Solar Energy FAQ
These FAQs are not a technical guide for design or installation. For design or installation
assistance we recommend that you contact an engineer, designer or contractor with solar
electric experience. A solar electric system can be a substantial investment and careful
planning will help ensure that you make the right decisions.
Are you thinking of buying a solar electric system for your home or business?
More City Light customers are showing interest in solar electric systems for
their homes and businesses. Why?
What is solar electricity?
Solar electric systems are safe, reliable, pollution free, and
use a renewable source of energy - the sun. Systems have no moving
parts and are increasingly easy to install.
The option of net metering, or interconnecting a customer generating
system to the utility grid, makes solar electric systems more
economically viable. When you generate more power than you need
during a billing period, you earn an energy credit for later use.
Federal tax credits and state renewable energy production incentives
offer additional financial benefits for owning and operating a solar
Solar electricity is produced when sunlight reacts directly with semiconductor
materials in solar electric cells, a process that frees electrons and creates
an electrical current. Electricity is produced whenever the sun is shining,
but more is produced when sunlight is intense (like on a clear sunny day) and
direct (when the sun's rays are perpendicular to the solar cells).
Solar electric technology, which converts sunlight directly into electricity,
should not to be confused with solar thermal systems designed to heat water.
Why should I buy a solar electric system?
People decide to buy solar electric systems for a variety of reasons. While
many would not consider solar a good financial investment, it may make sense
for others who wish to invest in a more sustainable future. Some people are
motivated to help preserve the earth's finite fossil-fuel resources and support
the development of clean energy technologies. Others might consider solar
electricity a property improvement that reduces the risk of increasing utility
rates. Whatever your reason, solar energy is widely thought to be the energy
source of choice for the future.
Benefits of solar electricity:
What equipment is needed?
- No fuel (no price risk)
- No water
- No noise
- High reliability
- Low maintenance
- Long life
- Modular and expandable
- Short lead times
A solar electric system consists of basic components for generating and delivering
electricity to the home or business. There are two fundamental types of solar electric
systems: independent, or "off grid" systems, and interconnected, or
"grid-tied" systems. Only grid-tied systems are covered here since most
customers will choose to generate electricity in parallel with Seattle City Light's
distribution system. For systems less than 100 kilowatts (kW), grid-tied systems
are often referred to as "net metered" systems.
Commonly used components are described below.
The basic building block of solar electric generation is the solar "cell."
Cells are wired together to produce a "module", which looks like and is
often called a "panel". (This sometimes is confusing because panels also
describe solar thermal systems for heating water.) Solar electric modules range
in power output from about 10 watts to 400 watts. Many recent residential
applications use modules that are 200 watts or more to minimize the number
of modules and amount of wiring required. A group of modules wired together
form a solar "array". Various mounting rails and hardware are
used to attach modules to a building or other support structure and are
often called "racking".
In addition to solar modules (not shown), a solar inverter,
solar meter and AC & DC disconnect switches complete this solar electric system.
A solar electric system tied to the utility grid also requires an "inverter";
a power electronics device that converts direct current (DC) produced by the modules
into conventional alternating current (AC). Modern inverters also provide important
safety features to meet the latest National Electric Code standards, as well as
monitoring and diagnostic capabilities. AC and DC power disconnect switches
allow components to be safely shut down and isolated from the utility grid.
These are increasingly incorporated into the newest inverter models.
Batteries are optional in a net metered system and are only used if a customer
wants to provide backup power during utility power outages.
A separate utility-grade kilowatt-hour meter, or "production meter"
is also optional but is required to receive City Light renewable energy production
incentives (see question below on incentives).
How much does a solar electric system cost?
Cost depends on a number of factors, but for conventional systems mounted on a
sloped roof, cost is fairly proportional to size ranging from $5 – 8 per
watt of capacity installed. Thus, a typical 3,000 watt or 3 kilowatt (kW)
system would cost $15,000 – $24,000 installed. Other cost factors relate
to design complexity, system configuration, equipment options, and contractor
expertise. Systems that integrate solar cells into roofing or glazing materials
or require special equipment to install cost more. Local solar electric providers
can provide you with estimates or bids.
Is solar electricity a good investment?
Unlike electricity purchased month to month, solar electricity comes with an
initial investment but no monthly charges. It's like paying for years-worth
of electricity all at once. You'll probably appreciate having lower electric
bills as you harvest "free" electricity but the initial expense of
a system may be jolting. Financing may be an option to help spread out initial
If we divide the initial cost of a system by the total electricity produced
over 30-years, the cost of solar electricity (without incentives) is currently
over 20 cents/kilowatt-hour (kWh). This is about 3 times what City Light
residential customers now pay for electricity. With net metering and new
federal and state incentives (see below) the economics of solar become more
Remember, if reducing energy costs is your prime concern, there are many
energy conservation measures that offer shorter paybacks than solar.
Visit City Light's Conservation website
How much money will my solar electric system save?
Dollar savings will depend on how much electricity is produced, when it is
produced, and whether you qualify for additional incentives (see below).
You can estimate how much electricity your system will produce using the
following simple "rule of thumb" for well sited (shade free)
Seattle area systems:
Installed wattage = kWh generated per year
For example, a 3 kilowatt (3,000 watt) system will generate about 3,000 kWh in one year.
Small deviations from "ideal" system orientation (due south) and tilt
(30 - 45 degrees) will not affect annual performance more than about 5%. However,
annual electricity production may vary by up to 20% due to annual variations in
You could also ask your system provider for a written estimate of the average
annual electricity production for any system proposed, which should take shading
How much is that electricity worth? There is no simple answer to this question
since it depends on how much electricity you use, your current rate schedule
(residential, general service, etc.) as well as how much and when you generate
Seattle City Light net metering customers receive full retail value for their
solar electricity. However, residential customers pay lower summer and first-tier
rates are higher winter and second-tier rates. Since most solar electricity will
be generated in the summer, it will be worth either first tier or second tier
residential summer rates (currently about 5 cents and 10 cents per kWh,
respectively). If you are now paying for electricity at second-tier rates, more
savings will occur at this higher rate. Low electricity use at first-tier rates
and any net-generation at first-tier rates will provide savings at a lower rate.
Are incentives available?
Yes, the following incentives are available for City Light customers. Further
information is provided in the Guide
to Installing a Solar Electric System
Am I Guaranteed an Incentive?
City Light Net Metering - When you install your solar electric
system in compliance with City Light Interconnection Standards and
sign an Interconnection Agreement, any solar electricity you generate
that is not immediately needed goes back into City Light's grid,
spinning the meter backwards and lowering your electric bill. Meter
readings by City Light record a customer's "net" electricity
use. At the end of any billing period, if overall electricity production
exceeds consumption (indicated by a negative meter read) a billing credit
at current retail rates is applied to your next bill.
Federal Tax Incentives - The federal Energy Policy Act of 2005,
as amended by the Emergency Economic Stabilization Act of 2008, includes
provisions for individuals and businesses to claim a 30% federal income
tax credit for the cost of solar technology installations. Credit applies
to the basis remaining after any utility or state incentives have been
taken. Reference IRS Form 5695 for residential energy credits and IRS
Form 3468 for business investment credits. Contact the U.S. Internal
Revenue Service for further information.
Washington State Sales Tax Exemption - Solar electric systems less
than 10 kW in size are exempt from state sales taxes taken at the point
of sale. This exemption expires June 30, 2018. Solar electric systems
greater than 10 kW in size are exempt from 75% of the state sales tax.
Complete an Application for Sales Tax Refund on Purchases & Installation
of Qualified Renewable Energy Equipment and send to the WA Department
of Revenue with proof of tax paid for a 75% refund. This refund expires
January 1, 2020.
Renewable Energy Production Incentives - In 2006, the WA State
Department of Revenue issued WAC 458-20-273 establishing rules for
utilities choosing to offer renewable energy production incentives
for qualifying customer generation. The program offers a base-level
production incentive of 15 cents per kilowatt-hour ($0.15/kWh) capped
at $5,000 per year, for individuals, businesses, or local governments
that generate electricity from solar power, wind power or anaerobic
digesters. Higher incentive levels are available (up to 54 cents
per kilowatt-hour) if the solar electric (PV) modules panels and/or
inverter are manufactured in the State of Washington. If the system
is a community-solar system the base rate is 30 cents per kilowatt-hour
($0.30/kWh) with higher incentive levels if system components are made
in-state. The program runs from July 1, 2005 through June 30, 2020.
Ownership of the renewable energy credits or "green tags"
remains with the customer-generator. Your solar electric system must
be certified by the State Department of Revenue.
The state's utilities pay production incentives to qualified solar-generating customers (including Community Solar participants) within their service territories and earn a tax credit equal to the cost of the payments. The tax credit that the utility may claim cannot exceed the greater of $100,000 or 0.5% of the utility's taxable power sales. The incentive amount paid by a utility on behalf of the State may be proportionally reduced if requests for incentive payments exceed the tax credit cap available to that utility. Seattle City Light expects to reach its tax credit cap some time in 2016 or 2017. Without a change in the State law, incentive payments to all solar customers within City Light territory could be reduced for the duration of the program. A final decision on what will happen when we reach our cap has not been determined yet as we are in the process of reviewing different options at this time.
Do I have a good site?
To get the most benefit from a system, a well-designed solar electric system
has clear and unobstructed access to the sun for most of the day, throughout
the year. You can make an initial assessment yourself, and if the site looks
promising, your solar electric provider has the tools to trace the sun's path
at your site and offer a more complete assessment.
Is your site free from shade by trees, roof lines, nearby buildings, or other
obstructions in the surrounding landscape? Remember that an area that is
unshaded during one part of the day, may be shaded during another. Even
small objects, e.g. a utility or flagpole, can result in significant shade
losses. As little as 10 percent shade on a module can reduce output by
as much as 80 percent.
Other factors aside, the best orientation (direction) for a solar electric
system is south, where the sun spends most of its time, and therefore
south-facing roof installations are most common. Roofs that face east
or west may be acceptable but generate about 20% less electricity.
Solar "trees" reach skyward in this popular Seattle Park.
On flat roofs, solar modules can be mounted flat, facing up to the sky,
or mounted on frames tilted south at various angles. There is less than
a 5% variation from peak annual performance when modules are tilted south
between 20 and 60 degrees.
If a rooftop can't be used, solar modules can also be mounted on a separate
structure, pole or the ground, either on a fixed or "tracking"
mount that follows the sun to orient the modules for maximum performance.
Other options (used most often in multifamily or commercial applications)
include mounting modules on structures that offer weather protection (e.g
covered walkways or canopies) or provide shade as window awnings.
Do I have enough space on my roof or property?
The amount of space needed by a solar electric system is directly related
to the type and size of the system you purchase. One attractive feature
of solar electricity is that systems may be sized for almost any application
or power requirement. So, you should be able to find at least a small area
that has good solar exposure. Of course, larger systems will provide a
greater percentage of your annual electricity needs.
Most residential systems now operating in Seattle range in size from 2 to 4
kilowatts (kW), but smaller or larger systems are feasible. A 1 kW watt
system might require as little as 80 square feet of roof area for 5 typical
modules. A 10 kW system may require as much as 1,000 square feet.
If your area is limited, you might consider using more efficient solar
modules, which provide more watts/unit of area but cost about the same
per watt. System sizing is discussed further below and should also be
discussed with your solar electric provider.
Does the type of roof matter?
Roof type, slope and condition may influence the solar equipment you
select. While a solar electric system can be installed on any type of
roof, some roof types are simpler and less expensive to work with.
Typically, composition shingles and moderate to low slopes are easiest
to work with. Steep, slate roofs are most difficult. In any case, an
experienced solar installer will be familiar with all roof types and
installation techniques that eliminate any possibility of roof leakage.
Ask your installer how the solar electric system may affect your roof
warranty. If your roof is older and needs to be replaced in the near
future, you may want to defer installation of a solar electric system
to avoid having to remove and reinstall the system.
One trend in solar electric systems are solar-producing materials that
can be integrated into the roof or glazing components of a building.
Options include three-tab solar shingles, flat solar tiles with lap-joints,
solar material that comes in rolls and lies between raised-seam metal
roof sections, and thin-film solar wafers that go between two panes of
glass but allow some light to pass. These materials are pricey but
could offset the cost of conventional materials they replace.
What solar electric system is right for me?
You could examine electric bills over the past year and work with your solar
electric provider to estimate the size of the system needed to achieve a
certain percentage of your household's annual electricity needs. This might
be a good time to consider energy efficiency measures (appliance upgrades,
etc.) to lower your electricity use and boost the percentage contribution
of your solar system.
To qualify for net metering your solar electric system must not be larger
than 100 kilowatts of peak generating capacity.
A battery system to provide back-up power in case of a utility power outage
may sound attractive, but add cost and complexity to the system. Batteries
will require regular maintenance and more frequent replacement than most
other system components.
Thin film solar cells built into the glass do double duty
by providing shade and electricity at the Ballard Neighborhood Service Center.
Consider the "economies of scale" that can decrease the cost per watt
as you increase the size of the system. For example, many inverters are sized
for systems up 2.5 or 3 kilowatts, and if your array is smaller, say 1 kilowatt,
you may still end up buying the same inverter. Labor costs for a small system
may be nearly as much as those for a larger system. For example, your solar
electric provider is likely to offer you a better price to install a 2 kilowatt
system all at once, than to install a 1 kilowatt system this year and another
similar system next year, since multiple orders and site visits add cost.
Is financing available?
Although there are some special programs available for financing solar and
other renewable energy investments, the best way to finance solar electric
systems for homes is through a mortgage loan. Mortgage financing options
include your primary mortgage, a second mortgage such as a U.S. Department
of Housing and Urban Development (HUD) Title 1 loan, or a home-equity loan
that is secured by your property. There are two advantages to mortgage
financing. First, mortgage financing usually provides longer terms and
lower interest rates than other loans such as conventional bank loans.
Second, the interest paid on a mortgage loan is generally deductible on
your federal income tax (subject to certain conditions).
If you choose to install a solar electric system at the same time that
you build, buy, or refinance your home, by including the cost of the
solar electric system in your mortgage loan you can avoid additional
loan application forms or fees. If mortgage financing is not available,
look for other sources of financing, such as conventional bank loans.
Remember to look for the best possible combination of low rate and long
term. This will allow you to amortize your solar electric system as
inexpensively as possible. The terms and conditions of your financing
are likely to be the most important factor in determining the effective
price of your solar electric power.
Solar electric systems purchased for business applications are probably
best financed through a company's existing sources of funds for capital
purchases - often Small Business Administration loans or conventional
Who sells and installs solar electric systems?
In some locations, finding a solar electric provider can be as simple as
picking up the telephone directory and looking under "Solar Energy
Equipment and Systems - Dealers." Be aware, however, that many of
those listings are for solar water-heating companies. They may not be
experienced in solar electric system design or installation. Similarly,
many electrical contractors, although proficient in most electrical work,
may not have expertise in solar electricity or residential roof-mounting
techniques. Unless you are skilled in solar electric installation, you
should consider hiring a reputable professional contractor with experience
in installing solar electric systems.
Visit the Find Solar Contractors
page for a list of solar contractors with experience installing solar electric
systems in Seattle City Light's service territory.
How do I choose among solar electric system providers?
Compile a list of prospective solar electric providers. You might first
consider those closest to you, because the contractors travel costs might
add to your system price. Next, contact these providers and find out what
products and services they offer. At minimum, find out the following:
How do I choose among competing bids?
- Is the company properly licensed?
- This usually means that either the company or a subcontractor has an
electrical contractor's license.
The Washington State Department of Labor and Industries website includes
tools for hiring an electrical contractor. You can look up if a contractor
is licensed, bonded & insured, and if they have committed any infractions.
- How many grid-tied solar electric systems has the contractor installed?
- Experience installing grid-tied systems should be considered valuable but
not mandatory. Since grid-tied systems are relatively uncommon (although
this is starting to change), many contractors with solar electric experience
have worked only on systems such as those that power remote homes far from
the nearest utility line. These contractors may have experience with all
aspects of solar electric system installation except the connection to the
utility grid. Although grid-connection work is different from off-grid work,
a reputable company with solar electric experience should not be eliminated
just because it has not installed grid-connected solar electric systems in
- Other forms of documenting installer experience might include: a solar
contractor specialty license issued by a local building jurisdiction;
certification by a group such as a state chapter of the Solar Energy
Industries Association; or, a letter from a solar electric system
manufacturer stating that the installer has experience and/or training
necessary to install the system properly.
First, ensure that all of the bids are made on the same basis. For example,
comparing a bid for a system mounted on the ground with another bid for a
rooftop system is like comparing apples to oranges. Bids should cover the
total cost of getting the solar electric system up and running, including
hardware, installation, connection to the grid, permitting, sales tax, and
warranty. Bids should clearly state the maximum generating capacity of the
system measured in watts or kilowatts. If possible, have the bids specify the
system capacity in "AC watts" under a standard set of test conditions,
or specify the output of the system at the inverter.
You may want to obtain an estimate of the amount of electricity that the system
will generate on an annual basis measured in kilowatt-hours. Because generation
depends on climate - which varies year to year - it is unrealistic to expect a
specific or guaranteed amount. A range of ± 20% is more realistic.
Warranty is an important factor for evaluating bids. Some rebate programs
(none in Seattle) require that systems be covered by, say, a two-year parts-and-labor
written installation warranty, in addition to any manufacturers' warranties on
specific components. The installer may offer longer warranties. Ask yourself,
"Will this company remain in business to stand behind any manufacturer or
Price should not be your only consideration. Often, you get what you pay for.
Remember that a solar electric company is a business just like any other, with
overhead and operating expenses that must be covered. It's always possible
that a low price could be a sign of inexperience. Companies that plan to
stay in business must charge enough for their products and services to cover
their costs, plus a fair profit margin.
What permits are required?
City Light customers will need an electrical permit from the Seattle Department
of Planning and Development (DPD) or respective local jurisdiction, to meet
City Light's requirements for net metering (see information on net metering,
below). An electrical permit is required to qualify for Washington State's
production incentive program. You may also need a building or land use
permit depending on the size and complexity of the installation. Tip 420 by DPD is a good resource for learning more about
permitting and installation requirements for solar electric systems in Seattle.
If you live in a community in which a homeowners association requires approval
for solar installations, you or your solar electric provider may need to submit
Typically, your solar electric provider will take care of all required permits
and include the cost into the overall system price. However, in some cases,
your solar electric provider may not know how much time or money will be involved
in obtaining required permits. If so, this task may be priced on a
time-and-materials basis, particularly if additional drawings or calculations
must be provided to the permitting agency. In any case, make sure the permitting
costs and responsibilities are addressed at the start with your solar electric provider.
Code requirements for solar electric systems vary somewhat from one jurisdiction
to the next, but most are based on the National Electrical Code (NEC). NEC Article
690 carefully spells out requirements for designing and installing safe, reliable,
code-compliant solar electric systems. Because most local code requirements are
based on the NEC, your building inspector is likely to rely on Article 690 for
guidance in determining whether your solar electric system has been properly
designed and installed.
If you are among the first people in your community to install a grid-tied solar
electric system, your local building department may not have approved one of these
systems. If this is the case, you and your solar electric provider can speed the
process by working closely and cooperatively with your local building officials
to help educate them about the technology and its characteristics.
What is net metering?
"Net metering" refers to an interconnected customer generation system
with a meter that reads the "net" difference between the customer's
electricity generation and consumption. State law requires the 16 largest utilities
in the Washington (including Seattle City Light) to offer net metering to customers
for generation up to 100 kilowatts in capacity. Most utility revenue meters are
already able to spin in both directions according to whether power is being consumed
or generated. The net metering customer pays only the net amount of electricity
that they consume for any billing period. Any excess electricity generated by the
customer during a billing period is credited on the customer's next bill.
Large public and commercial buildings often have plenty of opportunities
to add solar electricity.
City Light requires that customers install generating systems in compliance with City
Light Interconnection Standards and sign an Interconnection Agreement in order to
interconnect solar electric systems or other approved customer-owned generation.
It is the customer's responsibility to ensure that the solar electric provider
complies with these standards. The agreement also specifies the terms and conditions
under which your system will be connected and operated. If you are unclear about your
obligations under this agreement, you should contact City Light for clarification.
Further information is provided on City Light's Solar Energy
After your solar electric system is installed, it must be inspected and "signed
off" by the local permitting agency (the Department of Planning and Development
in Seattle) and by Seattle City Light. Once permits, and your Interconnection Agreement
are signed, you may begin operating your solar electric system.
What should I know about warranties?
Warranties are key to ensuring that your solar electric system will be repaired if
something should malfunction during the warranty period. Be sure you know who is
responsible for honoring the various warranties associated with your system - the
manufacturer, provider (dealer) or installer (contractor). Your provider should
disclose the warranty responsibility of each party. Know the financial arrangements,
such as contractor's bonds, that assure the warranty will be honored. A warranty
does not guarantee that the company will remain in business to honor the warranty.
To avoid any misunderstandings, be sure to read all warranties carefully and review
the terms and conditions with your provider. Under some solar rebate programs,
dealers must provide documentation that specifies information on system and component
warranty coverage and claims procedures.
Where can I get further assistance?