cost of Solar Power

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mcblum
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cost of Solar Power

Postby mcblum » Fri Mar 10, 2017 5:01 pm

We have a townhouse in Montgomery county ,Maryland. I am interested in what the cost would be to install solar panels. I don't want to go to a solar web site before I know the ball park figure.
Can someone help? Thanks, Marty

dwickenh
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Re: cost of Solar Power

Postby dwickenh » Fri Mar 10, 2017 5:04 pm

A close friend just had a solar system added to his 2000 sq feet residence at a cost of about 38.000.00. There are generous tax incentives to alleviate some of the cost.

This friend normally pays too much for everything he buys!!!

Hope this helps,

Dan
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

mcblum
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Re: cost of Solar Power

Postby mcblum » Fri Mar 10, 2017 5:07 pm

thanks. That's a shocker, I had no idea it was that expensive.
Marty

fishmonger
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Re: cost of Solar Power

Postby fishmonger » Fri Mar 10, 2017 5:15 pm

I am also considering doing panels on our 3000 sqft colonial. I happen to work for a roofing contractor that has a solar division.

I don't know enough about the technology to talk intelligently about it, but $38k is a lot for a residential system. We operate in NH and VT and do a lot of systems for $20-25k

HoberMallow
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Re: cost of Solar Power

Postby HoberMallow » Fri Mar 10, 2017 5:34 pm

It depends how much electricity you use and how much of your usage you want to offset with solar.

Solar panels are sold based on their power output under standardized conditions. The amount of energy produced depends on the installation details (direction panels are facing, tilt relative to horizontal, local weather, etc.). A great place to start is the NREL's PVWatts calculator (http://pvwatts.nrel.gov/pvwatts.php). You input your address, some basic details of the system, and it will estimate the energy production per month. Ideally, the panels are pointed south and are tilted at an angle equal to the latitude. Whether you can achieve that will depend on your house.

As a reference point, last summer I installed a 4.68 kW system. I paid $3.50 per Watt, so $16,400 total. The federal tax rebate reduced that to $11,500. It hasn't been installed for a full year yet, but it's estimated to produce about 7,800 kWh annually. I live in southern CA - an identical system in Maryland would produce less. Using PVWatts will account for that for you.

One thing to look at closely is the net metering rules in your area. With net metering, you only pay for the difference between energy consumed and produced. You effectively sell power back to the grid at full retail rates. Without that benefit, solar is a lot less attractive.

Dilbydog
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Re: cost of Solar Power

Postby Dilbydog » Fri Mar 10, 2017 5:43 pm

I work for one of the top 5 electrical contractors in the country, and my division focuses on the construction of utility scale solar. Think solar power plants that produce in excess of 100 MW.

While I admittantly don't have any residential construction experience I shutter when I see some of these home installations. For example, modules on the west pitch of a roof, modules that spend half the day shaded by a tree, the neighbors home, etc. Shading of a module has a disproportional effect on production, especially with crystalline modules. For example, a module that is 10% shaded will drop 60-80% of its nameplate production.

My only recommendation would be to buy your system out right, and require that the contractor provide a PVSyst model specific to your installation. This analysis will provide you with an idea of how many KWHr your system will produce per year. It takes into account system losses, module soiling (dirt and dust), and seasonal changes in the intensity of the irradiance of the sun unique to your geographical location. This will also give you an very accurate idea on what your ROI will look like.

countdrak
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Re: cost of Solar Power

Postby countdrak » Fri Mar 10, 2017 6:58 pm

I did a ton of investigation and the most important factor is how much electricity you use presently. Depending on how much power they need to compensate determines the size of unit which then equates to the cost. I have friends who needed a $15K system and I needed a $30K system. Assume you will get 50% discount on federal and state rebates and will have to finance the other 50%. The solar company will promise 110% generation of your present consumption and will mostly pay the difference if they can't generate the power.

I didn't think leasing was a good option. Outright buying or finance was the best bet. Look at multiple vendors, we looked at sunpower, solar city etc. They were all competitive, but depending on technology some can generate more power with lesser panels.

Good luck!

Thesues
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Re: cost of Solar Power

Postby Thesues » Fri Mar 10, 2017 7:05 pm

I got a 15 Kw system two years ago. I paid about $50,000 in Northern Virginia.

If you do get one, make sure the installer knows what they are doing - you will be thankful for paying a little more.

HoberMallow
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Re: cost of Solar Power

Postby HoberMallow » Fri Mar 10, 2017 7:12 pm

To give you some more details on the return, our electricity bill was $2,100 per year and the solar system cost $11,500. Assuming a 3% discount rate, that's a payback period of just over 6 years. The panels have a 25 year warranty and typically last for 30+, so after that it's free electricity.

And one other point - if you have tiered pricing (higher electricity rates the more you use) even a smaller system can help if it keeps you out of the upper price tiers.

Good luck! :beer

TravelGeek
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Re: cost of Solar Power

Postby TravelGeek » Fri Mar 10, 2017 7:13 pm

dwickenh wrote:A close friend just had a solar system added to his 2000 sq feet residence at a cost of about 38.000.00. There are generous tax incentives to alleviate some of the cost.

This friend normally pays too much for everything he buys!!!

Hope this helps,

Dan


How much does it generate? $38k isn't particularly meaningful without that information. Mine cost $22k-ish, if I recall correctly. Is that better or worse? :happy

arsenalfan
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Re: cost of Solar Power

Postby arsenalfan » Fri Mar 10, 2017 8:31 pm

PM sent. Local installer who will educate you, and let you decide. Similar to Bogleheads and finances.

homerj15
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Re: cost of Solar Power

Postby homerj15 » Fri Mar 10, 2017 10:05 pm

After taxes and rebates I paid just over $9k for a 5kW system down here in Texas. My average monthly electric bill is about $11. And that's with two 5 ton refrigerated air units running for a good part of the year.

dwickenh
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Re: cost of Solar Power

Postby dwickenh » Fri Mar 10, 2017 10:25 pm

TravelGeek wrote:
dwickenh wrote:A close friend just had a solar system added to his 2000 sq feet residence at a cost of about 38.000.00. There are generous tax incentives to alleviate some of the cost.

This friend normally pays too much for everything he buys!!!

Hope this helps,

Dan


How much does it generate? $38k isn't particularly meaningful without that information. Mine cost $22k-ish, if I recall correctly. Is that better or worse? :happy


I have confirmed his system is a 15 KW system.

Dan
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

misterno
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Re: cost of Solar Power

Postby misterno » Fri Mar 10, 2017 10:28 pm

google has a nice online website for this

you enter your home address, it will show you how your house faces to sun and how much you gain from solar panels

https://www.google.com/get/sunroof#p=0

misterno
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Re: cost of Solar Power

Postby misterno » Fri Mar 10, 2017 10:33 pm

Google has this website where it has 3D of your house if you enter your address

then tells you if it makes sense to install solar panels

https://www.google.com/get/sunroof#p=0

here is mine
http://i.hizliresim.com/vbR0l6.png

so I did not do it although I am in TX because my roof not facing south

jthokie4
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Re: cost of Solar Power

Postby jthokie4 » Fri Mar 10, 2017 11:16 pm

In Texas, I paid $2.75 per watt for a 5kw system (so around $14k altogether). My system doesnt produce near as much as my installer insisted it would, so get production estimate from NREL website, which is more accurate.

Also, DO NOT GET MICROINVERTERS. Get a string inverter. Microinverters underneath each panel do not stand up to ambient heat/moisture, and I have had many fail after only a few more years. Yeah, they are under warranty, but reinstallation is not covered, and it is damn near impossible for your average homeowner to get up on the roof and replace them by themselves, especially if the failure is in the middle of the array.

homerj15
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Re: cost of Solar Power

Postby homerj15 » Fri Mar 10, 2017 11:58 pm

jthokie4 wrote:In Texas, I paid $2.75 per watt for a 5kw system (so around $14k altogether). My system doesnt produce near as much as my installer insisted it would, so get production estimate from NREL website, which is more accurate.

Also, DO NOT GET MICROINVERTERS. Get a string inverter. Microinverters underneath each panel do not stand up to ambient heat/moisture, and I have had many fail after only a few more years. Yeah, they are under warranty, but reinstallation is not covered, and it is damn near impossible for your average homeowner to get up on the roof and replace them by themselves, especially if the failure is in the middle of the array.


@jthokie4: You using Enphase?

Teague
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Re: cost of Solar Power

Postby Teague » Sat Mar 11, 2017 12:13 am

How long will you keep this home? If/when you sell, the buyer may not consider rooftop solar an asset.

billfromct
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Re: cost of Solar Power

Postby billfromct » Sat Mar 11, 2017 12:29 am

homerj15 wrote:After taxes and rebates I paid just over $9k for a 5kW system down here in Texas. My average monthly electric bill is about $11. And that's with two 5 ton refrigerated air units running for a good part of the year.


Homerj, if your average monthly electric bill is now $11/month, how much was your average monthly electric bill before the solar installation?

bill

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unclescrooge
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Re: cost of Solar Power

Postby unclescrooge » Sat Mar 11, 2017 12:30 am

jthokie4 wrote:In Texas, I paid $2.75 per watt for a 5kw system (so around $14k altogether). My system doesnt produce near as much as my installer insisted it would, so get production estimate from NREL website, which is more accurate.

Also, DO NOT GET MICROINVERTERS. Get a string inverter. Microinverters underneath each panel do not stand up to ambient heat/moisture, and I have had many fail after only a few more years. Yeah, they are under warranty, but reinstallation is not covered, and it is damn near impossible for your average homeowner to get up on the roof and replace them by themselves, especially if the failure is in the middle of the array.


I find it hard to believe that enphase would offer 25 year warranties on products with high rates of failure.

I insisted on microinverters on my previous house installation due to heavy shading issues. My installer is an ex-Disney electrical engineer. He said he'd replace any for free for 10 years. He was confident that any failures would occur within the first year (burn-in period).

HIinvestor
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Re: cost of Solar Power

Postby HIinvestor » Sat Mar 11, 2017 12:43 am

Ours cost about $12K for our needs and we got about 65% rebate for state and fed taxes. Yep,meet cost after rebates was about $4K. We have a small home and no A/C and no heating. Price depends a great deal on how much sun your home gets, whether your roof is suitable or you need to mount it specially and how much electricity you use.
Last edited by HIinvestor on Sat Mar 11, 2017 1:48 am, edited 1 time in total.

jthokie4
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Re: cost of Solar Power

Postby jthokie4 » Sat Mar 11, 2017 12:48 am

homerj: yes, I have Enphase microinverters. Unreliable junk, as far as I'm concerned.

desiderium
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Re: cost of Solar Power

Postby desiderium » Sat Mar 11, 2017 12:54 am

Perhaps the most relevant calculation is payback period. Clearly from the responses, there are a number of parameters, including system costs, production expectations, electricity costs and incentives. I investigated this for a number of years until the payback period came down to 4 years, which is when I purchased my system.

madbrain
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Re: cost of Solar Power

Postby madbrain » Sat Mar 11, 2017 5:25 am

jthokie4 wrote:Also, DO NOT GET MICROINVERTERS. Get a string inverter. Microinverters underneath each panel do not stand up to ambient heat/moisture, and I have had many fail after only a few more years. Yeah, they are under warranty, but reinstallation is not covered, and it is damn near impossible for your average homeowner to get up on the roof and replace them by themselves, especially if the failure is in the middle of the array.


This is pretty strange. I had a few D380 inverters fail a few years ago. 6 out of 28. Not only was reinstallation covered, but since Enphase didn't have any D380 replacement units available, they swapped out my entire array for the newer M215s. And paid my installer of choice labor for swapping out everything. My M215s have been fine. So have the M190s in my other array. I plan to add more this year as we added a second EV.

My production has beaten the installer estimates, but maybe he just did a more realistic estimate than yours.

madbrain
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Re: cost of Solar Power

Postby madbrain » Sat Mar 11, 2017 5:50 am

dwickenh wrote:I have confirmed his system is a 15 KW system.


$38k for a 15 kW system is not a crazy price. That's $2.5/watt. If that's before the 30% federal tax credit, that's actually a pretty good price.
If the $38k already accounts for the tax credit, then it's a more typical price, but 2 systems of the same size can still vary widely in cost depending on the type of panels (mono vs poly, efficiency, brand name) and what type of inverters.

15 kW is a pretty big system, BTW. My 9.4 kW system has generated between 14 MWh and 16 MWh the last 4 years, in Northern California.

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just frank
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Re: cost of Solar Power

Postby just frank » Sat Mar 11, 2017 6:23 am

Here is a good site, which aggregates national numbers... http://solar-power-now.com/cost-of-solar/

Looks like solar PV in the US in 2017 is $3/Watt pre-incentives, and $2/W post incentives. Say $2k per kW of panel

Energy production per year is probably 1100-1300 hours times nameplate capacity....so 1 kW makes 1100 to 1300 kWh per year. Multiply that by your price of electricity to estimate what each kW of panel (costing about $2k) would pay you per year. E.g. at $0.13, each $2k panel saves you $0.13*1200 = $156/yr, or about 8% return on capital.

NB: This payback is NOT the same as a risk-free bond that pays 8%, because you need to depreciate the hardware (unlike the principal on a bond). That is, if the array were destroyed in year 12, you would have only made back your initial investment (ignoring inflation and time value of money). In reality, the hardware will probably last 2x that long at least, so if we say it returns 200% of your initial investment over 24 years, that is more like a 3% risk free rate of return.

One risk is that when solar gets really cheap (continuing price trends), then utilities will install loads of it up to the point that it can power the local grid almost completely during sunny days. In this scenario, the utility has an incentive to provide different rates at different times of day, typically with the cheapest power then being during the day. If they renegotiate your net-meter agreement with them at that point (say in 8-10 years), then your power you sell them during the day might be worth almost nothing, and then they will charge you full retail rate when you buy power back from them at night....obviously destroying your rate of return.

I'd say the above risk is not too big a deal....more likely to be a problem in solar early adopter states like CA, MA and NJ.

madbrain
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Re: cost of Solar Power

Postby madbrain » Sat Mar 11, 2017 8:02 am

just frank wrote:Energy production per year is probably 1100-1300 hours times nameplate capacity....so 1 kW makes 1100 to 1300 kWh per year.


This very simplistic formula is not likely to be accurate for many people. There are so many other variables that go into the equation, such as your location and the weather. I recommend going there for a good, quick estimate :
http://pvwatts.nrel.gov/

FYI, I have a 9.52 kW system since late 2012 (was 6.58 originally in late 2012).
My production numbers for the full calendar years for that 9.52 kW system are :
2013 : 16,131 kWh
2014 : 15,032 kWh
2015 : 14,860 kWh
2016 : 14,082 kWh

In other words, 1 kW of PV made between 1479 kWh and 1694 kWh per year for me - much more than the 1100 to 1300 you are estimating.

Now, granted, all four have been drought years, but this is Northern California we are talking about.
The drop between 2015 and 2016 is explained by quite a few more rainy days towards the end of last year.
Not quite sure about the drop between 2013 and 2014 , but the D380s were replaced with M215s during that time frame and that may have something to do with it too.

FYI, PVWatts estimates 14,930 kWh per year for my system on average, so it's right in the ballpark of what I'm getting.

madbrain
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Re: cost of Solar Power

Postby madbrain » Sat Mar 11, 2017 8:09 am

just frank wrote:One risk is that when solar gets really cheap (continuing price trends), then utilities will install loads of it up to the point that it can power the local grid almost completely during sunny days. In this scenario, the utility has an incentive to provide different rates at different times of day, typically with the cheapest power then being during the day. If they renegotiate your net-meter agreement with them at that point (say in 8-10 years), then your power you sell them during the day might be worth almost nothing, and then they will charge you full retail rate when you buy power back from them at night....obviously destroying your rate of return.

I'd say the above risk is not too big a deal....more likely to be a problem in solar early adopter states like CA, MA and NJ.


That is a concern, and it's happening sooner than 8-10 years in CA. The net meter "agreements" don't include fixed rates. My utility (PG&E) changes the rates 4 times a year. The time of use periods have not changed yet, but they are going to. I think in about 3 years, the rates will be inverted, ie. peak power prices will be at night, and daytime will be off-peak.

On the other hand, currently, the time-of-use rates are completely voluntary, not mandatory. So one option would be to just switch back to a non time-of-use rate schedule, and only be billed for the difference between consumption and production, regardless of the time of day.

Another option - but a much more expensive one - would be to use battery storage and charge them with excess solar power during the day, and discharge them at night. Battery costs are coming down, too, though. But they have a much more limited lifetime than solar PV.

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just frank
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Re: cost of Solar Power

Postby just frank » Sat Mar 11, 2017 10:35 am

Thanks @madbrain. I was trying to provide a brief and understandable answer to the OP in Maryland who was asking for a rough estimate, using the solar resource in the mid-Atlantic area and assuming a favorable site.

I will leave the details to those bidding his install who get to see his location.

EDIT: PVWatts estimates 1300 hours per year solar resource for Baltimore, MD. factor in some shading or non-optimal tilt, and that will shave 10-15% easy. This is not as favorable as CA, but nearly 2x better than Germany or the UK.
Last edited by just frank on Sat Mar 11, 2017 5:21 pm, edited 1 time in total.

Valuethinker
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Re: cost of Solar Power

Postby Valuethinker » Sat Mar 11, 2017 10:49 am

just frank wrote:Here is a good site, which aggregates national numbers... http://solar-power-now.com/cost-of-solar/

Looks like solar PV in the US in 2017 is $3/Watt pre-incentives, and $2/W post incentives. Say $2k per kW of panel

Energy production per year is probably 1100-1300 hours times nameplate capacity....so 1 kW makes 1100 to 1300 kWh per year. Multiply that by your price of electricity to estimate what each kW of panel (costing about $2k) would pay you per year. E.g. at $0.13, each $2k panel saves you $0.13*1200 = $156/yr, or about 8% return on capital.

NB: This payback is NOT the same as a risk-free bond that pays 8%, because you need to depreciate the hardware (unlike the principal on a bond). That is, if the array were destroyed in year 12, you would have only made back your initial investment (ignoring inflation and time value of money). In reality, the hardware will probably last 2x that long at least, so if we say it returns 200% of your initial investment over 24 years, that is more like a 3% risk free rate of return.

One risk is that when solar gets really cheap (continuing price trends), then utilities will install loads of it up to the point that it can power the local grid almost completely during sunny days. In this scenario, the utility has an incentive to provide different rates at different times of day, typically with the cheapest power then being during the day. If they renegotiate your net-meter agreement with them at that point (say in 8-10 years), then your power you sell them during the day might be worth almost nothing, and then they will charge you full retail rate when you buy power back from them at night....obviously destroying your rate of return.

I'd say the above risk is not too big a deal....more likely to be a problem in solar early adopter states like CA, MA and NJ.


it's a good prediction and if you look at renewables heavy countries like Germany (c. 30GW installed solar capacity?) and Denmark (wind power) it's beginning to happen.

Wind of course has a somewhat less predictable pattern (I believe, generally, it drops at night, because the difference between ground and air temperature is lessened?).

But we are in the world of the "utility of the future" and electric power in daytime may well become virtually free (plus Transmission & Distribution network charges).

Whereas peak rates will be at night.

I hadn't thought it through, but I can see California and the Mountain States getting there.

What is happening in the utility space is happening a lot quicker than all but the optimists forecast. Solar and wind are now competitive with other forms of new capacity (utility scale solar, at least, if not home solar). Storage is improving (but has a significant way to go).

We could have another huge "stranded assets" problem, as happened when electricity markets were deregulated in the 1990s, and utilities wrote off a lot of their investments in, for example, nuclear power plants (that were often never completed).

Mike Scott
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Re: cost of Solar Power

Postby Mike Scott » Sat Mar 11, 2017 11:27 am

A lot depends on federal/state/local rebates and incentives. I have been trying to make the math work at our current location. It keeps being a lot cheaper to buy electricity (no state/local incentives combined with some of the cheapest electric rates in the country). $$$ spent on energy efficiency and reducing use is far more productive.

msr999
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Re: cost of Solar Power

Postby msr999 » Sat Mar 11, 2017 11:50 am

Anyone familiar with solarcity? They claim that their complete solar roof will cost just as much as a regular roof. Its time to replace my roof and I am waiting for them to go full production. I called them last year and they are only working on southern ca (i live in MD) and it will be a year before they reach other parts of the country?

HIinvestor
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Re: cost of Solar Power

Postby HIinvestor » Sat Mar 11, 2017 12:54 pm

When we were all in the market to buy photovoltaic, you could call the various companies and tell them your average electric bill and they could send you a free preliminary quote over the Internet and if you were interested, they'd send someone over for a final quote, including an inspection of your roof, etc, shading, etc. For our home, the prelim quotes and final quotes were very close.

squirm
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Re: cost of Solar Power

Postby squirm » Sat Mar 11, 2017 2:15 pm

Average person won't need nite than 5kw system. Expect about $3/watt. Pay outright. Solar makes since in solar friendly states with high electric cost. First button up your house and add insulation if needed. Then do solar if needed.
We paid $15k. Our bills are zero.

TravelGeek
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Re: cost of Solar Power

Postby TravelGeek » Sat Mar 11, 2017 3:28 pm

msr999 wrote:Anyone familiar with solarcity? They claim that their complete solar roof will cost just as much as a regular roof. Its time to replace my roof and I am waiting for them to go full production. I called them last year and they are only working on southern ca (i live in MD) and it will be a year before they reach other parts of the country?


Check out this thread from a few months ago when they announced their solar shingles.

viewtopic.php?t=203529

Valuethinker
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Re: cost of Solar Power

Postby Valuethinker » Sun Mar 12, 2017 12:05 pm

msr999 wrote:Anyone familiar with solarcity? They claim that their complete solar roof will cost just as much as a regular roof. Its time to replace my roof and I am waiting for them to go full production. I called them last year and they are only working on southern ca (i live in MD) and it will be a year before they reach other parts of the country?


Be very careful with anyone who claims to do something to your roof, rather than *on* your roof.

Do not be an early adopter. Because if it goes wrong, you are in for a world of hurt (moisture inside the roof -- uggh).

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unclescrooge
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Re: cost of Solar Power

Postby unclescrooge » Sun Mar 12, 2017 12:23 pm

just frank wrote:
One risk is that when solar gets really cheap (continuing price trends), then utilities will install loads of it up to the point that it can power the local grid almost completely during sunny days. In this scenario, the utility has an incentive to provide different rates at different times of day, typically with the cheapest power then being during the day. If they renegotiate your net-meter agreement with them at that point (say in 8-10 years), then your power you sell them during the day might be worth almost nothing, and then they will charge you full retail rate when you buy power back from them at night....obviously destroying your rate of return.

I'd say the above risk is not too big a deal....more likely to be a problem in solar early adopter states like CA, MA and NJ.


I think AZ already had a similar problem, with peak costs occurring late-afternoon/early evening, right when solar generation is tapering off and people are getting home from work.

Hopefully Tesla's battery packs will become a viable cost effective solution in the near future.

Valuethinker
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Re: cost of Solar Power

Postby Valuethinker » Sun Mar 12, 2017 2:17 pm

unclescrooge wrote:
just frank wrote:
One risk is that when solar gets really cheap (continuing price trends), then utilities will install loads of it up to the point that it can power the local grid almost completely during sunny days. In this scenario, the utility has an incentive to provide different rates at different times of day, typically with the cheapest power then being during the day. If they renegotiate your net-meter agreement with them at that point (say in 8-10 years), then your power you sell them during the day might be worth almost nothing, and then they will charge you full retail rate when you buy power back from them at night....obviously destroying your rate of return.

I'd say the above risk is not too big a deal....more likely to be a problem in solar early adopter states like CA, MA and NJ.


I think AZ already had a similar problem, with peak costs occurring late-afternoon/early evening, right when solar generation is tapering off and people are getting home from work.

Hopefully Tesla's battery packs will become a viable cost effective solution in the near future.


in truth every utility in the developed world has this problem.

The early shift arrives home from work, sticks the TV and the oven on (apparently in the UK grid, the impact of LED/ CFL lighting on the spike can be seen; there are also predictable spikes eg around commercial breaks in World Cup Football (soccer) games when everybody puts the kettle on for tea ;-)).

Meanwhile stores are all still open, so are offices, the late shift is still at work.

Demand peaks. In winter peak countries, that's after sunset (NW Europe; also N America in January-Feb).

Heat of the day is maximized 4.30-6pm so in summer peak territories, same effect (most of North America is now summer peak, even southern Ontario).

It means "on demand" power, like hydro electric, is very valuable to the grid.

By contrast due to nuclear power and wind power in particular, you get periods of negative power prices.

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unclescrooge
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Re: cost of Solar Power

Postby unclescrooge » Sun Mar 12, 2017 2:44 pm

Valuethinker wrote:
unclescrooge wrote:
just frank wrote:
One risk is that when solar gets really cheap (continuing price trends), then utilities will install loads of it up to the point that it can power the local grid almost completely during sunny days. In this scenario, the utility has an incentive to provide different rates at different times of day, typically with the cheapest power then being during the day. If they renegotiate your net-meter agreement with them at that point (say in 8-10 years), then your power you sell them during the day might be worth almost nothing, and then they will charge you full retail rate when you buy power back from them at night....obviously destroying your rate of return.

I'd say the above risk is not too big a deal....more likely to be a problem in solar early adopter states like CA, MA and NJ.


I think AZ already had a similar problem, with peak costs occurring late-afternoon/early evening, right when solar generation is tapering off and people are getting home from work.

Hopefully Tesla's battery packs will become a viable cost effective solution in the near future.


in truth every utility in the developed world has this problem.

The early shift arrives home from work, sticks the TV and the oven on (apparently in the UK grid, the impact of LED/ CFL lighting on the spike can be seen; there are also predictable spikes eg around commercial breaks in World Cup Football (soccer) games when everybody puts the kettle on for tea ;-)).

Meanwhile stores are all still open, so are offices, the late shift is still at work.

Demand peaks. In winter peak countries, that's after sunset (NW Europe; also N America in January-Feb).

Heat of the day is maximized 4.30-6pm so in summer peak territories, same effect (most of North America is now summer peak, even southern Ontario).

It means "on demand" power, like hydro electric, is very valuable to the grid.

By contrast due to nuclear power and wind power in particular, you get periods of negative power prices.


LOL. Tea kettle spikes!

There was an article recently on Bloomberg about the wholesale prices in Texas being negative at night. The causes were wind energy being produced when not needed, and inability to move the power to other states where it could be used.

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Re: cost of Solar Power

Postby knpstr » Sun Mar 12, 2017 2:54 pm

just frank wrote:Here is a good site, which aggregates national numbers... http://solar-power-now.com/cost-of-solar/


from the site:
Another misconception is that the price for residential solar power is still more than what utilities are charging their customers across America. This is no longer true. The effective rate for solar power spread across the life of a system is $0.08/kWh. The average cost for conventional energy is $0.12/kWh and rising.


wow, solar is already 33% cheaper than conventional utilities! Can't wait to see what it is in another 5-10 years
Very little is needed to make a happy life; it is all within yourself, in your way of thinking. -Marcus Aurelius

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Re: cost of Solar Power

Postby Valuethinker » Mon Mar 13, 2017 3:19 am

unclescrooge wrote:
Valuethinker wrote:
unclescrooge wrote:
just frank wrote:
One risk is that when solar gets really cheap (continuing price trends), then utilities will install loads of it up to the point that it can power the local grid almost completely during sunny days. In this scenario, the utility has an incentive to provide different rates at different times of day, typically with the cheapest power then being during the day. If they renegotiate your net-meter agreement with them at that point (say in 8-10 years), then your power you sell them during the day might be worth almost nothing, and then they will charge you full retail rate when you buy power back from them at night....obviously destroying your rate of return.

I'd say the above risk is not too big a deal....more likely to be a problem in solar early adopter states like CA, MA and NJ.


I think AZ already had a similar problem, with peak costs occurring late-afternoon/early evening, right when solar generation is tapering off and people are getting home from work.

Hopefully Tesla's battery packs will become a viable cost effective solution in the near future.


in truth every utility in the developed world has this problem.

The early shift arrives home from work, sticks the TV and the oven on (apparently in the UK grid, the impact of LED/ CFL lighting on the spike can be seen; there are also predictable spikes eg around commercial breaks in World Cup Football (soccer) games when everybody puts the kettle on for tea ;-)).

Meanwhile stores are all still open, so are offices, the late shift is still at work.

Demand peaks. In winter peak countries, that's after sunset (NW Europe; also N America in January-Feb).

Heat of the day is maximized 4.30-6pm so in summer peak territories, same effect (most of North America is now summer peak, even southern Ontario).

It means "on demand" power, like hydro electric, is very valuable to the grid.

By contrast due to nuclear power and wind power in particular, you get periods of negative power prices.


LOL. Tea kettle spikes!


The Queen's Christmas speech no longer does it ;-).

I would bet at least 50% UK electric kettles now draw 3 kw. So you talk 1 million kettles, say, at 3 kw, that's 3 GW power demand spike, when the grid normally does about say 45 GW on your average day at peak (all time peak demand is something like 55 GW; our reserve margin (capacity over peak demand) is now something like 3% due to power station closures (rule of thumb was that you needed 20% pre electricity deregulation, and say 10% now).

The water people also know when there are half time breaks on big football matches ;-).

There was an article recently on Bloomberg about the wholesale prices in Texas being negative at night. The causes were wind energy being produced when not needed, and inability to move the power to other states where it could be used.


Part of that is the structure of the US wind power subsidies, they get the tax credit for every kwhr produced (even if it is not needed).

ERCOT (Texas) was deliberately isolated from its neighbours, in terms of high voltage grid to move power. A policy decision way back (to prevent power outages hitting Texas, also to protect the local utilities generation asset investment). I believe that may be changing.

The Economist had a piece a while ago about High Voltage DC lines. These are more efficient for long distance transmission of power than the AC grid. They are little used in USA but countries like China, Russia, Quebec, Brazil have built them, and China has plans for an ambitious grid (there are also similar plans, with less drive behind them, for Europe-- utilities like EDF (France) don't want the competition so they influence the political process to obstruct it).

Texas has become a wind power Mecca, and it may be the politics will therefore drive it to physically open its electricity borders.

Solar of course has similar issues, but total solar generation is much smaller in most countries, and solar is quite predictable-- you know the hours in a day, and you can forecast cloudy weather fairly well.

Nuclear power is another one. Nuclear reactors don't easily come and go off the grid (it's possible, but difficult) and they are "always on" to keep the pump circulating to cool the reactors (hence Fukushima Daichi-- the reactors went off due to the quake, but were still hot, and the grid connections failed, and the tidal wave took out the backup diesel generators; for a period, the staff wired the pumps to car batteries in the parking lot (lot of Prius's) but eventually they just ran out of power and the pumps failed.

So for example Ontario (60% nuclear) tends to export nuclear generated electricity to New York and the Midwest via Michigan at low demand times (again, facing a negative power price after grid charges some nights) and import expensive electricity in the peak summer months. Its hydro resources are also seasonal-- low in winter, peak in spring, lower in summer. The addition of wind and solar power has simply made this problem worse.

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Re: cost of Solar Power

Postby mouses » Mon Mar 13, 2017 7:41 am

I was reading recently that there have been efforts underway in various states to do away with the government subsidies for solar and wind (not for gas and oil, however!) So if you are planning on doing something with the former, I would keep an eye on such things so you don't miss the boat.

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Re: cost of Solar Power

Postby ponyboy » Mon Mar 13, 2017 7:44 am

Solar is a cool concept but its a joke. Its just too expensive. I dont care what the tax incentives are. I guess if you plan on staying in your home forever...because its going to take 20 years to break even. Imagine what the initial price of a full solar roof...now invest that in the 3 fund vanguard portfolio...whats $30k going to grow to over 20 years? Catch my drift? Solar is a waste.

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Re: cost of Solar Power

Postby Valuethinker » Mon Mar 13, 2017 8:40 am

ponyboy wrote:Solar is a cool concept but its a joke. Its just too expensive. I dont care what the tax incentives are. I guess if you plan on staying in your home forever...because its going to take 20 years to break even. Imagine what the initial price of a full solar roof...now invest that in the 3 fund vanguard portfolio...whats $30k going to grow to over 20 years? Catch my drift? Solar is a waste.


Can you give us some citations and backing data?

Because for US householders, calculations I have seen suggest payback in 7-10 years.

Granted price per installed kw of capacity is c. 2x that of Germany due to variations in rules etc in the US killing economies of scale. But, even so, the price of silicon has plummeted-- it's getting down towards $1/ watt.

Of course Hawaii, where retail electricity prices are c. 30 cents/ kwhr or above, the only question is why *not* solar PV? And the answer is that the electricity company has put restrictions on new solar, because the grid supposedly cannot handle it.

Imagine what the initial price of a full solar roof...now invest that in the 3 fund vanguard portfolio...whats $30k going to grow to over 20 years? Catch my drift? Solar is a waste


The thing you are missing is risk. A certain cash flow has a different valuation than a risky cash flow.

So the answer is:

- over 20 years at a risk free rate of say 2% nominal or c. 0.5% real, you can work out the return by $30k * (1+disct rate)^20

Now is that the same discount rate as for a solar installation? Well yes, probably-- it's not risk free, but it is close to I would argue. Depending on how your returns are compensated: energy saved v. feed in tariff etc. One issue is that as solar increases on the grid, (see the discussion so far), daytime prices of electricity are likely to fall, and may fall to zero (at the wholesale level, at the retail level you still have distribution charge etc.). And you have replacement of inverters every 10-15 years say. And also a fall in solar efficiency (from what I have seen, by c. 1% pa over 25 years).

So the right way to do this is an NPV calculation. But you need to have adjusted the cost of capital properly for risk in your discount rate. And for the PV array you need a terminal value.

When I did this, the sorts of numbers I was getting was that the 2 options (solar or invest the cash) were NPV neutral if your cost of capital was c. 5-6% nominal*. At least from memory. But there's a lot of variables in there:

- solar output (I am 850w per peak kw of capacity; but I live at 51 degrees N in a modified Maritime climate. Someone in Phoenix or Boulder or SoCal should be closer to 2000 watts for the same silicon)

- retail cost of electricity (much more complex if time of day) and future outlook (I tended to assume rises with CPI inflation i.e. 2%

- net metering i.e. at what price can you sell back excess power to the grid?)

- cost of installation of course

- assumptions about maintenance and degradation, above

- US has tended to be a leasing market rather than an owner invested market. So that means the returns are levered for the homeowner. You can't do that with a stock and bond portfolio

And there's a liquidity cost. If you put this in US Treasury bonds, you are very likely to always be able to pull out your initial capital or say 90% of it. Conversely in stocks, you could be trying to sell in the next March 2009 i.e. at 50%, say, of your value. But a solar array you cannot sell, and what is your terminal value?

* the UK listed solar power plays (solar farms) disclose discount rates in their accounts used for valuing their assets to calculate a Net Asset Value per share. Around 6% (Bluefin Solar and there's another one).

There may be US vehicles which do something similar and make similar disclosures under US GAAP (UK firms use IFRS accounting standard).
Last edited by Valuethinker on Mon Mar 13, 2017 8:57 am, edited 1 time in total.

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Re: cost of Solar Power

Postby Valuethinker » Mon Mar 13, 2017 8:43 am

mouses wrote:I was reading recently that there have been efforts underway in various states to do away with the government subsidies for solar and wind (not for gas and oil, however!) So if you are planning on doing something with the former, I would keep an eye on such things so you don't miss the boat.


Interested to see the citations? Where did you read this?

There *are* certain states like MA that do subsidize solar quite heavily. However, the subsidy is about the net metering, usually, i.e. the price the grid pays you for excess power.

That's where the soft point is. Certain places, notably Hawaii, the grid operator is saying they cannot accept more power being sold back into the system, and are restricting new installations.

You get to California and New England, and 20 cents/ kwhr retail for electricity is not uncommon. Solar starts to look quite smart at that point.

There *was* a renewal of US Federal subsidies on solar and wind-- with a phasing down of same over time. One of the things that Obama and the Congress managed to get done in 2016 (or 2015?) covering 7 years, from memory. The new Administration wants to revoke that, but they might face strong Congressional opposition (given that it was agreed on a bipartisan basis, and made into law already).

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Re: cost of Solar Power

Postby madbrain » Mon Mar 13, 2017 9:10 am

ponyboy wrote:Solar is a cool concept but its a joke. Its just too expensive. I dont care what the tax incentives are. I guess if you plan on staying in your home forever...because its going to take 20 years to break even. Imagine what the initial price of a full solar roof...now invest that in the 3 fund vanguard portfolio...whats $30k going to grow to over 20 years? Catch my drift? Solar is a waste.


The joke is people who can't do math, not solar.

I keep a spreadsheet of all my electric bills, including consumption and solar production, since it first went online in 2010.
I recalculate the bill also to what it would have been without the solar every month. Here is the running data so far :

Image

And here for comparison to the costs :
Image

Note that not all the money was spent a the beginning - $26k were spent in October 2010, and another $6 in October 2012 to expand the system. The total price is noted. Going back from the original system date, it will be about 7.5 years before the system will have paid back for itself. Just 11 months away. After that, it's pure profit, and the kWh produced cannot be taxed.

I may add more capacity between now and then though, as I now have a second EV. I did not run my hot tub all of last year also and plan on fixing it, and that's a big energy consumer.

Note: the number of days/year in above picture are not errors - these are based on billing days per statement period, and they don't align with calendar years.

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Re: cost of Solar Power

Postby mouses » Mon Mar 13, 2017 4:59 pm

Valuethinker wrote:
mouses wrote:I was reading recently that there have been efforts underway in various states to do away with the government subsidies for solar and wind (not for gas and oil, however!) So if you are planning on doing something with the former, I would keep an eye on such things so you don't miss the boat.


Interested to see the citations? Where did you read this?

There *are* certain states like MA that do subsidize solar quite heavily. However, the subsidy is about the net metering, usually, i.e. the price the grid pays you for excess power.

That's where the soft point is. Certain places, notably Hawaii, the grid operator is saying they cannot accept more power being sold back into the system, and are restricting new installations.

You get to California and New England, and 20 cents/ kwhr retail for electricity is not uncommon. Solar starts to look quite smart at that point.

There *was* a renewal of US Federal subsidies on solar and wind-- with a phasing down of same over time. One of the things that Obama and the Congress managed to get done in 2016 (or 2015?) covering 7 years, from memory. The new Administration wants to revoke that, but they might face strong Congressional opposition (given that it was agreed on a bipartisan basis, and made into law already).


I don't recall where I saw the original article, but googling turns up a bunch of stuff, like this:

https://www.nytimes.com/2016/07/27/busi ... tates.html

My recollection was that the article was talking about state subsidies.

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unclescrooge
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Re: cost of Solar Power

Postby unclescrooge » Mon Mar 13, 2017 9:18 pm

ponyboy wrote:Solar is a cool concept but its a joke. Its just too expensive. I dont care what the tax incentives are. I guess if you plan on staying in your home forever...because its going to take 20 years to break even. Imagine what the initial price of a full solar roof...now invest that in the 3 fund vanguard portfolio...whats $30k going to grow to over 20 years? Catch my drift? Solar is a waste.


It might not with where you live, but that high rates in California (especially the hot summer months) coupled with the tax incentives make it very attractive. I calculated a 6-7 year pay back period.

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unclescrooge
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Re: cost of Solar Power

Postby unclescrooge » Mon Mar 13, 2017 9:19 pm

ponyboy wrote:Solar is a cool concept but its a joke. Its just too expensive. I dont care what the tax incentives are. I guess if you plan on staying in your home forever...because its going to take 20 years to break even. Imagine what the initial price of a full solar roof...now invest that in the 3 fund vanguard portfolio...whats $30k going to grow to over 20 years? Catch my drift? Solar is a waste.


It might not work where you live, but that high rates in California (especially the hot summer months) coupled with the tax incentives make it very attractive. I calculated a 6-7 year pay back period.

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Re: cost of Solar Power

Postby quantAndHold » Mon Mar 13, 2017 11:35 pm

ponyboy wrote:Solar is a cool concept but its a joke. Its just too expensive. I dont care what the tax incentives are. I guess if you plan on staying in your home forever...because its going to take 20 years to break even. Imagine what the initial price of a full solar roof...now invest that in the 3 fund vanguard portfolio...whats $30k going to grow to over 20 years? Catch my drift? Solar is a waste.


Ummmm....no. Most people don't need a $30k system. Our California house has a 2.4 kW system that was just barely over $10k after incentives several years ago when solar panel prices were higher. It provides 85% of our electricity for that house, and doing the math with actual power generation and electricity prices, the payback period is 7-9 years.

In Seattle, where it's far north, cloudy, and electricity is both cheap and not carbon based (90% hydroelectric), solar makes no sense. But there are large parts of the country where it does make sense.


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