Life with solar after a year.

[SmallCityDave]

We bought solar a little over a year ago it wasn't a political decision nor was it to save the world it was a decision to save money in the long run and keep our outgo low in our retirement years.

Upfront spent $16,000 on the solar after tax credits it ended up being $10,000. The home is all electric no natural gas* (with the exception of propane for the stove, we also installed a wood burning stove). As far as heating and cooling we have as and forced electric heat plus a eveporative cooler and the previously mentioned wood burning stove, we primarily used the evaporative cooler and it was about 50/50 between the electric heat and wood burning stove.

I'll try to keep the numbers as straight forward as I can but some variables changed such as the installation of the wood burning stove (at a cost of under $1500). The home is older it was built in the 70's it's just under 1700sq ft, our electric bill was $179 per month prior to solar and it's our family of 4 my wife works from home and our kids are home schooled so we spend a good amount of time at home. Solar is a 7.2kw system plus my .8kw that I bought on CL so a total of 8kw.

It was hard for us to have informed expectations of yearly/monthly savings the 3-4 companies we met with gave us numbers all over the map, I did some simple calculations and I was thinking we could save $1000 per year but I was hopeful to save $100 per month. We just received our last bill from the electric company and our average bill has been $59 per month, I'm not sure it's worth it on paper but we are happy with the results.
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[ShokWaveRider]

We have a 3200sqft home in Florida, our average (Equal Billing) costs are ~$120 a month. That is for 2 AC Units, 2hp Pool Pump, Electric Everything Except Propane Tankless Water Heater and BBQ.

I am not sure Solar would make it any more economical over a 10 year period, when considering the Install costs. YMMV

 

[stepford]

Back of the envelope that sounds like a 7 year payback time on your original investment. That's MUCH better than the usual estimates I've seen. I'd be happy too.

 

[ERD50]

... It was hard for us to have informed expectations of yearly/monthly savings the 3-4 companies we met with gave us numbers all over the map, ...

That's odd (at least it should be). There's data on the average amount of annual sunshine in an area, the solar panels, inverters, and your kWh cost are well characterized, the numbers should be close.

Sales people rarely (ever?) include opportunity cost in the equation. Your $10,000 is costing you $400 a year, using a 4% SWR, maybe $320 if you base your WR on a more conservative 3.2%.

You could also use a more conservative ~ 1.4% rate from a 20~30 year T-bill, but at end-of-life your solar system might cost you to tear it out, while the T-bill returns your original investment. So you'd need to add return of principal over 20 ~ 30 years, which would be ~ 5% ~ 3.33%, but with some reduction in interest as the principal is depleted, but that would be the minimum, so at least $333 to $500 in annual opportunity cost

...

I'll try to keep the numbers as straight forward as I can but some variables changed ...

Would it make more sense to simply see how much the system generated, and what your cost/kWh is? That should be your savings, rather than trying to take a delta from a moving target? I'm assuming those numbers are available, I've seen something like that before.

-ERD50

 

[ckelly78z]

I've been toying with the idea of going solar, but most of our electrical usage is in the dead of Winter when NW Ohio is mostly overcast/snowing/raining, so a low solar gain compared to the Summer.

 

[RobbieB]

If it wasn't for the tax credits I wouldn't have done it. I also installed a new EPA certified high efficiency wood burning insert (more for romance than heat) and that thing will keep the furnace off all day long.

 

[street]

Robbie do yo have to buy would?

 

[REWahoo]

Robbie do yo have to buy would?

So the question is,

"How much wood would a woodrobbie rob if a woodrobbie could rob wood"?

 

[RobbieB]

Oh yeah, I buy it in bundles at the grocery store which is very expensive but at least it's dry. These new EPA stoves do not work well at all with badly cured wood. Expensive like I said but at least the furnace isn't running because the fireplace is sending all the heat up the chimney.

 

[Alan]

This month completes our first full year with solar. No subsidies here these days.

Cost £8,500 for solar panels with battery storage. Also on a tariff that changes every 30 minutes, cheapest rates overnight and middle of the day, most expensive rates by far are between 4 and 7pm. The nice thing about the batteries is that you can program periods where you want the batteries to be charged in the absence of sunshine. My normal schedule has the batteries being charged for 2 hours between 1:30 and 3:30pm if needed, which ensures there is enough power to take us through the entire evening. We also get paid for electricity exported. Savings this first year has been £490.

It is a great toy for me to play with as about 30 days over this last year we have had periods of negative pricing when we get paid to use electricity to help balance the National grid. I get an alert several hours ahead of the negative pricing so I can schedule the batteries to charge, and be paid to charge them.

 

[Freedom56]

We installed our solar panels in 2012 at an initial cost $23K out of pocket. The rebate from the power company was $1832. With the 30% tax credit the net cost was about $16K. We generate about 11 megawatts annually and consume about 10.2 megawatts. Our electricity bill back in 2012 was approximately $3600 annually. We get about $120 to $200 refund every year now. The rates have increased considerably since 2012 at the higher tiers. We broke even after 4.5 years. Most of the consumption is from the pool pump and air conditioning unit. We changed all our lighting to LED and replaced the pool motor with a variable speed motor also. For us it was a great investment, $16K to save $3600 annually after tax. Very few investments give that type of return.

 

[Bigdawg]

We installed our solar panels in 2012 at an initial cost $23K out of pocket. The rebate from the power company was $1832. With the 30% tax credit the net cost was about $16K. We generate about 11 megawatts annually and consume about 10.2 megawatts. Our electricity bill back in 2012 was approximately $3600 annually. We get about $120 to $200 refund every year now. The rates have increased considerably since 2012 at the higher tiers. We broke even after 4.5 years. Most of the consumption is from the pool pump and air conditioning unit. We changed all our lighting to LED and replaced the pool motor with a variable speed motor also. For us it was a great investment, $16K to save $3600 annually after tax. Very few investments give that type of return.

Just spit ballin here but if invested in the SP500 your 23K would be worth close to 60K now. But you got the tax credit so still over 40K. And your 3600/yr could have gone down with the LED and pump switch over. But rates went up. Kind of a wash when everything is said and done. Maybe out a few bucks.

 

[ProspectiveBum]

We’re not huge consumers of electricity, so the break-even for solar has always been over 10 years when I’ve calculated it. This is despite living in an area with some of the most expensive electricity rates in the country. I suspect if we had a pool, or used our A/C more than a few weeks per year, it would be.

All that said, I appreciate all my neighbors who have installed solar, because I think it helped to prevent getting hit with rolling blackouts that we’ve experienced in previous years. Much appreciated during the recent SoCal heatwaves!

 

[ERD50]

We’re not huge consumers of electricity, so the break-even for solar has always been over 10 years when I’ve calculated it. ...

How does the amount consumed fit into the payback equation? Are there a lot of fixed costs or economy of scale for a larger residential installation? Otherwise, I would think it would just be a $/watt cost factor.

-ERD50

 

[Alan]

How does the amount consumed fit into the payback equation? Are there a lot of fixed costs or economy of scale for a larger residential installation? Otherwise, I would think it would just be a $/watt cost factor.

-ERD50

I can only speak for our situation but we generate more than we consume. The excess electricity is exported to the grid and the money we get paid for that is 5.4p/kWh. Our average cost of consumption is about 7p/kWh so if we were bigger consumers then more of the generated electricity would be worth 7p/kWh.

Our daughter is in a similar situation where she lives in California. She has a credit of $700 since it can only be applied to electrical bills. I see an EV in her future to replace her 15 year old car.

 

[Freedom56]

Just spit ballin here but if invested in the SP500 your 23K would be worth close to 60K now. But you got the tax credit so still over 40K. And your 3600/yr could have gone down with the LED and pump switch over. But rates went up. Kind of a wash when everything is said and done. Maybe out a few bucks.

You have to consider the $3600 saved and $120-$200 refund. So $3720 over an investment of $16K represents an after tax return of 23.5% annually. The S&P 500 did not give those returns. Also consider that the savings from the electricity bill was and is in effect invested every month. So far, approximately $29,760 (8 x $3720) of after tax expenses was avoided and invested Plus we still have another 17 years of life left on the panels and micro-inverters.

Solar makes sense for those who have a south facing roof and you live in an area where there is a lot of sunshine. The business case makes sense if you pay cash up front for the system rather than enter into a lease agreement with a third party.

Switching from CFL lighting to LED didn't make that much of a difference in terms of consumption. The pool motor change was done a few months prior to the installation of the panels.

 

[Offgrid Organic Farmer]

Our household solar power system came on in 2015.

We have 4400 watts of photovoltaic panels, our battery bank is 48vdc and 600ah.

Since our home is a farm, the solar system depreciates fully over seven years, 1/7th each year. Which is a huge factor in 'pay-back' calculations.

The township where we live has a lot of grid outages, this was the only way [short of running a generator] for us to have power every day of the month. Generators consume a lot of fuel when you need to run them a week out of every month.

 

[SmallCityDave]

Back of the envelope that sounds like a 7 year payback time on your original investment. That's MUCH better than the usual estimates I've seen. I'd be happy too.

That's what I thought too.

 

[SmallCityDave]

I've been toying with the idea of going solar, but most of our electrical usage is in the dead of Winter when NW Ohio is mostly overcast/snowing/raining, so a low solar gain compared to the Summer.

It's certainly not for everyone/everywhere.

 

[Offgrid Organic Farmer]

It's certainly not for everyone/everywhere.

True.

Though it is great for up here in Maine.

 

[Alan]

We are at latitude 55N, 10 degrees further north than Portland Maine. Our solar panels were installed September 2nd last year and over the last 12 months we have generated 3,353 kWh, imported 994 kWh, and exported 1,342 kWh.

That makes consumption of the devices in the house 3,005 kWh, of which we have had to pay for 994 kWh, and we have sold 1,342 kWh to the power company. The 3,005 kWh is in line with our usual ~3,000 kWh annual consumption.

 

[Ian S]

When we lived in Phoenix, we had a 6.9 kW system installed on our patio home in 2012. At that time we got a great deal on a prepaid solar lease - a single payment of $6300 upfront and no additional costs for the 20 year life of the lease. It produced around 12,000 kWh annually and with the electric plan we were on, we saved around $1500 annually on our electric bill which was mostly for air conditioning. In 2018, we opted to exercise our one time lease buyout provision for about $800 that made us the owners of the system. We pretty much hit the sweet spot of solar deals on that top of the line Sunpower system. We sold the home last October after moving to the Sedona area; I don't think having solar added much to the home's value but I don't think it was a detriment either.

Here in Sedona, our home is all-electric with heat pumps and we'd probably benefit from solar. But, we will pursue various energy efficiency modifications to the home before we'd go with solar again. Frankly, I really wouldn't like the look of the panels on our home and I think the utility company has made it far less to our financial advantage to go solar than it was in 2012. I would actually look into converting to natural gas to save on our heating bills rather than going solar again.

 

[SmallCityDave]

When we lived in Phoenix, we had a 6.9 kW system installed on our patio home in 2012. At that time we got a great deal on a prepaid solar lease - a single payment of $6300 upfront and no additional costs for the 20 year life of the lease. It produced around 12,000 kWh annually and with the electric plan we were on, we saved around $1500 annually on our electric bill which was mostly for air conditioning. In 2018, we opted to exercise our one time lease buyout provision for about $800 that made us the owners of the system. We pretty much hit the sweet spot of solar deals on that top of the line Sunpower system. We sold the home last October after moving to the Sedona area; I don't think having solar added much to the home's value but I don't think it was a detriment either.

Here in Sedona, our home is all-electric with heat pumps and we'd probably benefit from solar. But, we will pursue various energy efficiency modifications to the home before we'd go with solar again. Frankly, I really wouldn't like the look of the panels on our home and I think the utility company has made it far less to our financial advantage to go solar than it was in 2012. I would actually look into converting to natural gas to save on our heating bills rather than going solar again.

Wow that was a great deal.

 

[ProspectiveBum]

How does the amount consumed fit into the payback equation? Are there a lot of fixed costs or economy of scale for a larger residential installation? Otherwise, I would think it would just be a $/watt cost factor.

-ERD50

Sorry for the late reply. We have tiered pricing here, with the first tier up to ~400KWh at .23 per KWh, 2nd tier is up to ~700 KWh at .41 per KWh and 3rd tier is anything above that at .48 per KWh. Our consumption for a family of 4 is around 500 KWh per month. If we consumed significantly more, our costs per KWh would be higher, and the payback period shorter. Last time I looked at installing solar, the payback was over 12 years, which was longer than I wanted.

If we ever got an electric vehicle, that might make the finances of it more appealing for us.

 

[Offgrid Organic Farmer]

In this state the utility companies do not pay you for power you put on their grid. You get credits which may be spent when you want power from the grid. And you still pay the transmission fees and taxes on the power both ways.