In this podcast, Brian Sadler, VP of Solaris Renewables, and Spencer Killette of Maxeon Solar Technologies talk about the cost and benefits of solar power. They explain why people install these energy efficient solutions, and then, they explain how financing and tax credits can help reduce the cost.
John Maher: Hi, I’m John Maher. I’m here today with Brian Sadler, Vice President at Solaris Renewables, a solar company designing, installing, and servicing solar systems in Massachusetts, Southern New Hampshire, and Maine. Welcome, Brian.
Brian Sadler: Thanks, John. Good to see you today.
John: Yeah, thank you. And our special guest today is Spencer Killette, North American Director of Sales for Maxeon Solar Technologies. Welcome, Spencer.
Spencer Killette: Hey guys, thanks for having me.
Benefits of Solar Power
John: Absolutely. So Brian, we’ll start with you. Today we’re talking about the costs and benefits of solar power, and I want to ask you if you could give us a little bit of an overview of the benefits of solar energy, particularly in terms of cost savings and environmental impact.
Brian: Yeah, absolutely. I think on a basic level, these systems make electricity. So in all cases, what we’re trying to do is help the end user, be it homeowner or business owner, save money on their utility bills, on their electric usage. So certainly they’re going to be able to do that by creating that electricity and being able to offset their uses, just a matter of how each individual site works. But essentially there’s also — that’s the bottom line, right? — saving money.
And then there’s also the environmental impact of allowing folks to offset their carbon footprint and make an impact. Some folks are more motivated by that environmental factor than others are. I know, for our family, when we went solar, we were just interested in the technology and the environmental impact more so than the savings, being that we didn’t have much of an electric bill and that wasn’t hurting us, we just thought it was the right thing to do.
But for most folks, the bottom line is a major player, and in all cases that the site is viable, which is typically when folks are saying, “I have sun on my property, and how can I harness the sun to save some money?”, it’s a no-brainer, right? So yeah, I think that there’s an obvious benefit there for folks to take advantage of that.
Inflation Reduction Act — Impact on Solar Costs
John: Right. Has the Inflation Reduction Act of 2022 had any impact on the cost of solar?
Brian: Yeah, it’s been dramatic. In fact, the federal tax credit, which was set back in…I think it was the mid 2000s when it began at 30% of a credit on the gross cost of the system, that helps offset that investment obviously, that was declining in recent years. And then through the prior…I think it was the Obama administration that extended it. I believe it might’ve got extended twice at that time, but it had a decline. So it went from 30 to 26 to 22, and it was slated to go away, and then it was brought back with the IRA to the full 30%, which is a game changer.
It’s a game changer for anyone that’s looking to invest in solar and also the industry as a whole to allow us to keep driving along and helping folks to save money and make a dramatic environmental impact. There are several other pieces. It’s a pretty deep piece of legislation.
There’s some additional adders that primarily commercial projects can take advantage of with domestic content, prevailing wage labor, and then also looking at other energy efficiency pieces that supplement or work nicely with solar. So in all, I would say it’s a massive piece of what’s going to continue to drive the technology to help us move away from conventional fuels and fossil fuels and make a real difference for our country and give us some energy independence and security.
30% Tax Credit for Solar Systems
Spencer: Yeah, the only other thing I would say is, I totally agree, the solar portion of the Inflation Reduction Act was very meaningful. It’s hundreds of millions of dollars invested in solar in this country over the next decade, so very exciting.
And then just to tack onto what Brian said about the ITC, the Investment Tax Credit for solar systems, I think it was an extremely timely upgrade from 22% to the original 30%. It’s a wonderful opportunity to get something out of the free sunlight that’s pouring down on your property all day, every day, forever.
But it has to be affordable for homeowners to go solar for it to make sense to them. And as costs in general have come up, as we’ve experienced inflation here in this country for the last couple of years with the inflation reduction, or excuse me, with the ITC coming down, it made for, for a short period of time, more expensive solar for the consumer. So the 30% being reinstated really helps to fight a lot of the cost increases that we’ve experienced with inflation over the last couple years.
Brian: Great point, Spencer. Yeah, thank you.
Factors to Consider About Installation Costs
John: Yeah. So when it comes to installing solar panels, obviously there’s a cost associated with that, Brian. What are some of the factors that people should consider when they’re considering installing solar panels when it comes to installation costs?
Brian: Yeah, great question. I think primarily to Spencer’s point that he just made is that there was a line there where solar was becoming more expensive due to the reduction in income tax credit, as well as we’re seeing the Fed continually increase rates to try to control that inflation as well. So the dollar’s not going as far as it once did.
So I think one thing is can folks take advantage of that income tax credit, right? That’s a huge piece that’s going to pay for almost a third of the cost of the system alone and have a faster return for that investment. And so most folks that are paying taxes are going to be able to take advantage of that, but they want to take a look, talk to their tax professional and make sure that their tax liability lines up with what that tax credit is going to be. And they can leverage it as much as possible that first year because you can carry it over for subsequent years, which is a huge piece as well.
Roof Replacement Costs (If Applicable)
And then some other points is that the age and condition of your roof need to be considered. There are potentially some benefits in going solar for investing in a new roof with the income tax credit as well. And that’s again, something that you need to consult your tax professional with, but there’s some additional benefits there.
If this system’s going to last for the next 40 plus years, let’s set it and forget it and not have to worry about the roof, and their current electrical system is something else we want to look at. And that’s generally speaking, a non-issue, but as code continues to change, especially here in Massachusetts, it tends to be on the forefront of adopting the newest and latest and greatest code.
So those are all things that we take care of on every project and are going to help guide the customer through that, but we want to make sure that their investment is protected. So those are a couple of pieces I think that they would initially want to look at. And then we’re going to be there to guide customers through the educational piece, the latest and greatest on incentives, technology, and how the system’s going to work for them.
Financing Options for Solar Panels
John: What about financing options? Is that an important consideration as well for customers who are installing solar panels?
Brian: Absolutely. I mean, we do take checks, but I guess the industry has matured a great deal in the last decade in particular. I think part of it’s through a financial mechanism that was, I’ll call it the PPA or power purchase agreement, and leasing really opened up a lot of opportunities for everyone to go solar. And then other financial institutions saw that, “hey, there’s a huge opportunity here” and jumped on. And so there’s been a lot of new businesses or businesses transforming themselves into servicing the solar industry for financing.
So there’s really a lot of unique products that are tailored specifically for solar and even in individual markets where they might work slightly differently, might be a different rebate or incentive available. And those financial mechanisms have mechanisms for those different incentives and rebates, things like that.
Financing Allows More People to Invest in Solar
Spencer: Yeah, I would only add that I completely agree, loans and leases have really accelerated the growth of and been the foundation for growth, the meteoric sort of growth that we’ve seen in this industry year over year because they have allowed a huge set of customers who either don’t have the cash on hand to outlay all everything up front.
When you think about it, with the solar system, you’re essentially paying for a good chunk of, if not all of, your energy for the next 25, or with the Maxeon system, 40 years upfront. And so if you think about your own utility bill, maybe it’s a couple hundred bucks a month, that’s not a whole lot.
If you add up 200 times 12 times 25 or times 40, that’s a pretty big number. And so there are a lot of folks who were very interested in going solar who simply could not afford to pay cash or were unwilling to with that amount of money, said, “Hey, prepay my energy for 40 years. I might only be in this house for 10 or 12,” something like that.
So loans and leases have provided an avenue for those types of customers who now can say, “Oh, well, instead of paying the $200, let’s say to the utility company every month I’ll pay 175,” or 210 or whatever the case may be to a loan for my solar system. Or maybe I’m willing to pay a little bit more than my current power bill because I want to pay this thing off in 10 years instead of 12 or 20 or 25. So there are lots of options for every customer in terms of financing. And to Brian’s point, cash is still an option as well. But I think the array of options have really, again, provided a great foundation for growth for this part of the industry.
Brian: It’s huge. I mean, it makes it so much more accessible. It’s low or no money down to access solar at this point, so I think it’s been a huge piece to the industry and to individuals being able to access savings by controlling their own power.
Benefits of Maxeon Solar Panels
John: So Spencer, you alluded to this a little bit as well, in terms of the solar panels and their longevity and durability, that would play a factor in the cost of solar as well. If a panel only lasts 25 years versus 40 years, that’s going to make a huge difference.
Talk a little bit about Maxeon solar panels in particular and a little bit about their longevity, durability, and the maintenance that may be required to keep them working properly over the lifespan of the panels and what that means in terms of overall cost.
Highest Efficiency Modules
Spencer: Yeah, absolutely. So without going too terribly deep into it, I’ll highlight our technological advantage and differentiation. So Maxeon makes the highest efficiency modules on the market, and that just means we convert the largest percentage of sunlight hitting the panel into energy that can be used in the home. We do that by way of our proprietary cell technology. It’s called IBC or Interdigitated Back Contact.
And the simple way to think about that is it is a cell that uses the highest grade silicon available. And instead of having the conductive elements, which are called busbars, on the front of the cell in a grid, we actually put a structural copper plate on the back of the cell. And then instead of having just a few thin connections between each cell, we have a solid connection that runs the length of the cell. It has redundant energy connections, and then it’s got a strain relief built in.
Durable, Reliable, and Efficient
So that allows the panels to just be more durable and to react better to weather and geographical factors. So it builds in their ability to flex and extend when it gets hotter during the day, colder during the night, stuff like that. So a very high efficiency panel, very durable and reliable.
And because we’ve been doing this for so long, so Maxeon and SunPower have been in business for over 37 years, we’ve produced over 50 million modules. We’ve got a lot of empirical data to show us that the performance of our modules is really superior to what you typically find on the market. They’re extremely reliable. They produce a lot of energy every year for the life of the system.
And because of that, we’re able to wrap them in a 40-year warranty, which is the longest warranty in the industry. We actually warrantied them to work at over 88% of their day one capacity in year 40.
And that is, I don’t know any other product in the world that is warrantied to perform like that in year 40. So the industry standard is 25 now. It didn’t always used to be that way, but it’s 25 years now and we’re offering the only 40-year warranty. A lot of panel manufacturers will talk about a 28 or 30-year useful life, whereas ours is clearly in excess of 40 with that robust warranty.
Now, in terms of maintenance, there’s very, very little to do. I think Brian likes to use the term, he says “set it and forget it”. I think that’s an old saying, but that’s essentially what you want to do.
Set It and Forget It
I mean, I think if you’re new to solar, you’re considering going solar, meaning you’re diverting your energy spend from your utility to a solar system of your own, you want it to be easy, because the utility company may annoy you with fees and upcharges and that kind of stuff and increasing rates and everything, but it’s easy.
John: Constant rising rates, right.
Spencer: That’s right. But they are reliable and easy. You don’t think about energy coming into your home a whole lot from the utility, and you want the same thing to be true of your solar system. So in terms of maintenance, there is very little, virtually nothing to be done from a panel standpoint. You can wash your panels if you like, but our top track recommendation on that front is the best panel watcher in the world is God. Let it rain on those panels and they’ll be just fine for 40 years.
Brian: Yeah, absolutely. I know as an installer, we are not servicing Maxeon panels, for instance, right? So there’s just no maintenance there. There’s no moving parts. And because of all the technology that Spencer has pointed to, there’s really no failure points. And we do have to service electronics from time to time that supports the panels and helps that interaction of that energy from the panels to our homes or our businesses. But in terms of the panels themselves, there’s really, there’s no maintenance to be had.
John: Unlike my furnace where I have to service it every spring and fall or going into the winter season or something like that, I have to get somebody to come out and service it every year. You don’t have to do that with the panels.
Maxeon Solar Panels and Sustainability
John: Spencer, one of the main benefits of solar energy is the positive impact that it has on the environment. And Brian alluded to this a little bit earlier where he mentioned that that might be a factor for a lot of people. Some people might be just looking at the bottom line, but for a lot of people, we do want to make sure that we’re impacting the environment in a positive way and cutting our carbon emissions, etc.
Can you talk a little bit more about Maxeon solar panels and how they’re contributing to reducing carbon emissions and promoting sustainability?
Spencer: Yeah, absolutely. So first of all, I’ll just say that Maxeon or any other manufacturer, if you were a homeowner who goes solar, you’ve done a good thing for the environment. You are generating your own clean power from the sunlight that I mentioned earlier that pours all onto your roof and lawn every day that was previously going unused. So all solar is good for the environment.
One of 100 Most Sustainable Companies in the World
That said, some manufacturers are more focused on their environmental impact than others, and we may be by some measure, certainly the most focused on ESG, or our environmental impact, of any manufacturer in the space. We were actually just named one of the 100 most sustainable companies in the world by a group called Corporate Knights, which was a great honor.
First Certified Net-Zero Factory in Mexico
And just a couple of little anecdotes about why we got that distinction. All of the modules that are sold into the United States are built in a factory in Mexico. That factory was actually the first certified net-zero factory in Mexico of any kind, and we’ve worked very hard to reduce our energy use and offset it with generating our own clean power at that factory.
Less Than a Year of Production, Covers Energy Used to Manufacture Panels
The other thing to mention is solar panels typically take about two years to generate the energy that it took to manufacture them. So every panel has to be made in the factory. Factories need energy to run so every panel comes at a cost, however small, to actually produce it, right? And so most panels take two years to produce enough energy to offset what it took for them to be produced.
Our panels do that same thing in a little bit less than half that amount of time, so just under a year. And again, that’s through efforts to reduce our energy use at the factories, as well as our advantage in efficiency — we’re creating more energy from the same footprint as any other module in the market.
Brian: That’s impressive.
John: All right. Well, that’s really great information. Spencer Killette from Maxeon Solar Technologies, thanks again for joining us today.
Spencer: Absolutely. Thanks for having me, guys.
Contact Solaris Renewables to Learn More
John: And thanks as always to Brian Sadler from Solaris Renewables. Thanks for speaking with me today, Brian.
Brian: Absolutely, thank you.
John: And for more information about Solaris Renewables or Maxeon solar panels, you can visit the Solaris Renewables website at solarisrenewables.com or call 781-270-6555.