payoff period for viable solar ?

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RustyShackleford
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payoff period for viable solar ?

Post by RustyShackleford » Mon Nov 04, 2019 5:25 pm

What would you all say is a payoff period - ratio of cost of installation to payback per year - that makes a solar PV installation economically viable ? Perhaps a range of numbers between where it definitely makes sense and where it definitely doesn't. I suppose you have to assume something about inflation - although perhaps not, if one assumes that increases in electricity rates track with inflation.

Also, to what extent do you think it's reasonable to consider how such a system might increase your home's value ? There is some evidence it does:
http://money.com/money/5642057/home-value-solar-panels/ and https://emp.lbl.gov/sites/default/files ... 002778.pdf

brianH
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Re: payoff period for viable solar ?

Post by brianH » Mon Nov 04, 2019 7:04 pm

There are a bunch of variables to consider, many of which may change over the life of the panels (20 years, give or take.) Google's Project Sunroof (https://www.google.com/get/sunroof) has many of these variables figured into the equation you're looking for: net present value. The 20-year NPV for me (assuming that 4% discount rate), would have to be at least 10-15K for me to consider it worth the hassle, especially since I believe conditions will change for the worse with net metering.

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RustyShackleford
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Re: payoff period for viable solar ?

Post by RustyShackleford » Mon Nov 04, 2019 7:16 pm

brianH wrote:
Mon Nov 04, 2019 7:04 pm
There are a bunch of variables to consider, many of which may change over the life of the panels (20 years, give or take.) Google's Project Sunroof (https://www.google.com/get/sunroof) has many of these variables figured into the equation you're looking for: net present value. The 20-year NPV for me (assuming that 4% discount rate), would have to be at least 10-15K for me to consider it worth the hassle, especially since I believe conditions will change for the worse with net metering.
"Project Sunroof hasn't reached my address yet".

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TomatoTomahto
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Re: payoff period for viable solar ?

Post by TomatoTomahto » Mon Nov 04, 2019 7:17 pm

In MA, net metering is legislated to last 25 years. Additionally, for me, the ability to renovate my home to have no fossil fuels burned inside, being immune to grid outages (requires batteries), the quiet, the cleanliness, the lack of smells, etc. were significant factors that are difficult to capture on a spreadsheet.
Okay, I get it; I won't be political or controversial. The Earth is flat.

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RustyShackleford
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Re: payoff period for viable solar ?

Post by RustyShackleford » Mon Nov 04, 2019 7:40 pm

TomatoTomahto wrote:
Mon Nov 04, 2019 7:17 pm
In MA, net metering is legislated to last 25 years.
Afraid my state isn't quite that enlightened; in fact, seems like a miracle we have it at all.
Additionally, for me ...being immune to grid outages (requires batteries)
That increases the cost and complexity of a solar system signifcantly.

I do have a great big battery in our EV, and have rigged that up to support a few critical loads like refrigerator for a few days. And I plan to use the SMA inverter that has a 120vac/2kw outlet that will work during grid outages (if the sun is shining, of course :-) ). Can possibly use that to pump some more juice into the EV's battery for longer outages.

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Nate79
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Re: payoff period for viable solar ?

Post by Nate79 » Mon Nov 04, 2019 8:02 pm

The payback on our recently installed solar was 5 years which was about the longest that I would have considered in our case where I'm pretty sure we will be in our house for 5 years. So I have little financial risk assuming no added value to the house. The added value to the house is difficult to predict.

curmudgeon
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Re: payoff period for viable solar ?

Post by curmudgeon » Mon Nov 04, 2019 8:07 pm

brianH wrote:
Mon Nov 04, 2019 7:04 pm
There are a bunch of variables to consider, many of which may change over the life of the panels (20 years, give or take.) Google's Project Sunroof (https://www.google.com/get/sunroof) has many of these variables figured into the equation you're looking for: net present value. The 20-year NPV for me (assuming that 4% discount rate), would have to be at least 10-15K for me to consider it worth the hassle, especially since I believe conditions will change for the worse with net metering.
Amusingly, Google estimated cost to install a small (2.8Kw) system on my house was 50% higher than what I actually paid (this year); they must be partnering with Sunrun or some of the other high cost installers.

I would agree that the regulatory/political risks to net metering are probably the biggest concern. California has kinda/sorta guaranteed 20 years of net metering for current solar installations, but that may not apply to installs done in future years (the main factor pushing me to install this year). The current net metering requires a "time of use" tariff, which is subject to modifications that could still hurt the value of your solar production. Even so, I expect that it's possible that there will actually be extra value in a solar system with is grandfathered under the current NEM 2.0 when rates continue to rise to pay for the current PG&E mess, though whether home buyers will appreciate that is unclear.

California is requiring solar PV to be installed an all new homes built, which will only further imbalance the power production vs usage timing.

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TomatoTomahto
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Re: payoff period for viable solar ?

Post by TomatoTomahto » Tue Nov 05, 2019 5:46 am

RustyShackleford wrote:
Mon Nov 04, 2019 7:40 pm
TomatoTomahto wrote:
Mon Nov 04, 2019 7:17 pm
In MA, net metering is legislated to last 25 years.
Afraid my state isn't quite that enlightened; in fact, seems like a miracle we have it at all.
Additionally, for me ...being immune to grid outages (requires batteries)
That increases the cost and complexity of a solar system signifcantly.

I do have a great big battery in our EV, and have rigged that up to support a few critical loads like refrigerator for a few days. And I plan to use the SMA inverter that has a 120vac/2kw outlet that will work during grid outages (if the sun is shining, of course :-) ). Can possibly use that to pump some more juice into the EV's battery for longer outages.
Batteries are expensive, no doubt. My point, poorly made, is that some “off spreadsheet” factors affect our “payoff period,” being fully aware that it’s our good fortune elsewhere that allows us to indulge in this energy independence. I enter this winter near Boston sure that we will be okay energy wise, so for me, regardless of the dollar cost, it has paid off already.

I have a 90kw Tesla, but my understanding is that warranties are void if I try to use it that way.
Okay, I get it; I won't be political or controversial. The Earth is flat.

Old Sage(brush)
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Re: payoff period for viable solar ?

Post by Old Sage(brush) » Tue Nov 05, 2019 7:21 am

I’ve put solar panels on 2 houses, one in Vermont one in Massachusetts. Payoff in Vermont was 10.5 years and in Massachusetts about 5. At 5 years unless you know you’re moving I think it’s virtually a no-brainer if you have the cash. Our Vermont installation was probably not a great financial investment although it too will be ok if we own the house a while. I think solar does increase house value although as someone said hard to predict and I’d say not dollar for dollar. To me, as someone else said, there are intangibles that tip the scale,like the fact that you’re contributing to fighting climate change. Good luck with the decision. Btw, I ran the google on my Massachusetts house and it was remarkably close to our actual numbers although somewhat understated size of system and overstated cost.

jpelder
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Re: payoff period for viable solar ?

Post by jpelder » Tue Nov 05, 2019 7:51 am

RustyShackleford wrote:
Mon Nov 04, 2019 7:40 pm
TomatoTomahto wrote:
Mon Nov 04, 2019 7:17 pm
In MA, net metering is legislated to last 25 years.
Afraid my state isn't quite that enlightened; in fact, seems like a miracle we have it at all.
Additionally, for me ...being immune to grid outages (requires batteries)
That increases the cost and complexity of a solar system signifcantly.

I do have a great big battery in our EV, and have rigged that up to support a few critical loads like refrigerator for a few days. And I plan to use the SMA inverter that has a 120vac/2kw outlet that will work during grid outages (if the sun is shining, of course :-) ). Can possibly use that to pump some more juice into the EV's battery for longer outages.
I live in NC, as well. I have a great roof for solar, but our electricity cost (about 6 cents per kWhr) makes the payoff period too long to be worthwhile, especially since I can't afford it without financing.

CurledMoss
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Re: payoff period for viable solar ?

Post by CurledMoss » Tue Nov 05, 2019 7:54 am

When I penciled it out a few years ago it was around 13 years with no loan, cash. That was where they charge a grid access fee.

Now a county away they didn't charge a grid access fee, and xcel energy also paid you 9 or 11 cents per kwh produced. Making roi about 7 years.

I had priced between 20-40 kw system. 40 is the max you can do residential.

Minnesota. 11cents per kwh. Decent sunlight.

Bmac
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Re: payoff period for viable solar ?

Post by Bmac » Tue Nov 05, 2019 9:11 am

brianH wrote:
Mon Nov 04, 2019 7:04 pm
There are a bunch of variables to consider, many of which may change over the life of the panels (20 years, give or take.) Google's Project Sunroof (https://www.google.com/get/sunroof) has many of these variables figured into the equation you're looking for: net present value. The 20-year NPV for me (assuming that 4% discount rate), would have to be at least 10-15K for me to consider it worth the hassle, especially since I believe conditions will change for the worse with net metering.
I just looked at our address on Project Sunroof. Unfortunately the analysis shows 20 year savings with solar of -$1700. 😢 Likely a combination of cheap electric rates and relatively low electrical utility usage locally. (Avg $80/month on estimate and that’s probably a bit higher than our actual costs)

wootwoot
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Re: payoff period for viable solar ?

Post by wootwoot » Tue Nov 05, 2019 9:14 am

7 years in AZ. While we receive a ton of sunshine but electricity costs are low.

brianH
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Re: payoff period for viable solar ?

Post by brianH » Tue Nov 05, 2019 9:55 am

Bmac wrote:
Tue Nov 05, 2019 9:11 am
I just looked at our address on Project Sunroof. Unfortunately the analysis shows 20 year savings with solar of -$1700. 😢 Likely a combination of cheap electric rates and relatively low electrical utility usage locally. (Avg $80/month on estimate and that’s probably a bit higher than our actual costs)
My estimate is a 20-year saving of $15,000 (15 year payback), but that still works out to a NPV at 4% discount of negative a few thousand dollars. PA doesn't have any state tax incentives, and our electric is right around the national average of 12-13 cents/kWh.

The installation cost of a 16.5 kW system (before rebates) of $55K seems high to me, but I'm not comfortable with any payback period of more than 10 years for something like this.

These panels are only going to get cheaper in the next few years. I'm waiting for the Federal tax incentives to sunset so we can start seeing major drops in price. As always seems to be the case, these government incentives are skewing the true cost of these panels/install, and a lot of solar companies are lining their pockets thanks to them.

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RustyShackleford
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Re: payoff period for viable solar ?

Post by RustyShackleford » Tue Nov 05, 2019 6:23 pm

Nate79 wrote:
Mon Nov 04, 2019 8:02 pm
The added value to the house is difficult to predict.
That article by Lawrence Livermore (in my OP) seems pretty reliable, at least if you're in one of the areas they studied - which I am.

OTOH, folks in the solar forums think I'm foolish to consider that, that I need to see a payback from POCO savings of 10 years max.

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RustyShackleford
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Re: payoff period for viable solar ?

Post by RustyShackleford » Tue Nov 05, 2019 6:27 pm

TomatoTomahto wrote:
Tue Nov 05, 2019 5:46 am
I have a 90kw Tesla, but my understanding is that warranties are void if I try to use it that way.
If they know. If you are at all interested, this thread describes how I did it on my Leaf: https://www.mynissanleaf.com/viewtopic. ... 616ddc1882 but definitely don't tackle it if you aren't pretty comfortable with car work and with electrical work.

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RustyShackleford
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Re: payoff period for viable solar ?

Post by RustyShackleford » Tue Nov 05, 2019 6:32 pm

Old Sage(brush) wrote:
Tue Nov 05, 2019 7:21 am
I’d say not dollar for dollar.
Probably dollar for dollar if you DIY like me. I'm not planning to spend much more than $1/watt.
there are intangibles that tip the scale,like the fact that you’re contributing to fighting climate change.
You made me realize that I'm currently adding $16/month to my POCO bill to "buy" 400kwh of "green" power. I'll stop doing that, and add $200/year to my expected payback from my PV installation. Thanks.

hightower
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Re: payoff period for viable solar ?

Post by hightower » Tue Nov 05, 2019 7:01 pm

We have 37 panels and 2 Tesla Powerwalls scheduled to be installed in the next few weeks. Very excited about it. Not sure what the exact payoff period will be because we just moved to this house and we aren’t sure what our actual electricity use will look like yet. I think the predictions were up there in the teens though because the powerwalls really add to the cost of the system.
As others have stated, for me there are other factors that are probably more important to me then the financial aspect. I see this as voting with my wallet. I believe we have a crisis on our hands and I want to do everything I can to be part of a solution.

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