In 10 years, will I think "I should have bought that solar panel system?"

[ncbill]

As other posters have said, the first thing the OP needs is an energy audit.

Good chance the local electric utility offers them.

And with the OP's electric rates, they should choose a HVAC unit with the minimum SEER required...OP won't save enough money to justify the extra expense of a 20+ SEER unit.

Plus, getting that level of performance also requires a near-perfect installation, and to be frank most HVAC companies are not up to that (for a traditional split install)

 

[bucktheherd]

Short answer is do not use a turnkey company. Even if not DIY you can contract this out. Lots of variables to consider. Roof type and age, Utility policy, solar access/orientation, inverter technology and more that turnkey guys can’t be trusted to act in your best interest. The tech is still changing rapidly. (See ENPH). Happy to consult for $0 to give you ideas and options.

 

[mountainsoft]

Yes, 2 KWH meant 2000 KWH, as (clearly) no one is using only 2 KWH/mo.

My mother-in-law just got her electric bill and only used 235KW last month. She rarely turns on lights or fans, and does almost no cooking. Most of that usage is probably just the hot water heater.

That's still a long way from 2KW per month , but she has the lowest electric bill I've seen without some other kind of power source (solar, gas appliances, etc.).

 

[Telly]

One main questions I don't have answered is:

Are Texas power rates about to "sky rocket" ?

Apparently a California based company (San Diego) Sempra has purchased a major stake in Oncor (a major power distribution facilitator based in Dallas) last year. Add this to the list of things that Warren Buffet couldn't do (at least he did try, eh?)

EFH was a financial disaster. way over leveraged, debt load weighing like depleted uranium, and loaded with old coal -powered generating plants. The only good, solid revenue generating part of it was ONCOR, which was ring-fence-protected against raiders who may have bought EFH and milked ONCOR dry. The courts were heavily involved on the ring-fencing idea and protecting the viability of the regulated part, ONCOR. ONCOR is distribution-only, and is regulated to an extent.

Power generation in Texas is changing. More old old coal-fired plants are being shut down, and big solar and to a much greater extent, wind power, are expanding rapidly. IIRC, last year Texas exceeded CA on wind power generation. The issue of what over the years to come will provide baseline power generation is evolving. Quick-startup gas plants, battery backup, things are evolving as technology progresses.

I would not make a big bet that TX electrical generation prices are "about to skyrocket". Bet on Pork Belly Futures instead

 

[aja8888]

As other posters have said, the first thing the OP needs is an energy audit.

Good chance the local electric utility offers them.

And with the OP's electric rates, they should choose a HVAC unit with the minimum SEER required...OP won't save enough money to justify the extra expense of a 20+ SEER unit.

Plus, getting that level of performance also requires a near-perfect installation, and to be frank most HVAC companies are not up to that (for a traditional split install)

This...^^^^^

 

[target2019]

Some HVAC components can be priced through Amazon and other sites.
https://www.amazon.com/Rheem-Seer-Conditioning-System-RA1430AJ1NA/dp/B01ICBX3KM

 

[REWahoo]

Here is another source for online pricing of HVAC systems: https://www.acdirect.com/

 

[ERD50]

Just for reference, you are still making some errors with your figures. Not picking on you, just trying to help as these things need to be right if you are going to get good information:

... And yes, a 3000 KWH solar system ...

I'm pretty sure you mean the 3 kW system you talked about earlier. That is 3 kW, which is also 3000 Watts (the k is a 1,000 multiplier). You posted a 3000K is 3 million.

Also, solar panel systems are specified in kW not kWH (hours). The kW tells you the peak power they could deliver in direct overhead sunlight at that moment. The manufacturer has no idea how many hours that sun is available to you (probably never actually, it really is a peak number), so they cannot rate the kWh delivery. For that, you need to go to a calculator for your installation, taking into account your roof exposure, angles, and local sun conditions.

In an earlier post I used a rough estimate of 25% capacity factor. Capacity factor is the % of "nameplate capacity" you get over time, taking into account day/night, seasons. So a 3kW system at 25% Cap Factor would produce an average of 3000*0.25*24 hours/day * 30 days/month = 540 kWh per month. The 25% may not be a good estimate for you, you would need to verify that - there are on-line calculators.

People talk about being able to get solar installed for ~ $2/watt, so that should be in the neighborhood of $6,000 installed, but there are lots of variables.

... But just as the panels themselves have a certain efficiency (18-22%), the system overall also has an efficiency percentage: it is not producing 24/7. And even when producing, the efficiency changes over seasons (sun tilt angle) and years (degraded components over time by being fully exposed to hot/cold temperature variations; storm damage, etc). ...

Be careful not to double count. The efficiency of the panel is already accounted for in the nameplate power output. That is, a 3kW system that uses 10% efficiency panels will produce the same power as a 3kW system that uses 20% efficiency panels. It just takes twice as many panels (and they will be cheaper, so look at overall installed costs).

Those online calculators should take most/all of that into account.

... The cases I've read of achieving the "free electricity" do tend to be the $30K+ systems involving 30+ panels. And yes, it's contingent on the arrangement with the corresponding power company -- if you can get a credit on the amount of surplus that the system produces. But the form of that credit is a bit nebulous (i.e. not all power companies are consistent in how the surplus is credited back to you).

....

"Free electricity".. after you pay $30K. Not sure why people think like that (I realize that's why you put it quotes, but still). Didn't someone mention dividends as "free money"?

Heck, I'll guarantee you free electricity for life (in that residence), use as much as you can/want (w/o upgrading the panel beyond 200 Amp 220V service!). I just need a deposit of $4,000,000.00. Then it's "free"!

And the fine print with the power company is important. If 'excess' is not accounted to you the same as your purchased rate, it probably does not make economic sense to put in a system large enough to provide an excess. Also, the fine print might be changed over time. I think we are seeing some utilities needing to charge more for a monthly connection fee to offset the solar users who are kind of getting a free ride on the grid (that's not a judgemental comment, just an economic one).

... That said, I do think it is possible for conditions to exist that tapping into a 401K briefly makes sense ....

JMO, but I think you would have got better, more focused responses if you just stuck to the economics of the upgrades. Once you determine if any make sense on their own, then you could look at how to pay for it.. If they don't make sense w/o borrowing, the certainly don't make sense after borrowing.

... In my view, the individual panels should run around $300 (I see a range of $78 to $495 on the web -- so I pick a "reasonable quality" average of $300, with even that being a tad high). So even if you double that price to account for frame, wiring, inverters, insurance, tax, install, etc. a 30 panel system is $18K. Add a because-other-people-need-to-eat markup, then the $25K range isn't so unreasonable (plus extra costs associated with the actual power grid connection, which yes may involve some permits, i.e. a couple grand). Tax credit that 30%, and things really might start to make sense... I'll mull it over further. ...

Yes, I've heard of $1/watt prices for panels, but installation takes most of the estimates I've heard about over $2/watt installed, and that's the low end. So expect at least a doubling for installed costs. But you really need a firm quote on your particular situation (roof type, angles, etc).

-ERD50

 

[Offgrid Organic Farmer]

In 10 years, will I think "I should have bought that solar panel system?"

Solar power is some of the most expensive power you will ever consume.

We went to solar power in 2015. I am still glad that we did it.

We live in a rural area, about 30-minutes from the ocean. You can't get any more East Coast than where we live. The power grid in our township goes down every month. Every home here has at least one generator.

You do not want to be 2 days into a 5-day snow storm without power.

 

[candrew]

And the fine print with the power company is important. If 'excess' is not accounted to you the same as your purchased rate, it probably does not make economic sense to put in a system large enough to provide an excess. Also, the fine print might be changed over time. I think we are seeing some utilities needing to charge more for a monthly connection fee to offset the solar users who are kind of getting a free ride on the grid (that's not a judgemental comment, just an economic one).-ERD50

I'm glad you brought up the issue of utility companies changing policy over time.

Our local utility has "grandfathered" us as rooftop solar customers in terms of avoiding any monthly connection fee increases that are applied to their PV solar customers. The same will apply to the next-in-line homeowner should we sell our home.

Initially, we were reimbursed at the retail rate for any excess our rooftop solar back-fed into the grid. Now our local utility has decided that those of us with rooftop solar should be treated like any other commercial supplier of electricity and reimburses at the much lower, commercial rate while still charging us at the retail rate for electricity we use.

 

[OldShooter]

... Are Texas power rates about to "sky rocket" ? ... I think the point is: it's another variable in the model. I assumed a normal 2.5% inflation on cost of energy. When I first moved to Texas 18 years ago, electrical cost were higher (much higher, noticeably higher -- the inflation model would have been very wrong). ...

“It's tough to make predictions, especially about the future.” ― Yogi Berra

No surprise there. The way to handle this is, once you have your present value or internal rate of return set up (https://www.investopedia.com/ask/answers/05/npv-irr.asp and
https://investinganswers.com/articl...te-return-using-excel-or-financial-calculator ) is to experiment with parameters to make what is called a "sensitivity analysis." This will help to identify any predictions that are particularly critical to the success of each investment.

For example, you might be able to say: "For power cost inflation of at least x.y%, constant household consumption of f.g KWH, and up front cost of $m,nnnK the investment return is 8% or better." and/or "For future electric consumption of a.b KWH/month, and power cost inflation of n.m% or more, the investment return is at least 5%. ... and so on, looking at any parameters to which the calculation might be sensitive. No one can predict the future, so any correctly-done investment calculations must consider a range of possible futures and their effect on the investment decision.

 

[daylatedollarshort]

On the solar hot water topic...In summer the only gas we use is for the hot water heater, so I know exactly how much it costs us for hot water, and it is $10 a month. The simple break even point for us then, assuming no repairs or maintenance costs, on a $3,500 solar hot water system would be over 29 years.

 

[cyber888]

Hell No lol .. With Elon Musk progress on Solar and Battery storage power .. the cost of Solar and Battery storage will probably be 60% or more cheaper in a few years.

 

[Mulligan]

Utility scale wind and solar power recently became the least expensive power source. Hydro (essentially maxed out) and natural gas are the next low cost options. Coal and nuclear plants are rapidly closing as a result.

Utility scale battery storage is just starting to take off. Coupled with anticipated further improvements in wind and solar, this combo will soon prove to be unbeatable compared to residential solar costs.

In the past there have been essentially three different national grids in the continental USA: east and west coasts, and Texas. In the future, new transmission lines to support the 'wind corridor' will help tie these grids together and hold down costs in an unregulated market.

In short, unless you live outside the continental USA, or are hostage to an inefficient and overtaxed municipal monopolistic power company, it will soon be hard to justify long term sunk costs for residential solar compared to utility scale renewable plus battery storage. A special case, Californians seem to takes pleasure out of periodically screwing up their system with legislation and lawsuits - so their electric rates will not be efficient anytime soon.

IMHO

Atom

Yes, this is happening already in my Ameren controlled utility area. They cut rates 6% last year and filed a request to cut rates again because of the effects you mentioned. And our rates are 25% below national average already...My electric bill is so cheap I dont even look at my thermostat to try to save a nickel....But the bad news is ya gotta come live in fly over country to get these low rates.

 

[jmp470]

I live outside of San Antonio and my house faces South. So I live in a great Solar area and my house and roof face the proper way to maximize Solar production.

In 2016 I put in a $44K system and received a local $4K instant rebate, thus, $40K came out of my pocket. That year my tax bill was reduced by $12K, which helped significantly.

Fast forward to today, my Solar system is paid off and I generate about 95 - 100% of my own electricity. With 5 people, heated pool & Spa, and a mandatory $20 per month convenience fee for being connected to the grid, my electricity bill varies between $0 and highest ever was $200. (200 was heating the pool for the entire month of February when we had company)

In my opinion, as a wannabe RE person again, you need 3 needs minimized. Electricity, water, and food. I produce almost all my electricity, and if we cut back, we could do 100%, we have a well for water, and I want to do hydroponics for some foods!!!

 

[Wincherr]

Two other things to consider in your financial analysis....
1. Solar panels decrease in effective generation of electricity by some percentage each year. I have no idea what this is, but I do know that it’s true. As they age, they produce less and less electricity.
2. What happens when it is time to replace your roof? I really just pose this question, I don’t know the answer. Do you have to remove all these panels in order to put a new roof on your house?

 

[candrew]

I do business with 2 companies that design solar panels. They say the typical life of panels is 12-15 years and after that the efficiency drops drastically while the maintenance time and cost increases.

Regarding maintenance time and costs of PV solar panels - could you elaborate on that a bit? The reason I ask, is that we've had PV solar panels on our roof for the past 8 years. The only maintenance ours have required is an occasional spray of the garden hose to rinse off accumulated dust.

 

[zippy2020]

Just FYI, we bought a solar panel system in 2014 and are very pleased with it. However, we were told altho the panels last 25 yrs, the inverter only lasts about 7-8 yrs. Then you have to buy a new one. Cost is $700 to 1K.

We are still hooked up to the utility grid, so we get an offsetting credit of kWh generated vs kWh used.

To be fully independent we would need to install a whole-house battery system. Not quite worth it yet.

The year following our install, our tax adviser was impressed that the solar credit generated a refund (we don't usually get one, being in a high tax bracket). He said it was worth "dollar for dollar", whatever that means.

Electricity costs are very high here so our payback period keeps shortening. Looks now like we will break even in less than 6 years.

 

[OldShooter]

... In 2016 I put in a $44K system and received a local $4K instant rebate, thus, $40K came out of my pocket. That year my tax bill was reduced by $12K, which helped significantly.

Fast forward to today, my Solar system is paid off and I generate about 95 - 100% of my own electricity. With 5 people, heated pool & Spa, and a mandatory $20 per month convenience fee for being connected to the grid, my electricity bill varies between $0 and highest ever was $200. (200 was heating the pool for the entire month of February when we had company) ...

So your net cost was $28K? And your annual electricity cost was reduced to the $240 fee plus an occasional bump? And what do you think the annual depreciation of the system is? From savings less depreciation, what is your net as a % of the up-front cost (neglecting present value calculations for simplicity). Ballpark #s OK. I am just curious.

 

[Global Wizzo]

Things to consider

Things you might want to consider.
1. Make sure your system will power the house off grid and not just feed power to the grid. Won’t help in a power out situation without the on-site storage and switching systems.
2. Get the provider to guarantee low RF noise. Many of the solar systems put out a lot of noise that affects other equipment.
3. Get insurance riders to cover the panels for hail and storm damage. Rest of the system as well. Many policies specifically exclude solar systems.
4. Take advantage of the tax credit. I got a 50% cost share in FL years ago upgrading to hurricane doors and windows.
5. Plan to upgrade the panels in about 5 years.

Good luck.

 

[NW-Bound]

I live outside of San Antonio and my house faces South. So I live in a great Solar area and my house and roof face the proper way to maximize Solar production.

In 2016 I put in a $44K system and received a local $4K instant rebate, thus, $40K came out of my pocket. That year my tax bill was reduced by $12K, which helped significantly.

Fast forward to today, my Solar system is paid off and I generate about 95 - 100% of my own electricity. With 5 people, heated pool & Spa, and a mandatory $20 per month convenience fee for being connected to the grid, my electricity bill varies between $0 and highest ever was $200. (200 was heating the pool for the entire month of February when we had company)

Do I understand it correctly that your out-of-pocket cost of $28K was recovered in 3 years with the generated electricity?

If so, you have been using $9K worth of electricity a year? How many kWh is that, as I do not think electricity in San Antonio costs that much?

And what is the nameplate rating of your system?

 

[jimnjana]

Just FYI, we bought a solar panel system in 2014 and are very pleased with it. However, we were told altho the panels last 25 yrs, the inverter only lasts about 7-8 yrs. Then you have to buy a new one. .../QUOTE]

That is about right. Depends on environmental factors. The thing you keep in mind is if your panels go, you can upgrade at significantly more output. In 6 years 240 watt panel standard is now 300. Cost is less and inverter cost are dropping as well. When my old inverters die may upgrade some panels as well.

 

[morriss003]

We have 19 panels for a 2000 sq ft home. We have no AC, all LEDs, a PHEV, and we don't quite break even for the year. We installed the panels in 2011, and after the tax credits we broke even in 2018. So the system is paid for. Our bill without our solar water heater and the solar panels would be about $500 a month. We average about $50 a month. 1) Don't use your 401K, get a loan. Interest rates are just too cheap. 2) It does not sound like the quoted system has enough panels. Get a second opinion from different installer.

 

[REWahoo]

Do I understand it correctly that your out-of-pocket cost of $28K was recovered in 3 years with the generated electricity?

I read it as the loan for the system was paid off in three years, not that he'd recovered his cost in savings. kWh costs in the San Antonio area run in the $0.10 range, so his annual consumption would have to be off the charts to get payback in 3 years.

 

[triangle]

In ten years from now I believe you might wonder why did I spend/borrow to buy all this old technology (old solar panels). About 10 years ago I did a back-of-the-envelope calculation for the cost of a system to power my home to find that if I invested the same amount in my local electric company stock (it was paying over 6% at the time) I could earn enough in dividends to pay for my electricity with some a good margin for error. And if I decided to move I could take the investment with me to continue to pay electric bills for life.


Even today, 40K invested in a basket of power/energy companies would generate a lot to pay for a homes yearly electric consumption (ignoring higher marginal tax rates). Just sitting in cash that would buy electricity for a long time.