I intended for this site to be a place to promote my books and to share fun stuff I do from time to time, as well as what little writing wisdom I have. But I need to talk about my experience with having solar panels installed on my home and how that’s turned into a nightmare.
I have two “patches” of panels installed on the southern side of my house so they can get as much sunlight as possible. Below is a capture of the Facebook post I made back in April of 2015 after having the panels installed. If you’re able to read the quote, the local power company came out to inspect the system and to officially turn it on before mid-May. The system costs $21,000.00, plus another $100 or so for the net meter.
Before we go further, there are some things you need to understand about solar panels.
They in no way actually help the environment. Their efficiency is at best %20. They’re production and disposal creates toxic waste. Each year they generate power, they lose efficiency. Over 20 years, my system is expected to have its electricity production halved.
When power goes out, which it often does, the solar system disconnects from the electrical grid as a safety measure for any of the power company workers trying to repair the system. So, when the power goes out, even if it’s bright and sunny outside (which happens), I still lose power. The only way to get around this is to purchase and install an expensive battery system that wears out and dies usually in about 4 years.
Solar panels are also far too expensive to be practical. So much so, without substantial tax credits you’re basically wasting thousands of dollars.
Over the last 12 months, my system generated the following amount of power (kWh) and “dollars saved.”
Even if my system were to stay at its brand new electricity generation level indefinitely, it would take about 30 years for the system to pay for itself at current energy prices. More than likely though, the panels would never be able to pay for themselves as their generation continues to degrade to nothing.
So, you may be wondering why, if I knew all of this, did I got a solar system installed on my home.
There were three reasons.
First, Louisiana, where I live, has had a very generous tax credit (%50 of the cost up to $25,000) to help homeowners purchase solar systems. Coupled with the still ongoing %30 Federal tax credit for said systems, you could get a $25,000 system installed at %20 of the total cost (or basically for free with financing). And if you look at my generation numbers and consider %20 of 21,000 is $4,200, it would only take 6-8 years for my system to pay for itself. Not only that, but the solar installer I used made a contractual guarantee to make up the difference of expected versus actual power generation in the first year, which ended up netting me another $200.
Second, I had been interested in taking advantage of the solar credits for a while, because they were supposed to go away in 2017 if not earlier. What kept me from pulling the trigger was I needed a new roof first. And I got one installed in late February of 2015. So, the timing seemed great.
Third, I naively considered that having a $21,000 system installed on my house for power generation would increase my home’s value by some percentage of the cost of the system. At the time, I was very close to escaping having to waste money every month on mortgage insurance or PMI. I figured I could get the system basically for free, have it installed, get my home reappraised, and then save on the additional cost of PMI every month.
With all of these things in mind, I signed the contract and was thrilled to have my system installed. It was so neat to keep peaking at the website that reports the power generation or to go look at the actual meter. And I paid for it through an 18 month, no interest, no payments plan for the %80 of the cost (17% deferred interest) I was going to get back in tax credits when I filed in January 2016.
And it turns out I was wrong. Critically wrong.
The appraiser couldn’t determine what, if any, value the system added to my home because no homes with systems had been sold in the area to make a comparison. It was still too new. So, any hope I had of escaping PMI early died.
And as some many have heard, the State of Louisiana fell on some hard fiscal times. Our state has never been good about managing money and spends it all when it has it. So July of 2015 comes and the legislature is having its come-to-Jesus moment about the budget. They start cutting tax credits and raising taxes. Which is fine, you have to do what you have to do.
But they decided to change the solar tax credit law. They decided to cap it. They had already spent close to $150 million on the credits and now they needed that money. Again, this is fine. Times are tough, so turn off the spicket.
To be as clear as possible: In April of 2015, I financed $16,800 for 18 months because I was going to get a Federal tax credit and a State tax credit to pay for this amount in early 2016. In July of 2015, the legislature added a $10 million cap for 2015 for the credit. The credit, if you read the law linked above, is paid out on a first-come, first-served basis. So, in July of 2015 I found myself placed in a race to file my taxes.
I filed my income taxes on the first day of filing in 2016 with Turbo Tax (lots of problems, tech support). January 19, I believe. And this was in spite of trying to amend my return after my house being robbed three days later on the 21st or so. Still, I got it done. I ended up having to fax my solar credit form in on the 22nd.
See, the State was criminally late in setting up its electronic system for receiving the packet of paperwork required to claim the tax credit. It still accepted my income tax filing on the 19, but I had to fax the paperwork into the Louisiana Department of Revenue a few days later (no email? seriously?) and got confirmation of receipt of the materials in mid-February of 2016. Sometime in late March or early April, I got a letter from LDR requesting that I send in an invoice for the system, so I did.
Note, this request for additional paperwork, even paperwork that had already been included in the initial packet was not an uncommon occurrence. I know of two other people who had the same experience.
It’s not July 22, 2016 and I haven’t gotten my state income tax back. And this is what the credit situation looks like.
While I received my Federal tax credit of $6,300, it’s increasingly looking like I’m going to get left holding the bag for $10,500. And this is money that needs to be paid off in some form before the 18 months runs out or I could also find myself responsible for thousands of dollars more in deferred interest.
A friend of a friend got this letter in the mail from LDR today. I added the black bar to protect personal information.
I haven’t gotten my letter, yet. I still may not. But I know I’m not alone. There are a lot of people like me that took advantage of what the State had been encouraging us to do for years and then left us holding the check. We agreed to play the game and the State changed the rules on us after we made our move. Had there been a cap in place in April of 2015, I’d never have taken the risk, because I’m not a moron.
I’ve tried contacting my local representatives and senators about my plight. I’ve emailed the local media, but they’re just starting to wake up to the issue and are still missing the point. They’re falling back on the same lazy angle of the strident solar energy industry bracing for the loss of business instead of speaking up for the people being hurt by incompetent governance.
This could lead to a pretty embarrassing and expensive class action suit against the state. But in the near term, all I can do is wait to see what happens with my credit, spread the news about the people that have been burned (because the media isn’t), and plan for what to do if I suddenly need to come up with the equivalent of a new down payment on a house.