If you’re looking into installing solar, one of the biggest questions will be what size your solar panel system should be. It’s common practice to install enough panels to cover as close to 100 percent of your electricity needs as possible, as this is how you’ll maximize your savings. But, is there any benefit to oversizing your solar panel system to generate more electricity than you need? For most people, the answer is no; but, there are certainly situations in which it’s a good idea to install a larger system than you currently need. Read on to learn why you should and should not oversize your solar panel system.
Why you shouldn’t oversize a solar panel system
Oversizing a solar panel system will not reap large benefits for most people, especially if you’re not utilizing the extra electricity your system generates. Here are some of the top reasons why you shouldn’t add more panels than you need.
Utilities won’t pay you extra for your extra electricity
Most utility companies offer net metering. With net metering, your utility company will credit your bill for any excess electricity generated from your solar energy system. While an oversized system might mean more net metering credits on your account, you aren’t going to realize the benefit of those credits unless you’re using them down the line. If you’re not using the credits, they’ll either exist as an ongoing credit on your bill or will expire after a certain amount of time. The specifics of how long you’ll get to keep net metering credits depends on your utility company’s policy.
A common misconception is that utilities will pay your money for any excess electricity generated from your solar panel system. However, the large majority of utility companies will not pay people out for net metering credits. In the rare instance that your utility will buyout your extra net metering credits, the rate they will pay for them will be substantially lower than what you originally received for the net metering credit (which is typically retail price).
Ultimately, the additional upfront cost of installing an oversized solar panel system will not be worth it if you cannot take advantage of that extra electricity. The added cost will only extend your payback period for going solar.
Your solar panel system will cost more upfront
Larger solar panel systems are going to cost more upfront. This is because larger systems typically require more panels, potentially a larger inverter, additional racking, and more labor from your installer. The added cost will depend on how many watts you’re adding onto your solar panel system, but it generally isn’t worth it if you’re not using all of the electricity being generated.
Difficult interconnection process
When you apply to connect your solar panel system to the grid, utilities will review your past electricity consumption to see if the system proposed is sized appropriately. Utilities all across the country will often deny interconnection requests when the system proposed is much larger than what your usage history indicates you need.
Some utility companies will be stricter about allowing oversized system than others and may make an exception if you’re planning on oversizing for a logical reason. Always check with an installer to see if your utility allows oversizing, and if so to what extent.
Additional incentives may not be worth the added cost
If you’re installing a larger system and paying more money, you’ll likely be eligible for higher upfront incentives. Most rebates and tax credits are either calculated as a percentage of your total cost or based on the size of your system. That being said, some of these incentives also have a cap on the total amount you can claim. For example, New York has a 25% state tax credit that’s capped at $5,000. At a certain point, even if you’re installing more panels and paying a higher cost, you’re not going to receive higher incentive amounts. Even for incentives that aren’t capped (such as the 30% Federal ITC), the added cost of installing more panels won’t be worth the additional incentive amount.
Alternatively, there are some performance-based incentives (PBIs) where your incentive amount is directly correlated to how much electricity you’re producing. For example, in states with solar renewable energy certificates (SRECs), you will earn more in SREC income with a larger system because you will generate more kWh and more certificates. At that point, it becomes a question of whether the added SREC value is more than the additional upfront cost of more panels. For the majority of current SREC markets, the answer is no.
Why you should oversize a solar panel system
For most customers, the added cost and complications of oversizing a solar panel system aren’t going to be worth it. That being said, there are some cases for when you’d want to oversize your system ahead of time.
Purchasing an electric vehicle
If you have plans to purchase an electric vehicle in the near future, it’s a good idea to initially oversize your solar panel system so that you can use the power of the sun to charge your commute. The number of solar panels you would need to add to your system will depend on a number of factors, including the type of EV, how electricity it will use, and how often you will drive it. You can always work with an experienced solar installer to determine the extra amount of electricity your EV will need, and how many additional panels that will require for your specific system.
Transitioning to electric appliances
If you’re going solar and have some old appliances in your house, it’s a great time to consider transitioning to new efficient, electric appliances and energizing them with additional solar panels. You can shift away from using traditional fuel sources and instead use solar panels to power a new air conditioning system, air source heat pumps, refrigerators, and more. Adding a hot tub or heating a pool are other common reasons for needing more electricity down the road. By adding more solar panels in anticipation of these upgrades, you can avoid an add-on solar project in the future.
Additions to your home
Another reason to oversize your solar panel system is if you’re planning new additions to your home. This means either adding more people living in your home or expanding your living space with new additions like a garage, sunroom, or finished basement. The larger your home gets, both in terms of square footage and people, the more electricity you will likely use. By installing more solar panels upfront, you can be ready for this increase and usage and continue to save as much money as possible on your electricity bills.
Shop for solar on EnergySage
Whether you’re looking to oversize your solar panel system or not, you can use the EnergySage Solar Marketplace to receive free quotes for installing solar on your home or business. If you’re contemplating installing more panels than you need, simply note it on your account along with the reason why you’re looking to oversize your system so that installers can propose the best solar solution for your property.