Solar electric...what's up with that?

[Rick Potter]

I told a salesman he could come over and pitch his solar electric system. Can anyone give me some real world advice?

Is it worthwhile? Do you ever make back your investment? What type or brand is considered the best or most efficient? What questions should I ask? Do they need maintenence, like cleaning? Buy or lease?

Sorry for the shotgun approach, but I know very little about the real world viability of a solar electric system. Years ago I went for a solar water heater, and it never paid for itself before becoming problematical.

I do have a roof that is large enough and situated well for solar panels, and I live in SoCal.

Thanks,
Rick Potter

[Jim Matthews]

SolarAmerica pitched their product to me.

It's important to note two things:
the ROI in years and if your utility pays you for the extra power you generated.
Massachusetts has "net metering" so I only get rebates equal to my usage.

If you're running an airconditioner, it may suit your plans to check your actual consumption.
My total electric consumption, for a full year, is less than $1200. It didn't make a strong case.

If I owned an EV for daily driving, I would reconsider the installation.
It just doesn't make dollars and sense to spend nearly $55,000 (including the retail price of the car)
to drive the 30 miles I travel, daily.

Your situation should consider your total electric consumption, and the value of any power you generate.
Compare how long it takes to break even (ROI) to the amount of time you hope to spend in your home.

Projected payoff for the array on my roof (considerably further North than yours) was 14 years.
It's not the risk for rain infiltration over this period to install at the current cost for electricity.

There is also some sort of "coupon" affiliated with Carbon emissions regulation with utilities that can be sold off by the homeowner
to offset the cost of installation. It might also make you feel good to contribute in this manner.

http://www.dsireusa.org/solar/solarpolicyguide/?id=13


I would be more inclined to consider a retrofit of an air conditioner with an integrated solar array.
The idea is clever - sunshine is most abundant when the air conditioner is most in demand.

Let the sun help do some of the cooling for you...

http://www.lennox.com/solar-solutions/

[Lee Schierer]

Solar panels aren't for every one. A friend of mine did a panel for his house in eastern PA and he is doing well with the pay back. However, he got in when the subsidies were at their highest so he only paid for about 40% of the cost.

We have an all electric house and I considered getting solar panels, but in the decided not to. The sales people show the pay back to relatively quick, but that is only if you have the cash to pay for the system out right. If you have to borrow to pay for the system, then the pay back gets pushed out pretty far. There used to be some federal and state programs that paid up to 50% of the system cost which helped tremendously, but those are pretty much gone now. In the end I was looking at at least a 15 year break even which would have made me 75 years old. I also wasn't too keen on erecting a billboard in my back yard. Instead we upgraded our geothermal heating system to be a heating/cooling system with a more modern unit. It dropped our electrical usage about 10% and will pay off in less than five years. Plus we were able to cool our house the first summer at a constant 74 degrees using the same kilowatts we had used the previous summer running fans and a dehumidifier.

[glenn bradley]

My buddy did it. Family of 5 with a normal electric bill of $400 to $600 per month through the summer. The 20 year lease of the solar is $280 per month plus he is generating enough juice to get a credit from the utility as opposed to a bill. Once the credit reaches a certain level, he must pay the extra to the solar lessor(?). Read your contract . . . .

There is a formula to see if your current average monthly will make you a good candidate. Cheesy sales guys will try to push you on future rising costs of electricity. I would steer clear of these guys. The technology can sell itself based on your current costs and the nature of the lease / payback contract. Make sure you understand what you are signing up for. As in all trendy technologies, there are the solid players and then there are the bottom feeders who were selling aluminum siding, fire-proof tuxedos or 50 year paint last summer.

[Mike Henderson]

I'm looking into solar electric right now, also. The problem is that we don't use much electricity except for a couple of months in the summer so what I'm looking at is a small system that will generate excess electricity during the year except for those summer months. And if your electricity charges are like mine, you're on a tiered system and electricity costs per kWh are really high in those higher tiers (tier 4 costs are $0.29/kWh and tier 5 costs are $0.33/kWh - that adds up pretty quickly). The solar guy tells me that we should change to "time of day" metering if we go solar because the highest charges are during the time when you're generating the most electricity.

I haven't got far enough to know if it makes sense yet but I should have a financial analysis in a few days. There's still a federal tax credit for solar but the CA rebates are pretty much gone.

Mike

[Kevin Bourque]

It's a great idea when govt. subsidies are helping pay for it.

[Rick Potter]

Mike,

I'd appreciate it if you can let me know what they come up with.

My bills are all over the place from a low of $120 to a one time bill of $850 when we had the son's family living in my shop, running the AC constantly. Normal summer high is $250-300. They finally got a house again after 5 months of having three families living here.

Basically I live in a duplex, with two of everything. We built a 'Casita' (newspeak for granny flat), 1100 sq. ft. with it's own furnace and AC, kitchenette etc. which my daughter and family live in.

I am 70, and it will have to pay off fairly quickly, besides...I want an all electric car before someone in gov. figures out they pay no road tax.

Rick P

[Mike Henderson]

I am 70, and it will have to pay off fairly quickly, besides...I want an all electric car before someone in gov. figures out they pay no road tax.

Rick P
I'll let you know what I figure out, Rick. I've heard people say that they no longer buy green bananas, but never that the have to have a fast payback on solar:)

Mike

[Joe Angrisani]

.....with a normal electric bill of $400 to $600 per month.....

Holy kilowatts, Batman! That's insane.

[Greg Portland]

Is it worthwhile? Do you ever make back your investment? What type or brand is considered the best or most efficient? What questions should I ask? Do they need maintenence, like cleaning? Buy or lease?

Sorry for the shotgun approach, but I know very little about the real world viability of a solar electric system. Years ago I went for a solar water heater, and it never paid for itself before becoming problematical.

There are multiple ways you can get solar power:

1) Buy the whole thing outright (maybe with financing). You can "sell back" electricity to the grid. Note that you only get credits on your bill... you don't get a check from the electric company. This is typically the only option where you'd get tax credits. With this option you also get to control everything about the install (number of panels, equipment used, etc.). Battery storage, etc. can drive up costs & complexity (plus you need room for everything).
2) Company installs for free and owns the equipment, you buy electricity at a rate lower than the local grid. The company decides how many panel's they'll install (i.e. they may not install enough to get 100% of your home's energy usage covered). *Some* companies offer a buy option @ the end of the lease. Of course at this point you're sitting on 10-15 year old panels... I'm not sure if this would make sense. The company handles all equipment problems during the lease period.
3) Buy solar energy from your electrical company directly (for a premium).

The newer panels allow individual cell failures (parallel system) without the entire grid failing like a serial system. Thus, your efficiency goes down but the panel is still useful until you pay $$$ to replace it. There is little maintenance required for the system.

As far as "making back your investment" it depends on your locale (amount of sun), the amount of energy your house uses, and costs & incentives. Let's say you pay $15K out of pocket ($25k - tax incentives). In 15 years, how much money have you saved versus sticking $15K in a decent money market account? Assume that efficiency would decrease over the years and you'd need to replace all the panels in 15-20 years (they'd probably be cheaper then). I ran the numbers for my location in Oregon and it didn't make fiscal sense even though it was cheaper than option #3 (green energy purchase from the Electric Co.). I didn't like the "do what they want to my house" aspect of option #2. If being "green" is important to you then I think it's worth considering... just don't think you're going to see a large financial return on the investment. Obviously LA is a completely different climate so the numbers will be different.

IMO, find someone in LA that has a system and ask them about the costs. There is probably an electric car club nearby... a lot of these folks also have solar arrays.

[Prashun Patel]

Not worth it. I had them installed on my company a couple years ago. Here's my experience:

1) The REAL money in this was supposed to come from the solar credits for each MW that you generate. You can sell these on the open market. The price when I signed on was about $600/cred. The price has since plummeted in NJ to below $100. No solar company will build a similar market 'collapse' into their models of payback. My payback went from 4 years to 10+.

2) They DO generate about 70-80% of my electrical power, which was as advertised. However, somehow, my electricity prices aren't about 70-80% less than they were. They are about half. NOBODY can explain to me why. The power is all routed back to PSE&G and we have a bidirectional meter which keeps track of what comes in and what goes out. We are supposed to be billed for the difference, but it doesn't appear to add up. It feels flimflammy and I feel powerless (no pun intended) to understand why.

3) Our standing seam roof leaks. The installers keep coming out to fix the umpteen leaks but more appear. It's a pain.

4) During a power outage, the system shuts down to avoid 'overloading the circuit and causing a fire'. This logic is also above my head. And the irony of it kills me.

If I could do it all over again, I wouldn't.

[Jim Laumann]

We are looking in to putting panels in - but since it's winter now, nothing will be done 'til spring - so I've got lots of time to do research and get another bid or two or three.

We will be able to sell our excess power back to our utility. The company proposed to mount on our roof, but I said 'no'. We have a acreage, and it's wide open to the South, so if we do it, the panels will go there.

The company presented it's bid in parts....the first part seemed resonable (panels, mounting racks and a inverter to convert the DC power to AC), then we learned that the battery bank and charge controller for the batteries (for when there is no sun/outages, etc), is not included - then it got spendy - in a hurry.

The Fed 30% tax credit was/is available at the time we got the bid (about a month ago), but who knows what the outcome of the tax debate in Washington will be.....

Jim

[Moses Yoder]

My buddy did it. Family of 5 with a normal electric bill of $400 to $600 per month through the summer. The 20 year lease of the solar is $280 per month plus he is generating enough juice to get a credit from the utility as opposed to a bill. Once the credit reaches a certain level, he must pay the extra to the solar lessor(?). Read your contract . . . .

There is a formula to see if your current average monthly will make you a good candidate. Cheesy sales guys will try to push you on future rising costs of electricity. I would steer clear of these guys. The technology can sell itself based on your current costs and the nature of the lease / payback contract. Make sure you understand what you are signing up for. As in all trendy technologies, there are the solid players and then there are the bottom feeders who were selling aluminum siding, fire-proof tuxedos or 50 year paint last summer.

We live as a family of 4 and have an electric bill of around $120 per month. We use propane for furnace and stove, electric hot water, window air upstairs and downstairs. Why in the world would you have an electric bill of $400 - $600 per month? Just wondering. We watch a movie every night on a 36" screen, two laptops and a desktop, telephones for each member, I-pods, Kindle, cameras, lighting, $120 per month.

[Todd Burch]

We live as a family of 4 and have an electric bill of around $120 per month. We use propane for furnace and stove, electric hot water, window air upstairs and downstairs. Why in the world would you have an electric bill of $400 - $600 per month? Just wondering. We watch a movie every night on a 36" screen, two laptops and a desktop, telephones for each member, I-pods, Kindle, cameras, lighting, $120 per month.

LOL

Family of 2 here, we balance our bill over the year and we pay $475/month. 3600 sf 2-story house, swimming pool, workshop that gets used a lot. Natural gas heat, gas hot water, gas dryer.

The primary difference will be the location - southeast Texas. Those summer bills remind us of where we live all year round. This house was built in 2001, and is not near as well insulated as my last house that was built in 1969 and used R5.6 in the walls.

[Rick Potter]

Well, I just signed up for solar.

I found out a neighbor had a solar system installed 2 years ago, and asked him about it. Turns out he is a retired electrical engineer, and interviewed 10 different solar companies before deciding on one. I told him I was not interested in leasing, and he told me he felt the same, he just wanted to pay for it and have it done with no payments. Well, he ended up leasing, and I followed suit.

What I did is kind of a hybrid deal. The good thing about leasing is that you get in for little down and a 20 year contract for a guaranteed level of efficiency, with all maintenance and repairs included. The bad thing about leasing is that you are paying for 20 years, which basically means you are paying interest on the initial cost for 20 years, and the leasing company gets any rebates and payments for surplus energy you may produce. If you buy, you are responsible for any maintenance and repairs, and the initial price is more than the initial price for leasing, not quite sure why, but two companies told me the same thing. You get to keep rebates and surplus energy.

So.........I went for the hybrid deal, it's a lease, 20 years including all maintenance and repairs etc, but I am paying for the whole 20 year lease immediately. This saves me all that interest, they get the rebates, I get the surplus. My net cost is 26% less than buying it outright, and my payback will be in 4 1/2 years.

I got a system that should cover about 98% of my total usage for the year or better. We figured this on this years bills which, as I said earlier, were WAY up because of the extra family living here for 5 months. I am getting 46 panels, and I have to put them on two roofs, which are situated great for exposure. It also includes a main panel upgrade to 200 amps.

I found out that there are different efficiency ratings on panels, even through the same manufacturer, kind of like a 3HP or 5HP table saw. The ones I got were 140 watts each, not the highest, but pretty good. The inverter is another big deal. Older style inverters are used with the panels wired in series, so if one panel goes bad, it slows down the whole system. The newer types, which I am getting, have panels which each have their own built in micro inverter. If one goes bad, it does not affect the others.

Oh yeah, I forgot to mention. At the end of the 20 year lease, what happens? Well, the contract says that if they choose not to remove the system, and I do not ask them to remove it, they will convey the system to me at no cost. Note that the panels and the inverters are guaranteed to produce 80% of their original power for 25 years. As the salesman says, "do you think the company is going to spend money to remove and sell or dispose of a 20 year old system?" I also have the option to purchase the power from the system for another 5 years at 6 cents per kw. if they do decide to remove it after all.

Now we wait for their engineer to come and make sure what I signed up for will work on my house. If not, we renegotiate.

Rick Potter

PS: Interesting facts: The system has it's own Edison meter, that keeps track of what you produce and how much goes back into the grid. It shuts down in a blackout, or line down situation so an Edison employee won't get shocked by my juice when the grid is supposed to be off. Edison has a habit of waiting about 9 weeks after the system is installed and approved before they allow you to turn it on. You decide...are they that far behind, or do you think they are squeezing some extra weeks out of you before you go rogue? My 20 year contract starts when it's turned on.

[John Pratt]

Depending on location, why not small wind turbines? The intial cost is considerably less and the buyback is relatively quick compared to solar. I have seen wind turbines as big as the Skystream 3.7 in the middle of some towns. Of course, zoning and obstructions could affect your ability to put one of these up. It just seems that with many of the subsidies gone and the large initial up-front costs, Solar falls into the same category as replacing all the windows in the house (install vs. buyback). Unless there are tremendous discounts and the "need" is over-the-top, it just doesn't seem to pass the test of financial viability. I have three neighbors that have soloar and regret it daily vs. two neighbors with wind turbines who have achieved buyback in three years and the system works when the power goes out.

[David Weaver]

I think solar is more viable in most places. A relative of mine put up a 10KW turbine in the early 80s and found that most days the output is either none or not a very large % of the rating.

You have to put it on a tower, and I don't know how the new ones are for maintenance, but the older ones weren't as reliable as you'd guess (despite being fairly simple), and weren't maintenance free.

[Rick Potter]

John,

I live in suburban SoCal. There is no way in the world they would allow me to put a wind turbine in. The payback on my future system is supposed to be 4 1/2 years.

In a way it is fortunate we had such a large bill this year. It gives Edison Co. a higher baseline to use figuring out just how much solar I can use. They will not allow you to produce more than your baseline year used.

Rick Potter

[Rich Riddle]

If the figures are correct about wind energy, nearly 50% of it is currently funded by the federal government, 12.1 billion annually. That subsidy will end next year unless Congress renews it. Solar offer a better long term option for most people. I know one "truck farmer" who lives totally off-grid with solar but he doesn't need much electricity and most suburbs certainly wouldn't approve of his system's aesthetic looks. It's more of a "Mother Earth" type of thing. He's vigilant about maintaining it and set it up a few years ago. Loves being totally off-grid.

[Greg Portland]

Depending on location, why not small wind turbines? The intial cost is considerably less and the buyback is relatively quick compared to solar. I have seen wind turbines as big as the Skystream 3.7 in the middle of some towns. Of course, zoning and obstructions could affect your ability to put one of these up. It just seems that with many of the subsidies gone and the large initial up-front costs, Solar falls into the same category as replacing all the windows in the house (install vs. buyback). Unless there are tremendous discounts and the "need" is over-the-top, it just doesn't seem to pass the test of financial viability. I have three neighbors that have soloar and regret it daily vs. two neighbors with wind turbines who have achieved buyback in three years and the system works when the power goes out.
John, my Dad looked into wind turbines (about 10 yrs ago) and the cost of ground prep + the tower + electrical was prohibitive (actual turbine wasn't too pricey). Do you have any costs for a modern installation (and the amount of KW/hr they produce)?

[michael skehan]

They DO generate about 70-80% of my electrical power, which was as advertised. However, somehow, my electricity prices aren't about 70-80% less than they were. They are about half. NOBODY can explain to me why.

One would think that the utility bill would show this? Utility bills are comprised of two main pieces; generation and distribution. Being a commerical acount your cost per kWh is probably based on consumption so the lower consumption the greater the cost per kWh. This along with you only save on the generation piece is probably why it's not 70-80% lower in bill.

[michael skehan]

Now we wait for their engineer to come and make sure what I signed up for will work on my house. If not, we renegotiate.

Has anyone discussed the weight you're putting on your roof? If structural reinforcement is required, was that included within the solar companies analysis?

[Rick Potter]

Good question Michael,

When the engineer gets here Monday, I will be sure to ask him. I am not too worried about it because the old part of the roof that gets panels used to have a tile roof, and is now comp. The new part of the roof which gets most of the panels is new, and we built it pretty strong, above code for tile, even though it has comp.

Preshan,
I can tell you why your system goes off in a blackout. Here, at least, it is an Edison requirement. They don't want it feeding into their system when they may be working on it. Zap!

Rick Potter

[Jerry Thompson]

Kevin;

Gernment subsidies is my money along with millions of other taxpayers. If solar power is such a good deal it would not have to use the people's taxes to promote it. The free enterprize/captilist system would be all over it if it were financally feasable.

[Shawn Pixley]

In my opinion, the way to look at this holistically is create a Montecarlo model on costs and correlation to energy prices etc. We performed one of these at my company a number of years ago (we had a number of blackouts, and electricity shoratges in SoCal) regarding cogeneration. When examining the various scenarios, there was payback when electricity and natural gas prices moved roughly equivelantly. If they didn't have correlated change in pricing, it was either incredibly favorable or negative.

The other aspect of this was what was the cost to remain connected to the grid? We could generate enough electricity to be self sufficient. But the fees to remain connected to the grid, negated most if not all savings under most scenarios.

The last major factor was the cost of money you assumed in the model. This is of course a simple equation dpending upon how you fund the project (borrow money or pay cash).

The above relate to the solar situation this way. In Southern California where I live. Most of our electricity generation is from natural gas turbines. We have tiered rate structure (the more you use the higher the rate per KWH) to encourage consumption (a good thing in my opinion). If you over-generate, they won't be writing you any checks. So the most probable scenario where it makes sense is to provide enough capacity to keep you in the lowest of the tier structures consistantly. It also helps if you use more daytime vs nightime. If one were to have an electric car and charge during the day from solar, that scenario might be very favorable. We use on average 27.93 kWh per day. That throws us into tier four ($0.29/kWh). If i could offset demand to stay below a tier three rate, i can reduce my bill by $121/mo (~67%). We conserve quite a bit and don't have AC so we are not the best candidates right now. I do have an ideal roof for solar though. Some of my employees have ~$1500/mo bills in the summer from swimming pools and AC. For them, solar might make a great deal of sense.

There are also companies that approach you to install the photovoltaic cells at their cost on your roof. You then would pay them for the electicity the PV array provides. Presumably, they disconnect you from the grid.

[Mike Henderson]

I realize I'm posting in an old thread but I want to give an update.

My wife and I decided to go ahead and install a solar electric system, even though our electricity usage is fairly low - she really likes to be as green as possible. We put up a 14 panel system, with a maximum generating capacity of 3KW (but the peak generated has been about 2.6KW). Right now, it's generating about 18KWh a day, when we have cloudless days. I've noticed a gradual increase in the amount generated as the days get longer. On a cloudy day that could fall to 8KWh and would probably go lower on a really cloudy, rainy day.

The surprise is that we're generating more electricity than we use. I've had days when our net usage is as much as -9KWh, but my average since March 11 (when things went live) is -4KWh per day. I need to build up a cushion because in August and September I know I'll use a lot more than I generate with the A/C on.

I'm on a "net metering plan" which means that I only settle up with the power company once per year, although I get a "bill" each month to let me know what my cost status is. If I was accumulating a big obligation (meaning I'd owe a lot of money) I can make monthly payments - but I don't have to pay until the end of the year. If we wind up with the power company owing us money, they will pay us or roll over the credit to the next year.

I have no idea how long it will take to pay for the system (I bought it outright) but I'm sure it will be somewhere around ten years. The system has a 20 year warrantee on it, but I expect it to last longer than that. Analyzing the return requires you to make estimates on what electricity will cost in the future. Putting in the system isolates me from future cost increases - and if I can generate more power (I guess the proper term is energy) than I use, I'll be rooting for large increase in the cost of power. Ah, capitalism, it all depends on what side of the equation you're on:)

Mike

[David Weaver]

I realize I'm posting in an old thread but I want to give an update.

My wife and I decided to go ahead and install a solar electric system, even though our electricity usage is fairly low - she really likes to be as green as possible. We put up a 14 panel system, with a maximum generating capacity of 3KW (but the peak generated has been about 2.6KW). Right now, it's generating about 18KWh a day, when we have cloudless days. I've noticed a gradual increase in the amount generated as the days get longer. On a cloudy day that could fall to 8KWh and would probably go lower on a really cloudy, rainy day.

The surprise is that we're generating more electricity than we use. I've had days when our net usage is as much as -9KWh, but my average since March 11 (when things went live) is -4KWh per day. I need to build up a cushion because in August and September I know I'll use a lot more than I generate with the A/C on.

I'm on a "net metering plan" which means that I only settle up with the power company once per year, although I get a "bill" each month to let me know what my cost status is. If I was accumulating a big obligation (meaning I'd owe a lot of money) I can make monthly payments - but I don't have to pay until the end of the year. If we wind up with the power company owing us money, they will pay us or roll over the credit to the next year.

I have no idea how long it will take to pay for the system (I bought it outright) but I'm sure it will be somewhere around ten years. The system has a 20 year warrantee on it, but I expect it to last longer than that. Analyzing the return requires you to make estimates on what electricity will cost in the future. Putting in the system isolates me from future cost increases - and if I can generate more power (I guess the proper term is energy) than I use, I'll be rooting for large increase in the cost of power. Ah, capitalism, it all depends on what side of the equation you're on:)

Mike

That's not capitalism, that's any-ism. No matter what the ism, your position depends on what lens you're looking through.

It's fantastic that you got the array put on, though, and that you bought it outright. As i mentioned in a previous post, we are in a bad area for solar, very near the worst in the united states. Still some folks have installed it cash, and a fellow near my parents did it (money burning a hole in his pocket). I said to my mother "I doubt he'll ever get paid back on that", and she said he'd never care. Solar is still not that bad of a move, even here, but wind is an awful proposition. Same guy got a windmill in the 2.5kw range installed, too, that was sort of dumb because there's nothing around here to suggest it would ever come close to paying back, but I think he was just curious.

(we are at about 16 cents a kw/hr when all is said and done here)

But in CA, with the prices you guys have. I'd do it in a second.

I'm not particularly green, I think that widespread true poverty is really the only way you'll stop people from consuming a lot of energy, but we (the pa germans) a thrifty bunch sometimes, and where I grew up, there is a farm that has been generating all of their electricity plus surplus that gets put back on the grid from their cow poo.....


.... since 1979. 600kw of generation capacity.

http://www.epa.gov/agstar/projects/profiles/masondixonfarms.html

I have since seen news articles about how this farm or that farm in california is the first farm to be self sufficient and generate power from poo "since 2006" or whatever, but it must be a lack of research and lack of desire of journalists to actually get their story right (ghee, who'd have thought). The Waybrights' farm did it on the cheap, with their own design and power generation equipment from the 1930s that was mothballed.

Which does bring something to the discussion. A lot of alternative energy solutions can be economically viable if a couple of people do them - innovative folks, but not so viable if everyone does them (solar not included in that, but electric cars sure have the potential to go there). We are seriously seriously lacking these days in the individual innovation that the Waybrights have.

[Rick Potter]

Wow, Mike,

I knew you were getting it too, but I'm surprised to hear that it's up and running. I'm probably slower because I had to wait a few weeks to finish my refinance.

Mine is on the front burner now, and the electrician is coming Thursday. The panels will be put on starting Monday....April fools day:o. Hmmm.

We went big. Our system is as large as Edison would allow, 11 kW, with 46 panels. The more you get the better the price, kinda. We used an inordinate amount of electricity last year with three families living in the house. This allowed us to go bigger than we normaly would. I am hoping to be able to use the electric heater and big window AC in the shop more now.
We'll see.

We leased it for 20 years, and are paying it all up front. This saves us 20 years of interest on the lease, and gets us 20 years of guarantee and maintenance, and like you say, the system should last longer.

Our payback is 4.5 years, as we should be generating pretty close to as much as we use. My Aunt Lois died at 91 a year ago, and left us enough to pay for this. We never expected it, and wanted to use the money in a meaningful way. Now, every time we get our electric bill we will think of her generosity.

Thanks, Aunt Lois,
Rick Potter

PS: Michael S........Each panel weighs about 50#, and should be no problem for out roof. Also, we no longer have tile up there to worry about, since we replaced it with 50 year fiberglass shingles.

[Chris Padilla]

There are multiple ways you can get solar power:

2) Company installs for free and owns the equipment, you buy electricity at a rate lower than the local grid. The company decides how many panel's they'll install (i.e. they may not install enough to get 100% of your home's energy usage covered). *Some* companies offer a buy option @ the end of the lease. Of course at this point you're sitting on 10-15 year old panels... I'm not sure if this would make sense. The company handles all equipment problems during the lease period.

I went with this route. It was nice not having to shell out a dime to get solar on my roof.

[David Weaver]

11 kW, with 46 panels.

Awesome! I've never heard of an individual homeowner installing an array that large. Way cool.

[Jim Matthews]

The catch with PVs is that they generate less power as the ambient temperature rises (http://www.ewp.rpi.edu/hartford/~ernesto/S2012/EP/MaterialsforStudents/Fontenault/Teo2012.pdf).

That means that on the days with the longest sun exposure the panels are putting out less juice per photon.
This is actually good news for Northern latitudes, we're not hamstrung by the high temperatures of our Western deserts.

Coupled with a net Zero home (superinsulation) this is a winning proposition.
If you drive a plug in EV or plug in Hybrid EV, they're brilliant.

For me, just South of Boston, it was more holes in my roof than I want in Hurricane alley.

[Rich Enders]

If you search "True cost of solar" it brings up a number of hits that discuss the total cost per KwH to generate solar voltaic energy by installing a residential unit. This "true" cost is defined as what it would cost a homeowner if there were no subsidies, or tax rebates, and the cost is truly astounding. An article by WKB Associates (10/12/2012) calculates that in a semi-realistic example the true cost is $0.42/KwH. Costs vary around the nation, but mine last year from the local power company was $0.117/KwH. That is a big difference. Another article by the American Thinker (10/19/2012) estimates that for every dollar you spend installing, maintaining and operating a solar system, you would get $0.12 back if there were no subsidies or tax rebates.

But this is unrealistic because there are subsidies, and tax rebates. So who is making up the $0.30/KwH difference? Of course it is the American taxpayer. The homeowners who install these units are actually transferring the bill for the difference between the true cost, and their cost to the rest of us. Am I missing something here?

[Mike Henderson]

If you search "True cost of solar" it brings up a number of hits that discuss the total cost per KwH to generate solar voltaic energy by installing a residential unit. This "true" cost is defined as what it would cost a homeowner if there were no subsidies, or tax rebates, and the cost is truly astounding. An article by WKB Associates (10/12/2012) calculates that in a semi-realistic example the true cost is $0.42/KwH. Costs vary around the nation, but mine last year from the local power company was $0.117/KwH. That is a big difference. Another article by the American Thinker (10/19/2012) estimates that for every dollar you spend installing, maintaining and operating a solar system, you would get $0.12 back if there were no subsidies or tax rebates.

But this is unrealistic because there are subsidies, and tax rebates. So who is making up the $0.30/KwH difference? Of course it is the American taxpayer. The homeowners who install these units are actually transferring the bill for the difference between the true cost, and their cost to the rest of us. Am I missing something here?
I don't know about your state, but the rebate from Southern California Edison is not that much. The federal tax credit is 30% of the system cost. I don't know what those people who did the "true cost of solar" used as numbers but here in CA, the cost of electricity in the highest tier is presently around $0.36 per KWh. Most people do not try to zero out their electricity bill, but just generate enough to get them down to tier two ($0.16 per KWh). And just FYI, tier three is $0.29 per KWh, and tier four is $0.33 per KWh - this is winter rates and summer rates are a bit higher.

But in analyzing the payback, you have to take into account that there's very little variable cost in the system - it's all up front fixed cost. So if the system will last for 30 years, you need to take the present value of what you would have paid for the electricity you generated (and therefore didn't have to buy) during those 30 years and compare it to the capital cost of the system. My guess is that you will get to payback (in present value) a lot sooner than 30 years. I expect to get paid back (in present value) in about 10 years. That means that I get 20 years of free electricity, which seems like a pretty good deal to me.

Regarding who pays for the tax credit and rebate. Let me address the rebate first. Here in CA the power company has a mandate to generate about 30% of it's power from renewable sources by some date (maybe 2020, I don't remember). By encouraging homeowners to put up solar panels, the electric company avoids having to invest in renewable energy power plants. They feel it's a pretty good deal for them.

As for the federal energy credit, the government has funded (in many different ways, sometimes directly, sometimes through tax credits) the investment in many technologies that are believed to be important to the future of the country. The federal government funded the development of what became the Internet, for example, and radar was developed completely with government funding during WWII. GPS is fully funded by the government - what would we do without it now?

Mike

[Mike Henderson]

If you search "True cost of solar" it brings up a number of hits that discuss the total cost per KwH to generate solar voltaic energy by installing a residential unit. This "true" cost is defined as what it would cost a homeowner if there were no subsidies, or tax rebates, and the cost is truly astounding. An article by WKB Associates (10/12/2012) calculates that in a semi-realistic example the true cost is $0.42/KwH. Costs vary around the nation, but mine last year from the local power company was $0.117/KwH. That is a big difference. Another article by the American Thinker (10/19/2012) estimates that for every dollar you spend installing, maintaining and operating a solar system, you would get $0.12 back if there were no subsidies or tax rebates.

But this is unrealistic because there are subsidies, and tax rebates. So who is making up the $0.30/KwH difference? Of course it is the American taxpayer. The homeowners who install these units are actually transferring the bill for the difference between the true cost, and their cost to the rest of us. Am I missing something here?
Would you provide a pointer to the web site where you got your numbers, please. I did as you suggested and found a number of articles, including one that was focused on Los Angeles. Here's what that article said:

"In this example, the post-incentive cost is $9,213. Incentives for this system consist of the federal tax credit of 30 percent, a property tax exemption from the state and a rebate of $0.12/kwh for 20 years from the city of Los Angeles. The breakeven point is 3.64 years — where the savings equal the initial investment. Over a 25-year period, the total savings is almost $100,000."

Mike

[Jim Matthews]

The idea of a distributed power system makes a great deal of sense in areas with fragile power lines.
(Anyone from Connecticut or Vermont can tell you what that meant in the last major snow storms.)

PV makes the most of it's output if you have a bank of batteries storing power, and an inverter to supply AC to your mains.
If you're looking at it with a view to ROI, it may not make a great deal of dollars and sense.

If you're adding PV to augment an increasingly creaky Electrical grid, it has the same utility as buying insurance.
I invested in a standby generator that runs on natural gas instead of PV, as the additional cost or battery storage wasn't price competitive.

I think the "killer app" for PV arrays is in battery storage of excess power, either in an Electric vehicle or house stack.
Lacking that, it's a perforated roof that holds me back from making the leap.

[Steve Rozmiarek]

Kevin;

Gernment subsidies is my money along with millions of other taxpayers. If solar power is such a good deal it would not have to use the people's taxes to promote it. The free enterprize/captilist system would be all over it if it were financally feasable.

+1.

More on topic though, all of these wind/solar power schemes require high subsidies from multiple levels of government. In case no one has noticed, there is a slight financial crisis on hand, do you trust the government to pay its obligations, or worse, that it will agree that it still has an obligation? Especially on something that would likely be gone the instant the other political party gains power? If you are worried about buying green bananas, I suppose it doesn't matter to you, but what kind of potential mess are you handing to your kids?

Worse then that, these are generally also dependent on subsidies from the state and the local power company. I know a guy who put up three large wind turbines, only to have the rules be changed by the local power company. The shorter payoff is now something like 50 years. Oh, the life span of the turbines is 7.

Next issue, what is the logical thought process to "invest" in something that doesn't even break even until the device is at the end of its usable life, and has no salvage value? Would't it make more sense to take the money and use it for something else? If you want to feel good, just give it to a charity, you'll get better returns.

[David Weaver]

Turbines are a bad individual investment ( in terms of actual power production, possible maintenance, damage ). I probably mentioned a relative's experience with a 10kw generator on a 90 foot post earlier here. I don't see how they could ever come close to solar's economic viability in most parts of the country. Certainly on a large enough scale and in certain places, they can generate a fair amount of power but an individual has no hope of placing one on a 200 foot tower on an ideal clear ridge top in a high wind area.

[Mike Henderson]

Next issue, what is the logical thought process to "invest" in something that doesn't even break even until the device is at the end of its usable life, and has no salvage value? Would't it make more sense to take the money and use it for something else? If you want to feel good, just give it to a charity, you'll get better returns.

I don't know about wind, but my solar installation is guaranteed for 20 years and the payback is significantly less than that (I estimate 10 years). I expect to get at least 30 years out of the system. Regarding investing for the long term, yep, some people do invest for the long term. Some people buy land and don't develop it or sell it for 30 years. Many of us put money into a 401K and don't take it out for 40 to 50 years. There's nothing wrong with having a long investment horizon.

Mike

[Regarding the rules changing, I do worry about that. Let me use myself in this example. I generate electricity and feed my excess back to the power company - and in doing so, I zero out my electric bill. So the electric company doesn't get a penny from me. But they still have to provide generating capacity and distribution to me because I need to take power from them during the evening and when the sun isn't shining. They can't do that without getting some money from me to pay for that. So I do think the rules will change in the future.]

[Rick Potter]

As Mike says, the objective is to keep your electric bill in tier 1 and 2. Tier one is kept very low and is used as a break for fixed income seniors, etc. It is a very short tier, which quickly jumps to tier 2 (16 cents). Trying to stay out of tier 3, which almost doubles (29 cents), and 4 (33 cents), is the goal. In CA the amount the Edison Co. pays you back for generating more than you use used to be more, but now has phased back to 3 cents kWh. It makes no sense to think you will make money on the deal, the object is to save money on what you use.

The system I am installing will provide most all of what I use, and the average kWh over the 20 year period the system is maintained and guaranteed is 6 cents. Remember, the current tier 2 rate is 16 cents. We can only guess what it will be in the future. As I mentioned before, my payback is 4 1/2 years.

As to the rebates, I am in agreement that they will not always be there, that's why I am getting the system now. BTW, there are six houses on my street, and I am the third to get solar.

If this system works out as expected, I will be looking at a plug-in hybrid for my next car in a couple years.

Rick Potter

[Rich Enders]

Mike,

Thanks for your response. I spent most of my career in Southern California, but we moved everything to Arizona when we brought manufacturing in house. We could not compete in our business with all the extra costs applied by California.

The $0.117/KwH is the rate we paid last year in the Phoenix area, and that includes 5 months of full on A/C use. For reference I just read another article that estimated the average cost across the US last year was $0.11/KwH.

I am no expert on solar. My interest is how our taxes are spent, and solar is just one area of concern.

One of the articles I referenced on "true" cost is available at www.americanthinker.com/2011/ (http://www.americanthinker.com/2011/) The original article was written July 11, 2011, and then reprinted in their October 19, 2012 issue. The other article seems to have fallen off the internet, but I found it by doing a search of WKB Associates. It is highlighted as True Cost on their web page. If you are still unable to find the articles, I will be happy to email or fax them to you directly.

I noted the special situation you have in California, and the incentives that encourage solar. However the really significant subsidy seems to be in the cost of the panels to a home owner. According to the American Thinker the residential panels that sell for a few thousand would have a true unsubsidized cost in the 10's of thousands. In their particular example a 900 kilowatt-hour-per-month solar array has a true cost of $67,500. As I read the article this size array is about enough to run a 2 ton A/C unit.

Again I am not an expert, but if these numbers are even close to factual then we need to rethink what we are doing, and what it is costing all of us.

[Mike Henderson]

However the really significant subsidy seems to be in the cost of the panels to a home owner. According to the American Thinker the residential panels that sell for a few thousand would have a true unsubsidized cost in the 10's of thousands. In their particular example a 900 kilowatt-hour-per-month solar array has a true cost of $67,500. As I read the article this size array is about enough to run a 2 ton A/C unit.

Again I am not an expert, but if these numbers are even close to factual then we need to rethink what we are doing, and what it is costing us.
Solar panels are coming in from China, and I'm sure they don't receive any US government support, and are driving the cost of solar panels down. It's hard for me to believe that US companies are that much different in price from the Chinese panels. The US plants have to pay higher wages but there doesn't seem to be that much labor in a solar panel. And if the Chinese were "dumping" the product in the US, they wouldn't have to sell that cheaply to drive the US plants out of business. Additionally, there are avenues that US companies can pursue to have tariffs applied to products that are deemed to be "dumped".

No, I think the cost of solar panels represent the cost of manufacturing them, plus some profit.

BTW, for everyone's information, the before credits and rebates cost of solar around here is about $5.25/watt. This is fully installed, parts and labor. My guess - and it's just a guess - is that the material cost (solar panel, inverter, and mounting hardware) is about $3/watt. So a 260W panel with inverter would be about $750 or less. A 900KWh/month installation would be about 25 panels, or about $19,000 in material (let's call it $20,000 in material). If the material cost is $3.50/watt, the material cost would be about $22,750.

Mike

[That article you gave a link to is not available through your link. Maybe something wrong with the URL?]

[Steve Rozmiarek]

I don't know about wind, but my solar installation is guaranteed for 20 years and the payback is significantly less than that (I estimate 10 years). I expect to get at least 30 years out of the system. Regarding investing for the long term, yep, some people do invest for the long term. Some people buy land and don't develop it or sell it for 30 years. Many of us put money into a 401K and don't take it out for 40 to 50 years. There's nothing wrong with having a long investment horizon.

Mike

[Regarding the rules changing, I do worry about that. Let me use myself in this example. I generate electricity and feed my excess back to the power company - and in doing so, I zero out my electric bill. So the electric company doesn't get a penny from me. But they still have to provide generating capacity and distribution to me because I need to take power from them during the evening and when the sun isn't shining. They can't do that without getting some money from me to pay for that. So I do think the rules will change in the future.]


Mike, you illustrated what I meant. The example you cited of land and a 401K have intrinsic value for an infinite period. Machinery, cars, and solar panels don't. One way to look at it is you are prepaying the electric bill until the system breaks even, then you are in the profit. Using a quick google of some government site http://www.eia.gov/tools/faqs/faq.cfm?id=97&t=3

my state uses an average of 1029 kWk/month, costing $95. This puts breakeven on a 900 kWh/month system at 17.54 years as calculated on cost. If it runs for another 2.5 years (20 year life) you make $2,850, or if it goes to 30 years, you make $14,250, assuming no breakdowns.

Now, if you had invested $20,000 at 3% for 20 years, you would get back $33,090, 30 years gets you $42,570. For my simple mind, investing in this scenario nets you $10,240 more, or for a 30 year, $8,320 more.

At some point, it looks like the solar panels beat the return of the investment, but it would be in year 70 or so I think. Another thought, sure the panels may last 30 years, but what if technology changes between now and then, and in year 15 the "new improved panel" comes out and you want to replace yours. Then you've lost money for the first 15 years.

[Steve Rozmiarek]

Turbines are a bad individual investment ( in terms of actual power production, possible maintenance, damage ). I probably mentioned a relative's experience with a 10kw generator on a 90 foot post earlier here. I don't see how they could ever come close to solar's economic viability in most parts of the country. Certainly on a large enough scale and in certain places, they can generate a fair amount of power but an individual has no hope of placing one on a 200 foot tower on an ideal clear ridge top in a high wind area.


Just to clarify, the turbines I referenced are 25Kw, IIRK, and they are large, on 150 foot poles. We are very rural, and they would not be allowed in most places. The issue here is the local utility changed the rules on what they paid for locally generated power. They are now not even close to profitable, and short of changing laws, there is no recourse.

[David Weaver]

I'm sure they're a better investment there than they are here. What do they pay you now, generation?

We have gobs of them popping up around here (the big ones), but something happened with solar credits recently because a lot of the implementation has been put on hold. I haven't a clue about the subsidies for the windmills, but something must've changed drastically.

My relative tried to go the turbine route way back in the late 70s or early 80s, the last time alternative energy was popular. It was sickening to watch the turbine moving fairly slow or not moving at all a lot of days. And after a while, it seemed like the whole thing was down more than it was up. I'm sure they're a little better now, but they go back and forth between doing nothing and taking a beating.

Do you know what yours will average over a season? Will it come out around 15%.....or 25% of rating or something like that overall?

[Steve Rozmiarek]

David, they aren't mine, a neighbors. I don't know the answer to the average, I would guess a bit better than that though. We have the (mis)fourtune of living where the wind always blows. Some day I may make a little money, and move someplace between the mountains with tall trees so that I get a change of pace.

I'm not sure what the rate that the utility paid initially, but he set them up based on it, and got cut to about a tenth. He is using them when he runs the irrigation now, said it costs money to run them into the power line. I think you are right, turbines are probably a horrible idea in most of the country.

[Mike Henderson]

Mike, you illustrated what I meant. The example you cited of land and a 401K have intrinsic value for an infinite period. Machinery, cars, and solar panels don't. One way to look at it is you are prepaying the electric bill until the system breaks even, then you are in the profit. Using a quick google of some government site http://www.eia.gov/tools/faqs/faq.cfm?id=97&t=3

my state uses an average of 1029 kWk/month, costing $95. This puts breakeven on a 900 kWh/month system at 17.54 years as calculated on cost. If it runs for another 2.5 years (20 year life) you make $2,850, or if it goes to 30 years, you make $14,250, assuming no breakdowns.

Now, if you had invested $20,000 at 3% for 20 years, you would get back $33,090, 30 years gets you $42,570. For my simple mind, investing in this scenario nets you $10,240 more, or for a 30 year, $8,320 more.

At some point, it looks like the solar panels beat the return of the investment, but it would be in year 70 or so I think. Another thought, sure the panels may last 30 years, but what if technology changes between now and then, and in year 15 the "new improved panel" comes out and you want to replace yours. Then you've lost money for the first 15 years.
Perhaps electricity is a lot less expensive in your area than it is in mine - I can assure you that the breakeven in California for a 1029KWh/month is not 17.5 years. With the cost of electricity in my area, I believe I'll have 20 years of free electricity from the system I installed. And when I said I expect to pay it off in present value terms in 10 years, that takes into account the cost of money (which is pretty cheap right now). Present value is what stream of money, discounted at the present cost of money, will equal your investment.

While better panels may come out in the future, it will not obsolete my panels. If I decide to replace what I have, it would have to be because I could make more money with the new panels than I could leaving what I have in place. So if I "scrap" my panels, it will be because I can make more money with new panels. But people have been trying to improve the efficiency of solar panels for a long time and the advances have been pretty small - and increase the cost of the panel. I'll welcome a breakthrough but I won't hold my breath waiting for it.

Solar panels beat the investment (for my installation) in about 10 years. Solar panels for people who use a lot more electricity beat the investment (in California) in a lot less than 10 years, not 70 years. For your area, with your cost of electricity, it may be 70 years. If so, be thankful you have cheap electricity. Only a good financial analysis could answer that question.

Mike

[I'm not trying to convince anyone to buy a solar-electric system. I'm only telling people what I did and why.]

[David Weaver]

David, they aren't mine, a neighbors. I don't know the answer to the average, I would guess a bit better than that though. We have the (mis)fourtune of living where the wind always blows. Some day I may make a little money, and move someplace between the mountains with tall trees so that I get a change of pace.

I'm not sure what the rate that the utility paid initially, but he set them up based on it, and got cut to about a tenth. He is using them when he runs the irrigation now, said it costs money to run them into the power line. I think you are right, turbines are probably a horrible idea in most of the country.

A lot of the turbines I've seen are rated at some ridiculous windspeed, like 35 miles per hour. If the wind blew constant at half that, they'd only make about 1/4 if their rating. The bigger ones might be a lot more reasonable about their ratings.

http://www.neo.ne.gov/renew/windresources/NE_spd50m_0408052.pdf

I see from this map that there are a lot of places with average wind speeds of 15-17 miles per hour in Neb. That's really good....but not if you don't get paid for the electricity.

[Steve Peterson]

As much as I hate big government and big power companies, I think solar is one system that works best on a large scale.

The present system has 1000 individual homeowners putting up 14 panels each with 1000 separate inverters and 1000 extra meters and 1000 different rooftops with holes in them.

It would be more efficient to have large installations on the rooftops of Walmart and Home Depot, or out in the parking lot where they can provide shade. The wiring could be optimized. The power inverter could be highly efficient because it would run at a higher voltage. One skilled worker would keep the system at high efficiency. One low skilled worker would keep the panels clean.

Steve

[Mike Henderson]

As much as I hate big government and big power companies, I think solar is one system that works best on a large scale.

The present system has 1000 individual homeowners putting up 14 panels each with 1000 separate inverters and 1000 extra meters and 1000 different rooftops with holes in them.

It would be more efficient to have large installations on the rooftops of Walmart and Home Depot, or out in the parking lot where they can provide shade. The wiring could be optimized. The power inverter could be highly efficient because it would run at a higher voltage. One skilled worker would keep the system at high efficiency. One low skilled worker would keep the panels clean.

Steve
It's interesting that you mention this. Here in southern California, in the area known as the Inland Empire, companies with low flat buildings, such as warehouses, are renting their roofs for a solar installation. A company comes in and installs the solar panels, gets the connection to the grid, and pays the building owner rent.

And just a few comments on your numbers. Solar installations are now done with mini-inverters, so each panel has an inverter. The old method, where the panels were connected in series and fed to one inverter has a problem - if even one panel gets shaded, or has a problem, the output of the system is decreased quite a bit. So if 1,000 homes each install 14 panels (a very small system - most installations have more panels), there are 14,000 inverters.

There are not 1,000 extra meters. The old mechanical meters would simply run backwards if power was fed from the system back to the grid. The new electronic meters monitor which direction the power is flowing and record it. So you just keep your existing meter.

One advantage of distributed generation is that it minimizes the need for transmission lines. Power companies encourage generation close to the point of use (other power users in the neighborhood will not have generation capabilities and will take the power you generate.)

Mike

[Rick Potter]

An unexpected solar bonus.

They started installing today, and I noticed this nice looking aluminum extrusion they use to mount the panels. I mentioned to the guys that if there were any scraps left I would be able to use them. The boss said they were finished with that part of the job, and I could have the extrusion they didn't use.

That was two 14 foot extrusions, about 2 3/4" high and 3/4" thick, anodized aluminum with a couple T slots. I see some new router table fences, etc. in my future. I think I might just make a fence for my Jet Oscilating spindle sander too, I just used a makeshift one today to smooth the inside cuts of a breadboard cutout. Worked great.

Rick Potter