Are Solar Panels Worth It in Oregon?

7 factors to consider before going solar in Oregon

ConsumerAffairs has heard from thousands of solar customers who have already gone through the installation process. It’s generally worth it if you like the idea of lowering your monthly utility bills, helping the environment and gaining more energy independence. But it doesn’t work out for everyone. Here’s what to consider before making the switch.

1. Solar panel installation costs

2. Your energy consumption

3. Oregon solar incentives

4. Net metering buyback rates

5. How long you live in your house

6. How you pay

7. The solar company you hire

1. Solar panel installation costs: $10,000 to $30,000

Average solar panel costs in Oregon are comparable to the national average. Residential systems generally range from $13,733 to $27,466 before considering any financial incentives.

Most installers set the price according to the system's wattage, with a typical cost between $2.50 and $5 per watt. In Oregon, the average cost per watt is only $2.75.

Comparing cost per watt is a little like looking at the price per square foot when you buy a house. It helps you compare the value of solar energy systems in different sizes.

Solar panel costs by system size in Oregon

2. Your current energy consumption

The average Oregon household needs a system with a capacity of 5.9 kW to offset its electricity needs with solar energy. You might need a larger or smaller system, depending on your current energy consumption.

Look at your most recent utility bills to see how much electricity your house needs each month. This tells you what size and capacity your solar system needs to be.

Once you know your current energy consumption, you can calculate your potential savings and the time it should take for your solar installation to pay for itself. In Oregon, the average payback period is 12.77 years.

3. Oregon solar incentives: tax credits and rebates

The 30% federal residential solar tax credit has expired, but Oregon still offers several ways to lower solar costs. Programs vary by utility and location, and funding is limited.

• State rebate: The Oregon Solar + Storage Rebate Program offers up to $5,000 for solar and $2,500 for batteries, with larger benefits for some income-qualified households.

• Utility rebates: Salem Electric, Central Lincoln PUD, EWEB and other utilities offer additional solar incentives.

• Solar Within Reach: Some lower-income PGE and Pacific Power customers may qualify for larger solar and battery rebates.

• Property tax break: Adding qualifying solar generally won’t increase your property taxes.

» MORE: Solar incentives in Oregon

4. Net metering in Oregon: retail rates

Net metering lets Oregon homeowners earn bill credits for extra solar power sent to the grid. Those credits are generally based on the retail electricity rate and can roll over from month to month.

Any credits left at the end of the annual cycle usually expire or go toward utility assistance programs instead of being paid out.

Did you know? Renewable Energy Certificates (RECs) are separate from net metering credits. They track the environmental value of the solar energy your system produces.

5. How long you plan to stay in your house

Solar panels typically pay for themselves within 12.77 years in Oregon. If you sell your house and move before then, you might not fully realize the financial benefits of your solar investment.

A Zillow study found that, on average, houses with solar panels sell for 4.1% more. Let’s say you spend $25,000 putting solar panels on a house that costs $400,000. It might sell for $16,400 more in a few years, according to Zillow, but you miss out on some of that $50,441 in total avoided utility costs over 25 years.

In other words, don't get solar panels just because you want to sell your house soon. Instead, consider a home improvement project with a better return on investment, like remodeling the bathroom or kitchen.

6. How you pay

If you can, it’s often financially strategic to pay for the whole thing upfront. Of course, paying cash is not always an option. That’s when loans, leases and other agreements come into play.

• Solar loan: Solar loans work like any other type of loan. They have relatively low fixed interest rates. Once you pay it off, you own your system outright.

• Leasing options: Leasing panels is one way to get the benefits of solar energy without the high upfront cost. A solar lease works like a car lease — you get to use the panels but don’t own them. Leasing can be good if you have limited savings. Solar lease agreements typically last 20 to 25 years.

• Power purchase agreement: Similar to leasing, a power purchase agreement (PPA) lets homeowners install solar panels without the upfront costs. You sign a long-term contract with a solar services provider to purchase the electricity generated by the panels at a predetermined rate. The provider owns and maintains the panels throughout the agreement, which usually lasts 10 to 25 years.

7. The solar company you hire

People have had mixed experiences with solar companies. In the best-case scenario, it’s easy and you’re happy with the system’s performance. In the worst-case scenario, you end up paying thousands for mid-tier solar equipment from a company with poor customer service and no follow-up or support.

One of the most common complaints is related to pushy sales reps who make promises that can’t be delivered.

That’s why it’s so important to thoroughly research and verify claims made by sales teams before making a decision. Project Sunroof is a free solar savings estimator powered by Google Earth imagery.

Is your house a good candidate for solar panels?

Going solar ends up being worth it for many homeowners as long as their house is a good candidate to support a solar panel installation. Here’s what to think about before you commit:

• How old are your appliances? The first step is to ensure that your electrical loads are as small as possible. If you have an older refrigerator or air conditioning unit, for instance, it's smart to upgrade those before investing in solar panels. That way, you can get a smaller system, which will be cheaper overall.
• How much sunlight do you get? Solar panels need regular exposure to sunlight to produce the most energy possible. Oregon averages three to five peak sun hours each day. However, lots of shading — like trees or tall buildings above your roof — could make your solar system less efficient.
• What is the size and angle of your roof? Oregon (and the rest of the United States) is in the northern hemisphere, so solar panels perform best on south-facing roofs. The worst place to install would be on north-facing roofs, especially if those roofs have a high pitch. For example, if the only place you can install is a north-facing roof with a 30-degree pitch, your costs will likely go up by 30% to 40%.
• What is the condition of your roof? If you have to replace your roof, do that before you install solar panels. Solar panels are designed to last up to 30 years, so you want your roof to last just as long. Otherwise, it could cost thousands to remove the panels, fix your roof and reinstall the panels again.

Pros and cons of solar panels in Oregon

It’s a common misconception that solar panels will completely eliminate your monthly power bill — this is not always the case. Still, you’ll likely be paying much less than you would for traditional utility bills.

Benefits of solar panels in Oregon

Solar panels have an amazing value, according to Melanie in Beaverton. “You will see your utility drop to either zero or significantly lower,” she said.

Another resident, Robin in Portland, said it took a while to get started (“because I live in a three-story condo, so that required a manlift”). But now, when Robin's panels generate enough power, their power bill is around $13 a month, although it goes back up in the colder months.

• Better for the environment: Traditional energy sources like coal and natural gas release carbon dioxide and other harmful pollutants into the air. Solar panels generate electricity from sunlight, a clean and renewable energy source. Installing solar panels on your roof helps the environment primarily by reducing greenhouse gas emissions and dependence on fossil fuels.

• Higher home resale value: Installing solar panels can significantly increase a home's value. According to the study mentioned above, houses with solar panels sell for 4.1% more on average. The exact increase in value varies by location, with homes in active solar markets sometimes seeing even higher boosts.

• Cheaper energy bills: The average homeowner in Oregon uses a lot of power, which adds up to a lot of savings when you switch to solar. Many residents are happy to see their electric bills fall after switching to solar power. Going solar now means that your monthly energy expenses will be more predictable (and very often significantly lower). It also protects you from future energy cost increases.

Drawbacks of solar panels in Oregon

The main obstacle to going solar is the high upfront cost of purchasing and installing solar panels, inverters and other equipment. Then, since solar panels do not generate electricity at night, you need to pull power from the grid or get a storage battery to keep your lights on.

• Solar equipment is expensive: Even with rebates and other financial incentives, the price typically starts between $10,000 and $30,000. It’s even more expensive if you want a solar battery for energy storage. Solar battery costs are generally between $7,000 and $18,000. Getting a solar battery might be strategic if net billing rates continue to decline in Oregon. That way, you can store energy at home instead of tapping into the local grid when you need to.

• Potential roof leaks: The installation process involves drilling holes into the roof to anchor the panel mounting systems. If not done correctly, this can lead to leaks or structural damage.

• Energy production varies: Solar panels are dependent on weather conditions and seasonality. Solar panels still work on cloudy days, but less available sunlight does affect how efficiently they produce energy. Snow cover may also temporarily reduce efficiency until it's removed or melts off.

» MORE: Solar energy pros and cons

Find solar companies in Oregon

A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for the top solar companies in Oregon to learn more.

FAQ

Bottom line: Is going solar in Oregon worth it for you?

Going solar in the Beaver State might be easier than you think. For a lot of homeowners, it ends up being worth it as long as their cost savings over time outweigh the initial investment. Others are happy to go solar for the environmental benefits alone.

Given the rising energy costs in Oregon and elsewhere, financing solar panels makes sense as long as your monthly loan payment is less than what you would be paying the utility company anyway. Solar panels essentially generate free electricity once the initial installation costs are paid for.

Solar costs vs. savings: Oregon and nearby states