When Zechariah Schmidt installed solar panels on his home eight years ago, he was one of the first people in his Azle neighborhood to take the plunge. The 28-year-old auto repair entrepreneur now owns five properties – all of which have rooftop solar.
Schmidt has watched the trend take off in the northwest Tarrant County town over the past year, as more homeowners wrestle with skyrocketing electricity bills.
“I’m seeing solar gain traction,” Schmidt said. “Just in my neighborhood, it went from me and one other person to, a year later, I can probably name 30 houses. I have a good friend who recently followed in my footsteps for his home. In three months, he went from being the first to now there’s 12 houses in this 50-house community that have solar.”
Many Texans are paying at least 50% more for home electricity than they did at this time last year, according to the Texas Tribune. In Azle, Schmidt’s neighbors reported spending between $800 and $1,000 on electricity in July. Schmidt’s bill was about $380, or $200 more than a typical month.
Dennis Wamsted, an energy analyst focused on electric utilities for the Institute for Energy Economics and Financial Analysis, said the higher costs can be blamed on surging natural gas prices driven by European demand for gas and the fallout of the February 2021 power outages, among other factors.
“We are now paying for that storm, because people had to buy gas at very high prices during that storm to use it to generate electricity,” Wamsted said. “Those costs are generally passed through to consumers. They’re not usually covered by the generation companies or the utility companies. That’s why you’re seeing this run up in electricity bills or utility bills.”
Those eye-popping bills, as well as concerns about the reliability of the Texas electric grid, have more residents turning to solar panels and batteries for relief.
Estimating solar cost
The cost of installation and maintenance of a solar array depends on a variety of factors, including roof size and shape, shaded roof areas, local weather, electricity prices, electricity use, product cost and estimated incentives.
While hardware costs are decreasing, one 2016 Department of Energy study found that the “soft costs” of permitting and installation remained high.
A solar provider evaluation is the only way to get an accurate estimate. Google’s Project Sunroof offers some information based on Google Earth data.
During the past six months, interest in rooftop solar has increased dramatically in Texas and the Dallas-Fort Worth region, said Jim Cushman, the general manager of Current Solar in Fort Worth. The surging rates offered by retail electricity providers – think TXU Energy or Reliant – have flipped the financial formula for home and business owners, he said.
The equation used to sound something like this, according to Cushman: Homeowners financing solar equipment over the course of a 15- or 20-year contract would likely pay $150 to offset their $150 residential utility bill.
Cushman and other solar companies had to convince homeowners that, after six to 10 years, their solar payments would stay flat while retail utility costs would increase. It was often a tough sell, especially since the upfront cost of solar installation is still steep despite tax incentives offered through the federal government, he added.
That dynamic has changed with rapidly rising electricity prices, giving many customers the push they need to invest in solar technology now, Cushman said.
“The financial model has flipped for us where a solar power system can actually save homeowners $50, $60, $70 per month financing a system versus utility bills,” Cushman said. “It’s definitely an interesting time. It’s the No. 1 opportunity market in the country right now.”
Solar works, but not ‘for every house’
Salesmen from out-of-state or national providers have flooded North Texas to take advantage of the increased interest. Cushman’s contacts at United Cooperative Services in Burleson reported neighborhoods seeing five to seven solar canvassers per week, Cushman said.
That’s a concerning trend for Cushman, who receives up to 10 calls a week from residents who had solar equipment installed from out-of-state companies that no longer do business in Texas.
“This poor customer doesn’t know how to get their solar power system back up and running,” he said. “(Companies) bring in sales teams and then they go back to their headquarters and leave their customers high and dry. That’s a problem in the industry, and unfortunately, people don’t see that until it’s too late.”
Jim Cushman’s advice for potential solar customers
- Get two to three estimates before moving forward with a contract or installation. The right provider will understand the need to validate prices and generation estimates.
- A provider who wants you to sign a same-day contract should be a red flag that they do not want you to validate your numbers with another provider or through your own research.
- Look for a company with a local office who can respond to your service calls.
- Avoid ads or companies claiming to give you solar “for free.”
Navigating the onslaught of solar system options and payment plans can be a tall order, said Lonnie Carreau, an Arlington homeowner who explored rooftop solar after the 2021 winter storm. He was interested in storing solar energy in batteries so that he and his family would have energy during any future power outages.
The investment proved to be too high for Carreau. With federal tax incentives, he would still need to spend at least $24,000 on solar panels and several thousand more on batteries.
“It’s very difficult to calculate the return on investment with the way (salespeople) talk, and their high pressure tactics make it feel very scammy,” he said. “You also have to consider that you’re in a 30-year contract where the technology may change. If the technology gets better, you’re stuck in this 30-year contract.”
Cushman gives customers the unvarnished truth about whether their home is ideal for generating solar power.
For example, if the front of a house faces south, installers will put panels only on the west and east sides of the house. Those panels will only be about 75% to 80% as efficient as compared to south-facing roof panels, and the house will require more panels to generate more power, he said.
“Solar absolutely works. It doesn’t work for every house, though,” Cushman said. “That’s what people really need to understand is, you might walk into a neighborhood, and one side of the street is perfect for solar, and the other side is terrible for solar.”
Homeowners must also do their research to find an electricity provider that will offer competitive pricing in its buyback program, Schmidt said. Many companies will compensate homeowners for the excess solar power residents don’t use, but the pricing varies by provider.
“It’s not something just turnkey,” Schmidt said. “You can’t just get solar and automatically save money. But as long as you’re willing to do your part, you’re not only going to save money, but you very well could make money.”
For some customers, including former UT-Arlington School of Architecture Dean Don Gatzke, the decision to install solar came down to environmental impact. Nine years ago, Gatzke installed a solar panel array in an effort to reduce his carbon footprint. The decision also made sense economically, he said.
“I calculated that over the last year, our average monthly electric cost is $109 a month,” he said. “Solar is just going to continue to expand, particularly once I or anybody can produce off the rooftops, store locally in a battery, and then buy and sell whatever excess capacity or demand is to an energy company. That reliability of solar and local battery storage is going to make this even more attractive to people.”
Texas growing fast in ‘utility’ solar, but rooftop lags behind
Texas – which leads the country in wind power generation – is growing faster than any other state when it comes to “utility-scale solar,” or large facilities that generate electricity and feed it directly into the grid, said Dennis Wamsted, an energy analyst for the Institute for Energy Economics and Financial Analysis. That expansion has translated to record-setting months for solar generation in the state.
This July, solar generation rose to 2.99 million megawatt hours, a 60% percent jump from July last year and four times the total in 2019, according to Wamsted’s analysis. More importantly for the Texas electric grid, solar resources met 10% or more of demand at the peak hour on 25 of 31 days in July.
There are still concerns about the reliability of solar and wind energy. A July report from the North American Electric Reliability Corporation found that renewable energy sources can make electric grids “more unreliable” as they gain share because they are weather-dependent and more impacted by abnormal atmospheric conditions or when weather disrupts the fuel supply chain.
The report recommended additional investment in natural gas infrastructure to support grid stability.
“If we’re going to reliably integrate these (renewable) resources over the next 10 years, we’ve really got to start now,” John Moura, the corporation’s director of reliability assessment and performance analysis, told Utility Dive. “Gas is a bridge fuel to where I think policies ultimately want to take us. Batteries aren’t going to do it, and we’re going to need a backup fuel for wind and solar. So this is important to invest in.”
Wamsted “freely admits” that wind and solar energy are variable. But he also finds them to be very predictable, especially as the infrastructure to generate and transmit solar power in Texas expands.
“Our argument to anybody who says we can’t rely on it is that you can rely on it and you can plan for it,” Wamsted said. “ People will say: ‘It could be cloudy.’ Well, then the demand won’t be as high either, usually, because when it’s cloudy, there isn’t as much need for the electricity to run. There might be lower solar generation, but I wouldn’t be surprised if you were still at that 10%.”
Despite its investment in large-scale solar power, Texas lags behind other states in terms of rooftop solar generation.
A February report from the Frontier Group and Environment America estimated the state’s potential for rooftop solar generation at 97,800 megawatts, or more than 15 times the total installed solar capacity during the 2021 winter storm. The total potential would be enough to power about one-third of Texas’ total electricity use in 2020, according to the report.
While an individual homeowner might not make a dent in the Texas energy landscape by installing solar on their rooftop, Wamsted said the overall trend could have a major impact on the state just as it has nationwide.
“The Department of Energy didn’t use to count what they call ‘small-scale solar’ until probably five or six years ago, and then it started to become a big number,” he said. “You look at it and think: ‘Those are all little tiny rooftops all over the country,’ but you add them all together, and you start to see a big number. I think that will continue going forward.”
This story has been corrected to reflect that solar generation in July rose to 2.99 million megawatt hours, not 2.99 megawatt hours.
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