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

[Offgrid Organic Farmer]

When you add some improvement onto your house, a government subsidy is not enough to make the improvement to make sense. The improvement needs to make sense on its own without subsidy.

Here in my town, we compare the cost of solar power to the cost of running and maintaining a generator, and of course the expense of running utility poles to your house. Every home has a generator.

When I was shopping for land to buy, most places I looked at would have required that I get an easement to run power poles for 10 to 20 miles to reach my home. That expense is often equal to the price of buying the land. Then you still need a generator for when the grid goes down every month.

Subsidies are nice, but you can not allow them to over rule common sense.

Here in my town, the utility company has power lines available to about one-third of the town. Everyone else must be responsible for providing their own power.

 

[ERD50]

When you add some improvement onto your house, a government subsidy is not enough to make the improvement to make sense. The improvement needs to make sense on its own without subsidy.

....

Subsidies are nice, but you can not allow them to over rule common sense. ....

Common sense? Hey, I really, really dislike subsidies. I see them as a shell game, with the cost of bureaucracy added on top. They also distort the free market and can actually be counter-productive to adoption of new technology (or at least there were better ways for the money to spur adoption, an opportunity cost).

That said, if an individual can obtain a subsidy, why wouldn't they factor it into their personal economic decision? It seems to me the common sense is to factor it in.

-ERD50

 

[ERD50]

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!!!

" my Solar system is paid off" is confusing. As noted earlier, it must mean you paid for it out of your portfolio, not that it paid for itself. I'm not sure why you mention it?

If the $28K you invested in solar was in a retirement portfolio, at a conservative 3.5% WR, it would provide $980/year, $82/month, inflation adjusted.

With your $20 connection fee, your solar is only saving you on the amount above ~ $102/month. It's costing you if you use less than $102.

I didn't see an average or annual figure, but with a $200 peak when heating a pool (big $), I'm guessing closer to $100 ballpark on average? Are you saving anything?

And the odds are good that your portfolio will grow, or at least keep up with inflation over 30 years. But a solar installation doesn't seem to add any value to a home (I know there are differing views on this), but if I were doing the calculation, I'd assume my $28,000 was gone. And the value certainly will be gone in 30 years, the rated life of the panels.

Then add in the occasional inverter replacement (7-10 years mentioned for average life?), added cost of roof repairs/replacement, insurance. Not sounding attractive to me.

-ERD50

 

[OldShooter]

... That said, if an individual can obtain a subsidy, why wouldn't they factor it into their personal economic decision? It seems to me the common sense is to factor it in.

+1

" my Solar system is paid off" is confusing. As noted earlier, it must mean you paid for it out of your portfolio, not that it paid for itself. I'm not sure why you mention it? ...

+1 again.

IMO the correct way to look at this financially is as a discounted cash flow problem; given the initial (negative) outlay and the stream of net (positive) returns out into the future for the expected life of the system, what is the internal rate of return? (Note that the initial outlay is net of any subsidies.) Excel has built-in formulas for this calculation.

Further, when people work with IRRs the concept of "hurdle rate" is usually involved. This is the number that the proposed investment must exceed in order to be desirable. A risky investment might have a hurdle rate of 25% where a super conservative investment, typically multi-use commercial real estate, might have an 8% hurdle rate. IMO there is risk in a solar investment to the extent that the promised savings will not materialize, that maintenance costs will be higher than planned, and/or that the system lifetime will be shorter than the estimate. My personal hurdle rate for such a moderately risky investment might be 15% but of course YMMV.

(Note: For some, this is not strictly a financial decision. I have a nice and nephew-in-law who are true believers, having both worked for Solar City at one point. Their house and even the kids' play house in the back yard are covered in solar panels and I am sure they have never done any financial calculations related to their decisions.)

 

[NW-Bound]

... Here in my town, the utility company has power lines available to about one-third of the town. Everyone else must be responsible for providing their own power.

People who are city folks like myself take a lot of things for granted. In my travel through Alaska, I saw how people or even small towns had to generate their own power. I did not realize it could be the same at other states. At my high-country boondocks home, the subdivision already had power line strung long ago, and water was the only issue.

How are your lead-acid batteries doing? I have seen lithium battery price coming down slowly. Out of China, I have seen deals for as low as $300/kWh. Shipping cost is still high for individual orders. It may take a few years yet, before a distributor steps up to import them by the boatload for resale to the public.

 

[NW-Bound]

... Note: For some, this is not strictly a financial decision. I have a nice and nephew-in-law who are true believers, having both worked for Solar City at one point. Their house and even the kids' play house in the back yard are covered in solar panels and I am sure they have never done any financial calculations related to their decisions.

For fun, I spent a bit of money to put up 5.5kW of solar panels in my backyard, against the back fence. Then, I ran wires to bring the juice to a garden shed, where power is stored in 22 kWh of lithium battery. The battery feeds inverters to generate both 115V and 230V to run some of the home circuits, including a newly installed 1.5-ton mini-split AC (it would take a horrendous inverter to run the central 5-ton AC).

It would take more than 10 years to recoup the material cost, if everything works out. And I already spent time to buy hardware at fairly low cost. My labor is "free", and I am not counting opportunity cost of the money. No subsidy, no rebate, because this is unsanctioned DIY.

Just now, looked at yesterday's data and found I spent $7.69 for electricity from the grid. The 24-hour average temperature was 100F, and I found two days of last year with that temperature. The daily cost then was $13.61. Usage is now 35 kWh less per day, with 2/3 of it during the expensive peak hours.

So, I saved roughly $6 yesterday. That's it. As said, I did it for fun.

 

[Offgrid Organic Farmer]

Common sense? Hey, I really, really dislike subsidies. I see them as a shell game, with the cost of bureaucracy added on top. They also distort the free market and can actually be counter-productive to adoption of new technology (or at least there were better ways for the money to spur adoption, an opportunity cost).

That said, if an individual can obtain a subsidy, why wouldn't they factor it into their personal economic decision? It seems to me the common sense is to factor it in.

-ERD50

Sometimes I hear folks talking about how they do things purely for the government subsidy. I know that subsidies come from tax-payer funding and I do not like government subsidies.

I do not think that anyone should be motivated purely by subsidy to do anything.

I have a neighbor [Peter] who owns 40-acres of woodlot. his plan is to cut some quantity of wood each year for firewood to heat his home.

Peter found a USDA program where they pay him to 'manage' his woodlot. Management includes that he MUST cut down a minimum amount of trees each year. So they adjusted the subsidy amount to match exactly how much firewood Peter needs each year.

So the USDA pays Peter to cut firewood from his own land every year.

That is the same activity that Peter would be doing even without subsidy.

 

[Offgrid Organic Farmer]

... With your $20 connection fee, your solar is only saving you on the amount above ~ $102/month. It's costing you if you use less than $102.

What connection fee?

I dont have one of those fees.

... But a solar installation doesn't seem to add any value to a home (I know there are differing views on this), but if I were doing the calculation, I'd assume my $28,000 was gone. And the value certainly will be gone in 30 years, the rated life of the panels.

A house that can power itself without running a generator has a great deal of 'value' here on the East Coast.

Generators can consume a lot of fuel each month. And they do not last forever.

... added cost of roof repairs/replacement, insurance. Not sounding attractive to me.

My photovoltaic panels are nowhere near my roof, so roof repairs have nothing to do with solar panels.

My insurance company did not say anything about our solar power system. They were way more interested in our woodstoves.

 

[Offgrid Organic Farmer]

People who are city folks like myself take a lot of things for granted. In my travel through Alaska, I saw how people or even small towns had to generate their own power. I did not realize it could be the same at other states. At my high-country boondocks home, the subdivision already had power line strung long ago, and water was the only issue.

Public Utility lines going through my town are not really a true 'grid'. They run a power line through a series of towns one after the other. So when the wind blows down trees, they will knock down power lines, it might be 20 towns away where the break happens.

In my town the power lines only follow one road, the other roads have no power lines. The road that does have power lines only has that for maybe 2/3 of the length of the road.

... How are your lead-acid batteries doing? I have seen lithium battery price coming down slowly. Out of China, I have seen deals for as low as $300/kWh.

They work okay, I guess.

My battery bank is 48vdc 600ah and it cost around $2160.

 

[ERD50]

Sometimes I hear folks talking about how they do things purely for the government subsidy. I know that subsidies come from tax-payer funding and I do not like government subsidies.

I do not think that anyone should be motivated purely by subsidy to do anything. ... .

We're in agreement in our opinion of the usefulness of subsidies. But I still do not think it makes "common sense" to not include available subsidies in a personal economic decision.

What connection fee?

I dont have one of those fees. ...

I understand, you are off-grid - but my response was specific to the numbers and situation that jmp470 posted.

...
A house that can power itself without running a generator has a great deal of 'value' here on the East Coast.

Generators can consume a lot of fuel each month. And they do not last forever. ...

OK, I'm sure that a full solar and battery system adds value to a house that is off-grid, or that maybe experiences frequent outages. But that's not the scenario that most of these people are talking about.

... My photovoltaic panels are nowhere near my roof, so roof repairs have nothing to do with solar panels.

My insurance company did not say anything about our solar power system. They were way more interested in our woodstoves.

And that's good for you, but certainly not the norm being discussed here. Solar can clearly be a good option for those who need to pay to bring the utility to their homes, but that's a tiny minority of the US public. As always, one must consider their particular circumstances.

It sounds like you've got a nice set up for your needs. Certainly the low maintenance and near silent solar (I only say 'near silent' in case someone comes along and claims they can hear the inverters hum!) has a ton of advantages over a noisy generator and fuel.

-ERD50

 

[ls99]

Just to pitch in a data point.
Last month I formally asked the local utility for a cost estimate to run electric to my camp. Their best estimate was between $50 and $100K. It is rough country to put up poles and running wires. 20 years ago the previous owners were quoted $30K to $50K.
Then I would have had to engage an electrical inspector to certify the AC system currently in the building before the power company would install the meter. Needless to say it is a non starter.

Solar, wind and occasional generator power it is now and will stay that way. Will likely expand the system as I feel like it.
There is an abandoned mine close by around 500 feet below, mostly flooded. And no, not doing geothermal. It would need a good bit of drilling (expensive proposition in and of itself) and electrical power to run the motors for the heat exhanger and blowers.

 

[NW-Bound]

Public Utility lines going through my town are not really a true 'grid'. They run a power line through a series of towns one after the other. So when the wind blows down trees, they will knock down power lines, it might be 20 towns away where the break happens.

In my town the power lines only follow one road, the other roads have no power lines. The road that does have power lines only has that for maybe 2/3 of the length of the road.

That's the case in much of rural USA, including up in my boondocks home in the high country of AZ. I use the word "grid" just to mean utility power.

... I would have had to engage an electrical inspector to certify the AC system currently in the building before the power company would install the meter. Needless to say it is a non starter...

Up in my boondocks area, many lot owners have a meter installed at their lot, so that they can plug in their RVs. It's "free country". Don't know if it is the same in other places in AZ.

 

[Safe Harbour]

Replacing Geothermal

I could pretty much guarantee it. The house was built in 2006/2007 when there were significant subsidies.

If/when it dies, it will be replaced with a conventional system.

Hey FlyBoy,

Do consider a couple of things when you replace.

1. You've already spent the cost to drill the wells and hook up to them, so the replacement cost is much lower.

2. One advantage of Geothermal is you don't have outside condensers running and making noise all the time.

3. Even the the saving is small, if the replacement cost is similar, saving are savings.

Gary

 

[Safe Harbour]

Community Solar

Solar Farms (community solar) are much cheaper than roof-top solar. It is cheaper to install on the round, there are economies of scale, and maintenance is centralized. It also avoids the issue of having solar on your roof. I pay $70/month for 15 panels (5kW) and in the summer I can make $130 worth of electricity for my house. In the winter maybe $50. It's not big money saver, but it does more than pay for itself, and I don't do to make money. Many states are now requiring power providers to offer community solar. Sometimes you have to dig a little to find its availability.

By the way the lifetime of solar panels on a roof is really determined by the lifetime of the roof. The roof will need replacement first. Solar and a battery system is certainly more strategic than a generator, as you can never run out of fuel with a solar system. There are great videos on Youtube on how to build your own power wall. It looks pretty easy.

Adding a component of Solar power to your electrical mix is certainly a good way to aid in addressing Global Warming and something everyone needs to start considering. We need to leave a climate our children can enjoy.

 

[ERD50]

Solar Farms (community solar) are much cheaper than roof-top solar. It is cheaper to install on the round, there are economies of scale, and maintenance is centralized. It also avoids the issue of having solar on your roof. I pay $70/month for 15 panels (5kW) and in the summer I can make $130 worth of electricity for my house. In the winter maybe $50. It's not big money saver, but it does more than pay for itself, and I don't do to make money. Many states are now requiring power providers to offer community solar. Sometimes you have to dig a little to find its availability. ...

I also am very, very much in favor of community solar farms over panels on an individual home (exception for off-grid people like OOF here). As you say, economy of scale, easier to optimize angles and avoid shade trees, far safer to install at a commercial site than to travel to so many more individual sites with steep roofs, gutters, etc. Surprising to most, injuries and death make solar the most dangerous power we have relative to the power supplied. Worse than coal, far, far worse than nuclear.

But I think solar on a roof could be fine, if that is a commercial flat roof like on schools, warehouses, big box stores, etc. Not dangerous to work on a large flat roof.

I'll look again into community solar, it really shouldn't matter if it is local or not, best to invest where there is the most sunshine and best payback. Or if environmental issues are your main concern, wherever it can displace the most coal, oil, gas (combo of available sun and the local grid mix). Those could be the same.

... Adding a component of Solar power to your electrical mix is certainly a good way to aid in addressing Global Warming and something everyone needs to start considering. We need to leave a climate our children can enjoy.

While I'm 99.999% sure that solar is a good environmental choice *(note below), I think it is overstating it to say that the levels of solar we can support will have much of an affect on Global Warming. It can help, and that's fine, but I think the models state we need to make massive changes very quickly (or that it is already too late) to even have a small effect on the temperature they show in 50 years.

-ERD50





*(and I only add the caveat because I'm not 100% sure after considering what it takes to make them, and then dispose of them in 30 years - that will be a LOT of panels to dispose of)

 

[ERD50]

I'm also curious about the numbers that jmp470 posted in #90, but looks like he's been away from the forum since posting that.

-ERD50

 

[Lewis Clark]

Here is a question for anyone that has rooftop solar panels. I would imagine that the presence of the solar panels mounted on the roof would reduce the attic heating, since there is less sunlight getting absorbed by the roof. Less attic heating will reduce the air conditioning load on the house.

Has anyone made any measurements to see how much less air conditioning is necessary just by shading the roof with the solar panels? Just curious …

 

[NW-Bound]

... There are great videos on Youtube on how to build your own power wall. It looks pretty easy...

Be careful. Some of these guys do not know how lithium batteries can burst into flame if abused, or think it cannot happen to them.

If the battery inside a phone or a laptop can burn down a house, imagine having a battery equal to a large fraction of a Tesla battery, inside your garage or your home.

 

[NW-Bound]

Some more battery accidents.

A commenter wrote on the video below:

Please guys take this very serious !
Last April I lost every single thing I own from what we believe was a lipo battery fire
I had a awesome rc, gun,hotwheel every thing collection ..
we lived it a hotel for 17 days then a rent house till our new house was built . Seeing this vid pop up just brings back such bad memories of us just watching our house burn to the ground .

 

[candrew]

Here is a question for anyone that has rooftop solar panels. I would imagine that the presence of the solar panels mounted on the roof would reduce the attic heating, since there is less sunlight getting absorbed by the roof. Less attic heating will reduce the air conditioning load on the house.

Has anyone made any measurements to see how much less air conditioning is necessary just by shading the roof with the solar panels? Just curious …

I have read that rooftop solar panels reduce attic temperatures by approx. 3 degrees C. Not sure what that translates to in terms of less heat transfer to the living space. The shading from solar panels will reduce UV damage to a home's rooftop and in the case of tile roofs (like ours) reduce deterioration of the underlayment through shading.

 

[NW-Bound]

Shielding the roof with solar panels would certainly help reduce the attic temperature. Most installations cover only a small portion of the roof area though.

 

[candrew]

Most installations cover only a small portion of the roof area though.

Depends on the size of the roof and the array. Ours covers half of our home's roof area and also faces SSW. Nice to have that shading here in the SW desert, and although it probably helps somewhat to lower attic temperatures, any reduced energy use for cooling would be difficult to quantify. I do expect that the shading those panels provide should help extend the life of the underlying roofing material.

 

[samclem]

The shading from solar panels will reduce UV damage to a home's rooftop and in the case of tile roofs (like ours) reduce deterioration of the underlayment through shading.

When it is time to replace the roofing and flashing that isn't under the panels, do you imagine that you'll want the roofers to just try to weave the replacement shingles and underlayment into the existing old ones? That won't look great and significantly increases chance of leaks. Then, in 10 more years when the shingles/underlayment under the solar rig go bad, what then?
No, it would look better and be cheaper to replace it all at once. Any decreased wear under the panels won't result in reduced expenses, and the re-mounting of the panels will come with a bill (if it even makes sense to put them back up).

 

[candrew]

When it is time to replace the roofing and flashing that isn't under the panels, do you imagine that you'll want the roofers to just try to weave the replacement shingles and underlayment into the existing old ones? That won't look great and significantly increases chance of leaks. Then, in 10 more years when the shingles/underlayment under the solar rig go bad, what then?
No, it would look better and be cheaper to replace it all at once. Any decreased wear under the panels won't result in reduced expenses, and the re-mounting of the panels will come with a bill (if it even makes sense to put them back up).

Ours is a tile roof. It is not at all uncommon for homeowners with tile roofs to replace sections (sometimes half) at at time rather than the entire roof. The only roof tiles that are replaced are broken ones. So, there's not the appearance issue that you are referring to.

I can't speak to what would be best for a traditional shingle type roof. It seems in that case it would be best to replace the entire roof.

 

[ExFlyBoy5]

Hey FlyBoy,

Do consider a couple of things when you replace.

1. You've already spent the cost to drill the wells and hook up to them, so the replacement cost is much lower.

2. One advantage of Geothermal is you don't have outside condensers running and making noise all the time.

3. Even the the saving is small, if the replacement cost is similar, saving are savings.

Gary

All true points. I guess it would probably come down to the overall cost of replacing the system (not the loops, obviously) with a similar vs. going conventional.