Any recent experience with buying a solar system for your house?

[eyeonFI]

Apologies if there is a recent thread about this - my searching only turned up discussions several years old.

There is a group in my area that has worked with a non-profit to negotiate a bulk purchase of solar systems, and I'm thinking of joining in. I just found out about it and the deadline to sign up is June 30. But I know basically nothing about solar. So I'd love any insights the group might have....

Here is some of the info the non-profit provides on estimated costs for a 3kW system (no clue what would actually be appropriate for my house, but I have a fairly small house/roof):

Cost before discount/incentives: $13,500
Upfront discounts: $4950
Upfront costs: $8550
Fed/State credits/grants: $3835
Estimated 1st year energy savings $465
Cost after 1st year: $4250

Some of my thinking about this....
I'm aiming to FIRE in 1-3 years. Right now, while I still have a high income, $4250 won't really be a noticeable expense. I'm guessing after I FIRE it would feel a lot more painful to drop that much $ on something. My planned WR after FIRE is about 2.8%, so I find myself now thinking about recurring costs in terms of how much I need to have in my stash to support the cost indefinitely at that rate. So I take the estimated annual $465 savings and multiply by ~35 to get $16,275 (less needed in stash), which then makes the $4250 cost look pretty good....(of course I may well move ~5 years down the line, but that is uncertain...). Oh, and my roof is only 4 years old, so should not need replacement any time soon.

Any thoughts or experience welcome...

Thanks!

 

[travelover]

Others can offer more information on the economics of a solar system, but I'd offer up this:

1) The price on solar is dropping fast, so it is likely it will cost less in the future
2) It is never a good idea to rush a decision to meet a short fuse deadline unless you have considered all the facts and can make a confident call.

 

[MRG]

A couple of folks in this area just installed some. I don't know if there was a slick salesman going through or what the motivation was. I did notice one having a roof inspection done after what could have been light hail. Don't know about insurance cost of the panels, seems like they would go quickly in a hailstorm.

 

[scrinch]

I installed a 3 kW solar system about 8 years ago for a net cost of about $12k (after incentives). It paid out about a year ago. Output has held up well over the years, and reliability has been perfect. My total electricity bill since installation has been zero. Solar technology is proven now, so don't worry about that part. If you have enough south-facing rooftop (mine only covers a little more than the two-car garage) then I say go for it.

 

[ERD50]

What do you know about this 'non-profit'?

How certain are all the discounts/credits? Are any assumed to be future credits that might be eliminated/reduced?

How certain are you of the 'estimated' energy savings? How was this calculated? Is there a 'guarantee'?

As someone else mentioned - insurance cost?

This includes installation, permits, etc? Have they inspected your house and electrical, or will there be 'surprises' when they do?


If all those are good, a ~ 10 year payback (not accounting for opportunity costs) isn't bad. There is some debate about this, but you may not get anything for the solar if you move in a few years (as others mentioned, if prices keep coming down, a new system might be cheaper than the amortized price of yours).

And the 'rush', hard sell concerns me as well. Of course, I'm not interested in seeing my money spent on your system, so maybe I'm biased


Not that relevant, but...

Some of my thinking about this....
I'm aiming to FIRE in 1-3 years. Right now, while I still have a high income, $4250 won't really be a noticeable expense.

$4,50 is a noticeable expense before retirement and after retirement. Retirement does not change the dollar amount - your net worth is reduced by that amount whether you spend it the year before you retire, or the year after. I only mention it because I think that is faulty, and maybe dangerous thinking.

-ERD50

 

[eyeonFI]

Thanks for the input so far!

travelover: both good points. on the rush to judgement, I actually only have to sign on as "interested" by the end of the month, then a contract would need to be signed by end of July, after assessment of my roof's suitability (by the non-profit), and specific estimate for my house by the installer.

MRG: we don't get much hail, and the panels are supposed to withstand 1" hail at terminal velocity, but I had not thought about insurance implications. suppose I would need to talk to my home insurer.

scrinch: nice to hear you have had a good experience!

 

[tryan]

So you're looking at 9+ years for these things to break even. What most sales people conveniently "forget" is MAINTENANCE. What's the cost going to be if the panels - or god forbid ... ROOF - need service.

FWIW I am in year 8 of a geothermal heat pump which was supposed to break even year seven. But maintenance - and head aches - have been so excessive it is VERY apparent this thing will NEVER break even.

 

[NW-Bound]

I just read an article yesterday about home owners with a solar system having a tough problem selling their home if it is a leased system. The lease has to be renegotiated to be transferred to the new home owner. Most buyers do not want to deal with it, and demand that the system be paid out right before they consider. On the other hand, a paid-for system adds to the value of the home, but the article did not say whether one recoups that cost.

I am a pro-solar guy myself, but cannot have it for my home. The roof orientation is wrong, and installation on tile roof is tricky. I have enough trouble with the tile roof without having something else on top of it.

Regarding roof orientation, walking around my neighborhood I see several installations where the roof orientation is all wrong and the panels would be nowhere near their potential output. What a waste!

 

[ls99]

No solar at home. Township permit process a major PITA. Just not worth the effort or the hassle.

At my camp I operate over 90% of the time on solar. Including a specially modified by yours truly, record player. When needed, generators are ready to pull their weight.

 

[AllDone]

That's a pretty good price, but prices may continue to drop. We put in too much solar because we were planning on an electric car, but then my mom offered me her old, low-mileage ragtop for free, so now we are making a couple of dollars every month. However, when you sell more than you use, you only get wholesale rates. Eventually, though, I'll have a vehicle that runs on homebrew and then it will pay off. Anyway, look at your power bills before you decide how much solar to install.

My understanding is that solar panels are viewed as a positive selling point in the real estate market.

My husband wears a T-shirt that says "A big solar energy spill is just called a nice day."

 

[ERD50]

...
My husband wears a T-shirt that says "A big solar energy spill is just called a nice day."

That's 'cute', but it ignores some realities.

It takes a lot of energy to make a solar panel, and I have not yet heard of a solar powered solar panel factory.

Toxic chemicals and waste are produced in making solar panels.

Solar has a fairly large injury/death rate associated it with it (relative to total power produced). IIRC far worse than Nuclear, though this will taper off after initial installations are complete.

Of course there are positives, but I'm kind of a 'whole truth' kind of guy.

-ERD50

 

[NW-Bound]

Solar has a fairly large injury/death rate associated it with it (relative to total power produced). IIRC far worse than Nuclear, though this will taper off after initial installations are complete.

Death during installation? Falling off roof?

That's why I wish I have a big lot, which would allow me to install a huge array at ground level and at the perfect orientation.

I have room and nearly perfect orientation at my boonies home, but I use so little electricity there (high country hence needs no A/C).

 

[zinger1457]

Cost before discount/incentives: $13,500

I know a couple of people that had solar systems installed about 3-4 years ago and the price they paid before any discounts was around $25K. Sounds like the prices have already dropped a lot or you're getting a really good deal.

 

[ERD50]

Death during installation? Falling off roof?

...

Yes. Working on home rooftops to install a relatively low kWh system, and moving to another home the next day, and on and on. Versus big industrial projects where a trained crew is doing much the same work day in day out, under better controlled conditions.

-ERD50

 

[6miths]

I was thinking that 'there is no way that I would have room for the planets let alone a main sequence star on my lot!' Mind is obviously wandering...

 

[scrinch]

I was thinking that 'there is no way that I would have room for the planets let alone a main sequence star on my lot!' Mind is obviously wandering...

Yeah, gonna need a bigger roof for that kind of solar system!

 

[eyeonFI]

Thanks for all the replies.

What do you know about this 'non-profit'?

How certain are all the discounts/credits? Are any assumed to be future credits that might be eliminated/reduced?

How certain are you of the 'estimated' energy savings? How was this calculated? Is there a 'guarantee'?

I know nothing about the non-profit beyond what is on their own website, but the initiative is being sponsored by the local University and local municipality, so that makes me feel pretty comfortable it is not some scam. Turns out both Uni and town have been holding info sessions for months, but it just crossed my radar screen this week.

I did verify state and federal incentives, and also found there is a county incentive that will cut the price in half via a property tax credit So that pushed me over the edge to go ahead and sign up to have my roof evaluated by the non profit and get an estimate from the installer while I continue to educate myself about this (I am not obligated to actually buy anything by getting the evaluation/estimate).

 

[jimnjana]

With the property tax credit sounds like a good deal. The upfront cost of our system about 18 months ago was $3.6 per watt. I recently talked to the rep from the folks that put it in and now the upfront cost is down to $2.7 per watt installed. With rebate and tax credits our out of pocket cost was in the $.75 per watt. What type of roof do you have and how old is it? If it is relatively old and would likely need to be replaced in the next 5-10 years I would seriously consider having it done prior to having the solar panels installed. If you have it redone, I would definitely have a layer of the self healing rubber membrane in lieu of tar paper installed. We are looking at adding up to another 2k of panels to our system in the next year or so.

 

[AllDone]

That's 'cute', but it ignores some realities.

It takes a lot of energy to make a solar panel, and I have not yet heard of a solar powered solar panel factory.

Toxic chemicals and waste are produced in making solar panels.

Solar has a fairly large injury/death rate associated it with it (relative to total power produced). IIRC far worse than Nuclear, though this will taper off after initial installations are complete.

Of course there are positives, but I'm kind of a 'whole truth' kind of guy.

-ERD50

I don't believe that anyone has made those claims or disagree with you. Solar energy is "low carbon", not "no carbon". Of course roof work is dangerous. It always has been. Happily, our roof repair and solar install was accomplished without any problems.

 

[pb4uski]

We looked into solar last summer. The proposed system cost $23k and about $14k after state and federal tax credits. Our electric bill is about $70 a month. The payback ignoring the time value of money was about 15 years. Assuming a 5.5% cost of money the payback was about 25 years (25 years before cash flow positive).

While our roof faces due south our neighbor has a huge maple tree close to her line that shades our roof and the neighbor is extremely difficult so cutting the tree down was not a possibility. The proposed alternative was an array on a pedestal next to our garage.

I emailed the sales rep informing him that "The economics just don't seem very attractive after considering the time value of money. I'm hopeful that over time the pricing will improve and the economics will become more attractive."

He responded that "Solar is made affordable by the help of several factors; the first is the [state] Rebate. This rebate is based on a pool of money that the legislator designates towards renewable energy projects. Currently, there is only about $1 million left. We expect this to last maybe another two months. When it is gone, we do not know when or if it will get re-filled. Currently this is a savings of $1,863. Second is the Federal Rebate. This is good for 30% of the total system cost, or in your case, $6,955. Although this is good till 2016, it is unlikely that it will continue beyond that.

In short, in order for solar to be more affordable in the future, we will need to see the cost of product to reduce by significantly more then 30% from where it is today. Although we would love to see this, history suggests that product costs will not decrease by this much in this amount of time."

I sent him a snarky response asking if that really meant that solar was not economically viable without taxpayer subsidies. He never got back to me on that one.

 

[davemartin88]

We recently installed an 8.2KW ground mounted system (32 panels) at a cost of about $2.90 per watt. We talked with several installers and pricing for our area in West Virginia were very close. A ground mounted system was slightly higher in cost but we have a lot of room with open space to orient the panels in the best direction. No one was killed during our installation that I'm aware about.

With the cost of electricity at about $.10 per KW where we are (WV coal!), payback will be well over 15 years but if costs rise, payback will be better. It's a very long payback period. Like retirement calculators, the input you put in for factors like future inflation have a big impact on whether this is a good decision.

We have microinverters on each panel and both the panels and the inverters are warranted for 25 years, theoretically, there is no maintenance for the system but only time will tell of course. There are thousands of panels in use and damage from storms/hail etc. seem to be well within the predictions and the panels are made to withstand high wind and hail- again, time will tell but the research I did didn't seem to indicate this was a major issue.

From what I can tell, the main solar production calculators that are used to set the production rates for a system in our area seem to understate the actual production by about 10% or so. This was based on discussion with others who have installed systems and based on our limited (less than 90 days) experience, this seems to be the case for us. If our production beats the predictions, good news. I think our being able to orient the panels in the perfect direction and without any obstructions really will work to our favor.

Our finance calculations also didn't include receiving any payments for selling Solar Renewable Energy Credits (SRECs) either as I'm a bit sceptical this will work out. These are 1,000 KW hours blocks of production that can be sold in a limited market to power companies that are required to produce some of their energy through solar. Skipping the politics, we've signed up with a trader to sell ours as they are produced. This month will be the first month we've had this set up and hoping to sell the units on the Pennsylvania market (the only one we're eligible for at this point since WV doesn't have an SREC market). It cost a one time fee of $50 to set up with a broker and last month, the credits were selling at over $40 each. Net is, if we can sell our predicted 8 SRECs each year, then that would decrease the payback time. Our system is connected to the internet so the broker tracks the production directly and hopefully, our only involvement is to get a check once in a while.

We really liked the idea of solar panels here for a variety of reasons. We have the panels connected to our guest cabin and and don't expect to have any bill for electricity there, the excess credits apply to our main house. I saw the post about the manufacturing impacts of solar panels and don't know the overall impact but I guess it's a bit like hybrid cars.

I like paying less to our power company and enjoyed working with the small, local company that we used to do our installation.

eyeonFI- don't know the details of the equipment/configuration for your offer but the numbers do seem very low for the up front cost. Obviously you'll want to make sure everything is included like connections to your existing power system, permits, disconnect switches, cabling, etc. It also looks like your payback is based on about 15 cents per KW hour for your existing suppplier, always worth checking to make sure that's accurate. I think it will also be nice to understand just how much this system will produce compared to your total use. Might be a great deal but is 3KW per year 10 percent of your energy needs or 50%? Our 8.2 KW system was selected based on providing about 40% of our energy needs, nothing magic about 40%, just wanted it to be a significant impact but weren't looking to live "off grid".

Best of luck with your decision.

 

[davemartin88]

I have room and nearly perfect orientation at my boonies home, but I use so little electricity there (high country hence needs no A/C).

FYI, not sure if this applies to your situation but you might ask your power company about what is called a "parasitic agreement" here in WV, lol. Net is, excess power from solar equipment generated at a host site (for us, our guest cabin), is applied as credit against another "parasitic" account (for us, our main house). Our solar panel array is about 500 feet from the house and we originally were planning to trench a line from the solar panels to supply power but when we found out about the parasitic agreement, we were able to connect to the guest cabin with only about 50' of cabling.

Would have to be the same company for both accounts, etc. but just some FYI in case it might work for you. We're supposed to see our first credit to the home account next month as it takes the power company 90 days to get it set up.

 

[Theseus]

Net is, excess power from solar equipment generated at a host site (for us, our guest cabin), is applied as credit against another "parasitic" account (for us, our main house). Our solar panel array is about 500 feet from the house and we originally were planning to trench a line from the solar panels to supply power but when we found out about the parasitic agreement, we were able to connect to the guest cabin with only about 50' of cabling.

That sounds like a great deal. When weighing cost/benefit I was contemplating installing system on my shop (minimal consumption) using time of day rates, with the credit for buyback offsetting my residence on standard rate. But utility only allows buyback on main residence, so that scheme wasn't going to work for me.

I've had a site assessment done, and while I would like to install a system for several reasons I've not been able to reconcile the upfront cost with my modestly frugal self.

 

[ERD50]

...Happily, our roof repair and solar install was accomplished without any problems.

.... No one was killed during our installation that I'm aware about. ...

Anecdotes are not data.

Deaths per TWH by energy source

Rooftop solar is several times more dangerous than nuclear power and wind power. It is still much, much safer than coal and oil, because those have a lot of air pollution deaths.

RE - AllDone: a T-shirt that says "A big solar energy spill is just called a nice day."

Me: That's 'cute', but it ignores some realities. ....

I don't believe that anyone has made those claims or disagree with you. Solar energy is "low carbon", not "no carbon". Of course roof work is dangerous. It always has been. ...

My point stands that a t-shirt with a cheer leading slogan that ignores realities is just 'cute'. It isn't helpful to ignore realities, what is the point of that? The oil and coal companies can come up with lists of positives, if we simply ignore any negatives.


This thread points out the silliness of the way these subsidies are dished out. Let's assume that the majority of people in an area have agreed that solar is a positive overall, and that it should be promoted. Given that, it makes no sense to subsidize individual homeowner roof-top installations. If everyone benefits, everyone should share in the cost, or overall savings if that comes to pass:

A) Why should one guy get this subsidy, and the potential for a lower bill and enhanced ROI (only because others paid part of the cost for his system), when his neighbor maybe can't install one due to roof orientation or shade tress. That sounds pretty random to me.

B) Why should people in apartments or who rent or plan on moving be effectively shut out from these subsidies? Rather selective, and one could say discriminatory.

C) If we want solar as a group, we should get the most kWh for our $, and therefore the most benefit. Individual rooftop installations are far more expensive and dangerous than a much larger industrial installation that everyone would share - a large flat roof on a warehouse or big-box store would provide a safer installation environment, and provide an economy of scale far above installing on hundreds of individual roofs, with many restrictions to get those panels oriented for maximum output. A big industrial rooftop could even have the panel angle adjusted a few times a year to maximize output. Two people could get that done over a short time. But not if they had to drive around and climb on hundreds of residential rooftops. The same for any monitoring and maintenance (washing) to maintain peak output. How many of these residential installations will end up with some shading over the next decade or two as trees grow, etc?

It seems to me that if you are a fan of solar, you should be opposed to residential rooftop solar, and supportive of community-shared, industrial-sized installations.

-ERD50

 

[NW-Bound]

FYI, not sure if this applies to your situation but you might ask your power company about what is called a "parasitic agreement" here in WV, lol. Net is, excess power from solar equipment generated at a host site (for us, our guest cabin), is applied as credit against another "parasitic" account (for us, our main house)...

Would have to be the same company for both accounts, etc. but just some FYI in case it might work for you. We're supposed to see our first credit to the home account next month as it takes the power company 90 days to get it set up.

Thanks for the tip. Unfortunately, my two homes are 140 miles apart and served by two different companies.

The far end of my lot is in a sunlit spot with no trees (I am a tree lover and hate to cut any down). And another power line runs right at the lot boundary. So, in theory it is possible to mount a transformer on the pole, another meter, and I can have a 100KW array in production.

The problem is I am not there often, particularly in the winter, and some thieves will likely just unbolt and truck my precious panels away.