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Any recent experience with buying a solar system for your house?
Old 06-25-2014, 09:20 AM   #1
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Any recent experience with buying a solar system for your house?

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!
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Old 06-25-2014, 09:28 AM   #2
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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.
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Old 06-25-2014, 09:42 AM   #3
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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.
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Old 06-25-2014, 09:52 AM   #4
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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.
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Old 06-25-2014, 10:12 AM   #5
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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...

Quote:
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
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Old 06-25-2014, 10:13 AM   #6
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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!
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Old 06-25-2014, 01:42 PM   #7
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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.
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Old 06-25-2014, 02:34 PM   #8
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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!
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Old 06-25-2014, 02:48 PM   #9
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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.
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Old 06-25-2014, 04:58 PM   #10
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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."
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Old 06-25-2014, 05:11 PM   #11
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Quote:
Originally Posted by AllDone View Post
...
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
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Old 06-25-2014, 05:17 PM   #12
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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).
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Old 06-25-2014, 08:47 PM   #13
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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.
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Old 06-25-2014, 08:49 PM   #14
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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.

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Old 06-25-2014, 09:48 PM   #15
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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...
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Old 06-25-2014, 09:53 PM   #16
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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!
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Old 06-26-2014, 09:41 AM   #17
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Thanks for all the replies.

Quote:
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).
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Old 06-26-2014, 10:03 AM   #18
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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.
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Old 06-27-2014, 04:20 PM   #19
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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.
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Old 06-27-2014, 05:26 PM   #20
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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.
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