Energy Flow to and from Grid
Production vs Usage
As you can see from this graph, your household energy use typically peaks in the morning and evening, but your solar panels produce best during mid-day. This excess production must be stored in some way so it can all be used when needed.
You could add batteries to store and reuse this electricity, but batteries are still too expensive.
Thankfully there is a zero cost, 100% efficient and maintenance free way to store, and then use this energy. This is referred to as Net Metering.
Net Metering makes this mismatch in Production and Usage times irrelevant, and is the most important tool in making solar panels economically viable for residential use.
Free 100% efficient energy storage
Net Metering is when your connected electric public-utility will credit you at full retail price for excess electricity your solar panels send back out onto the electric grid. It’s basically running your electric meter backwards at the same cost rate as when you’re drawing electricity from the electric grid.
If the utility is only willing to pay you Wholesale Rate (around 3cents/kWh) for the excess electrify you produce, the payback period for solar panels becomes much longer and solar panels becomes difficult to justify economically.
In Illinois, Net Metering is now guaranteed to be available to solar installations until the amount of renewable energy flowing onto the Illinois grid reaches 5% of peak demand. At the end of 2016, renewable energy accounted for just 1/10th of 1% so it’s expected to be 4 to 8 years before this 5% limit is reached. And at that point even if Net Metering is then eliminated, the current and growing trend is to grandfather in existing solar installations. This trend greatly reduces the risk of losing this Net Metering benefit in the future.
NOTE: Under Illinois Net Metering rules, at the end of a yearly billing period, any excess electricity generation (your house has generated more electricity than it’s used) will not be credited to you. So be sure to review your average annual kWh usage and size your solar installation to produce no more than the amount of power you expect to use in a year.
A No Battery, Grid-Tied System is Best
The most economical solar installations are those with the least amount of equipment (lowest cost). By staying connected to a public electric utility that provided free Net Metering, you eliminate the need for expensive batteries and charge controllers. Free Net Meeting is what makes solar panels economical.
NOTE: There is a misperception that a solar installation will continue to provide your home with power if the public electric utility experiences a power outage. This is not true. For safety reasons most grid-tied solar system inverters are designed to shut down when they stop receiving power from the public electric grid.
Individual Panel Optimization
Strings, Optimizers & Micro Inverters
Until recently, a typical solar installation connected panels together in strings by daisy chaining one panel into the next. The downside of this is that the single electric cable tying them all together acts like a garden hose for the electricity. Shading on one panel will “Pinch” this single cable like a garden hose and limit the amount of electricity that can flow through all the panels.
Power optimizers isolate each panel so shading on one does not affect the others. Power Optimizers also provide what is called Maximum Power Point Tracking (MPPT) which dynamically adjusts the balance of Current to Voltage in the panel to maximize the amount of power the panel produces. In addition to maximizing the amount a power each panel produces, having a power optimizer on each panel allows you to monitor each panel’s performance.
Micro inverters not only perform Maximum Power Point Tracking but also convert the panels DC current to AC current right at the panel. This eliminates the need for a single central string inverter.
Individual Panel Monitoring
Strings Spread and Mask Issues
If one of your panels is underperforming due to shading or an electrical problem, having them all connected in a string will affect all panels and make it difficult to pinpoint which panel is causing the issue.
Optimizers and Micro Inverters add Monitoring
Hanging a Power Optimizer or Micro Inverter off of each panel not only maximizes the amount of power each panel produces, it also allows you to capture real-time performance data on each panel. The data gathering device and monitoring services vary from manufacturer to manufacture with some including this service as a onetime fee, and others charging monthly after installation.
This concludes the Utility Interaction section.
Let's move on to the financial calculations.