Do's And Don'ts Of Installing Solar On Your Home
NET ZERO SOLAR INTERVIEW: VIDEO TRANSCRIPTION
Introduction: Solar Lease Addendum
Tyler Ford:
Hello. Tyler Ford here, Tucson, Arizona, eXp Realty. And welcome to this episode of Living in Tucson, your Tucson Real Estate connection. And in this video, we’re going to be talking about solar, the do’s and don’ts. We recently put solar on our home. We used Net Zero. And I’m going to be doing an interview with Brian Mueller, he’s the salesperson over at Net Zero. Again, it kind of be talking about the do’s and don’ts of solar. And if solar done the wrong way, it can be a huge liability when trying to go resell a home, especially if it’s leased or financed. If you own it outright, it’s definitely an asset.
Tyler Ford:
But one thing that we didn’t talk about in the interview coming up is the solar lease addendum. So when you go sell a home, if you have a lease on it or it’s financed, there’s what is called the solar lease addendum. In this addendum, it gives the buyer the ability to do their due diligence in terms of the lease or financing that they’re going to be assuming and their ability to assume it. And if they can’t assume it, then they can get out of the contract. So again, we didn’t talk about this in the interview but just wanted to let you know that there is a lease addendum when selling a home or buying a home if the solar on the home is leased or financed. Hopefully, you enjoy the interview coming up with Brian Mueller, the do’s and don’ts of solar on a home.
Introduction: Net Zero Solar and Brian Mueller
Tyler Ford:
Hello, everyone. This is Tyler Ford, eXp Realty here in Tucson, Arizona. And today, I am with my buddy Brian Mueller, he’s with Net Zero. It’s a local solar company here in Tucson. We’re going to be talking about the do’s and don’ts of solar on homes. Being a licensed agent for over 30 years, and within the last 10 years or so, solar being really popular and a lot of people getting solar installed, I’ve seen quite a few instances where solar can actually be a liability and hinder a sale rather than help a sale. So just kind of want to go through some of the do’s and don’ts because I have seen some things that really can hurt homeowners.
Tyler Ford:
And kind of a shameless plug, we just had solar installed at our house. Net Zero did it. Brian did it. They did an awesome job. We’ll give you his contact information at the end. But I contemplated it for a couple of years just because the numbers didn’t make sense, but finally figured out a way to do it the right way and have it be an asset on our home and not a liability. So with that, I’m going to turn it over to Brian and ask him a few questions and just help people make the right decision when it comes to home solar on their homes. Hey, Brian.
Brian Mueller:
Great. Hey, thanks, Tyler. And thanks not only for having me on your channel, but thanks for hiring us to do your installation.
Tyler Ford:
Absolutely.
Brian Mueller:
It was great to get solar on your house.
Condition Of Your Roof Prior To Installing Solar
Tyler Ford:
Cool. We appreciate you guys did a great job. So first off, I’ve seen quite a few instances that where somebody gets sold a solar system and they put solar on a roof that isn’t in good condition. I had one deal, the guy put solar on and six months later he had to sell. During the home inspection, they discovered that his roof was in need of a new roof.
Brian Mueller:
Yeah.
Tyler Ford:
And he just put solar on and the solar company, in my opinion, did a disservice. So, in your opinion, when you come out and look at a home, when you’re doing the installation, what are some of the things that you look at and what should homeowners consider before installing a solar system in regards to roof, location, things like that? Just things to consider that could cause an issue down the road.
Brian Mueller:
Yeah. And that’s really a big deal. One of the things that we try to do is that we’re always on site before we do a solar installation. One of the things we do is a site assessment. So we’re looking at electrical service, we’re looking at roof conditions, we’re looking for any potential problems on site that are going to cause issues after a system is installed. And that is a really important one, is getting up on the roof. If we see any trouble areas, getting a roofing professional out to do an evaluation, because the last thing you want to do is install a solar system and then have to remove it a month, a year or two down the line.
Brian Mueller:
So for any homeowner that’s considering solar, it’s also never a bad idea if they don’t know kind of age of the roof or condition of the roof to have a roofer come on out. Most evaluations from a roofing company are free as you well know. It’s never a bad idea to kind of understand where your roof is and its lifeline, but that’s something we, and any good company is going to check out when we’re onsite.
Tyler Ford:
Okay. Well, that’s good to know. And just people need to know that.
Brian Mueller:
Sure.
Tyler Ford:
Because again, I’ve seen a couple of situations where people have installed solar. They’ve got a roof that needs some work. They have to spend the money to take the solar off, repair the roof and put it back on. If somebody did have to remove the solar, let’s say there were some roof issues, what’s that process look like and typically what’s the expense if somebody had to take it off and then put it back on?
Brian Mueller:
It’s a pretty big process because the entire solar system has to come off and then be completely re-installed. So depending on the size of the solar system, that can range anywhere from 2,500 to $5,000 to remove a solar system. It’s definitely something that’s very important to check into pre installation.
Tyler Ford:
Right. Well, you bring up a good point. That cost is really the cost of a new roof.
Brian Mueller:
Yeah.
Tyler Ford:
So if you’re in question, it’s better to get the roof taken care of-
Brian Mueller:
Absolutely.
Tyler Ford:
… upfront and just get it done. I mean, that big lesson learned for a lot of people and I’ve seen it happen more than once.
Brian Mueller:
Yeah. Good question. Great question.
Tyler Ford:
And that’s what I like about you guys. I mean, you guys are honest. I mean, you’re going to tell people the way it is. You’re just not out to sell a solar you’re, you’re wanting to do the right thing.
Brian Mueller:
Yeah. I mean, we’re a review based company and a referral based company. One way you get good reviews and get referrals is you take care of people and you’re transparent in your process.
Tyler Ford:
Mm-hmm (affirmative).
Brian Mueller:
That’s one of the things about an evaluation of a home is we want to let people know kind of what they’re looking at. That’s a really important factor is roof conditions.
Tyler Ford:
Mm-hmm (affirmative).
Brian Mueller:
Southern Arizona is really hard on rooftops. So it’s really important to make sure that the roof we’re installing on is in great condition.
Leasing VS Owning Your Solar System
Tyler Ford:
So now let’s jump over to… And this is one of the things that I struggled with, leasing versus owning.
Brian Mueller:
Yeah.
Tyler Ford:
Some of the leases are good. I’ve seen some leases that actually kill a deal just because they don’t make any sense. We bought ours outright, so we own it. I think that’s the way to go at the end of the day. There’s a lot of companies that they’re selling a payment when it comes to a solar system and it looks good, but you got to be really, really careful because a lease at the end of the day is a liability on a balance sheet. And when you got to sell it, you’ve got to look at that lease and go, “Okay, if I’m buying this home, would I sign up for that lease?” And so, talk to me a little bit about the difference between leasing, owning, and how you guys go about doing it when you’re talking to people.
Brian Mueller:
Yeah. It’s something where leasing got really popular really with SolarCity quite a few years ago. No money down, no money out of pocket. It was really appealing to a lot of people that weren’t reading fine prints and contracts and fully understanding what they were getting into.
Tyler Ford:
Mm-hmm (affirmative).
Brian Mueller:
Because a small local business never offered leasing, it’s something we checked into. What we found out is it just wasn’t who our clients were. And it just wasn’t a good deal for many people. One of the major issues with leases is fully understanding what that lease is.
Tyler Ford:
Mm-hmm (affirmative).
Brian Mueller:
All leases have escalators. I don’t think I’ve ever seen a lease that didn’t have an annual escalator. What a lot of companies will do is they’ll base that escalator on a perceived cost of energy increase that’s fairly unrealistic. I’ve seen escalators on an annual lease as high as 6%, which means your lease payment goes up 6% every year. And when you can kind of do the math on that, the first few years, things may not be that bad. You get into you’re seven, eight, nine, 10 of a lease, you may be paying more for a leased solar system than you would be for energy.
Tyler Ford:
Oh, and that’s the point.
Brian Mueller:
Yeah.
Tyler Ford:
I’ve seen some of them where their electric bill is actually less than what their leased payment’s going to be down the road, but they’re just looking short-term at what that is the first couple of years so they really need to look at that.
Brian Mueller:
Yeah. Absolutely. I’ve seen it so many times where families haven’t read the fine print on these lease contracts and don’t really know what they’re getting into. The good news is there aren’t many leases left out there. There aren’t many companies that are offering leases just due to policy changes. But definitely, if it’s… When your clients is buying a home, it’s something that they should dig into in great detail, or you should dig into is figuring out what that lease escalator is.
Tyler Ford:
Right. And a lot of the leases, even with some of the other competitors out there, at the end of the day, when the lease is up, they still don’t even own the solar.
Brian Mueller:
Exactly.
Tyler Ford:
It doesn’t make any sense to me.
Brian Mueller:
I know.
Tyler Ford:
So I don’t know.
Brian Mueller:
It might work with cars if you want to buy, drive a new car and replace it every couple of years, but with a solar system, it’s a totally different piece.
Yeah, it’s a bad word in our company.
Tyler Ford:
Well, let me ask you this. If somebody wants to own it and own it outright, they didn’t want to lease, but they still wanted solar and they wanted to finance it, are there companies out there that will finance solar so they could use somebody like yourself get it financed and own it?
It makes sense because it’s a principal and interest payment.
Brian Mueller:
Yeah.
Tyler Ford:
No different than a mortgage payment. And so, you’re paying down principal, it’s going to be paid off, you’re building equity. And at the end of the day, you own the solar when you go to sell. You can even pay it off and negotiate that in the sale. That’s how I would do it, and it’s just common sense to me.
Brian Mueller:
Sure.
Tyler Ford:
Is that an option with a company like yourself?
Brian Mueller:
It is. What we do is we work with a small local credit union, Tucson Old Pueblo Credit Union for all of our leases. And they have a solar specific lease.
Tyler Ford:
Right.
Brian Mueller:
And what that-
Tyler Ford:
But it’s not a lease, it’s financed?
Brian Mueller:
Oh, excuse me. I’m sorry. It’s not a lease. Good catch there.
Tyler Ford:
Okay.
Brian Mueller:
So yeah, they offer financing on solar systems.
Tyler Ford:
Right.
Brian Mueller:
The nice thing about their program is there’s no second position on your mortgage if you have a mortgage, which is another thing. Even if customers are purchasing a solar system, they need to read the fine print within that contract.
Tyler Ford:
Right. Well, that’s good to know. It’s personally collateralized. It’s not collateralized against home, so it’s no different than like a credit card.
Brian Mueller:
Exactly. So we work with a Tucson Old Pueblo Credit Union just because they do a good job. They’re local. People can call, people can go into a branch. They can do everything online. We do offer financing through them. That’s one of those things where not a lot of our customers actually finance systems. I’d say about 85% are paying cash.
Tyler Ford:
Right.
Brian Mueller:
But there’s that option for people that want to finance.
Tyler Ford:
Okay. I mean, I would encourage people to really look at a lease, try to avoid a lease situation, pay for it in cash. If they can’t, then get it financed so they actually own it.
Brian Mueller:
Yeah.
Tyler Ford:
That to me is the right way.
Brian Mueller:
Absolutely. And all of these solar financing companies, there’s no prepayment penalties.
So if you even have a 10-year loan on a solar system and you pay it off in five, there is no pre-payment, just like paying down principal on your mortgage.
Tyler Ford:
Got it.
Brian Mueller:
A lot of these companies that offer solar financing, there is no prepayment penalty. But that’s another thing to check into if you’re looking at purchasing and financing a solar system as well.
Solar Installation Process
Tyler Ford:
Cool. Great information. Now, I want to just kind of jump over and explain the process. We just went through it.
Brian Mueller:
Yeah.
Tyler Ford:
It was a seamless process, other than you guys are super busy right now. So if it’s something you’re thinking about doing, you want to start the process now because there’s so much demand going on right now that it takes a little bit of time so you want to get on the schedule. So from start to finish, talk about the process of getting a solar system installed through Net Zero.
Brian Mueller:
Well, really what we do is we’re a face-to-face company. And even with COVID, we’re going out to see people. Obviously, we’re meeting at socially safe distances and we’re wearing mask and working with potential client’s comfort levels. But we still like to be on site so we can do an evaluation of the electrical service, look at the roof, do an inspection there, put a tape measure on the roof space, get measurements. Those meetings normally take about an hour. Proposals are usually turned around within 48 hours of going to visit a customer. And then, as far as if the customer’s ready to move forward, contract is going out by a DocuSign. Once that contract is signed, interconnection paperwork is then filled out, and then basically we’re scheduling a date on our calendar. We’re currently booked into the first week in July, which is pretty typical for most good local solar businesses, they’re booked out of ways.
But the process, as far as installation process, like most jobs are going to be between one and three days from start to finish when it comes to the actual installation. Then the jurisdiction, either the city or the County is going to come out and inspect the following business day and then the next seven to 10 business days, Tucson Electric Power or the utility that you’re in would come out and inspect that system and pass. It could actually be activated from that standpoint.
Tyler Ford:
Mm-hmm (affirmative). Okay. So that’s exactly how it went for our process.
Brian Mueller:
Yeah.
Tyler Ford:
Took a little bit of time, but it was worth the wait.
Brian Mueller:
Right.
Solar Economics In Terms Of Savings and Breakeven
Tyler Ford:
Appreciate that. So, the next question is just kind of talk about the economics in terms of savings, what people can expect. Break even, that’s kind of what I always struggled with. But for us it was more of just kind of a feel good, get our expenses down. We were willing to put the money up front. Breakeven is out some time, but talk about just the monthly type of savings that somebody could expect based on installing solar right out of the gate and then kind of break even over time.
Brian Mueller:
Right. So really, as policies have changed so has sizing of solar systems, or at least they should have changed. Within Tucson Electric Power, we’re in a mechanism now called net billing. What that means is every kilowatt hour of solar system produces that isn’t self-consumed, that energy is exported back to the grid and Tucson Electric Power is giving that customer currently an 8.68 cent credit for every kilowatt hour you push out to the grid.
Brian Mueller:
The important thing to keep in mind is when you’re buying energy from Tucson Electric Power, with all taxes and everything else, you’re paying about 11.5 cents for every kilowatt hour. When you’re exporting energy under this current net billing mechanism, you’re basically getting 75 cents for every dollar worth of exported energy. You don’t want to overbuild a solar system because that just means you’re exporting more energy, especially in the shoulder months when you’re not using air conditioning, heating, some bigger electrical load.
Tyler Ford:
Mm-hmm (affirmative).
Brian Mueller:
And you don’t want to be exporting a ton of energy at 75 cents on the dollar because the economics of that just don’t work out. But if a system is properly sized and we’re really digging into household’s consumption data to figure out how and when they consume energy which really helps us with sizing of the solar system, but with all that data, we’re looking at ROI and very fruitful ROIs between eight and 10 years depending on the size of the system and complexity of installation. So still sub, 10 year ROIs on a solar system under the current policies.
Tyler Ford:
Okay. And talk about just like monthly savings, what somebody could expect what their bill. Once they get it installed, what does their bill look like and their monthly variable or fixed cost on their home expenses in terms of utilities? I mean, the monthly savings is immediate, but it does have a breakeven period as you just said.
Brian Mueller:
Absolutely. And as far as those monthly savings go, they really vary fairly [inaudible 00:15:59], depending on what appliances in the home or gas and what are electric. If you live in an all electric home, you’re going to see some greater savings because you’re going to have multiple peaks in your consumption.
Tyler Ford:
Mm-hmm (affirmative).
Brian Mueller:
But most homes in Tucson are heated with gas and cooled with electricity. And what we’re going to see is those big months, June, July, August, September, you’re going to see that electric bill in a properly designed system may be offset between in 60% in those summer months. And then in the fall, winter and the spring, see greater offsets. In some months, you may even see some credits, small credits where your solar system is paying for all of your energy as well as offsetting your standard connection to the grid charge. But you’re going to see much lower bills in the fall, winter and spring months if you’re heating your home with gas.
Brian Mueller:
Our goal is to really kind of trim those bills down in the summer months. And then in the fall, winter, and spring months, you’re going to see much, much lower bills. But in all honesty, when it comes to solar, getting to a true net zero unfortunately is not really a reality any longer with these policies.
Tyler Ford:
Well, I like your name, and now I just understood it.
Brian Mueller:
I know.
Tyler Ford:
I never really understood it, but now I get it. The goal is to get-
Brian Mueller:
Yeah, that used to be our goal.
Tyler Ford:
Okay. The goal is to get to net zero. Okay. The light just came on. I get it.
Brian Mueller:
Yeah, changing our name to Net 75 Solar doesn’t make a lot of sense marketing wise. So it’s not an area I don’t think that the other is going to choose to do.
Tyler Ford:
Oh, I like that. You just said the monthly cost for the meter, there is just a monthly minimum to TEP.
Brian Mueller:
There is, yes.
Tyler Ford:
What is that?
Brian Mueller:
You’re looking at about $25 a month once you have a solar system installed. But that’s what you’re going to have to pay to Tucson Electric Power even if you didn’t use any energy. Sometimes the connection fee can be offset just due to exporting excess kilowatt hour [crosstalk 00:17:54].
Tyler Ford:
Got it. So if you’re out of town on vacation, not using anything-
Brian Mueller:
You got it. Yeah.
Tyler Ford:
I mean, it’s basically what you’re putting in is going to offset what your monthly is-
Brian Mueller:
Exactly.
Tyler Ford:
… if you decide that you’re a winter visitor or you take off for a couple of months. At that point, it really makes sense.
Brian Mueller:
You got it. If you’re a winter visitor and you’re gone in the summer months, you’re going to come and have some credits on your electric bill for sure.
Net Zero Contact Information
Tyler Ford:
Cool. Well, cool. We’re going to keep it short and sweet. If somebody wanted to get ahold of Net Zero to have you come out and you’re one of the guys that would come out and give them an estimate, Brian, how could they get home?
Brian Mueller:
Best way to get in touch with me is either call. Zip me an email at Brian, B-R-I-A-N, @netzerosolar.net.
Tyler Ford:
Okay. And then do you guys have a website they can go to as well?
Brian Mueller:
We do. It’s netzerosolar.net. The .net is the most important thing there.
Tyler Ford:
Got it. And you guys are locally owned. You’re a Tucson company. You’ve been at it for a long time. You know what you’re doing. You’re not going to be dealing with somebody in a different state.
Brian Mueller:
No, no subcontracting. All the employees that are onsite are full-time W-2 employees of Net Zero.
We’re a local business, been in business since 2008. We’re here to kind of help people navigate this process with honesty and transparency. It’s just kind of our goal.
Tyler Ford:
Awesome. So I just thought of one other thing I’d like to bring up even though we’re coming to the end of this just because it is an issue. For people that have solar that are leased, when you go sell a home, you’ve got the leasing company that you have to deal with.
There’s a lot of verification and paperwork for the title company to get. I’ve had three closings in the last three months where we don’t get that information and it holds buyer and seller hostage, where they’re not able to close because they can’t get the information from the leasing company. And there’s drawing a blank on the name, but the nice thing about owning outright is you don’t have to deal with any of that when you go to sell or even when you’re financing it, you don’t have to deal with any of that when you go sell.
Brian Mueller:
Yeah.
Tyler Ford:
I think the big takeaways I’m getting is, number one, make sure you got a roof that doesn’t need to be replaced or need work. If so, get it done before you put solar on. And number two, if you’re leasing, really look at that lease. And try to do everything to avoid a lease, get into more of owning it outright through cash or getting it financed which is similar to lease, but you own it and you’ve got more control and it’s yours and you’re building equity.
Brian Mueller:
Absolutely.
Tyler Ford:
I mean, to me, that’s the big take away.
Brian Mueller:
Yeah. You need a job?
Tyler Ford:
Yeah. Did I miss anything?
Brian Mueller:
No, you got it. You’re ready to roll.
Tyler Ford:
Okay.
Brian Mueller:
Let’s go out tomorrow.
Tyler Ford:
Well, we’re on, man. No, I appreciate you. And again, if anybody’s interested, reach out to Brian at Net Zero. They did an awesome job. Shameless plug, Brian and I grew up together. He’s an honest, great guy. They’ll treat you right. And really appreciate it, Brian.
Brian Mueller:
Thanks for the opportunity, Tyler. I’ll see you soon on the bike.
Closing: FREE Moving Truck
Tyler Ford:
Hope you enjoyed that interview with Brian and learned a little bit about solar especially if you’re buying or selling, and kind of the do’s and don’ts of solar.
One thing, when working with us, something to keep in mind. If you use us to buy or sell a home, you’re more than welcome to use our moving truck. We’ve got a 16 foot box moving truck for our clients.
And if you need help with any real estate needs, we’d love to help you out. If you enjoyed this video pound that like button, subscribe, comment, love to hear your thoughts.
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