According to Freddie Mac’s updated guidelines (effective 08/07/2024), solar panels can increase your home’s value—if you own them. But if your panels are leased or under a PPA, they won’t be included in the appraised value. 

For properties where the homeowner owns the solar panels outright or finances them as a fixture to the property (such as through a loan secured by the property), solar can add value to the home and be considered in the appraisal. 

However, if the solar panels are part of a lease or power purchase agreement (PPA) where the panels are not owned by the homeowner (e.g., financed separately with the panels as collateral), solar does not add to the appraisal value. This is because the panels can be repossessed or are not considered part of the property itself. The appraiser will still comment on the marketability of the home with solar panels, but they won’t include the panels’ value in the appraisal. 

Understanding how solar impacts property value is key when buying or selling a home. Learn more about Freddie Mac’s guidelines on energy-efficient homes and solar panels here.  

PJM Residential Energy Increase: On July 31, 2024, PJM, Ohio’s regional transmission organization, which coordinates the movement of wholesale electricity in all of Ohio, announced that the “cost of capacity” for most of its utilities will increase substantially on June 1, 2025.

What are Capacity Charges?

For electricity to flow and the lights to stay on, the electrical grid must ensure that it has enough supply to meet the demand of all the customers using electricity.  Capacity refers to the amount of electricity the grid needs to meet this “peak” demand and make the grid reliable.

Capacity charges are one component of the energy bill that ensure that the grid remains reliable by meeting customer demand. Recent shifts in the capacity of the PJM grid (due to increasing energy demand, retirement of outdated power plants and a change in how the reliability of different power plants are measured) have led to a major jump in the capacity price when the auction was held at the end of July this year.

What do the Upcoming Changes Look Like?

Many electricity consumers across Ohio have seen jumps in electricity rates over the last 1-2 years. Before now, rates rose steadily between 3-6% a year. But if you’ve been paying attention to your bill, you may have noticed as much as a 30% jump in the price you’re currently paying for electricity. The major jump in capacity pricing that was announced on July 31, 2024, will lead to even more significant increases in the “cost of capacity” moving forward, which will eventually find its way into the electric bills of Ohio consumers.

It is our understanding that retail electricity suppliers—like AEP, AES, Duke Energy, or First Energy, for example—will likely pass these increased costs down to ratepayers through increased tariff charges or electricity rates.  Industry analysts predict that residential customers may see an increase of around 2 cents per kilowatt hour, though the actual change could be slightly more or slightly less.

Timing

Utility companies will begin paying the increased rate starting June 1, 2025.  Rates your utility charges change up to five times per year, depending on utility. Historically these rate changes happen January 1, April 1, June 1, July 1 and October 1.

With numerous variables at play, it’s difficult to pinpoint the exact timing or extent of these rate increases. We also expect that your electricity company will soon start communicating with you when these upcoming rate changes will take place.

PJM Residential Energy Increase

This recent capacity charge change was part of an auction that historically has happened annually and was delayed for 3 years. The next capacity auction will be held again in December 2024, and this future auction will dictate future capacity charge rate changes that will take place beginning June 2026, likely leading to another jump in rates.

Looking at the complete picture, we are beginning to see the cost impacts of what has been a long time coming – the need for infrastructure upgrades, the increased demand for electricity, and the navigation needed to meet the changing market – will come in the form of costs passed down to ratepayers over the next couple of years.

The Solar Solution

Installing a residential or commercial solar energy system is a smart way to hedge against rising utility costs. By installing solar panels, you lock in a rate you’ll pay for that portion of your electricity for the next 25-30 years.

Think about it this way: If you could go back to 2019 and lock in your weekly grocery bill for the next 25-30 years, would you do that? With solar, you’re essentially locking in the rate you pay for electricity – at a known, fixed rate – for the lifetime of the solar PV system.

We’re looking ahead at what will surely be electricity rate increases for utility customers across Ohio. Our recommendation to them: Lock in your electricity prices now by installing onsite solar energy.

On July 31, 2024, PJM, the regional transmission organization responsible for coordinating wholesale electricity movement in Ohio, announced a significant increase in capacity charges that will begin on June 1, 2025. This change will likely lead to rate increases for many customers, which we will discuss in detail in this post.  

What Are Capacity Charges? 

Capacity charges are one component of the energy bill that ensures that the grid remains reliable by meeting customer demand. Recent shifts in the capacity of the PJM grid (due to increasing energy demand, the retirement of outdated power plants, and a change in how the reliability of different power plants is measured) led to a major jump in the capacity price when the auction was held at the end of July this year. The PJM cost of capacity will increase from ~$29/MW-day to $270/MW-day – this 800% capacity charge will affect different customer types in different ways, but the general trend will raise costs. 

PJM Commercial Energy Increase

Commercial electricity consumers in Ohio have already experienced rising rates in the past few years. This increase in capacity charges will likely result in further increases, especially for those with competitive contracts from CRES providers. The exact amount each customer’s bill goes up will vary based on their energy usage patterns and supplier but will likely range between 1-4 cents per kWh. A business with a very steady energy load (such as a factory with a continuous 24-hour process) might see a modest increase of 1.4 cents per kilowatt hour, a company with highly variable demand (such as a welding operation) could experience increases at the higher end of the range. 

Timing and Future Auctions 

These new capacity charges will take effect on June 1, 2025. Though we don’t know about the official timing, businesses should expect to see these increases reflected in their energy bills around that time at the latest. Businesses with a multi-year CRES contract may still be exposed to these rate jumps if their supply contract has a “regulatory change clause” allowing for an adjustment in the long-term rate. While this rate hike is significant by itself, it is likely to be followed by another one, as the next capacity auction is scheduled for December 2024, setting the capacity charge for the year beginning on June 2026. 

The Solar Solution 

For commercial entities, installing an onsite solar energy system is a strategic way to hedge against rising utility costs. By investing in solar, you can lock in a portion of your energy rates for the next 25-30 years, safeguarding your business against future rate hikes.  

If your business could have locked in the cost of materials at 2018 prices for the next 25-30 years – would you have? Going solar represents doing just that – locking in prices for your electric bill.  

As energy costs continue to climb, now is the time to secure your company’s financial future by exploring solar solutions that insulate your organization from this energy volatility. 

Anyone who has lived or is currently living in a homeowner’s association (HOA) community knows of the rules and regulations behind property styles. The HOA rules are in place to keep a neighborhood’s aesthetics standardized in the area. Since 2022, Ohioans have new guidance on how communities governed by HOAs can restrict solar in Ohio. Often, we must work with you and your HOA to learn the standing rules, but ultimately, we often can abide by the rules and get you your beautiful solar panels, too.  

Understanding HOA Restrictions on Solar Installations 

In 2022 after the passing of Senate Bill 61, Solar Companies and members of HOA governed communities celebrated, understanding that SB61 prevented HOAs from creating anti-solar rules. However, the issue is a little more complicated than this. 

Within Ohio, after the passing of SB 61, HOA communities are still able to “establish reasonable restrictions on solar” meaning there is wiggle room.  

Across Ohio, solar panels are allowable unless specifically regulated in the bylaws or deeds for a homeowner’s association. Reaching out to the right solar company will help make the process flow smoothly. Here at Kokosing Solar we have an abundance of amazing team members who are ready to answer your questions. 

Working with and around HOA and Solar 

Does your HOA have solar restrictions already set in place? 

Aesthetics is typically the biggest concern of the HOA. Today, we have options for sleek all black panels with efficient technology. The panels we installed today aren’t the blue panels with silver frames that you may have seen in the past. Some HOAs don’t know this.  

There are also ways to carefully place the panels in a form that suggests aesthetic – think a perfect square or rectangle or, in many cases, we can add panels to non-street facing sides of the house. These are typical concerns we see from HOA boards when addressing solar panel installation.  

Working in teams is also beneficial when navigating HOA approval. Teaming up with immediate neighbors who will be a wave of support will earn brownie points in front of the board. The HOA wants anything but backlash from the neighbors, therefore, having majority of the neighborhood on your back will present a stronger proposal statement.  

At the same time, keeping up to date with solar homes in nearby areas is an important leverage we can use. If other homes have solar, what type of panels are they using? Where has the solar been placed? What restrictions did they have? Other nearby homes who already have solar may help your proposal since it shows other HOAs allows solar and could influence your HOA to go forward with your solar.  

Proposal Content to Include for your Homeowners Association  

Making you sure have the right and most important language in a proposal is key. Include ideas such as increasing home reseal value, ensuring aesthetics of home remain the same if not better, including data to show the environmental benefits of solar, stressing the desire to want to work with the HOA instead of against it, and, of course, include the best photos of high-quality residential solar installations. All these tips will help you find an advantage when working with your HOA.  

If Proposal Is Declined/Next Steps 

In some cases, HOA can still disapprove an installation. From here, one option would be to obtain a letter from your attorney addressing the situation and speaking on the concerns. Here, you can provide the legal supporting documents for your case. Typically, it should not come down to this. 

To date, we are not aware of any legal cases challenging SB61, however we could see this in the years to come as HOAs navigate this new rule.  

Kokosing and Your Homeowners Association  

Overall, Kokosing Solar is more than willing to help you navigate through this process. We have members ready to guide and provide necessary advice to new homeowners. HOA’s restrictions shouldn’t hold you back from your dreams of achieving those beautiful panels. 

If you’ve already started your solar journey, it doesn’t have to end at that initial installation – as solar continues to evolve, so can your opportunities as a homeowner. Whether your motive for going solar is to save on utility bills, reduce your reliance on the grid or if it’s to leave a greener footprint on the planet, that step to go solar has a significant movement towards a sustainable resilient future.  

If you’re happy with your current system but you want more – here are a few options on how you can expand and why you should do so.  

• Adding more panels 
• Upgrading your current panels  
• Installing battery storage 

Additional Panels/ Panel Upgrade 

Before you add additional solar panels, you need to consider whether you need them. If you’re still paying a good amount for electricity and plan to use more electricity in the future, then an expansion might be a good option.  

The next thing you need to consider before an expansion is whether it is even possible. Though you may want an expansion, do you have the roof space available for it? Does your service panel have the space for it? Before you start your expansion, begin with a trusted installer so they can determine if you have the roof space and if it’s enough for additional panels. They can also check your service panel for you to determine if there’s room. Your service panel may have a limit on how many more panels you can tie into it.  

Solar is evolving and new technology is released, depending on how old your current system is, you may have to figure out if you can find your matching solar panels and inverters. If you have an existing string inverter, you will have to find a match to the solar panels from your original installation. If you’re having no luck finding matching panels, you can still do an expansion by creating a separate system but with a new inverter. Installing a new inverter may sound scary, but if you’ve had your inverter for 10-plus years, most likely, you’re going to have to update it soon anyway. While you’re replacing that old inverter, you can expand your current system and choose a larger inverter system.  

If your existing system isn’t performing how you’d like and it’s not meeting your electricity needs, it may be the right time for an upgrade. If your electricity consumption is no longer keeping up with your system and is generating less power than you need, replacing your existing panels with newer panels that will increase your growing energy demands and that are more efficient might be a good choice. The same thing applies to your electricity bills – if you notice an increasing bill, this might be because your current systems not proving enough power. Another indicator that you should consider an upgrade is if you notice that your inverter is having performance issues and errors. A couple of things to look out for are flickering lights or a lack of capacity. The last thing to consider before doing an upgrades and adding more panels is your electric panel capacity. Work with your solar installer to understand if your electric service will be able to handle the addition of more solar capacity.  

Battery Storage 

If you’re looking to increase your energy independence but you’re not sure about getting additional panels or maybe you don’t have the roof space, a battery backup system is a good idea. Battery solutions give you the freedom to reduce your reliance on the grid, control your energy consumption and protect your home during a power outage. All with power generated by the sun. Solar batteries can ensure you have power in the event of a grid outage, and they can increase the amount of solar energy your home consumes by storing the energy your solar system produces for future use at night when the sun’s not shining. When you have a battery bank, you can charge during low-rate periods when the demand for electricity is lower and discharge during the more expensive rate periods when the electricity demand is higher. 

When first installed your system and you knew you wanted a battery backup system, eventually, your inverter may already be ready for installation. Other options for you if you if didn’t think of a battery in the near future are a DC-coupled system or an AC-coupled system. If you choose a DC coupled system, your current inverter system will need to be replaced with one that works with a battery and solar system – these are hybrid inverter systems. A DC coupled system works by the power your solar produces, that power is used to charge the battery, the power is then passed through your new inverter which converts the power into AC. The other option is an AC coupled system. This system will use your current inverter as well as an additional inverter to charge your battery. From there, your current inverter and your added inverter will send power to your battery as you produce more and more electricity.  

Expanding Your Solar Energy System  

In conclusion, the journey into solar power doesn’t have to conclude with the initial installation. It’s a dynamic and evolving landscape, offering ongoing opportunities for homeowners to enhance their sustainability efforts, reduce reliance on the grid, and reap greater benefits from their investment. Whether you’re considering expanding your current system with additional panels, upgrading existing ones, or integrating battery storage solutions, the potential for growth is substantial. 

Expanding your solar capacity can be a strategic move, especially if you’re experiencing increased energy needs or aiming to further reduce utility costs. However, it’s essential to assess feasibility by consulting with trusted installers to determine roof space availability and compatibility with existing infrastructure. With advancements in technology, options abound, from matching existing components to creating separate systems with newer inverters. 

Moreover, the integration of battery storage presents a compelling opportunity to bolster energy independence and resilience. Beyond providing backup power during outages, batteries enable homeowners to optimize energy consumption, store surplus energy for later use, and take advantage of fluctuating electricity rates. 

Reach out to Kokosing Solar -weather we were your initial installer or not – to learn more about expanding your solar energy system.  

Whether it’s through additional panels, upgrades, or battery storage, expanding your solar setup is a strategic investment in a sustainable, resilient future.