developed with the support of the National Renewable EnergyLaboratory, in Golden, CO. The authors would like to thank Christy Herig and John Thorntonof NREL for their support and assistance in preparing this Guide.

March 2001

Are you thinking about buying a grid-tied PV (GTPV) system for your home or business? If so, this booklet will provide basic information that you need to know. Coloradans are showing increased interest in solar electric systems for their homes and businesses. These photovoltaic—or PV—systems are reliable, pollution free,and use a renewable source of energy—the sun.

Some Colorado utilities, including Xcel Energy, are making GTPV systems moreeconomical by offering net metering. Net metering means that you can sell the excesselectricity from your GTPV system back to your utility for the same price you pay forelectricity. In essence, your electric meter will run backward when you are not using all the power that your GTPV system generates.

This booklet is designed to guide you through the process of buying a grid-tied solarelectric system. Aword of caution: This is not a technical guide for designing or install-ing your system—for that information, we recommend that you consult an experiencedPV system designer or system supplier (“PV provider”) who will have detailed technicalspecifications and other necessary information. APV system can be a substantial invest-ment, and as with any investment, careful planning will help ensure that you make theright decisions.

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What is a solar electric, or photovoltaic,system?

PV technology converts sunlight directlyinto electricity. It works any time the sunis shining, but more electricity will be pro-duced when the light is more intense (asunny day) and is striking the PV modulesdirectly (when the rays of sunlight are perpendicular to the PV modules). Unlikesolar systems for heating water, whichyou might be more familiar with, PV tech-nology does not use the sun’s heat to makeelectricity. Instead, PV produces electric-ity directly from the electrons freed by theinteraction of sunlight with semiconduc-tor materials in the PV cells.

But you don’t need to understand thedetailed physics of how PV works tounderstand its appeal: investing in PVallows you to produce your own electric-ity with no noise, no air pollution, and nomoving parts while using a clean, renew-able resource. APV system will never runout of fuel, and it won’t increase our oilimports from overseas. In fact, it may

not even contribute to the trade deficit,because many PV system components are manufactured in the United States.Due to these unique characteristics, PVtechnology has been called “the ultimateenergy source for the 21st century.”

The basic building block of PV technol-ogy is the solar “cell.” PV cells are wiredtogether to produce a PV “module,” thesmallest PV component sold commer-cially, and these modules range in poweroutput from about 10 watts to 300 watts.

A PV system tied to the utility grid—a“grid-tied PV” or GTPV system—con-sists of one or more PV modules con-nected to an inverter that changes thesystem’s direct-current (DC) electricity to alternating current (AC), which is com-patible with the utility grid and able topower devices such as lights, appliances,computers, and televisions. You mayinclude batteries in the system to provideback-up power in case your utility experi-ences a power outage.

Background

Grid-Tied PV System Components

Photovoltaic Modules

PV Cell

CustomerLoads or

Utility GridBatteries(optional) Inverter

02512001m

PV System

2 15

Before you decide to buy a GTPV sys-tem, you should understand the currentstatus of the technology:

First, it produces power intermittentlybecause it works only when the sun isshining. This is not a problem for PV sys-tems connected to the utility grid, becauseadditional electricity you need is automat-ically delivered to you by your utility.

Second, GTPV-generated electricity ismore expensive than conventional utility-supplied electricity. Improved manufac-turing has reduced the cost to less thanone percent of what it was in the 1970s,but the cost (amortized over the life of the system) is still about 25 cents per kilowatt-hour. This is roughly three to

four times the retail price that most Colo-rado residents now pay for electricityfrom their utilities. Net metering can helpmake GTPV more affordable, but it can’tmatch today’s price for electricity fromyour utility.

Finally, unlike electricity purchasedmonth by month from a utility, PV powercomes with a high initial investment andno monthly charge thereafter. This meansthat buying a PV system is like payingyears of electric bills up front. You’llprobably appreciate the reduction in your monthly electric bills, but the initialexpense may be significant. By financingyour PV system, you can spread the costover many years.

This large grid-tied PV system will provideall of the electricity needed for this home.(Photo courtesy of Altair Energy)

Getting help

To get more information on solar electric systems, please contact:

Governor's Office of Energy Management and Conservation (OEMC)225 E. 16th Ave., Suite 650Denver, CO 80203Phone: 303-894-2383Fax: 303-894-2388E-mail: oemc@state.co.uswww.state.co.us/oemc

OEMC supports cost-effective programs, grants, and partnerships that benefit Colo-rado's economic and natural environment. The agency's primary objective is to serve the people of Colorado through educational, technical, and financial assistance, and to advocate energy-efficiency programs statewide.

The Colorado Public Utilities Commission (COPUC)1580 Logan Street, Office Level 2Denver, CO 80203Phone: 303-894-2000Fax: 303-894-2065

COPUC, part of the Colorado Department of Regulatory Agencies, regulates the state’sutilities. Utility customers have the right to file an informal or formal complaint with theCOPUC. Individuals, groups, or organizations can also intervene or participate in formalcases before the COPUC and can testify at public hearings that COPUC holds across the state.

Colorado Solar Energy Industries Association (COSEIA)2170 South Parker Road, Suite 255Denver, CO 80231Phone: 303-750-9764Fax: 303-750-0085www.coseia.org

COSEIA is the state chapter of the Solar Energy Industries Association, the nationaltrade association of the solar industry. Contact COSEIA for information about COSEIAcontractor certification programs and for a directory of solar-energy contractors inColorado.

Colorado Renewable Energy Society (CRES)1075 East Bates ParkwayEnglewood, CO 80110Toll Free: 888-806-5317Phone/Fax: 303-806-5317

CRES is a non-profit educational membership organization whose goal is to furtherrenewable energy use in Colorado, including solar building design, photovoltaics, solarthermal, biofuels and wind energy.

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Why should I buy a GTPV system?People decide to buy GTPV systems for

a variety of reasons. Some want to helppreserve the earth’s finite fossil-fuelresources and reduce air pollution. Othersbelieve that it makes more sense to spendtheir money on an energy-producingimprovement to their property than tosend their money to a utility. Some peoplelike the security of reducing the amount of electricity they buy from their utility,because it makes them less vulnerable tofuture increases in the price of electricity.Finally, some people just don’t like pay-ing utility bills and appreciate the inde-pendence that a GTPV system provides.

Whatever your reason, solar energy iswidely thought to be the energy source of choice for the future, and Coloradans have a unique opportunity to take advan-tage of a state-sponsored program to helpmake it their energy choice for today and tomorrow.

Is my home or business a good placefor a solar system?Can you orient your system for optimumperformance?

A well-designed PV system needs clearand unobstructed access to the sun’s raysfor most or all of the day, throughout theyear. You can make an initial assessmentyourself, and if the location looks promis-ing, your PV provider has the tools totrace the sun’s path at your location anddetermine whether your home or businesscan make use of a PV solar system.

The orientation of your PV system (thecompass direction that your system faces)will affect performance. In Colorado, thesun is always in the southern half of the

sky and is higher in the summer and lowerin the winter. Usually, the best location fora PV system is a south-facing roof, butroofs that face east or west may also beacceptable. Flat roofs also work well forsolar systems because the PV modules canbe mounted flat on the roof facing the sky or mounted on frames tiltedtoward the south at the optimal angle.

If a rooftop can’t be used, your solarmodules can also be placed on the ground,either on a fixed mount or a “tracking”mount that follows the sun to orient thePV modules for maximum performance.Other options (used most often in multi-family or commercial applications)include mounting structures that createcovered parking or provide shade as window awnings.

Is your site free from shading by trees,nearby buildings, or other obstruc-tions?

To make the best use of your PV system,the PV modules must have a clear “view”of the sun for most or all of the day—unobstructed by trees, roof gables, chim-neys, buildings, and other features of yourhome and the surrounding landscape. It isimportant to note that even though thearea where a system is mounted may beunshaded during one part of the day, itmay be shaded during another. If this isthe case, then this shading may substan-tially reduce the amount of electricity that your system will produce.

An existing Colorado law—ColoradoRevised Statutes, Article 38-32.5—estab-lishes your right to protect your solaraccess through the creation of a “SolarEasement.”

Investing in a GTPV system

A small grid-tied PV system has been installed on thecarriage house at the Colorado Governor's Mansion.

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Do you have enough area on your roof or property?

The amount of space needed by a PVsystem is based on the physical size of the system you purchase. Most residentialsystems require as little as 50 square feet(for a small “starter” system) up to asmuch as 1,000 square feet. Commercialsystems are typically even larger. If yourlocation limits the physical size of yoursystem, you may want to install a systemthat uses more-efficient PV modules.Greater efficiency means that the moduleuses less surface area to convert sunlightinto a given amount of electric power. PVmodules are available today in a range oftypes, and some offer more efficiency persquare foot than do others. The cost perkilowatt of higher-efficiency modules isabout the same as low-efficiency modules,so this may not add to your system’s price.System sizing is discussed later in thisbooklet and should also be discussed with your PV provider.

What kind of roof do you have, and what is its condition?

Some roof types are simpler and cheaperto work with, but a PV system can beinstalled on any type. Typically, composi-tion shingles are easiest to work with, andslate is the most difficult. In any case, an

experienced solar installer will know howto work on all roof types and can use roof-ing techniques that eliminate any possibil-ity of leaks. Ask your PV provider how the PV system affects your roof warranty.

If your roof is older and needs to bereplaced in the very near future, you maywant to replace it at the time the PV sys-tem is installed to avoid the cost of remov-ing and reinstalling your PV system.Panels often can be integrated into theroof itself, and some modules are actuallydesigned as three-tab shingles or raised-seam metal roof sections. One benefit ofthese systems is their ability to offset thecost of roof materials.

How big should my PV system be, andwhat features should it have?

As a starting point, you might considerhow much of your present electricityneeds you would like to meet with yourGTPV system. For example, suppose thatyou would like to meet 50 percent of yourelectricity needs with your GTPV system.You could work with your PV provider toexamine past electric bills and determinethe size of the GTPV system needed toachieve that goal.

You can contact your utility and requestthe total electricity usage, measured in

Net metering simplifies both the meteringprocess (by eliminating the need for a sec-ond meter) and the accounting process (byeliminating the need for monthly pay-ments from your utility). Be sure to askyour utility about its policy regarding netmetering.

Under the federal Public Utility Regu-latory Policies Act (PURPA), utilitiesmust allow you to interconnect yourGTPV system, and they must also buy any excess electricity you generate(beyond what you use in your home orbusiness). If your utility does not offer netmetering, it will probably require you touse two meters: one to measure the flowof electricity into the building, the other to measure the flow of electricity out ofthe building. If net metering is not avail-able, the utility will only pay you a whole-sale rate for your excess electricity. In thiscase, you will have a strong incentive touse all the electricity you generate so thatit offsets electricity you would otherwisehave to purchase at the retail rate. This maybe a factor in how you optimize your sys-tem size, because you may want to limitthe excess electricity you generate. This“dual metering” arrangement is the normfor industrial customers who generatetheir own power.

What about utility and inspection sign-off?

After your new GTPV system is installed,it must be inspected and “signed off” bythe local permitting agency (usually abuilding or electrical inspector) and mostlikely by the electric utility with whichyou entered into an interconnection agree-ment. Inspectors may possibly requireyour PV provider to make corrections, but don’t be alarmed—this is fairly com-mon in the construction business.

What about warranties?Warranties are key to ensuring that your

PV system will be repaired if somethingshould malfunction during the warrantyperiod. The warranty should cover allparts and labor, including the cost ofremoving any defective component, ship-ping it to the manufacturer, and rein-stalling the component after it is repaired or replaced. Even if the manufacturer’sown warranty on a particular componentis less than two years, the system vendormust still provide you with a two-yearwarranty. Similarly, even if the manufac-turer’s warranty is a limited warranty thatdoes not include the cost of removing,shipping, and reinstalling defective com-ponents, the system vendor must coverthese costs if the retailer also installed the system.

Be sure you know who is responsible forhonoring the various warranties associatedwith your system—the installer, the dealer,or the manufacturer. The vendor shoulddisclose the warranty responsibility ofeach party. Know the financial arrange-ments, such as contractor's bonds, thatassure the warranty will be honored.Remember, a warranty does not guaranteethat the company will remain in business.Get a clear understanding of whom youshould contact if there is a problem. Toavoid any later misunderstandings, besure to read the warranty carefully andreview the terms and conditions with your retailer.

100 250 500 1,000 2,000 4,000 10,000 100,000

4 30 75 150 300 600 1,200 3,000 30,000

8 15 38 75 150 300 600 1,500 15,000

12 10 25 50 100 200 400 1,000 10,000

16 8 20 40 80 160 320 800 8,000

PV capacity rating (watts)PV moduleefficiency*

(%)

Roof Area Needed in Square Feet (shown in Bold Type)

0251

2002

m

* Although the efficiency (percent of sunlight converted to electricity) varies with the different types of PV modules available today, higher-efficiency modules typically cost more. So, a less-efficient system is not necessarily less cost-effective.

12 5

grid. These will include your obligation toobtain permits and insurance, maintainthe system in good working order, andoperate it safely. The purchase and saleagreement specifies the metering arrange-ments, the payment for any excess genera-tion, and any other related issues.

The language in these contracts shouldbe simple, straightforward, and easy tounderstand. If you are unclear about yourobligations under these agreements, youshould contact the utility or your electricalservice provider for clarification. If yourquestions are not adequately addressed,contact one of the groups under GettingHelp at the end of this booklet.

National standards for utility intercon-nection of PV systems are quickly beingadopted by many local utilities. The mostimportant of these standards focuses oninverters. Traditionally, inverters simplyconverted the DC electricity generated byPV modules into the AC electricity usedin our homes. More recently, invertershave evolved into remarkably sophisti-cated devices to manage and conditionpower. Many new inverters contain all theprotective relays, disconnects, and othercomponents necessary to meet the moststringent national standards. Two of thesestandards are particularly relevant:

• Institute of Electrical and Electronic Engineers, P929: Recommended Practice for Utility Interface of Photo-voltaic Systems. Institute of Electrical and Electronic Engineers, Inc., New York, NY (1988, revised in 1999).

• Underwriters Laboratories, UL Subject 1741: Standard for Static Inverters and Charge Controllers for Use in Photo- voltaic Power Systems (First Edition). Underwriters Laboratories, Inc., Northbrook, IL (December 1997).

You don’t need to fully understand thesestandards, but your PV provider and utilityshould. It is your obligation to ensure thatyour PV provider uses equipment thatcomplies with the relevant standards, sobe sure to discuss this issue.

How do I get a net-metering agreement?

Some utilities in Colorado offer cus-tomers with GTPV systems the option to“net meter” the excess power generatedby the GTPV system. This means thatwhen the GTPV system generates morepower than the household can use, theutility pays the full retail price for thispower in an even swap as the electricmeter spins backward.

Xcel Energy has established a PV PilotProgram to offer net metering for up to 200residential and commercial customers whoinstall GTPV systems that are 10 kilowattsor smaller. Net metering allows eligiblecustomers with GTPV systems to connectto the grid with their existing single meter.Almost all standard utility meters are ableto measure the flow of energy in eitherdirection. The meter spins forward whenelectricity is flowing from the utility intothe building and spins backward whenpower is flowing from the building to the utility.

Under the Xcel Energy program, cus-tomers are billed monthly for the “net”energy consumed. If the customer’s netconsumption is negative in any month(i.e., the GTPV system produces moreenergy than the customer uses), the bal-ance is credited to subsequent months.Xcel Energy is not required to buy theexcess generation; any excess will be continually rolled forward.

Net metering allows customers to getmore value from the energy they generate.

kilowatt-hours, for your household orbusiness over the last 12 months (or con-sult your electric bills if you save them).Ask your PV provider how much yournew GTPV system will produce on anannual basis (also measured in kilowatt-hours) and compare that number to yourannual electricity demand to get an idea of how much you will save. In the nextsection, we’ll provide more informationon estimating how much you will save.

To qualify for net metering in XcelEnergy’s service territory, your GTPVsystem must have a peak generatingcapacity of not more than 10 kilowatts(10,000 watts). Other Colorado utilitiesmay have similar size restrictions. Also,utilities may have different provisions forbuying excess electricity produced byyour system on an annual basis (see thesection on net metering for more detail).Finally, customers eligible for net meter-ing may vary from utility to utility. XcelEnergy allows net metering for both resi-dential and commercial customers.

One optional feature you might con-sider is a battery system to provide back-up power in case of a utility power outage.Batteries add value to your system, but at an increased price.

As you size your system, you shouldconsider the “economies of scale” that can decrease the cost per kilowatt-hour as you increase the size and cost of thesystem. For example, many inverters aresized for systems up to 5 kilowatts, and ifyour PV array is smaller (say 3 kilowatts),you may still end up buying the sameinverter. Labor costs for a small systemmay be nearly as much as those for a largesystem. Therefore, it’s worth remember-ing that your PV provider is likely to offeryou a better price to install a 2-kilowattsystem all at once, than to install a 1-kilo-

watt system this year and another similarsystem next year—because multiple ordersand multiple site visits are more expensive.

How much will my GTPV system save me?

The value of your GTPV system’s elec-tricity will depend on how much you payyour utility for electricity and how muchyour utility will pay you for any excessthat you generate. If your utility offers netmetering (and so pays the full retail pricefor your excess electricity), your calcula-tion may be fairly easy because you andyour utility will each pay the same pricefor each other’s electricity. You can usethe calculation box on the next page toroughly approximate how much electric-ity your GTPV system will produce andhow much that electricity will be worth.Keep in mind that actual energy produc-tion from your GTPV system will vary by up to 20 percent from these figures,depending on your geographic location,the angle and orientation of your system,the quality of the components of your sys-tem, and the quality of the installation.Also keep in mind that you may not getfull retail value for excess electricity pro-duced by your system on an annual basis,even if your utility does offer net meter-ing. Be sure to discuss these issues withyour PV provider. Consider asking for awritten estimate of the average annualenergy production from the GTPV sys-tem. However, you should realize thateven if an estimate is accurate for an aver-age year, actual electricity production willfluctuate from year to year due to naturalvariations in weather and climate.

If your utility does not offer net metering,you can still use the calculation box todetermine the amount of electricity yoursystem will produce. But determining itsvalue is much trickier because your excess

6 11

electricity will not be worth as much as theelectricity you actually use. You may earnonly 2 cents per kilowatt-hour—or lessthan half of the retail rate—for your excesspower. PV systems produce most of theirelectricity during the middle of the daywhen residential electric loads tend to besmall. If net metering is not offered byyour utility, you may want to size yoursystem to avoid generating electricity significantly beyond your actual needs.

How much does a GTPV system cost?Your system’s price will depend on a

number of factors, including whether thehome is under construction or whether thePV is integrated into the roof or mountedon top of an existing roof. The price also

varies depending on the PV system rating,manufacturer, retailer, and installer. Thesize of your system may be the most sig-nificant factor in any equation measuringyour costs against your benefits. Small,single PV-panel systems with built-ininverters that produce about 75 watts maycost around $900 installed, or $12 perwatt. These small systems will offset onlya small fraction of your electricity bill. A 2-kilowatt system that will offset theneeds of a very energy-efficient homemay cost $16,000 to $20,000 installed, or $8 to $10 per watt. At the high end, a 5-kilowatt system that will completelyoffset the energy needs of many conven-tional homes may cost $40,000 to $50,000installed. These prices, of course, are just

What about permits?If you live in a community in which a

homeowners association requires approvalfor a solar system, you or your PV providermay need to submit your plans. Gainapproval from your homeowners associa-tion before you begin installing your PVsystem. Under Colorado law, you have the right to install a solar system on yourhome. If the approval is denied, contactone of the groups under Getting Help atthe end of this booklet.

Most likely, you will need to obtain per-mits from your city or county buildingdepartment. You will probably need abuilding permit, an electrical permit, orboth before installing a PV system. Typi-cally, your PV provider will take care ofthis, rolling the price of the permits intothe overall system price. However, insome cases, your PV provider may notknow how much time or money will beinvolved in “pulling” a permit. If so, thistask may be priced on a time-and-materi-als basis, particularly if additional draw-ings or calculations must be provided tothe permitting agency. In any case, makesure the permitting costs and responsibili-ties are addressed at the start with your PV provider.

Code requirements for GTPV systemsvary somewhat from one jurisdiction tothe next, but most requirements are basedon the National Electrical Code (NEC).The NEC has a special section, Article 690,that carefully spells out requirements fordesigning and installing safe, reliable,code-compliant PV systems. Becausemost local requirements are based on theNEC, your building inspector is likely torely on Article 690 for guidance in deter-mining whether your PV system has been

properly designed and installed. If you areamong the first people in your communityto install a grid-tied PV system, your localbuilding department may not haveapproved one of these systems. If this isthe case, you and your PV provider canspeed the process by working closely andcooperatively with your local buildingofficials to help educate them about thetechnology and its characteristics.

What about insurance?Your electric utility will require you to

enter into an interconnection agreement,described more fully in the next section.Usually, these agreements set forth mini-mum insurance requirements that youmust keep in force. If you are buying a PV system for your home, your standardhomeowner’s insurance policy is usuallyadequate to meet the utility’s require-ments. However, if insurance coveragebecomes an issue, contact one of thegroups under Getting Help at the end ofthis booklet.

How do I get an interconnection agreement?

Connecting your GTPV system to theutility grid will require you to enter intoan interconnection agreement and a pur-chase and sale agreement. ColoradoPublic Utilities Commission regulationsand federal law require utilities to supplyyou with an interconnection agreement.Some Colorado utilities, including XcelEnergy, have developed simplified, stan-dardized interconnection agreements forsmall-scale GTPV systems.

The interconnection agreement speci-fies the terms and conditions under whichyour system will be connected to the utility

Calculating Electricity Bill Savings for a Net-Metered GTPV System

Step 1: Select your location and kWh/kW from the map below.

Step 2: Multiply the kWh/kW-yr by the PV system rating (in kW) to get the yearly PV system production in kWh/yr.

Step 3: Multiply the PV system kWh/yr by your retail rate in $/kWh to get the annual bill savings.

Example: A 2-kW system in Denver, CO, at an electricity rate of $0.07/kWh will save about $252 peryear (1,800 kWh/kW-year x 2 kW x $0.07/kWh = $252/year).

1,800

1,800

2,000

2,000

1,650

2,100

1,650

2,100

Photovoltaic SystemProduction (kWh/kW-yr)Photovoltaic system productionestimates are for a 1-kW rooftop PVsystem facing due south at a 20° tilt.

Example: A 2-kW rooftop PV systemlocated in Denver, CO, will produce about 3,600 kWh per year (2 kW x1,800 kWh/kW-yr).

© Pacific Energy Group modeled with PVGRID™

02573404m

Before connecting a GTPV system to the grid

10 7

(and it’s generally a good idea to do so),you should take steps to ensure that all ofthe bids you receive are made on the samebasis. For example, comparing a bid for a system mounted on the ground againstanother bid for a rooftop system is likecomparing apples to oranges. Similarly,different types of PV modules generatemore electricity per square foot than others. Bids should clearly state the maximum generating capacity of the system (measured in watts or kilowatts). If possible, have the bids specify the sys-tem capacity in “AC watts,” or specify the output of the system at the inverter.

You may want to obtain some estimateof the amount of energy that the systemwill produce on an annual basis (mea-sured in kilowatt-hours). Because theamount of energy depends on the amountof sunlight—which varies by location,season, and year to year—it is unrealisticto expect a specific figure. A range of

±20% is more realistic. Bids also shouldinclude the total cost of getting the PVsystem up and running, including hard-ware, installation, connection to the grid,permitting, sales tax, and warranty. Yourwarranty is a very important factor forevaluating bids. The installer may offerwarranties. Also ask yourself, “Will thiscompany stand behind the full-systemwarranty for the next two years?”

Is the lowest price the “best deal”?It might not be. Often, you get what you

pay for. Remember that a PV company isa business just like any other, with over-head and operating expenses that must becovered. It’s always possible that a lowprice could be a sign of inexperience.Companies that plan to stay in businessmust charge enough for their products and services to cover their costs, plus afair profit margin. Therefore, price shouldnot be your only consideration.

rough estimates, and your costs will dependon your system’s configuration, your equip-ment options, and other factors such asstate or local incentives. Your local PVproviders can provide you with estimatesor bids.

Are incentives available to help reduce the cost?Federal Incentive Programs

The U.S. government provides finan-cial support for PV technology through atax credit for commercial uses of solarenergy. This energy investment credit pro-vides businesses (but not individuals orutilities) with a 10% tax credit and 5-yearaccelerated depreciation for the cost ofequipmentused to generate electricity bysolar technologies.

How can I finance the cost of my PV system?

There is nothing magical about financ-ing the cost of purchasing and installingyour PV system. Although there are somespecial programs available for financingsolar and other renewable-energy invest-ments, most of the options will be familiarto you.

The best way to finance PV systems forhomes is through a mortgage loan. Mort-gage financing options include your pri-mary mortgage, a second mortgage suchas a U.S. Department of Housing and

Urban Development (HUD) Title 1 loan,or a home-equity loan that is secured byyour property. There are two advantagesto mortgage financing. First, mortgagefinancing usually provides longer termsand lower interest rates than other loanssuch as conventional bank loans. Second,the interest paid on a mortgage loan isgenerally deductible on your federal taxes(subject to certain conditions). If you buythe PV system at the same time that youbuild, buy, or refinance the house on whichthe PV system will be installed, addingthe cost of the PV system to your mort-gage loan is likely to be relatively simpleand may avoid additional loan applicationforms or fees.

If mortgage financing is not available,look for other sources of financing, suchas conventional bank loans. Remember tolook for the best possible combination oflow rate and long term. This will allowyou to amortize your PV system as inex-pensively as possible. Because your PVsystem is a long-term investment, theterms and conditions of your PV financingare likely to be the most important factorin determining the effective price of yourPV-generated power.

PV systems purchased for businessapplications are probably best financedthrough a company’s existing sources offunds for capital purchases—usuallySmall Business Administration loans orconventional bank loans.

8 9

Who sells and installs PV systems?In some locations, finding a PV pro-

vider can be as simple as picking up thetelephone directory and looking under“Solar Energy Equipment and Systems—Dealers.” Be aware, however, that many ofthose listings are for solar water-heatingcompanies. Many of these companies maynot be experienced in PV system designor installation. Similarly, many electricalcontractors, although proficient in typicalelectrical contracting work, may not haveexpertise in PV or with residential roof-mounting techniques. How do you iden-tify solar electric system providers? Hereare several suggestions.

• Check the Colorado PV Products and Service Vendor List, available from the third-party Colorado PV Vendor List Service, by calling 303-783-3899, or toll-free, 877-783-3899.

• Contact the Colorado Solar Energy Indus-tries Association at 303-750-9764 for a list of solar service providers.

• Conduct a search on the Internet. Colo-rado is home to many reputable con-tractors with experience in installing PV systems. Unless you are skilled in PV installation, you should consider hiring a professional.

How do I choose among PV providers?Compile a list of prospective PV pro-

viders. You might first consider thoseclosest to you, because the contractor’stravel costs might add to your systemprice. Next, contact these providers andfind out what products and services theyoffer. The following questions may giveyou a good sense of their capabilities:

Has the company installed grid-con-nected PV systems? If not, has it installed grid-independent PV systems?

Experience installing grid-connectedsystems is valuable because some ele-ments of the installation—particularlyinterconnection with the local utility—are unique to these systems. Because grid-connected systems are relativelyuncommon, most contractors with PVexperience have worked only on systemssuch as those that power remote cabins farfrom the nearest utility line. This meansthey have experience with all aspects ofPV system installation except the connec-tion with the utility grid. Although grid-connection work is different from “off-grid” work, a competent company withPV experience should not be eliminatedjust because it has not installed grid-con-nected PV systems in the past. In fact,experience with off-grid systems is valu-able because grid-independent systemsare more technically complicated thangrid-tied systems.

How many years of experience doesthe company have installing PV systems?

This issue speaks for itself: A companyor contractor that has been in business along time has demonstrated an ability towork with customers and to competeeffectively with other firms.

Is the company properly licensed?

PV systems should be installed by anappropriately licensed contractor. Thisusually means that either the installer or a subcontractor has an electrical contrac-tor’s license. The State Electrical Board(303-894-2300, ext. 111) can tell you if a

contractor has a valid electrician’s license.Local building departments also mayrequire that the installer have a generalcontractor’s license. Consumers shouldcall the city and county in which they livefor additional information on licensing.

Does the company have any pendingor active judgements or liens againstit?

As with any project that requires a con-tractor, due diligence is recommended.The State Electrical Board (303-894-2300,ext. 111) can tell you about any judgmentsor complaints against a state-licensed

electrician. Consumers should call thecity and county in which they live foradditional information on how to check up on contractors. The Better BusinessBureau is another source of informationon contractors. The Bureau can be reachedat 303-758-2100 (Denver), 719-636-1155(Colorado Springs/Pueblo), or 970-484-1348 (Northern/Western Colorado).

How do I choose among competing bids?

If you have decided to get more than onebid for the installation of your PV system

Selecting a PV provider

This new home at Lowry features a grid-tied systemthat will provide about a third of the home's electricityneeds. (Photo Courtesy of McStain Enterprises)

8 9

Who sells and installs PV systems?In some locations, finding a PV pro-

vider can be as simple as picking up thetelephone directory and looking under“Solar Energy Equipment and Systems—Dealers.” Be aware, however, that many ofthose listings are for solar water-heatingcompanies. Many of these companies maynot be experienced in PV system designor installation. Similarly, many electricalcontractors, although proficient in typicalelectrical contracting work, may not haveexpertise in PV or with residential roof-mounting techniques. How do you iden-tify solar electric system providers? Hereare several suggestions.

• Check the Colorado PV Products and Service Vendor List, available from the third-party Colorado PV Vendor List Service, by calling 303-783-3899, or toll-free, 877-783-3899.

• Contact the Colorado Solar Energy Indus-tries Association at 303-750-9764 for a list of solar service providers.

• Conduct a search on the Internet. Colo-rado is home to many reputable con-tractors with experience in installing PV systems. Unless you are skilled in PV installation, you should consider hiring a professional.

How do I choose among PV providers?Compile a list of prospective PV pro-

viders. You might first consider thoseclosest to you, because the contractor’stravel costs might add to your systemprice. Next, contact these providers andfind out what products and services theyoffer. The following questions may giveyou a good sense of their capabilities:

Has the company installed grid-con-nected PV systems? If not, has it installed grid-independent PV systems?

Experience installing grid-connectedsystems is valuable because some ele-ments of the installation—particularlyinterconnection with the local utility—are unique to these systems. Because grid-connected systems are relativelyuncommon, most contractors with PVexperience have worked only on systemssuch as those that power remote cabins farfrom the nearest utility line. This meansthey have experience with all aspects ofPV system installation except the connec-tion with the utility grid. Although grid-connection work is different from “off-grid” work, a competent company withPV experience should not be eliminatedjust because it has not installed grid-con-nected PV systems in the past. In fact,experience with off-grid systems is valu-able because grid-independent systemsare more technically complicated thangrid-tied systems.

How many years of experience doesthe company have installing PV systems?

This issue speaks for itself: A companyor contractor that has been in business along time has demonstrated an ability towork with customers and to competeeffectively with other firms.

Is the company properly licensed?

PV systems should be installed by anappropriately licensed contractor. Thisusually means that either the installer or a subcontractor has an electrical contrac-tor’s license. The State Electrical Board(303-894-2300, ext. 111) can tell you if a

contractor has a valid electrician’s license.Local building departments also mayrequire that the installer have a generalcontractor’s license. Consumers shouldcall the city and county in which they livefor additional information on licensing.

Does the company have any pendingor active judgements or liens againstit?

As with any project that requires a con-tractor, due diligence is recommended.The State Electrical Board (303-894-2300,ext. 111) can tell you about any judgmentsor complaints against a state-licensed

electrician. Consumers should call thecity and county in which they live foradditional information on how to check up on contractors. The Better BusinessBureau is another source of informationon contractors. The Bureau can be reachedat 303-758-2100 (Denver), 719-636-1155(Colorado Springs/Pueblo), or 970-484-1348 (Northern/Western Colorado).

How do I choose among competing bids?

If you have decided to get more than onebid for the installation of your PV system

Selecting a PV provider

This new home at Lowry features a grid-tied systemthat will provide about a third of the home's electricityneeds. (Photo Courtesy of McStain Enterprises)

10 7

(and it’s generally a good idea to do so),you should take steps to ensure that all ofthe bids you receive are made on the samebasis. For example, comparing a bid for a system mounted on the ground againstanother bid for a rooftop system is likecomparing apples to oranges. Similarly,different types of PV modules generatemore electricity per square foot than others. Bids should clearly state the maximum generating capacity of the system (measured in watts or kilowatts). If possible, have the bids specify the sys-tem capacity in “AC watts,” or specify the output of the system at the inverter.

You may want to obtain some estimateof the amount of energy that the systemwill produce on an annual basis (mea-sured in kilowatt-hours). Because theamount of energy depends on the amountof sunlight—which varies by location,season, and year to year—it is unrealisticto expect a specific figure. A range of

±20% is more realistic. Bids also shouldinclude the total cost of getting the PVsystem up and running, including hard-ware, installation, connection to the grid,permitting, sales tax, and warranty. Yourwarranty is a very important factor forevaluating bids. The installer may offerwarranties. Also ask yourself, “Will thiscompany stand behind the full-systemwarranty for the next two years?”

Is the lowest price the “best deal”?It might not be. Often, you get what you

pay for. Remember that a PV company isa business just like any other, with over-head and operating expenses that must becovered. It’s always possible that a lowprice could be a sign of inexperience.Companies that plan to stay in businessmust charge enough for their products and services to cover their costs, plus afair profit margin. Therefore, price shouldnot be your only consideration.

rough estimates, and your costs will dependon your system’s configuration, your equip-ment options, and other factors such asstate or local incentives. Your local PVproviders can provide you with estimatesor bids.

Are incentives available to help reduce the cost?Federal Incentive Programs

The U.S. government provides finan-cial support for PV technology through atax credit for commercial uses of solarenergy. This energy investment credit pro-vides businesses (but not individuals orutilities) with a 10% tax credit and 5-yearaccelerated depreciation for the cost ofequipmentused to generate electricity bysolar technologies.

How can I finance the cost of my PV system?

There is nothing magical about financ-ing the cost of purchasing and installingyour PV system. Although there are somespecial programs available for financingsolar and other renewable-energy invest-ments, most of the options will be familiarto you.

The best way to finance PV systems forhomes is through a mortgage loan. Mort-gage financing options include your pri-mary mortgage, a second mortgage suchas a U.S. Department of Housing and

Urban Development (HUD) Title 1 loan,or a home-equity loan that is secured byyour property. There are two advantagesto mortgage financing. First, mortgagefinancing usually provides longer termsand lower interest rates than other loanssuch as conventional bank loans. Second,the interest paid on a mortgage loan isgenerally deductible on your federal taxes(subject to certain conditions). If you buythe PV system at the same time that youbuild, buy, or refinance the house on whichthe PV system will be installed, addingthe cost of the PV system to your mort-gage loan is likely to be relatively simpleand may avoid additional loan applicationforms or fees.

If mortgage financing is not available,look for other sources of financing, suchas conventional bank loans. Remember tolook for the best possible combination oflow rate and long term. This will allowyou to amortize your PV system as inex-pensively as possible. Because your PVsystem is a long-term investment, theterms and conditions of your PV financingare likely to be the most important factorin determining the effective price of yourPV-generated power.

PV systems purchased for businessapplications are probably best financedthrough a company’s existing sources offunds for capital purchases—usuallySmall Business Administration loans orconventional bank loans.

6 11

electricity will not be worth as much as theelectricity you actually use. You may earnonly 2 cents per kilowatt-hour—or lessthan half of the retail rate—for your excesspower. PV systems produce most of theirelectricity during the middle of the daywhen residential electric loads tend to besmall. If net metering is not offered byyour utility, you may want to size yoursystem to avoid generating electricity significantly beyond your actual needs.

How much does a GTPV system cost?Your system’s price will depend on a

number of factors, including whether thehome is under construction or whether thePV is integrated into the roof or mountedon top of an existing roof. The price also

varies depending on the PV system rating,manufacturer, retailer, and installer. Thesize of your system may be the most sig-nificant factor in any equation measuringyour costs against your benefits. Small,single PV-panel systems with built-ininverters that produce about 75 watts maycost around $900 installed, or $12 perwatt. These small systems will offset onlya small fraction of your electricity bill. A 2-kilowatt system that will offset theneeds of a very energy-efficient homemay cost $16,000 to $20,000 installed, or $8 to $10 per watt. At the high end, a 5-kilowatt system that will completelyoffset the energy needs of many conven-tional homes may cost $40,000 to $50,000installed. These prices, of course, are just

What about permits?If you live in a community in which a

homeowners association requires approvalfor a solar system, you or your PV providermay need to submit your plans. Gainapproval from your homeowners associa-tion before you begin installing your PVsystem. Under Colorado law, you have the right to install a solar system on yourhome. If the approval is denied, contactone of the groups under Getting Help atthe end of this booklet.

Most likely, you will need to obtain per-mits from your city or county buildingdepartment. You will probably need abuilding permit, an electrical permit, orboth before installing a PV system. Typi-cally, your PV provider will take care ofthis, rolling the price of the permits intothe overall system price. However, insome cases, your PV provider may notknow how much time or money will beinvolved in “pulling” a permit. If so, thistask may be priced on a time-and-materi-als basis, particularly if additional draw-ings or calculations must be provided tothe permitting agency. In any case, makesure the permitting costs and responsibili-ties are addressed at the start with your PV provider.

Code requirements for GTPV systemsvary somewhat from one jurisdiction tothe next, but most requirements are basedon the National Electrical Code (NEC).The NEC has a special section, Article 690,that carefully spells out requirements fordesigning and installing safe, reliable,code-compliant PV systems. Becausemost local requirements are based on theNEC, your building inspector is likely torely on Article 690 for guidance in deter-mining whether your PV system has been

properly designed and installed. If you areamong the first people in your communityto install a grid-tied PV system, your localbuilding department may not haveapproved one of these systems. If this isthe case, you and your PV provider canspeed the process by working closely andcooperatively with your local buildingofficials to help educate them about thetechnology and its characteristics.

What about insurance?Your electric utility will require you to

enter into an interconnection agreement,described more fully in the next section.Usually, these agreements set forth mini-mum insurance requirements that youmust keep in force. If you are buying a PV system for your home, your standardhomeowner’s insurance policy is usuallyadequate to meet the utility’s require-ments. However, if insurance coveragebecomes an issue, contact one of thegroups under Getting Help at the end ofthis booklet.

How do I get an interconnection agreement?

Connecting your GTPV system to theutility grid will require you to enter intoan interconnection agreement and a pur-chase and sale agreement. ColoradoPublic Utilities Commission regulationsand federal law require utilities to supplyyou with an interconnection agreement.Some Colorado utilities, including XcelEnergy, have developed simplified, stan-dardized interconnection agreements forsmall-scale GTPV systems.

The interconnection agreement speci-fies the terms and conditions under whichyour system will be connected to the utility

Calculating Electricity Bill Savings for a Net-Metered GTPV System

Step 1: Select your location and kWh/kW from the map below.

Step 2: Multiply the kWh/kW-yr by the PV system rating (in kW) to get the yearly PV system production in kWh/yr.

Step 3: Multiply the PV system kWh/yr by your retail rate in $/kWh to get the annual bill savings.

Example: A 2-kW system in Denver, CO, at an electricity rate of $0.07/kWh will save about $252 peryear (1,800 kWh/kW-year x 2 kW x $0.07/kWh = $252/year).

1,800

1,800

2,000

2,000

1,650

2,100

1,650

2,100

Photovoltaic SystemProduction (kWh/kW-yr)Photovoltaic system productionestimates are for a 1-kW rooftop PVsystem facing due south at a 20° tilt.

Example: A 2-kW rooftop PV systemlocated in Denver, CO, will produce about 3,600 kWh per year (2 kW x1,800 kWh/kW-yr).

© Pacific Energy Group modeled with PVGRID™

02573404m

Before connecting a GTPV system to the grid

12 5

grid. These will include your obligation toobtain permits and insurance, maintainthe system in good working order, andoperate it safely. The purchase and saleagreement specifies the metering arrange-ments, the payment for any excess genera-tion, and any other related issues.

The language in these contracts shouldbe simple, straightforward, and easy tounderstand. If you are unclear about yourobligations under these agreements, youshould contact the utility or your electricalservice provider for clarification. If yourquestions are not adequately addressed,contact one of the groups under GettingHelp at the end of this booklet.

National standards for utility intercon-nection of PV systems are quickly beingadopted by many local utilities. The mostimportant of these standards focuses oninverters. Traditionally, inverters simplyconverted the DC electricity generated byPV modules into the AC electricity usedin our homes. More recently, invertershave evolved into remarkably sophisti-cated devices to manage and conditionpower. Many new inverters contain all theprotective relays, disconnects, and othercomponents necessary to meet the moststringent national standards. Two of thesestandards are particularly relevant:

• Institute of Electrical and Electronic Engineers, P929: Recommended Practice for Utility Interface of Photo-voltaic Systems. Institute of Electrical and Electronic Engineers, Inc., New York, NY (1988, revised in 1999).

• Underwriters Laboratories, UL Subject 1741: Standard for Static Inverters and Charge Controllers for Use in Photo- voltaic Power Systems (First Edition). Underwriters Laboratories, Inc., Northbrook, IL (December 1997).

You don’t need to fully understand thesestandards, but your PV provider and utilityshould. It is your obligation to ensure thatyour PV provider uses equipment thatcomplies with the relevant standards, sobe sure to discuss this issue.

How do I get a net-metering agreement?

Some utilities in Colorado offer cus-tomers with GTPV systems the option to“net meter” the excess power generatedby the GTPV system. This means thatwhen the GTPV system generates morepower than the household can use, theutility pays the full retail price for thispower in an even swap as the electricmeter spins backward.

Xcel Energy has established a PV PilotProgram to offer net metering for up to 200residential and commercial customers whoinstall GTPV systems that are 10 kilowattsor smaller. Net metering allows eligiblecustomers with GTPV systems to connectto the grid with their existing single meter.Almost all standard utility meters are ableto measure the flow of energy in eitherdirection. The meter spins forward whenelectricity is flowing from the utility intothe building and spins backward whenpower is flowing from the building to the utility.

Under the Xcel Energy program, cus-tomers are billed monthly for the “net”energy consumed. If the customer’s netconsumption is negative in any month(i.e., the GTPV system produces moreenergy than the customer uses), the bal-ance is credited to subsequent months.Xcel Energy is not required to buy theexcess generation; any excess will be continually rolled forward.

Net metering allows customers to getmore value from the energy they generate.

kilowatt-hours, for your household orbusiness over the last 12 months (or con-sult your electric bills if you save them).Ask your PV provider how much yournew GTPV system will produce on anannual basis (also measured in kilowatt-hours) and compare that number to yourannual electricity demand to get an idea of how much you will save. In the nextsection, we’ll provide more informationon estimating how much you will save.

To qualify for net metering in XcelEnergy’s service territory, your GTPVsystem must have a peak generatingcapacity of not more than 10 kilowatts(10,000 watts). Other Colorado utilitiesmay have similar size restrictions. Also,utilities may have different provisions forbuying excess electricity produced byyour system on an annual basis (see thesection on net metering for more detail).Finally, customers eligible for net meter-ing may vary from utility to utility. XcelEnergy allows net metering for both resi-dential and commercial customers.

One optional feature you might con-sider is a battery system to provide back-up power in case of a utility power outage.Batteries add value to your system, but at an increased price.

As you size your system, you shouldconsider the “economies of scale” that can decrease the cost per kilowatt-hour as you increase the size and cost of thesystem. For example, many inverters aresized for systems up to 5 kilowatts, and ifyour PV array is smaller (say 3 kilowatts),you may still end up buying the sameinverter. Labor costs for a small systemmay be nearly as much as those for a largesystem. Therefore, it’s worth remember-ing that your PV provider is likely to offeryou a better price to install a 2-kilowattsystem all at once, than to install a 1-kilo-

watt system this year and another similarsystem next year—because multiple ordersand multiple site visits are more expensive.

How much will my GTPV system save me?

The value of your GTPV system’s elec-tricity will depend on how much you payyour utility for electricity and how muchyour utility will pay you for any excessthat you generate. If your utility offers netmetering (and so pays the full retail pricefor your excess electricity), your calcula-tion may be fairly easy because you andyour utility will each pay the same pricefor each other’s electricity. You can usethe calculation box on the next page toroughly approximate how much electric-ity your GTPV system will produce andhow much that electricity will be worth.Keep in mind that actual energy produc-tion from your GTPV system will vary by up to 20 percent from these figures,depending on your geographic location,the angle and orientation of your system,the quality of the components of your sys-tem, and the quality of the installation.Also keep in mind that you may not getfull retail value for excess electricity pro-duced by your system on an annual basis,even if your utility does offer net meter-ing. Be sure to discuss these issues withyour PV provider. Consider asking for awritten estimate of the average annualenergy production from the GTPV sys-tem. However, you should realize thateven if an estimate is accurate for an aver-age year, actual electricity production willfluctuate from year to year due to naturalvariations in weather and climate.

If your utility does not offer net metering,you can still use the calculation box todetermine the amount of electricity yoursystem will produce. But determining itsvalue is much trickier because your excess

4 13

Do you have enough area on your roof or property?

The amount of space needed by a PVsystem is based on the physical size of the system you purchase. Most residentialsystems require as little as 50 square feet(for a small “starter” system) up to asmuch as 1,000 square feet. Commercialsystems are typically even larger. If yourlocation limits the physical size of yoursystem, you may want to install a systemthat uses more-efficient PV modules.Greater efficiency means that the moduleuses less surface area to convert sunlightinto a given amount of electric power. PVmodules are available today in a range oftypes, and some offer more efficiency persquare foot than do others. The cost perkilowatt of higher-efficiency modules isabout the same as low-efficiency modules,so this may not add to your system’s price.System sizing is discussed later in thisbooklet and should also be discussed with your PV provider.

What kind of roof do you have, and what is its condition?

Some roof types are simpler and cheaperto work with, but a PV system can beinstalled on any type. Typically, composi-tion shingles are easiest to work with, andslate is the most difficult. In any case, an

experienced solar installer will know howto work on all roof types and can use roof-ing techniques that eliminate any possibil-ity of leaks. Ask your PV provider how the PV system affects your roof warranty.

If your roof is older and needs to bereplaced in the very near future, you maywant to replace it at the time the PV sys-tem is installed to avoid the cost of remov-ing and reinstalling your PV system.Panels often can be integrated into theroof itself, and some modules are actuallydesigned as three-tab shingles or raised-seam metal roof sections. One benefit ofthese systems is their ability to offset thecost of roof materials.

How big should my PV system be, andwhat features should it have?

As a starting point, you might considerhow much of your present electricityneeds you would like to meet with yourGTPV system. For example, suppose thatyou would like to meet 50 percent of yourelectricity needs with your GTPV system.You could work with your PV provider toexamine past electric bills and determinethe size of the GTPV system needed toachieve that goal.

You can contact your utility and requestthe total electricity usage, measured in

Net metering simplifies both the meteringprocess (by eliminating the need for a sec-ond meter) and the accounting process (byeliminating the need for monthly pay-ments from your utility). Be sure to askyour utility about its policy regarding netmetering.

Under the federal Public Utility Regu-latory Policies Act (PURPA), utilitiesmust allow you to interconnect yourGTPV system, and they must also buy any excess electricity you generate(beyond what you use in your home orbusiness). If your utility does not offer netmetering, it will probably require you touse two meters: one to measure the flowof electricity into the building, the other to measure the flow of electricity out ofthe building. If net metering is not avail-able, the utility will only pay you a whole-sale rate for your excess electricity. In thiscase, you will have a strong incentive touse all the electricity you generate so thatit offsets electricity you would otherwisehave to purchase at the retail rate. This maybe a factor in how you optimize your sys-tem size, because you may want to limitthe excess electricity you generate. This“dual metering” arrangement is the normfor industrial customers who generatetheir own power.

What about utility and inspection sign-off?

After your new GTPV system is installed,it must be inspected and “signed off” bythe local permitting agency (usually abuilding or electrical inspector) and mostlikely by the electric utility with whichyou entered into an interconnection agree-ment. Inspectors may possibly requireyour PV provider to make corrections, but don’t be alarmed—this is fairly com-mon in the construction business.

What about warranties?Warranties are key to ensuring that your

PV system will be repaired if somethingshould malfunction during the warrantyperiod. The warranty should cover allparts and labor, including the cost ofremoving any defective component, ship-ping it to the manufacturer, and rein-stalling the component after it is repaired or replaced. Even if the manufacturer’sown warranty on a particular componentis less than two years, the system vendormust still provide you with a two-yearwarranty. Similarly, even if the manufac-turer’s warranty is a limited warranty thatdoes not include the cost of removing,shipping, and reinstalling defective com-ponents, the system vendor must coverthese costs if the retailer also installed the system.

Be sure you know who is responsible forhonoring the various warranties associatedwith your system—the installer, the dealer,or the manufacturer. The vendor shoulddisclose the warranty responsibility ofeach party. Know the financial arrange-ments, such as contractor's bonds, thatassure the warranty will be honored.Remember, a warranty does not guaranteethat the company will remain in business.Get a clear understanding of whom youshould contact if there is a problem. Toavoid any later misunderstandings, besure to read the warranty carefully andreview the terms and conditions with your retailer.

100 250 500 1,000 2,000 4,000 10,000 100,000

4 30 75 150 300 600 1,200 3,000 30,000

8 15 38 75 150 300 600 1,500 15,000

12 10 25 50 100 200 400 1,000 10,000

16 8 20 40 80 160 320 800 8,000

PV capacity rating (watts)PV moduleefficiency*

(%)

Roof Area Needed in Square Feet (shown in Bold Type)

0251

2002

m

* Although the efficiency (percent of sunlight converted to electricity) varies with the different types of PV modules available today, higher-efficiency modules typically cost more. So, a less-efficient system is not necessarily less cost-effective.

14 3

Why should I buy a GTPV system?People decide to buy GTPV systems for

a variety of reasons. Some want to helppreserve the earth’s finite fossil-fuelresources and reduce air pollution. Othersbelieve that it makes more sense to spendtheir money on an energy-producingimprovement to their property than tosend their money to a utility. Some peoplelike the security of reducing the amount of electricity they buy from their utility,because it makes them less vulnerable tofuture increases in the price of electricity.Finally, some people just don’t like pay-ing utility bills and appreciate the inde-pendence that a GTPV system provides.

Whatever your reason, solar energy iswidely thought to be the energy source of choice for the future, and Coloradans have a unique opportunity to take advan-tage of a state-sponsored program to helpmake it their energy choice for today and tomorrow.

Is my home or business a good placefor a solar system?Can you orient your system for optimumperformance?

A well-designed PV system needs clearand unobstructed access to the sun’s raysfor most or all of the day, throughout theyear. You can make an initial assessmentyourself, and if the location looks promis-ing, your PV provider has the tools totrace the sun’s path at your location anddetermine whether your home or businesscan make use of a PV solar system.

The orientation of your PV system (thecompass direction that your system faces)will affect performance. In Colorado, thesun is always in the southern half of the

sky and is higher in the summer and lowerin the winter. Usually, the best location fora PV system is a south-facing roof, butroofs that face east or west may also beacceptable. Flat roofs also work well forsolar systems because the PV modules canbe mounted flat on the roof facing the sky or mounted on frames tiltedtoward the south at the optimal angle.

If a rooftop can’t be used, your solarmodules can also be placed on the ground,either on a fixed mount or a “tracking”mount that follows the sun to orient thePV modules for maximum performance.Other options (used most often in multi-family or commercial applications)include mounting structures that createcovered parking or provide shade as window awnings.

Is your site free from shading by trees,nearby buildings, or other obstruc-tions?

To make the best use of your PV system,the PV modules must have a clear “view”of the sun for most or all of the day—unobstructed by trees, roof gables, chim-neys, buildings, and other features of yourhome and the surrounding landscape. It isimportant to note that even though thearea where a system is mounted may beunshaded during one part of the day, itmay be shaded during another. If this isthe case, then this shading may substan-tially reduce the amount of electricity that your system will produce.

An existing Colorado law—ColoradoRevised Statutes, Article 38-32.5—estab-lishes your right to protect your solaraccess through the creation of a “SolarEasement.”

Investing in a GTPV system

A small grid-tied PV system has been installed on thecarriage house at the Colorado Governor's Mansion.

2 15

Before you decide to buy a GTPV sys-tem, you should understand the currentstatus of the technology:

First, it produces power intermittentlybecause it works only when the sun isshining. This is not a problem for PV sys-tems connected to the utility grid, becauseadditional electricity you need is automat-ically delivered to you by your utility.

Second, GTPV-generated electricity ismore expensive than conventional utility-supplied electricity. Improved manufac-turing has reduced the cost to less thanone percent of what it was in the 1970s,but the cost (amortized over the life of the system) is still about 25 cents per kilowatt-hour. This is roughly three to

four times the retail price that most Colo-rado residents now pay for electricityfrom their utilities. Net metering can helpmake GTPV more affordable, but it can’tmatch today’s price for electricity fromyour utility.

Finally, unlike electricity purchasedmonth by month from a utility, PV powercomes with a high initial investment andno monthly charge thereafter. This meansthat buying a PV system is like payingyears of electric bills up front. You’llprobably appreciate the reduction in your monthly electric bills, but the initialexpense may be significant. By financingyour PV system, you can spread the costover many years.

This large grid-tied PV system will provideall of the electricity needed for this home.(Photo courtesy of Altair Energy)

Getting help

To get more information on solar electric systems, please contact:

Governor's Office of Energy Management and Conservation (OEMC)225 E. 16th Ave., Suite 650Denver, CO 80203Phone: 303-894-2383Fax: 303-894-2388E-mail: oemc@state.co.uswww.state.co.us/oemc

OEMC supports cost-effective programs, grants, and partnerships that benefit Colo-rado's economic and natural environment. The agency's primary objective is to serve the people of Colorado through educational, technical, and financial assistance, and to advocate energy-efficiency programs statewide.

The Colorado Public Utilities Commission (COPUC)1580 Logan Street, Office Level 2Denver, CO 80203Phone: 303-894-2000Fax: 303-894-2065

COPUC, part of the Colorado Department of Regulatory Agencies, regulates the state’sutilities. Utility customers have the right to file an informal or formal complaint with theCOPUC. Individuals, groups, or organizations can also intervene or participate in formalcases before the COPUC and can testify at public hearings that COPUC holds across the state.

Colorado Solar Energy Industries Association (COSEIA)2170 South Parker Road, Suite 255Denver, CO 80231Phone: 303-750-9764Fax: 303-750-0085www.coseia.org

COSEIA is the state chapter of the Solar Energy Industries Association, the nationaltrade association of the solar industry. Contact COSEIA for information about COSEIAcontractor certification programs and for a directory of solar-energy contractors inColorado.

Colorado Renewable Energy Society (CRES)1075 East Bates ParkwayEnglewood, CO 80110Toll Free: 888-806-5317Phone/Fax: 303-806-5317

CRES is a non-profit educational membership organization whose goal is to furtherrenewable energy use in Colorado, including solar building design, photovoltaics, solarthermal, biofuels and wind energy.

16 1

What is a solar electric, or photovoltaic,system?

PV technology converts sunlight directlyinto electricity. It works any time the sunis shining, but more electricity will be pro-duced when the light is more intense (asunny day) and is striking the PV modulesdirectly (when the rays of sunlight are perpendicular to the PV modules). Unlikesolar systems for heating water, whichyou might be more familiar with, PV tech-nology does not use the sun’s heat to makeelectricity. Instead, PV produces electric-ity directly from the electrons freed by theinteraction of sunlight with semiconduc-tor materials in the PV cells.

But you don’t need to understand thedetailed physics of how PV works tounderstand its appeal: investing in PVallows you to produce your own electric-ity with no noise, no air pollution, and nomoving parts while using a clean, renew-able resource. APV system will never runout of fuel, and it won’t increase our oilimports from overseas. In fact, it may

not even contribute to the trade deficit,because many PV system components are manufactured in the United States.Due to these unique characteristics, PVtechnology has been called “the ultimateenergy source for the 21st century.”

The basic building block of PV technol-ogy is the solar “cell.” PV cells are wiredtogether to produce a PV “module,” thesmallest PV component sold commer-cially, and these modules range in poweroutput from about 10 watts to 300 watts.

A PV system tied to the utility grid—a“grid-tied PV” or GTPV system—con-sists of one or more PV modules con-nected to an inverter that changes thesystem’s direct-current (DC) electricity to alternating current (AC), which is com-patible with the utility grid and able topower devices such as lights, appliances,computers, and televisions. You mayinclude batteries in the system to provideback-up power in case your utility experi-ences a power outage.

Background

Grid-Tied PV System Components

Photovoltaic Modules

PV Cell

CustomerLoads or

Utility GridBatteries(optional) Inverter

02512001m

PV System

ContentsBackground

❑ What is a solar electric, or photovoltaic, system? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1Investing in a PV system

❑ Why should I buy a PV system? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3❑ Is my home or business a good place for a solar system? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3❑ How big should my PV system be, and what features should it have? . . . . . . . . . . . . . . . . . . . . . . .4❑ How much will my PV system save me? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5❑ How much does a PV system cost? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6❑ Are incentives available to help reduce the cost? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7❑ How can I finance the cost of my PV system? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Selecting a PV provider❑ Who sells and installs PV systems? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8❑ How do I choose among PV providers? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8❑ How do I choose among competing bids? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9❑ Is the lowest price the “best deal”? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

Before connecting a PV system to the grid❑ What about permits? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11❑ What about insurance? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11❑ How do I get an interconnection agreement? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11❑ How do I get a net-metering agreement? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12❑ What about utility and inspection sign-off? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13❑ What about warranties? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

Getting help . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

Page

This Consumer’s Guide was developed with the support of the National Renewable EnergyLaboratory, in Golden, CO. The authors would like to thank Christy Herig and John Thorntonof NREL for their support and assistance in preparing this Guide.

March 2001

Are you thinking about buying a grid-tied PV (GTPV) system for your home or business? If so, this booklet will provide basic information that you need to know. Coloradans are showing increased interest in solar electric systems for their homes and businesses. These photovoltaic—or PV—systems are reliable, pollution free,and use a renewable source of energy—the sun.

Some Colorado utilities, including Xcel Energy, are making GTPV systems moreeconomical by offering net metering. Net metering means that you can sell the excesselectricity from your GTPV system back to your utility for the same price you pay forelectricity. In essence, your electric meter will run backward when you are not using all the power that your GTPV system generates.

This booklet is designed to guide you through the process of buying a grid-tied solarelectric system. Aword of caution: This is not a technical guide for designing or install-ing your system—for that information, we recommend that you consult an experiencedPV system designer or system supplier (“PV provider”) who will have detailed technicalspecifications and other necessary information. APV system can be a substantial invest-ment, and as with any investment, careful planning will help ensure that you make theright decisions.

ColoradoConsumer’s Guide

to Buying a Solar Electric System

Cover photo: Installing a photovoltaic system on the roof ofthe BigHorn Home Improvement Center, Silverthorne, CO. (Paul Torcellini, NREL/PIX06682)