Solar Update – September 2017

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It’s time for another usual event: getting excited over receiving my utility bill. This year was my first full summer with the panels and I am pleased to report that they are performing as expected. I’ve had negative balances consistently since May which means not only do I not have to pay for the electricity, I’m producing more than I am using and thus I am accumulating credits for the colder shorter winter days. While our electricity usage spikes in the winter due to the continuous use of the heating system and we will not have enough credits to cover the entire winter, we are still likely to cover at least one full month of electricity with the credits we have accumulated since spring.

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Actual electricity bill for August 2017

If you’re curious what a full year of panel use looks like financially, take a look at the image below. For context, my house is 3,100 square feet and all of my appliances including clothes dryer and stove are electric. We also have central AC and the heating system is powered by electricity. We have 2 refrigerators and well water which uses an electric pump. This is not a typo. Between August 2016 and September 2017, we paid less than $500 in electric costs. That’s not even 2 months of cable in my house. How much would you save if you were powered by the sun?

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One year of usage

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Solar Update – January 2017

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Ever since I got my solar panels installed, I have noticed a troubling change in my behavior… I am excited to get my electric bill! Can you blame me? I’ve been getting the energy hook up from the heavens themselves and giving the proverbial middle finger to the utility company. It’s nothing to sneeze at.

However, things are a little different this time around. I am still losing sleep anticipating that electric bill, but the source of the anticipation is not the same. It is more of a nerve wracking anticipation than the joyful one I experienced with the looming summer solstice. The difference is that this time around, I am working with much shorter days and significantly more energy use to try and offset the nasty effects of the New England winter. This was my first full month of winter and also the first billing cycle when I did not have a left over credit from the previous month.

The daylight savings time kicked in and now the sun is fully below the horizon by 4:30 pm. Unlike the summer when it is bright until 9 o’clock at night, we no longer have 12 hours of sunlight keeping our appliances running. To make things worse, the last of the left over summer credits were eaten up by the December bill. But I did not have long to wait. My email pinged mid-day yesterday announcing that, with just a few clicks, I could find out if the cold and dark days of old man winter were going to keep burning a hole through our household budget or if renewable energy was worth the time and money we put into it. Lo and behold, our bill was $57 cheaper than it was this time last year.

Although $57 might not seem like a lot of money, we were saving over $150 a month by not having electricity costs all summer. If one of the colder months of the year can still yield us a $57 saving, I will put a check mark in the win column. Particularly since we haven’t even gotten our 30% tax credit yet.

You’re on Notice

 

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It wasn’t too long ago that I talked about the importance of never getting comfortable with your level or source(s) of income. I’m a big promoter of always seeking different income streams as well as seeing how you can get raises. Your ultimate goal should be to be in control of an amount of income that covers your cost of living. That’s true financial independence. That way, if you continue to work, you are working because you want to and you can stop at any time. Most importantly, if you’re involuntarily out of work, you’re not likely to be homeless in 3 months.

I also talked about my experience using a Bank of America ATM with a remote teller (Teller Asssist), and the potential threat they pose to many retail banking jobs.

Here it is: CNN is reporting that within the next 10 years, 30% of bank jobs could be obsolete. Very alarming.

These are routine repetitive jobs that we could anticipate being replaced. They are customer service jobs that provide an experience as well as a service. Well, I used one of these machines, and I got the experience. The woman on the screen was sufficiently pleasant and helpful for me to not care that we were interacting on camera rather than in person.

Technology has done it: using machines to provide services that could only be delivered in person. If you have a lower skilled job, this should be your wake up call. Save, invest and set yourself free from the bondage of debt. Otherwise, you might find yourself with a negative net worth an no income.

FinTech: Innovative Cents

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I got my first taste of the “future” this morning and I have to say I’m kind of impressed. Yesterday, I had a paid focus group where I received $125 for talking about my insurance company for an hour. But when I got my compensation, something was different. Instead of the thin envelope with a paper check, I got a Bank of America debit card, along with a packet of fee schedules (i.e. no fee for debit purchases, no fees for BoA ATM withdrawals, but fees for non-BoA ATMs, etc.).

Normally, the idea of receiving a gift card would be a cause for concern, because one could easily get stuck with a JC Penney card or a card that can only be used at a poit-of-sale terminal. But the ability to withdraw free of charge from BoA ATMs is as good as cash. BoA ATMs are like dog poop, they are everywhere so I knew there would be no issues with getting that money. So this morning, on my way to work, I stopped by my nearest branch (which by the way, I had several to choose from within a 1/2 mile radius) to collect my coins when I realized that this particular ATM only delivers in $20 denominations. Although most ATMs are like that, there are a few that I’ve used in different towns that have had $10 or even $5 denominations. Since the banking center was closed, I thought that it was an opportunity for me to give the remote teller a whirl.

I went through the log in process and this smiling, bubbly blonde lady rocking the stereotypical “call center headset” came on to greet me. She explained that, while $20s are the only available denominations at a self-serve ATM, the teller assisted ATMs can dispense any denomination you wish, even singles. Adding that since the actual teller line would not be open until 9 am, I made the right choice in using their Teller Assist feature, which is available from 7 am until 10 pm.

Keeping in mind that the level of customer service I received is a reflection of her as an employee who takes pride in her work, I have to admit that this technology, while still in its infancy, is a game changer. There’s a camera at eye level which allows her to see me. While the machine’s microphone allows her to hear me, there’s also a handset to help hearing impaired people or anyone who might want a bit of privacy in an overcrowded ATM lobby. The process was very smooth. I used the screen like I normally would, except, in the top left corner, she was there walking me through the entire process and providing me with a service that the regular ATM couldn’t: $5 bills.

Say what you will about BoA’s predatory lending practices or absurd fees, we have to admit that this is great news for customers, which will translate into more money for them. While I don’t see myself ever using an ATM at 10 pm in downtown Boston, they have managed to extend their customer services hours by 4 hours 5 of their 6 operating days. Customers will also likely get better service and treatment from these remote tellers, because, unlike banking centers where the branch managers are busy trying to meet their monthly quotas of getting people no open new accounts, they are probably more actively monitored by their call center managers.

It does spell bad news for the average big bank teller. However, it is not uncommon for lower skilled employees to be casualties of innovation. The only people who tend to benefit from technology breakthroughs are consumers who get access to improved services and big businesses who get to fatten their pockets. This also reinforces my belief that no job is safe. But we can’t stop innovation, so build multiple streams of income and strive for financial independence.

We’ve Taken the Plunge!

After a lot of thought, number crunching an sleepless nights, we decided to bite the bullet and hop on the solar panel bandwagon. While it seems like a no brainer to get “free” electricity from a renewable resource, it requires a significant upfront investment. It is often said that to make money you have to spend money. Apparently, in some cases, to save money, you also have to spend money.

 

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As much as we have tried to cut down on our electric usage (turning the lights of when we aren’t in the room, turning off the HVAC when we’re at work, and maximizing our use of the dishwasher,) we can only do so much. The refrigerators have to keep running, we use an electric boiler to heat the house, and living in the northeast means we can’t air dry our clothes for 8 of the 12 months of the year and we are forced to use the energy sucker known as the clothes dryer. According to the US Energy Information Administration, the national monthly average for electricity consumption was 911 kWh in 2014. Over the past couple of months, we’ve used an average of 870 kWh or $195 a month. While it may seem like a lot, I want to point out that we buy food in bulk when they’re on sale, and as a result we have 2 refrigerators. We have no gas line in our town, so we have an electric range, which we use almost every day since we don’t eat out often. Yet, despite the fact that our house is bigger than the average house in this country (3,100 sqft v. 2,600 sqft), we’re still using less than the national average. When the summer comes around and we aren’t using the boiler or the dryer as much, I anticipate much lower numbers.

 

I know you’re wondering what my laundry habits have to do with the solar panels. The installer who provides a quote for the project will try to maximize your roof space to eliminate as much of your bill as possible. They can’t do that unless they have a solid idea what you use over the course of the month. In our case, we happen to live in a house that faces north, meaning that the movement of the sun from east to west gives the roof continuous exposure to the sun until sunset. In other words, if we load up our roof with enough solar panels, we can cover 100% of our use annually. I say annually because in the winter months when the days are shorter, the sun doesn’t shine enough to cover a day’s usage. And in the summer months, you produce more electricity than you need as a result of 12-hour days. The average energy produced over the course of the year ends up being equal to your total energy use.

 

How is it measured, how does it work?

Part of the solar installation involves adding a 2-way meter. A regular meter only tells the electric company how much energy you’re using so they can send you a bill. A 2-way solar meter not only tells the company how much electricity you use, it goes a step further by telling the company how much electricity your panels are producing. During sunny July months, you will be producing more electricity than you will use. The company will keep track of those numbers (which should be reflected on your bill) and, on dark December days, will allow you to use those excess credits (read about net metering here). Once the credit runs out, you are now back to paying for electricity. Our plan will be to minimize our use in the summer to increase our credits and use them on shorter days. That should be easy since I’ll be air drying clothes and the house will not be heated. This should reduce our electric bill from approximately $2,000 to less than $300 a year.

 

How much does it cost and is it worth it?

If you’re looking for a bargain, this is not the project for you. It’s not cheap. My system, which is intended to cover 100% of my use for the year, and has a 20-year warranty, is going to cost $39,500. “EEEEKKK!!!” was the same sound I made when the company rep gave me the quote. I’m sure her ears are still ringing. I hope her insurance covers hearing aids. But, fret not because Uncle Sam has my back.

We will get a tax credit equal to 30% of the cost of the project next year when we file our federal taxes (this incentive is in place until 2019). In addition, our state will give us up to $1,000 credit on our state taxes. If you’re keeping track, the number should be $12,850. Note that these are credits, not deductions. I bet it sounds pretty good. But, it doesn’t end there. Have you ever heard of SREC? It stands for Solar Renewable Energy Certificate (read more here). It’s a program that pays you a certain amount of money per 1,000 kWh produced, quarterly. The amount of money depends on your location, in our state it’s between $200-250. You can go on their website to find out the prices for different states. Based on our system size and capacity, we are estimating our quarterly payments will average to about $200/month.

 

It doesn’t get any better… unless it does! Since I’m no Mrs. Moneybags, I have to fund this some other way besides writing a nearly $40,000 check to the contractor. Mr. Government man swoops in to rescue the damsel in distress once again. We have a program called Solar Loan * that is subsidized by the Massachusetts clean energy commission. Not only does it allow people to get the loan at a lower rate from local lenders by subsidizing the difference, it also allows the borrower to re-amortize the debt once over the life of the loan at no charge within the first 18 months. The purpose of that policy is to give people enough time to file their taxes, get a nice check, courtesy of the IRS, which they can use to pay the debt and recalculate the loan. Now, I know that some people will go out and buy a nice car or get a new tattoo and some gold grills with their tax return check. But the rest of us financially savvy people know that the money will be best used paying off debt and will take advantage of our 18-month window.

*You have to use an approved lender and an approved solar installer to get the loan at the preferred rate.

While it may seem like I’m replacing one payment with another (electric bill with loan payment), the long term financial benefits are undeniable. My loan payment will be fixed over the life of the loan until I restructure the debt, which will lower it, not increase it. That’s more than I can say about what the electric company will charge. Furthermore, part of the initial cost is subsidized by state and federal governments. The loan will also be for a shorter period than the life of the panels, meaning that they will give me nearly free electricity for longer than I have to make loan payments.

 

I am looking forward to instant savings and the chance to earmark what used to be the electric bill money to other areas that will be more beneficial to our family. We are scheduled to be installed before the end of summer, so be sure to come back for updates!

Technology Tuesday

Women in Silicon Valley 

It is not news that women are under represented in the STEM fields. Tech companies have this reputation for being bro clubs and this perception is not alleviated by the fact that there’s an age-old stereotype that “nerds” don’t know how to interact with women. As a result, the overwhelming white male appearance of senior leadership across STEM organizations has drawn significant criticism. As a result, many companies are adopting a quota system to fill those gaps.

I read an article this morning addressing this phenomenon. While I do not support people being appointed to positions they do not qualify for, I think authors of the piece is masquerading as a genuinely concerned individual, while in reality they’re saying: “Don’t be so focused on the numbers. So what if your organization doesn’t accurately represent the overall demographic of female and minority STEM degree holders?”

There are a lot of studies cited throughout their article, but none of them support exactly what the piece is saying. Perhaps they’re counting on the fact that no one will click on the link and take their word for it. Both the NPR and the Harvard Business Review pieces cited do not 100% support their negative view of a quota system.

The NPR article focused more on how social conditioning negatively influence women by lowering their confidence, thus impacting their performance. This doesn’t necessarily say that having a 15% woman or minority quota is a roadblock to success. By the time these women reach a level where they qualify to be appointed as a board member or promoted into a senior level management position, they’ve already dealt with decades of hearing that “boys are better at math than girls.” This psychological damage is not caused by the CEO of Twitter who’s showing enough confidence in them to hire them; it’s already present.

Their HBR reference is equally misleading. The article explicitly criticizing stereotyping women and minorities by now allowing them to blend in and integrate seamlessly in the organization.

they set them apart in jobs that relate specifically to their backgrounds, assigning them, for example, to areas that require them to interface with clients or customers of the same identity group. African American M.B.A.’s often find themselves marketing products to inner-city communities; Hispanics frequently market to Hispanics or work for Latin American subsidiaries.

The point is not to avoid quotas completely, but to implement a diversity management program that is equitable to all parties, including the majority of the employees. Don’t limit people’s potential by segregating them in stereotypical roles. Not only does it put a ceiling on their professional development, it also robs their colleagues of crucial interactions with possibly brilliant individuals.

For those who may dismiss my position because you think that quotas are unfair, I will simplify the concept for you to help you grasp it. Imagine you live in a house with 9 other people. 2 are of one gender (female 20% of the household), 8 are of another gender (male 80%). However, since there’s only one vehicle, only 5 of you can ever leave the house at a time. Do you think it’s fair that the only 5 people who get to leave are men? Shouldn’t 1 of the girls also be represented among the group of people leaving? Women don’t tend to study STEM at the same rate as men, but what sense does it make that organizations wouldn’t want to try and have their companies reflect the percentage of women and minority STEM degree holders as much as possible?

Like everything in life, execution is key. If you have a sprained ankle, you fix it and nurse it back to health. You don’t amputate it. The right approach is what Silicon Valley needs to deal with the under presentation of women and minorities. Not throwing their hands up and saying “tough luck”.