Off the Grid Report
by Sandy Philpott
For those who you who have not read my previous articles, I live on an off-grid sustainable ranch above the South Yuba Canyon near French Corral. My husband Jeffrey and I built Red Tail Springs Ranch to reflect our rural lifestyle and sustainable values.
Knowing that I am fully committed to solar energy and sustainable lifestyles, I still find that there are some key factors that make 2019 one of the best times in recent history to go solar.
So on the record, here are the top reasons I personally see this as a great time to go solar soon and why:
The 30% Tax Credit is Going Away after 2019
Every year when it’s time to do my taxes I think of all the creative ways I can itemize my deductions. I look at all those home improvements like upgrading my appliances to more energy-efficient ones or changing out those old light bulbs to LEDs.
This coming year it’s possible to invest in your home’s value, lower your utility bill, and do something great for the environment. Plus, it’s the last year to take full advantage of the 30% federal tax credit. Makes sense to me!
The federal solar tax credit, also known as the investment tax credit (ITC), allows you to deduct 30% of the cost of installing a solar energy system from your federal taxes. After 2019, the tax credit is being tiered down so starting in 2020 you will only receive 26%, in 2021 you’ll receive 22% and in 2022 only 10%. After this, it’s up to the Federal Government as to whether they extend any tax credit at all. Now is the time to take advantage of getting 30% back on your investment. And just to be clear, this 30% tax credit is not a deduction, but the amount that can be subtracted off your tax bill. Check with your tax consultant, but my understanding is that this can be rolled over and even used to offset taxes for multiple years, depending on your tax bill.
In 2020 California New Home Construction is required to Have Solar
My husband and I have been talking about retirement and what that will look like for us financially. Although we’ll have the house paid off by then, we’ll still have taxes and insurance to pay on our home every year. Plus, there is a housing/rental shortage. We’ve been talking about building a rental property on our land to help provide income for us when we retire.
Starting Jan. 1, 2020, State law will make California the first state in the nation to require solar panels on all new homes. The requirement will apply to single-family homes and to apartment and condominium complexes of three stories or less.
If you are planning on building your home or adding a rental property, schedule your solar install in 2019, before installers, inspectors and manufacturers feel the impact of this new law and are booked out.
NEM Changes Forecast (Net Energy Metering)
With solar energy comes Net Energy Metering (NEM). This is the agreement between you as a small-scale solar energy generator and your utility company that allows them to purchase energy you generate to offset your utility bill. For many of us in Northern California, this is PG&E. Early solar adopters are on PG&E’s NEM 1 plan. NEM 1 provided rate security and flexibility for PG&E solar customers. At the end of 2016, PG&E adopted NEM 2 as the plan for new solar customers. NEM 2 includes time of use (TOU) requirements and more limitations than did NEM 1. Since Electricity is most expensive at times of high demand, like late afternoon and early evening, TOU means that your utility will charge you more per kWh during those “peak hours.” It is currently projected that new solar systems interconnected after 2019 will need to comply with NEM 3 policies. So, if you’re like me thinking about adding solar, you might want to consider doing it sooner rather than later because rates and restrictions will likely continue to increase. Learn more about NEM here.
Greater Independence from the Utility Company
For us here at Red Tail Springs Ranch, having independence from the utility company is the best option. After a decade or so, I can absolutely confirm that I would rather pay $10 a month statement fee and have my solar system completely offset my utility bill than have tough decisions about how to pay for my energy use every month. While not everyone is going to be interested in an off-grid lifestyle, there are options for battery storage that are now more available and affordable and simple solar installations can have a very significant financial saving.
Helps the Environment
Like most Californians, we want to do our part for the environment. Using fewer fossil fuels and less energy is important to our household. We just thought, why not use our natural resource, the sun, to power our home?
We are happy with our choice and hope you have learned something through sharing these considerations for going solar.
About the Author
Sandy Philpott lives off-grid on an organic farm with her husband Jeffrey. During the day, find Sandy at Byers Solar, where she is a solar project administrator.
“It’s really great to help people move to solar energy and know that they are saving money while doing something good for the environment. We can be independent and get all of our energy from the sun. We do not have to be so reliant on utility companies. Energy rates are skyrocketing every day and causing people hardship. It’s great to part of a solution that lightens the load on peoples’ budgets and our planet.”