Solar photovoltaic on the house as an investment

[Texas Proud]

Remember, net metering means the power company buys back what you don't use. I'm in California with PG&E. If I go to Time-Of-Use, the rates are 5 cents per kWh off peak and 35 cents per kWh peak. If my meter runs backwards during the peak, they pay me 35 cents per kWh. That could add up and might be worth it. Getting PG&E to pay the invoice might be another matter though...

But I agree; it doesn't make sense in your situation. This would have to be a hobby or you are interested in the whole CO2 pollution/carbon footprint renewable resource thing as something you feel morally or ethically compelled to do. Many people in California with solar get it just for that reason.

If you want to reduce your carbon footprint then just buy renewable energy.... I am buying it now, but not that I feel guilty.... it is just cheaper with their teaser rate....

 

[skipro33]

We hear that prices on systems will continue to go down, so waiting isn't so bad.

Waiting is bad for three reasons;
1. The 30% federal tax credit expires on Dec. 31st 2016
2. The net metering capacity will fill out sooner than that in many markets.
3. State and utility company rebates will expire or run out of funds sooner rather than later.

These are incentives for getting solar rolling. Once the costs for panels and ancillary equipment drop in cost, so will the incentives.

if we are going to subsidize solar, it should be based on an estimate of the system's annual production, rather than the system's cost.

It is, indirectly. A 5kWh sized solar generation on a home is going to produce a certain amount of electricity. If it doesn't, the recovery of the buyer's capital is going to fail to meet it's goals. Solar companies are entering into contracts with buyers that the system they design and sell will produce a set volume of power. This is required by law in California. Every contractor selling solar systems are required to use this calculator when sizing a system so that the customers know they are not being over sold on a system. I've got to say, it's pretty well regulated that you know what you are buying when you contract for a solar installation.

In my project, the calculator takes into account my latitude, 38 degrees, the azimuth, 160 degrees (20 degrees East of South) and a tilt of 22 degrees. A perfect set up at my latitude, is 180 degrees and a tilt of 26 degrees. My less than perfect mounting accounts for about a 3% loss of efficiency. The calculator says that a 5kWh sized solar plant will generate 3650kWh of electricity in one year. If it doesn't, within reason, then something is broken.

A savvy customer is going to work out the math for themselves and not take a salesman's word for it. I've worked with a few outfits, one place even has solar plants set up with on-line monitoring so you can view their production as well as past performance. Systems I've checked into all offer wifi connectivity to measure solar performance down to the individual panels. Historical data is archived and several solar product producers will host your data on their website for scientific data gathering purposes.

 

[scrinch]

Doesn't that assume that you have no maintenance expenses, and that the panels maintain the same level of efficiency over that 25 years? Is that likely? Most of the electronics I purchased 15 years ago have already been retired, and those don't sit out in the elements 24/7.

My northern California rooftop system is now 9 years old and my savings have offset my subsidized cost (this last year). I purchased the system with the expectation that the quoted efficiency and maintenance numbers were exaggerated. Well, so far the system has only required cleaning with a mop every six months (no additional maintenance) and there has been no measurable decline in output. I was initially shocked that the system put out what the brochures said it would, and I am still surprised that it continues to perform as it initially did.

My initial calculations were that the ultimate ROI would be about the same as the rate at which power prices escalate...not so far from what the OP posted. I ended up installing enough kW to offset about 75% of kWh usage, and that has translated to offsetting 100% of the power bill due to the difference between on-peak and off-peak generation and usage.

So far so good.

 

[davemartin88]

We have a ground mounted 32 panel, micro-inverter system that was installed about 18 months ago. No storage or battery system and was sized to cover about 50% of our electrical usage. With 3% annual energy increase costs, we figured it would pay off in about 8-9 years- a long time but we plan to be here.

Panels and inverters are warranted for 25 years and we expect to lose about %1 per year or so of efficiency but liked the idea of going at least partially solar so admit there was some emotion in the decision. We've also been selling about 10 SREC (Solar Recovery Energy Credit) per year through a broker at an average of about $37 per month after costs- we didn't know about this when we installed our system so this is a nice bonus. The system so far is producing a bit more energy than predicted- we were told that most of the data that is available to use for planning was usually a bit understated- for us, this has turned out to be the case.

We found a local installer that was easy to work with and did a portion of the install ourselves, the micro-inverters are pretty much plug and play with one AC connection to the existing service panel through a breaker. If I was doing a ground mount system again, I'd do the whole thing myself. We have a whole house generator if needed so didn't want to deal with a battery backup system.

Net is, we're very happy with the decision to install but know it wasn't based on a purely financial basis, few things are I've found, lol. Good luck with your decision.

 

[Ed_The_Gypsy]

Since I don't know how long we will live in any given house, something with many years payback doesn't mean much to me. It then falls back into the category of the resale value of a remodel for us.

If we had the money to play with, PV would be fun, though.

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[jabbahop]

re-sale is our problem. We put ours in a few years ago before we thought we would be retiring/downsizing. Now we will never get our ROI but hope that it adds some resale value as the buyers will be able to offset much of their electric costs. We were close to 90% offset until we both got elec vehicles and tenants in our extra space above garage so consumption has gone up the last year.


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[Whisper66]

Has anyone had to replace their roof after installation of a solar system? If so, did this add cost to the roofing job and is this included in people's economics for solar?

In Texas, our typical asphalt shingle roofs take a lot of heat and do end up needing replacement in ~ 15 yrs or so. Normally one can do the first reroof by laying over a new set of shingles over the old one saving quite a bit of demolition cost. The second reroof normally requires all the shingles to be removed....adding cost. I was watching a "This Old House" episode where solar panels were put on top of the shingles and really wondered about the impact on roofing costs on solar economics over time. The show did not mention this.

 

[ArkTinkerer]

Doesn't that assume that you have no maintenance expenses, and that the panels maintain the same level of efficiency over that 25 years? Is that likely? Most of the electronics I purchased 15 years ago have already been retired, and those don't sit out in the elements 24/7.

Solar panels do remarkably well for electronics subject to the temps that panels get (or anything on a roof for that matter). They do reduce output as they age. Most manufacturers guarantee that output will be at least 80% of spec after 25 years.

This group is very good to catch that most calculations for "payback" don't calculate relative to a safe investment alternative. One thing to be very careful of is the rosy predictions of power output. Much of the country does not really have that many clear days--some south western states excluded.

 

[Ian S]

One thing to be very careful of is the rosy predictions of power output. Much of the country does not really have that many clear days--some south western states excluded.

Actually, there's a very useful tool for predicting solar power production for a given US location at PVWatts website. You have to know some basics about your proposed system but the calculator takes into account typical climatic conditions based on historical data.

 

[jabbahop]

So far our projections have been very accurate despite living in vermont with many cloudy days. What was a surprise was last Feb where snow cover and cold weather meant we only had a couple days where we generated ANYTHING. Normally the snow falls off but the combination of heavy snow with persistent cold weather didn't allow it to slide off even in sunny weather.


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[Texas Proud]

Just a curiosity question on the people who have the micro inverter systems...

What is in place to protect linemen from getting feedback from your system You state that all you need is a breaker in the panel....

From what I understand, you are supposed to isolate your system if there is a power outage (thinking backup generators here)....

 

[Ian S]

Just a reminder that the utility bill savings you get with solar are equivalent to tax-free income from other investments.

 

[samclem]

Has anyone had to replace their roof after installation of a solar system? If so, did this add cost to the roofing job and is this included in people's economics for solar?

This is one reason that the roof of a dwelling is not an optimum place for a solar array. I'd feel better about putting a solar array up there if I had a metal roof (50+year life). Another option is an outbuilding/shed that can be put where there is the least shade/best angles for catching the sun, and can have a metal roof.
I like that our house and lot has mature trees and plenty of shade, but it does limit where I could put PV panels.

 

[daylatedollarshort]

Just a reminder that the utility bill savings you get with solar are equivalent to tax-free income from other investments.

I agree, and I think cutting expenses like energy bills tends to be underrated topics here compared to topics like stocks. I can't control stock market returns but we've cut our energy bill by around $2,400 a year so far. Over a potential 40 years that is $2,400 X 40 = $96K in after tax money.

Personally, I'd rather be home sitting on the patio reading energy conservation books from the library and trying out thermal cooker recipes than commuting and working in an office 7 am - 7 pm or longer to earn the equivalent of that kind of savings in after tax money.

Our roof isn't the best location for solar and we have lots of trees, and at current prices panels just aren't cost effective for us. Our current electric bill is only around $600 a year. But I do have some books on interesting solar projects that do not involve panels.

 

[REWahoo]

I agree, and I think cutting expenses like energy bills tends to be underrated topics here compared to topics like stocks.

There are many websites out there for those who want to dive deeply into the 'how to strain glass from a broken jar of peanut butter' school of frugal living. There are even more websites devoted exclusively each of the many flavors of market investing. I find both to be a bit extreme and lacking in diversity.

My opinion is this board has a nice balance of LBYM and investment discussions which has been a key to its success.

 

[NW-Bound]

Just a curiosity question on the people who have the micro inverter systems...

What is in place to protect linemen from getting feedback from your system You state that all you need is a breaker in the panel....

From what I understand, you are supposed to isolate your system if there is a power outage (thinking backup generators here)....

Microinverters will shut down if the line is dead. They need to see a live line in order to synchronize to it, and to source a current into it. In fact, any grid-tie inverter needs to do the same.

 

[Texas Proud]

Microinverters will shut down if the line is dead. They need to see a live line in order to synchronize to it, and to source a current into it. In fact, any grid-tie inverter needs to do the same.

Thanks for the info....

So, solar cannot work without a line charge... so if there is a power outage then you do not get any benefit of having solar
I guess unless you get off the grid that is....

Does that mean all solar just connect up to the breaker box?

 

[daylatedollarshort]

There are many websites out there for those who want to dive deeply into the 'how to strain glass from a broken jar of peanut butter' school of frugal living. There are even more websites devoted exclusively each of the many flavors of market investing. I find both to be a bit extreme and lacking in diversity.

My opinion is this board has a nice balance of LBYM and investment discussions which has been a key to its success.

I don't know why anyone would strain glass from peanut butter. If I had peanut butter with glass in it I would throw it away.

But I am happy to see threads like these on using alternative energy and conservation. The savings on recurring expenses over 40 years or so of retirement for one time purchases or improvements can be quite significant.

 

[ERD50]

I agree, and I think cutting expenses like energy bills tends to be underrated topics here compared to topics like stocks. I can't control stock market returns but we've cut our energy bill by around $2,400 a year so far. Over a potential 40 years that is $2,400 X 40 = $96K in after tax money.

Personally, I'd rather be home sitting on the patio reading energy conservation books from the library and trying out thermal cooker recipes than commuting and working in an office 7 am - 7 pm or longer to earn the equivalent of that kind of savings in after tax money. ...

I think the reason you consider cutting energy bills as under-rated here is that I think most of us use far, far less energy than you were using before you went on a mission to reduce it.

I can't possibly save $2,400 on my annual energy bills, as they are closer to $1,800 (NG & Electric) - and that is for a large-ish house, in an area of the country where we need heating for 6-7 months, and summer A/C as well.

IIRC from your earlier posts, there was a lot of low-hanging fruit for you in terms of energy savings. I very much doubt (and I believe I expressed this before) that many of the things you do (thermal cookers, etc), have any significant savings - it was the low-hanging fruit you did early on. Many (most?) of us don't have the low-hanging fruit to pick, so there just isn't that much opportunity for financial return, and hence, not so much discussion.

Our roof isn't the best location for solar and we have lots of trees, and at current prices panels just aren't cost effective for us. Our current electric bill is only around $600 a year. But I do have some books on interesting solar projects that do not involve panels.

And this supports the idea that (conceptually at least), it would be far better for people interested in solar to invest in a 'share' of a commercial grade solar farm. You'd get economy of scale; it would be placed away from shade; and either on the ground, or on an industrial roof with a lifetime > solar installation.

-ERD50

 

[daylatedollarshort]

I think the reason you consider cutting energy bills as under-rated here is that I think most of us use far, far less energy than you were using before you went on a mission to reduce it.

What I posted was "I agree, and I think cutting expenses like energy bills tends to be underrated topics here compared to topics like stocks." and " The savings on recurring expenses over 40 years or so of retirement for one time purchases or improvements can be quite significant."

I think based on the number of solar panel pro and con threads many posters here are interested in reducing energy bills. We went from above average energy consumers to bottom 20% of similar home in terms of energy use for our area based on our utility company reports. Thermal cookers were one small part of probably a hundred or so low cost actions we took to reduce our bill. They are also time savers, do not heat up the house in warm weather (reducing the need for A/C), can be left unattended, do not dry out food like crock pots might do and do not let food spoil if the power goes out while we're out and about. I personally would like share ideas with others interested in similar topics. I am unclear on why it is not okay for me to express an opinion on topics I'm interested in and would like to see more of.

 

[NW-Bound]

So, solar cannot work without a line charge... so if there is a power outage then you do not get any benefit of having solar
I guess unless you get off the grid that is....

Does that mean all solar just connect up to the breaker box?

If you want solar power when the grid is down, you need an off-the-grid system. That requires battery storage. As I know, there is no off-the-grid system that does not use batteries. The power produced by the panels can vary a lot even during daylight, and you need energy storage to average out the power demand when appliances kick on/off.

An off-the-grid system that can power a residential A/C is BIG. I wonder how much I would need to run my 5-ton A/C.

PS. It's possible to have a grid-tie system that also has off-the-grid capability. Elon Musk's new system does that.

 

[NW-Bound]

I just check on the Web, and solar panels are incredibly cheap.

If you buy a 40-ft container worth (a semitrailer load), then the price is 54c/Watt. Anybody needs 588 panels of 280W each (164kW total)? You can have your own solar farm. Or how about splitting the order and its cost of $89K?

 

[ERD50]

What I posted was "I agree, and I think cutting expenses like energy bills tends to be underrated topics here compared to topics like stocks." and " The savings on recurring expenses over 40 years or so of retirement for one time purchases or improvements can be quite significant."

I think based on the number of solar panel pro and con threads many posters here are interested in reducing energy bills. We went from above average energy consumers to bottom 20% of similar home in terms of energy use for our area based on our utility company reports. Thermal cookers were one small part of probably a hundred or so low cost actions we took to reduce our bill. They are also time savers, do not heat up the house in warm weather (reducing the need for A/C), can be left unattended, do not dry out food like crock pots might do and do not let food spoil if the power goes out while we're out and about. I personally would like share ideas with others interested in similar topics. I am unclear on why it is not okay for me to express an opinion on topics I'm interested in and would like to see more of.

I honestly don't know how you got there from what I posted?

I merely tried to explain to you why you don't seem to see such an emphasis on discussions about cutting energy bills. I thought I explained that many/most of us simply don't have a lot of cutting to do there. As I said, your cuts are greater than my entire bill. So that could explain why it does not get as much emphasis as you might expect, right?

I never intended to say in any way that isn't 'okay for you to express an opinion on topics you are interested in and would like to see more of'. I'm interested in these topics as well, I might learn something about cutting my bill a bit.

So please continue to post (as if I can stop anyone!), and I will continue to read for any nuggets I can glean.

I also think the solar panel threads are more about payback, the environment, and general interest in technology. The payback is in the energy bill, but that's just a consequence. Heck, if a solar panel would reduce my food bill, or my property taxes, or my insurance rates and provide a 2 year payback, great - I don't care where the money comes from, ROI is what I'm mainly interested in (plus the other areas).

-ERD50

 

[daylatedollarshort]

I think the reason you consider cutting energy bills as under-rated here is that I think most of us use far, far less energy than you were using before you went on a mission to reduce it.

I did a Google search and there were 175 posts on this site containing the word "electric bill", 359 on "solar panels", 127 on "heating bills" and 90 on "LED bulbs" so I think I am not alone in my interest in reducing my energy bills.

I felt a comment like " I very much doubt (and I believe I expressed this before) that many of the things you do (thermal cookers, etc), have any significant savings" didn't exactly encourage me or anyone else to post more on the topic.

More on thermal cookers can be found at the link below. They are actually common in some other cultures outside the U.S. -

http://www.treehugger.com/kitchen-design/nissan-thermal-cooker-crockpot-without-cord.html - Treehugger calls them "A wonderful idea, and another example of a lesson from the past that can be a template for the future."

Low Tech Magazine:
We Insulate Our Houses Why not Our Cooking Pots
http://www.lowtechmagazine.com/2014/07/cooking-pot-insulation-key-to-sustainable-cooking.html

"While modern cooking stoves are convenient, when it comes to energy use they leave a lot to be desired. As we have seen in the previous article, the thermal efficiency of an electric hob does not exceed that of a conventional open fire. In both cases almost 90% of the primary energy is lost during the cooking process.

Cooking food could be achieved in a far more energy efficient way, especially if the cooking pot itself is insulated. This is the principle behind the fireless cooker, a well-insulated box that keeps food simmering with only the heat of the cooking pot itself. A fireless cooker doubles the efficiency of any type of cooking device because it shortens the time on the fire and limits heat transfer losses."

 

[rayvt]

under $10,000 for a 5kWh plant that will reduce your utility dependance by 8450kWh per year. .

That would save me $675 per year. 15 years to break even, if I ignore the interest & earnings on the $10K, or if I could get a 0% interest loan.

Assuming no maintenance costs. Assuming nothing like a tree grew up and shaded the panels.
15 years is a long time to wait before seeing any net benefit.