Project Assessment

Before we begin, it's important to confirm that both your property and objectives can be met by installing a new power system. Our initial assessment will help determine if your goals are compatible with your property's conditions and the existing electrical utility rates.

Being well-informed about the options and caveats will help determine which type of power system is right for you. Check out the resources on our website to do an initial self-assessment, then provide some information using our project form so we can qualify the project and provide tailored recommendations.

Determining the feasibility of a solar power project (a.k.a. "qualifying a project") considers the following factors:

1. Goals & Objectives: Solar power is increasingly integrated with battery systems to provide more functional and dependable backup power and energy independence than backup generators can offer. Reduced bills are a benefit, with the expectation of a swift payback becoming less central.

2. Utility Rates: Familiarity with applicable utility rates helps determine when solar offers savings on energy charges and when batteries can reduce demand charges.

3. Location and Shade-Free Area: Solar panels should be installed in a mostly south-facing location, free of shade from trees, structures, or terrain, to maximize performance.

4. Solar Capacity and Roof Suitability: Larger roofs on high-energy-use homes benefit most.

5. Project Complexity and Feasibility: Installing solar systems varies in complexity, and feasibility is affected by the building layout, roof type and slope (for roof-mounts), the existing electrical system, and other factors that influence a project's cost-effectiveness.

6. Financial Expectations for Solar Investments: An investment in solar sometimes assumes that power bill savings will equal the investment's cost within the system's lifetime.

Tailored Assessment

BH Solar will assess every project to ensure that a solar power system is the right fit for your property and goals:

Location: Solar panels must be placed in a shade-free, southern-facing location. The shade of a tree (or terrain, buildings, utility poles, chimneys, etc.) across a solar panel causes a significant performance loss. In some cases, trees need to be removed for acceptable solar performance.

Utility Rates: We are familiar with the electric utilities in the Black Hills, their services and rates, and the situations in which solar power is more or less favorable for achieving specific goals. When approaching solar with the primary goal of bill reduction, here's what you need to know:

• Net metering is not offered in South Dakota. The compensation structure is net billing, which differs from net metering. Net metering credits equal the retail electricity rate (what you, as a utility customer, pay for electricity). In contrast, net billing credits equal the wholesale rate (what your utility company pays for electricity).

• The benefit of solar panels equates to the cost of the utility power it displaces, with savings limited to the energy charge (kWh) portion of the power bill. The higher the utility rate, the greater the benefit solar panels provide.

• Since excess solar power that backfeeds the grid is valued only at an avoided-cost rate, this limits the benefit of oversized systems. Avoided cost credits are only 15-20% of the retail rate. To limit excess solar power going to the grid and use it directly, a battery system is necessary.

• Demand charges, which are unaffected by solar, require solutions such as battery systems or smart breaker panels to be reduced. This is particularly the case when connected to Black Hills Electric Cooperative.

• Compatibility with special utility rate (such as submeters, e.g., heat meters and EV charging) may not be eligible. Submeter eligibility may be lost when introducing solar or battery systems, depending on the utility.

From a functional standpoint, such as backup power, solar and battery systems will still lower utility costs, though the reduction might be less than anticipated when evaluated solely from an investment or payback perspective.

Financial Expectation: When solar power is approached with the expectation of lower power bills, the system's eventual payback through those savings can vary significantly. The estimation of payback will be influenced by factors such as location quality, times of energy use (night vs. day), system size, ease or complexity of the installation, and utility rates.

Battery systems offer other financial benefits via additional features (such as backup power for refrigeration, security, etc.) and reduced demand charges (where applicable) on utility bills.

In terms of ROI, every situation will be unique due to factors including:

• The utility rates;

• The size of the system (economies of scale favor larger systems);

• The usage of large appliances (space heating, HVAC, and EV charging);

• When the occupants use energy most (during the day or night) and seasonal variance;

• Whether or not a battery system is included.

Solar Capacity: The capacity of the system (or the 'size' of the system) will also contribute to site qualification. Homes with large roofs and relatively high energy usage more easily qualify, as they can benefit most from the economy of scale. On the other hand, homes with very limited usable roof space for solar panels, especially complex hipped roofs, may offer limited solar potential.

Complexity: Our team is experienced in installing solar power systems in various situations, including very large off-grid power systems and steep roofs. In some cases, the complexity of a project and increased installation costs might outweigh the benefits. Factors including the characteristics of the building or roof, the existing electrical system, or the terrain available for ground mounting may significantly impact the feasibility and cost-effectiveness of a project. If we believe that the costs may outweigh the benefits, we will let you know if we think it is reasonable or not to move forward. In some cases, we may decline a project due to excessive complexity if we do not believe could produce a desirable outcome. Thankfully, these situations are rare, and we are experienced in addressing highly complex scenarios.

Best versus Worst-Case Scenarios for Solar

Best case: There are several applications for which solar is especially favorable. Some of these include:

• Air-conditioning - cooling is needed most as the sun shines.

• Good solar resource - when an unshaded roof of 5:12 to 9:12 pitch faces directly south.

• EV-charging - when the vehicle is parked at home during the daytime at least a few days per week.

• Backup power is desirable - when a superior backup power system is desired for continuous, seamless, and quiet backup power with batteries instead of a generator.

• Retirees and working from home - energy is used most during the daytime when the home is occupied.

• Commercial - where most activity and energy use happens during the daytime.

• Energy intensive - larger homes or wherever there is higher than average energy use during the daytime.

Unfavorable: There are also some situations where solar cannot perform well or meet expectations, making a project hard to qualify:

• Poor solar resource - in forests, canyons, or other shaded areas, including when tall pipes and chimneys cast shadows that would significantly limit solar power production.

• For electric heat, most heating occurs when there is the least sunlight.

• Where heat meters are installed - sub-metered electric heat offers discounts that are not eligible when solar power is on site.

• Peak demand rates: Reduced energy costs lessen power bill reduction by solar panels; instead, batteries offset peak demand charges.

• Complex roofs—Highly complex roofs (hips, valleys, dormers) can limit solar placement, sometimes adding significant challenges for installation.

• Flat roofs—At our latitude, flat roof solar is good in the summer but bad in winter. Flat roofs may also introduce complex engineering challenges. Solar arrays on flat roofs require ongoing maintenance.