Why We Don’t Do Grid-Tie
We have installed quiet a few grid-tie systems, but we are no longer accepting new grid-tie projects. This allows us to concentrate our efforts on stand-alone solar systems that provide grid independence. Click on the link below if you want to know more about why we have removed grid-tie systems from our offerings.
GRID-TIE solar systems (often called grid-interactive or grid-direct) harvest solar energy from the sun and convert it to electricity to feed your electrical loads. In their simplest form, they have a single purpose; reduce the kWh you purchase and therefore, reduce your power bill. Solar grid-tie is fully capable of offsetting every kWh your house consumes. However, reducing your power bill is another matter.
The popular narrative is that you can produce enough solar power to eliminate all, or a significant part, of your bill and perhaps even generate some income. This is true where the utility elects or is mandated to use net metering. Net metering subsidizes solar at the expense of the rate payer or the tax payer. It is losing popularity – even in California.
There are no utilities in Alabama or southern Middle Tennessee that use net metering. Here is how it works here:
The utility operates under a franchise from the state and can’t prevent you from having a solar system. However, if you connect your system to theirs (grid-tie by definition), you have to sign and abide by their interconnection agreement. They are under no obligation to make the interconnection financially lucrative for you.
You get to consume any kWh your grid-tie system produces. You don’t purchase this kWh from the utility nor do you pay taxes on it.
The utility is not obligated to purchase any kWh you produce and don’t consume. But most will pay you the “wholesale”, or offset rate. This is roughly equivalent to the cost they pay for a kWh. In my opinion, this is a fair deal.
If you are an Alabama Power customer, you will also pay a Capacity Reservation Charge (CRC), roughly $5.50 per month for each kW of your inverter’s rating. This fee is approved by the Public Service Commission. Think of it as you wish, but it has the effect of removing all financial incentive for owning a solar gird-tie system. I suspect other utilities will eventually enact something to the same effect.
If you are not subject to a CRC, your grid-tie solar system MAY break even somewhere between 10 and 15 years.
If you want a solid solar investment that will reduce your power bill, consider heating water with the sun. A solar water heater costs less than an equivalent solar grid-tie system and will break even in the 7th year.
