Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Proposal for solar panels on our garage
Old 07-25-2021, 07:57 AM   #1
Thinks s/he gets paid by the post
Markola's Avatar
 
Join Date: Nov 2013
Location: Twin Cities
Posts: 3,927
Proposal for solar panels on our garage

A company called Avolta has partnered with our utility to offer homeowners solar panels at no out of pocket costs. We figured, why not have them look at our garage, which has better sun exposure than our house? We got the proposal and, in fact, we’d qualify for $0 out of pocket and around $20/month savings on our electric bill over the first 25 years while the system is financed. Then about double that for the remaining 10 years of system life expectancy. We are intrigued and would like to contribute to energy sustainability but are personally leaning against this proposal, because:

1) The place I wanted to install the panels would have been on the western slope of our garage. However, the panels work better on the eastern slope, which is visible to us, and we’re not crazy about the aesthetics.

2). We’re burned out on construction projects right now after a grueling remodel, which itself will save some energy thanks to better insulation installed.

3). We figure panel prices might continue to fall and we might have a better deal later. We are in Minnesota, which is pretty progressive on energy policy but just doesn’t get the solar radiation of more southern states. Maybe panel efficiency will continue to improve, too.

4). We don’t intend to stay in the house for 35 years to enjoy all the financial benefits, though they are transferable to the next owner.

Are we missing something? Here is the core of the proposal:

[ATTACH]
Attached Images
File Type: jpg IMG_0561.jpg (300.8 KB, 59 views)
Markola is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-25-2021, 08:12 AM   #2
Thinks s/he gets paid by the post
 
Join Date: Jan 2013
Posts: 3,405
This is a lease, and it encumbers the property. Should you sell, what are the terms of the lease? Can a buyer assume with qualifying? Does it have to be paid off at close of escrow?

Here, buyers will buy houses with existing owned solar systems, but frequently pay a fraction of the cost. Most buyers are adverse to assuming a lease. In a balanced market, your home may be difficult to sell with a solar lease.

For this reason, I would look at a purchase with financing if I really wanted solar.

Edit: If it's a purchase, look at the qualification requirements and how the loan is amortized from the perspective of a buyer.
Another Reader is offline   Reply With Quote
Proposal for solar panels on our garage
Old 07-25-2021, 08:28 AM   #3
Thinks s/he gets paid by the post
Markola's Avatar
 
Join Date: Nov 2013
Location: Twin Cities
Posts: 3,927
Proposal for solar panels on our garage

Good question and thanks for the concern in other places, which I had not heard about. This is not a lease but a financed sale of equipment at 1.99% over 25 years. The sale is assumable by the next owner and there is no lien on our home. Here’s a relevant slide:

[ATTACH]
Attached Images
File Type: jpg IMG_0562.JPG (551.5 KB, 44 views)
Markola is offline   Reply With Quote
Old 07-25-2021, 09:44 AM   #4
Thinks s/he gets paid by the post
walkinwood's Avatar
 
Join Date: Jul 2006
Location: Denver
Posts: 3,504
You should investigate the additional cost of replacing the roof of the garage due to the panels (not that they would affect the life of the shingles). Who would pay that extra cost. It could easily eat up all your energy savings and more.


Our house came with a 20 year pre-paid lease on the panels. We had to replace the roof due to hail damage and it cost about $2k more to remove & replace the 20 panels. I'm sure I'm paying a bit more in home insurance to have them cover that cost.
walkinwood is online now   Reply With Quote
Old 07-25-2021, 09:56 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 17,010
We had solar folks come by, our roof is really great for solar and we don't even see it.

I turned them down:
We may move in next 10 yrs.
The roof is already ~8 yrs old, so will need replacement before the panels die, lots of extra cost.
What about hail , that is why we had the roof replaced last time.
It didn't save much $$
I didn't trust the company to keep the rates lower for 20 yrs, or admin costs.

Panels will be 1/2 the cost in 10 yrs and produce more electricity.
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is offline   Reply With Quote
Old 07-25-2021, 09:57 AM   #6
Administrator
Alan's Avatar
 
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,054
We are 10 degrees further north than Twin Cities and our Solar panels, installed 2 years ago, generate enough electricity to power the house and export excess to the grid. Over the winter months our experience so far has that we import more than we export but over a year we export more than we import.

I wish we had done it a year earlier when government incentives were still available but I reckon we will have payback within 7-10 years depending on the cost of electricity - the more it goes up the shorter the payback. Our cost to purchase was £8,500 for a 4kW installation consisting of 13 panels. ($11k)
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
Alan is offline   Reply With Quote
Old 07-25-2021, 10:09 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 10,334
My reaction to this type of thing is always skepticism.

Total Savings First Year $1,091 ? That's $91/month; how does that square with the promised $20/month which sounds more realistic except when the panels are covered with snow and ice.

30 years is a long, long time and no one has system lifetime reliability data to support such a claim. I would read the warranty very carefully and perhaps have a lawyer review it. But if it is complicated enough to require legal review that is close to prima facie evidence that you don't want the deal. Who backs the warranty; itty bitty solar power company, the regulated utility, or someone serious?

20 bucks thirty years from now is not worth much. The thing needs a careful net present value calculation.

How much is being financed? $22,053 at 2% interest-only is $37/month with no principal amortization. The data presentation is very confusing. $37 does not match with the implication that when the loan is paid off, a $20 payment is eliminated. " ... about double that for the remaining 10 years of system life expectancy."

What is the collateral? All of your assets or just the solar system? If just the system (unlikely) are you subject to a deficiency judgment if the collateral is worth less than the loan balance?

That garage will probably need a new roof within 30 years, necessitating removal and replacement of the solar array. Who pays for that and how much?

Is there a prepayment penalty on the loan?

I think your inclination is leading you to the right decision. If the deal came with a personal salesperson's visit to your home I would reject it on that basis alone.

With my attitude I may miss a good deal once in a great while but it does pretty well keeping me out of stinky ones.
__________________
Ignoramus et ignorabimus
OldShooter is offline   Reply With Quote
Old 07-25-2021, 10:10 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
target2019's Avatar
 
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,685
Here in NJ the calculation for monthly electricity is $119 per month for past 7.5 years. Two HVAC systems, 3000 sq ft living space, new roof. Over the years we've paid for improvements like efficient windows, additional insulation and HVAC replacement.

$20 per month savings doesn't convince me. I might be inclined to buying a system with powerwall just over eastern-facing garage roof. But it would also mean cutting down a dozen trees, and so on. If I could turn that roof to face south that would also sweeten the deal. I would not go for a lease that nets me just $20 per month.

I think a purification/ventilation system of some kind might save $20 per month by making HVAC systems run more efficiently. Just thinking out loud...
target2019 is online now   Reply With Quote
Old 07-25-2021, 10:14 AM   #9
Moderator
Jerry1's Avatar
 
Join Date: Nov 2014
Posts: 9,101
So you save about $240 per year and as indicated, just under $6000 over 25 years. I don’t know but to me, it just doesn’t seem worth it. As you pointed out, construction/renovations are a PITA. Then a payback period or commitment of 25 years is just too long. It’s like the insulation contractor that wanted to air seal my attic for $10K. I didn’t doubt the work justified the price, but my payback period wasn’t even within my lifetime.

I imagine as current energy sources get more expensive and the cost of alternatives goes down, the payback will get more in line. But for now, I’m not in.

Having said that, there are some examples where it makes sense. I have a shed and with the low voltage draw of LED lights and a small solar system. I can light my shed cheaper that running an electrical line out to the shed. Not only cheaper, but easier since I’d have to dig under concrete and it would be an interesting little project.
__________________
Every day when I open my eyes now it feels like a Saturday - David Gray
Jerry1 is online now   Reply With Quote
Old 07-25-2021, 10:26 AM   #10
Thinks s/he gets paid by the post
 
Join Date: Feb 2014
Location: South central PA
Posts: 3,469
I would run from any company trying to drum up sales this way. Them partnering with your electricity provider suggests that there are two companies benefitting financially from this arrangement, Which cuts considerably into your savings.

We decided we wanted to look into solar a few years ago, so we contacted a couple of companies. Only one actually responded, and they had good ratings. We looked into the company, and decided to go with them. Had the roof inspected, and it was due for replacement. We used our existing HELOC to pay for part of it. I was working as well, so we used cash from our account as well. We got a 30% tax credit for the cost of the panels and the installation. We save about $240/month on electricity during the summer months, less in the winter of course. The company continues to participate in monitoring the workings of the system along with us. We've had small hail only a few times in the last 20 years.

A note, the OP's profile indicates he lives in Alaska. Hail is quite rare in that state.
EastWest Gal is offline   Reply With Quote
Old 07-25-2021, 11:47 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 17,010
Quote:
Originally Posted by EastWest Gal View Post
...
A note, the OP's profile indicates he lives in Alaska. Hail is quite rare in that state.
That would KILL the idea for me, Alaska is NOT prime solar country.
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is offline   Reply With Quote
Old 07-25-2021, 02:27 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 26,821
Quote:
Originally Posted by EastWest Gal View Post
...
A note, the OP's profile indicates he lives in Alaska. Hail is quite rare in that state.
Yes,
Quote:
About Markola

Gender
Male
City/Town
Twin Cities
State
Alaska
but his OP says
Quote:
We are in Minnesota,
OP is not being straight with us!

But anyhow, I'm also in the camp of being skeptical of something like this with so many assumptions and long payoff.

-ERD50
ERD50 is online now   Reply With Quote
Old 07-25-2021, 02:45 PM   #13
Thinks s/he gets paid by the post
skipro33's Avatar
 
Join Date: Sep 2011
Location: Placerville
Posts: 1,788
It sounds to me like you are renting your roof for $20 a month for the next 30 years.

But any way you look at it, it's not a good deal. If you can not rationalize an outright purchase of solar to cover your energy uses, then someone is making money off you, not the other way around.

As others have said, read carefully what you sign, not what their sales team tells you. Get everything in writing. Know who's responsible for damages, equipment failures, home sale, etc.

I bought a 5.5Kw solar design installed for about $14,000 about 7 years ago. I'm probably around break-even now. Here's a link to my solar data. It includes both generation and power/energy used. You can click on buttons to check back over the past years; daily, weekly, monthly, yearly. Lots of info to digest.

https://pvoutput.org/intraday.jsp?id=43187&sid=39456
skipro33 is offline   Reply With Quote
Old 07-25-2021, 04:28 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,808
What happens if the solar company goes out of business?

If you someday want to add battery storage what are the gotchas? I read that battery storage is too expensive right now but maybe in the future it becomes feasible?

These things always seem so complex to me. It has to be a clear win.
Lsbcal is offline   Reply With Quote
Old 07-25-2021, 05:06 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 35,712
Quote:
Originally Posted by Lsbcal View Post
If you someday want to add battery storage what are the gotchas? I read that battery storage is too expensive right now but maybe in the future it becomes feasible?
Adding battery storage is simple, if it is the AC-coupled approach used in the Tesla Powerwall. Basically, the battery module and the grid-tied solar inverters are connected together via the AC wiring.

They are both on the grid, and on the same side of the power meter, meaning the house side as opposed to the grid side. The solar panel power is converted from DC to AC, and pumped into the grid. At the same time, the battery charger is a AC to DC converter, and takes power from the grid to charge the battery. The battery charging rate can be controlled to match the solar panel output, so that there's no net in/outflow to the grid if that's what you want to happen.

On the other hand, my DIY solar battery is DC-coupled. The battery is charged by the panels via charge controllers. Then the battery juice is converted from DC to AC via inverters that may be grid-tied, or off-grid as in my case.

In the DC-coupled systems, the battery is an integral part of the solar power system along with the panels. In the AC-coupled systems such as Tesla Powerwalls, the battery is a storage unit independent from the solar panels, and can be installed even if you have no panels (however, Tesla will not sell the Powerwall alone).


PS. I can now get a hybrid inverter/charger that allows my battery to work similarly to a Powerwall. However, a grid-tied system requires permission of the utility company. Hence, I keep my solar+battery off-grid, and use it to run only part of my home appliances.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 07-25-2021, 05:25 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 8,309
I’d look very closely at the assumptions used for the savings analysis. The proposal we got assumed local utility rates would rise by ~4% annually which overestimated the savings since rates have actually gone down. The lease agreement included a provision to remove and replace panels if necessary for roof replacement or repair for a reasonable preset cost ($500). I think the panels should extend the life of the shingles.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is online now   Reply With Quote
Old 07-25-2021, 05:45 PM   #17
Thinks s/he gets paid by the post
 
Join Date: Aug 2012
Posts: 1,824
Quote:
Originally Posted by jazz4cash View Post
I’d look very closely at the assumptions used for the savings analysis. The proposal we got assumed local utility rates would rise by ~4% annually which overestimated the savings since rates have actually gone down. The lease agreement included a provision to remove and replace panels if necessary for roof replacement or repair for a reasonable preset cost ($500). I think the panels should extend the life of the shingles.

I have about 9 acres but mostly forested. Ideally if I were going to do solar I would love to have them ground mounted. Easier access for any service issues etc.
finnski1 is offline   Reply With Quote
Old 07-25-2021, 09:13 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 35,712
Quote:
Originally Posted by finnski1 View Post
I have about 9 acres but mostly forested. Ideally if I were going to do solar I would love to have them ground mounted. Easier access for any service issues etc.
First, chop down some trees and burn them for heat. Then, you have a clearing for your ground mounted solar array. Problem solved.

I love ground mounted arrays. Wish I have a bigger lot than what I have right now. It's easier to build, easier to wire up, and to protect from strong wind, does not mess up the roof. What's not to like?


PS. You may even be able to use the downed trees for lumber to build the mounting frame for your array. Beautiful.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 07-25-2021, 09:23 PM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 35,712
Back on the panels mounted on the roof, I saw some terrible installations around my neighborhood. One is so egregious that I wonder if the home owner even gets 1/2 of the output that he should be able to get; not only the panels are mounted on the wrong side of the roof, many are shaded by his large tree. Arghh!

It is obvious the installer just wanted to bolt down 30-some panels and bill for that many, without concern whether they produce any power or not. It's really a crime.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 07-25-2021, 09:32 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 26,821
Quote:
Originally Posted by NW-Bound View Post
Back on the panels mounted on the roof, I saw some terrible installations around my neighborhood. One is so egregious that I wonder if the home owner even gets 1/2 of the output that he should be able to get; not only the panels are mounted on the wrong side of the roof, many are shaded by his large tree. Arghh!

It is obvious the installer just wanted to bolt down 30-some panels and bill for that many, without concern whether they produce any power or not. It's really a crime.
Yes, I've seen some of this as well. And an old thermal solar installation that was almost completely blocked by trees 10 years later.

Some opinion piece some where(it was a while ago) mentioned that if we are going to give subsidies for solar, it ought to at least be based on actual production, not installed capacity. That would eliminate some of this incentive to install as many watts as possible for the subsidy.

-ERD50
ERD50 is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Are you a Solar Panels owner? VFK57 Other topics 22 12-11-2016 06:14 PM
solar panels in the Land of the Sun Ed_The_Gypsy Other topics 30 07-21-2013 05:29 AM
Cost effectiveness of solar panels bank5 Other topics 64 05-28-2010 02:01 PM
Lowes is going to start selling DIY Solar Panels jimnjana Other topics 3 12-13-2009 03:48 AM
Solar panels lets-retire Other topics 13 03-14-2008 01:37 PM

» Quick Links

 
All times are GMT -6. The time now is 11:50 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.