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Cost effectiveness of solar panels
Old 09-05-2009, 03:08 PM   #1
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Cost effectiveness of solar panels

I was talking to someone last night who said that solar panels can be very cost effective with the government rebate and if you can sell electricity back to the electric companies. Has anyone done this or looked into it?
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Old 09-05-2009, 05:13 PM   #2
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Has anyone done this or looked into it?
Um, yeah, you might say that.

This board has a big enough archive now that you can probably search for and find at least one keyword of nearly everything.

These are probably the best summary. In chronological order:
Any advice on solar electric?
Solar Power
Solar Elec?
New Tax laws for energy efficientcy...
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Old 12-09-2009, 04:28 PM   #3
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Well, this looks like the most current thread so I will jump in to blog my experience which is just beginning. I skimmed the threads Nord's referenced (and followed them back in the day) but they seem a little dated.

A friend of mine who is planning a solar installation invited me to the Capitol Hill Energy Coop's Solar Group meeting last night. The Coop has been studying the potential for solar on the flat row-house rooftops in DC for about a year. They work with the DC bureaucracy and have vetted a large group of solar installers selecting 4 they endorse and work closely with. The Coop has mapped out a process which includes getting a free DC energy assessment (how to improve your current wasteful ways); a solar assessment of your house and it's potential for an effective solar installation by one of the vendors; application for the DC rebate (9-12 months wait for action); request for bids from vendors after the rebate is approved; installation; application for Federal tax rebate; determination whether to sell your solar renewable energy credits (sRec) for an up-front lump sum or to sell them yearly based on actual performance.

I have signed up for DC's assessment and called for a solar assessment. The info from the Coop indicates that between the DC rebate, the Federal credit, and the sRec you essentially pay for the system without considering the savings on your electric bill. From the experience to date it looks like rebates cover about 65%-70% of the installation costs depending on the size and an upfront payment on the sRec would take that to 80-90%; the sRec would take the coverage to 100% over 1- 3.5 years if you take the credits yearly which I would do.) Installed users have varied in how much of the electric bill they defer but many are around the 50% level (I think, more research is needed here).

Lots of issues involving use of crystalline panels vs thin film; available space on the roof; roof maintenance issues, etc. I will keep you posted on what I learn and welcome any tips/cautions from those who have gone before.

Edit: looking at the OP, I can answer that in DC you can't sell excess power to the local utility but you can sell the sRec credits you earn. Sounds like a cap and trade kind of deal - solar users get to sell their altruism to others who need an offset (although I guess selling the credits means it isn't altruism .
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Old 12-09-2009, 04:35 PM   #4
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Interesting. Living here in BIG hail country has kept me out of thinking about solar.
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Old 12-09-2009, 04:59 PM   #5
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Interesting. Living here in BIG hail country has kept me out of thinking about solar.
We don't get much hail but it isn't unheard of. I will ask about the effects.
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Old 12-09-2009, 07:14 PM   #6
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If you can get a grid tie system and sign a contract where you lock in your power rate and transmission rate for 15 years you could save some money before you look at the amount of power you made.
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Old 12-09-2009, 08:57 PM   #7
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I've been interested in where solar will go. The thin films are very intriguing.
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Old 12-09-2009, 09:08 PM   #8
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We don't get much hail but it isn't unheard of. I will ask about the effects.
We've been in some pretty good sized hail. Big enough to crack some of the plastic on top of our motorhome and put a few dents in the top of our jeep (1.5 to 2 inch?). But our 100W motorhome roof top solar panel appears impervious which amazes us.

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Old 12-09-2009, 09:10 PM   #9
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I checked into it a couple of years ago. My conclusion was that the combination of lousy state tax credits, extremely cheap electricity, and relative lack of sunlight where I live (Idaho) made it a very iffy proposition financially. It makes more sense for someone like Nords, where the good tax credits, expensive electricity, and lots of sunlight swing the analysis the other way. If you're willing and able to go cheaper on the panels and batteries and build the system yourself, then all the better (provided you know what you're doing).

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Old 12-09-2009, 10:07 PM   #10
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Our main home is solar powered. I did it not only to save money, but for a certain level of self sufficiency, and as a bit of a hobby. We have not had an electric bill in the last 5 years, except for the interconnection fee ($4.95 per month). I believe that you save the most money on the marginal use of electricity, i.e., what you use over your baseline quantities, which at our utility are tiered. The highest tier rate is about $0.28 per kwh. The lower tiers are something like $0.25, $0.21, $0.18, $0.15 and a baseline that is around $0.125 or something like that (this is old knowledge, haven't looked at the rates recently). So if your highest three tier average is $0.21 per kwh and you used 4800 kwh in those three tiers, your cost per year in those tiers is $1008 per year. If you installed a 20 x 150w array of panels, you would be able to cover that 4800 kwh (if you lived in our area of California). The post-rebate and tax incentive installed cost would probably be in the $12,000 to $14,000 range. Without then taking into account cost of capital (choose your own) and energy inflation rates have been running around 6% per year average for electrical in our area) your payback period would be about 12-14 years. The panels will outlive most of us, and are warrenteed for 25 years (but are more likely to last over 50). You will likely have to replace the inverter somewhere between 10 and 20 years down the road, at a cost of probably $3000 in todays dollars.

Long term, I believe they are a good investment. But then again, it is more than just an investment for me...what with having a hobby of watching the electrical meter spin backwards and all....

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Old 12-10-2009, 04:34 AM   #11
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Rambler,

Before I left northern CA, I noticed they were building houses with the 'tiles' that were solar tiles - how do those work and are they efficient - they are a bit more aesthetic for sure? here in Europe, you see a lot of people with solar panels (and businesses) - energy costs here are very high in comparison to the US. I am fascinated with solar - I grew up in AZ where's there's lots of sunshine and it just made sense - the key is the payback time, for sure. I've also been watching the conversion technology closely - Nords was amazing in his do-it-yourself approach, although working on a submarine for years and having to memorize circuitry and fail-safe mechanisms probably made it a walk-in-the park for him.

In any case, my goal is to be fairly self-sufficient energy-wise in my retirement home someday - and not to save the planet, just to be independent - the planet does a good job of saving itself over time with different types of purges - whether they be weather, bacterial, fungal, or viral in nature :-)

I will be watching this thread for sure.
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Old 12-10-2009, 05:02 AM   #12
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I recently attended a seminar given by rep of local power company. NJ has additional rebates that are applied in addition to the federal incentives. The overall evaluation was mildly complicated. I recall we'd take out a 25K loan or similar after all the incentives/rebates were applied. In NJ you get the NSERC credits, and also sell back power.

I didn't go for it. The break-even milestone was too far out, and we expect to move within a few years. It could be a nice selling feature, but we would have to clear a substantial no. of trees, install a new roof, and not have optimum sun (house faces east and west, with no pure southern exposure all day). So, I was estimating an additional 15K on top of the solar package.

I also found that when I entered our electrical cost average for the last five years ($1600), we are extremely conservative, and have less to gain from the package.

If you have enough property, it may make sense to ground install the array.

Setback thermostat and other measures should be installed first. For instance, new efficient windows, garage doors, etc.
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Old 12-10-2009, 05:33 AM   #13
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Rambler,

Before I left northern CA, I noticed they were building houses with the 'tiles' that were solar tiles - how do those work and are they efficient - they are a bit more aesthetic for sure? here in Europe, you see a lot of people with solar panels (and businesses) - energy costs here are very high in comparison to the US. I am fascinated with solar - I grew up in AZ where's there's lots of sunshine and it just made sense - the key is the payback time, for sure. I've also been watching the conversion technology closely - Nords was amazing in his do-it-yourself approach, although working on a submarine for years and having to memorize circuitry and fail-safe mechanisms probably made it a walk-in-the park for him.

In any case, my goal is to be fairly self-sufficient energy-wise in my retirement home someday - and not to save the planet, just to be independent - the planet does a good job of saving itself over time with different types of purges - whether they be weather, bacterial, fungal, or viral in nature :-)

I will be watching this thread for sure.
There are several differnt types of tile or tile-like panels available. Last time I looked they were much more expensive per watt than the standard panels...that has been a couple years ago. If I ever get an electric car or PHEV I may retrofit the south roof on my home with something like that to cover the extra electrical usage. If I find time to check it out, I'll let you know what I find.

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Test my thinking on this...
Old 12-10-2009, 09:25 AM   #14
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Test my thinking on this...

Assuming we want the govt to subsidize/promote solar panels, wouldn't it make far more sense to provide the credits/rebates to the utility companies, rather than homeowners?

The advantages as I see it, would be:

1) Less overhead for the program - instead of dealing with many homeowners and installers with various levels of knowledge and various requirements, they would deal with a small number of utilities, who are experts in their field.

2) Less cost to install - an industrial installation is going to benefit from economy of scale. They can easily choose a site that has no trees in the way, and position it optimally with little/no aesthetic concerns. Instead of analyzing each site and trucking a crew and materials out to 100 homes, do a single install 100x the size.

3) More energy from the panels - an industrial site is far more likely to be able to position those panels optimally than is a homeowner. I think the transmission losses would be minor, since the panels would offset local usage, and I'd also bet that industrial sized inverters are a bit more efficient than home sized units.

4) 'Fairer' to taxpayers - there is no free lunch, we pay for those panels directly or through taxes. Since we all pay taxes, why should a few people get to take advantage of the rebates/credits (for example, renters are not in a position to do this)? Since #1,2,3 would indicate the taxpayer would get more solar "bang for their buck", it seems better for all. And that means more solar installed overall and isn't that the goal?

Of course, unless solar is actually economical on a total cost basis, #4 becomes a bit of a circle game - we pay taxes to subsidize electricity that we are paying for? Robbing Peter to pay Paul? But, if the panels are installed efficiently and do eventually provide a pay-back, it would make sense. And a utility is in a better position to take advantage of a 10 year payback (for example) than many homeowners, who may move before then and not be able to count on recouping their investment. NOTE: That is an economic assessment, it ignores any environmental benefits.

If some people are cutting down trees to clear a path for solar - hmmmm, what is the net carbon impact of that?

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Old 12-10-2009, 01:24 PM   #15
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Bank5, I think you are correct. I posted a thread on it a while back. I think you and I live in the same state. From memory, you get a 65% combined state/fed tax credit. Then you can sell your electricity at ~$0.20 per kWh to a green energy initiative. In five years you can sell all your equipment. I figured up the profit potential is well over 100%, close to 200%, over the course of 5 years if you can do some installation on your own and buy panels cheaply off Ebay/craigslist.
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Old 12-10-2009, 01:31 PM   #16
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Some municipalities are beginning to offer PACE (Property Assessed Clean Energy) loans. There is no initial cost and the payback amount is attached to the property tax and amortized over 20 years. It's also transferable -- it's attached to the property/deed and not the ower.

I, too, live in a haily region. I've never had problems with my panels, even when the hail shredded a roof and took out some windows and put pock marks in the front door.
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Old 12-10-2009, 01:51 PM   #17
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Bank5, can't recall if you live in the Hill, but if so, that is one of the few places that folks may actually pay a premium if they bought your house with PV panels on it. Elsewhere, I have heard people are indifferent or don't want them in general (kinda like a swimming pool). You could scrap them and then sell them after 5 years however. There is a tax recapture provision that says if you sell them in less than 5 years, you pay 20% per year for whatever period held less than 5 years.
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Old 12-10-2009, 04:50 PM   #18
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Has any one ever looked at the pay back of installing an open loop or closed loop heat exchanger? It can have a higher return in money and hot water. It’s also cheaper for the ones that can’t get all the tax credits. The pay off is better in a house hold of 3 or 4 people.

The materials run around $5,500 and a company that knows what there doing should be able to install them with about 20 man hours. There a PITA with a 2 story house and brings on a new set of challenges.
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Old 12-10-2009, 06:16 PM   #19
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Erd50, while having existing utility companies do it would have some benefits, it essentially would work very poorly, without very heavy and costly regulation. Perhaps new utility companies could be setup to compete directly with existing utility companies, which would hire expert talent, but existing utility problems would have one, huge, unsolvable problem.

Conflict of interest.

They have no reason to cut off their existing, more lucrative business, and replace it with a cheaper one. They have sunk costs. Even if there was a strong incentive to do so, they would wish to phase it in as slowly as humanly possible.

I strongly suspect there will be new companies, and there are new companies now, that have already setup industrial solar panel supply systems, just not on a nationwide scale. Some of the existing utility companies do it as well on their own, but not many and only to a very limited degree.
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Old 12-11-2009, 08:30 AM   #20
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RE: move the incentives for solar from homeowner to utility -

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Erd50, while having existing utility companies do it would have some benefits, it essentially would work very poorly, without very heavy and costly regulation. Perhaps new utility companies could be setup to compete directly with existing utility companies, which would hire expert talent, but existing utility problems would have one, huge, unsolvable problem.

Conflict of interest.

They have no reason to cut off their existing, more lucrative business, and replace it with a cheaper one. They have sunk costs. Even if there was a strong incentive to do so, they would wish to phase it in as slowly as humanly possible.

I strongly suspect there will be new companies, and there are new companies now, that have already setup industrial solar panel supply systems, just not on a nationwide scale. Some of the existing utility companies do it as well on their own, but not many and only to a very limited degree.
I understand the view behind what you say, but aren't utilities already a regulated industry? So I'm not sure that much of what you state above really applies, due to the regulation already being in place. I suspect one reason that the utilities are not putting in much solar is a combination of not getting the incentives that homeowners do, and that it just doesn't make economic sense for them.

Separately, I think the storage issues that we often here given as a reason for slow adoption of solar are overblown - we don't need to store a single milliwatt until we actually produce more than we can use in real time, and we are a long ways from that! And as I understand, even conventional plants waste some capacity as they cannot respond as fast to load changes as required, but that is just looked at as a 'cost of doing business', and it isn't worth the money to store that energy either. We would need to have a significant excess of solar power on a regular basis before any storage would make sense, even if it was relatively cheap to implement.

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