My solar investment experience

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vg55
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My solar investment experience

Post by vg55 » Tue Apr 30, 2019 5:43 pm

In 2017 I participated in a local program by installing a 7kWp solar system on our roof and now have some results that to share. The answers are: 13,746; 15,298; 385; 84.56 and zero. $13,746 was our net investment for the solar system. 15,298 is the pounds of CO2 emissions NOT emitted. 385 is the number of equivalent trees planted; and $84.56 is the total cost for a full 12 months’ supply of electricity from Eversource. Zero is the number of complaints. Each month we pay an energy delivery cost of $9.21 and in March of each year, Eversource pays us for the excess power we generated. In addition to getting a tax-free savings each month – we also immunized ourselves from the newly announced 19% increase in electricity rates.

Rather than sell my excess power to the utility for pennies; I have now purchased a used plug in hybrid. Figure I can save even more money putting the power in my tank.

So I look at the 14k investment as part of my portfolio in which it pays me about $1,200 in triple tax free savings every year. Pretty good return. methinks.

3504PIR
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Re: My solar investment experience

Post by 3504PIR » Tue Apr 30, 2019 6:03 pm

Thank you for sharing, you have benefited a lot from that decision and your investment wasn’t bad at all.

Solar is on my to do list for our retirement home, and while we won’t have a ROI like yours, it is still viable for us once we save enough to put it up.

Thanks!

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TomatoTomahto
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Re: My solar investment experience

Post by TomatoTomahto » Tue Apr 30, 2019 6:20 pm

Good job! In May we are decommissioning the oil burner, and going to geo and electric (solar sourced) for heating, cooling, and water — but I don’t know how the math for CO2 works out.

The Feds, Massachusetts, and Eversource go out of their way to make it affordable; I figure they are shouldering 40%+ of the expense. We will get the benefit month after month.
Okay, I get it; I won't be political or controversial. The Earth is flat.

thedane
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Re: My solar investment experience

Post by thedane » Tue Apr 30, 2019 7:26 pm

I live in sunny Arizona and this does not make financial sense as I am in "SRP" territory (local power company) and they jack up the rates for solar customers with peak charges.
I've tried 3 times, but each time the calculation ends up with me paying more with solar than without. Mind boggling.

Pu239
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Re: My solar investment experience

Post by Pu239 » Tue Apr 30, 2019 11:03 pm

OP - what were your annual electrical costs before installing solar? We considered it back in 2012 it but the payback numbers, based on actual rates and usage over the previous 15 years, weren't all that great. Conservation through energy efficiency and smart use, however, has resulted in halving our annual usage and resulted in significant savings. 2019 is the last year for the full Federal tax credit so maybe it's time for another look.

Dottie57
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Re: My solar investment experience

Post by Dottie57 » Tue Apr 30, 2019 11:15 pm

thedane wrote:
Tue Apr 30, 2019 7:26 pm
I live in sunny Arizona and this does not make financial sense as I am in "SRP" territory (local power company) and they jack up the rates for solar customers with peak charges.
I've tried 3 times, but each time the calculation ends up with me paying more with solar than without. Mind boggling.
What is a SRP?

mighty72
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Re: My solar investment experience

Post by mighty72 » Wed May 01, 2019 12:40 am

Dottie57 wrote:
Tue Apr 30, 2019 11:15 pm
thedane wrote:
Tue Apr 30, 2019 7:26 pm
I live in sunny Arizona and this does not make financial sense as I am in "SRP" territory (local power company) and they jack up the rates for solar customers with peak charges.
I've tried 3 times, but each time the calculation ends up with me paying more with solar than without. Mind boggling.
What is a SRP?
It is a utility company in Arizona. Salt River Project water and power

Finridge
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Re: My solar investment experience

Post by Finridge » Wed May 01, 2019 12:46 am

vg55 wrote:
Tue Apr 30, 2019 5:43 pm
In 2017 I participated in a local program by installing a 7kWp solar system on our roof and now have some results that to share. The answers are: 13,746; 15,298; 385; 84.56 and zero. $13,746 was our net investment for the solar system. 15,298 is the pounds of CO2 emissions NOT emitted. 385 is the number of equivalent trees planted; and $84.56 is the total cost for a full 12 months’ supply of electricity from Eversource. Zero is the number of complaints. Each month we pay an energy delivery cost of $9.21 and in March of each year, Eversource pays us for the excess power we generated. In addition to getting a tax-free savings each month – we also immunized ourselves from the newly announced 19% increase in electricity rates.

Rather than sell my excess power to the utility for pennies; I have now purchased a used plug in hybrid. Figure I can save even more money putting the power in my tank.

So I look at the 14k investment as part of my portfolio in which it pays me about $1,200 in triple tax free savings every year. Pretty good return. methinks.

Hmmm. What is the life of the system?

Plugging this into Excel as a $13,746 investment generating $1,200 per year and assuming this income stream continues for 25 years, I see the internal rate of return is 7.2% That's a better return than we can expect from bonds but less than equities. And that is assuming that you continue to get the returns for 25 years. If for a lessor period of time, the IRR will be less. Also, these calculations assume that the there won't be any maintenance or repair costs.

Of course, to compare apples to apples, we'd need to also include how much you're saving in taxes. And initially, you might see an increase in annual returns per year. But this might be mitigated by a declining market for the excess power. As solar power gets more prevalent, in come places the power companies are paying less.

Also, I am curious how much of the cost of a solar system is recoverable when you see the house. If I add a $15,000 solar system to my house, does it increase my sale price by $15,000? Rationally, if people see it as a cash-generating investment, it should. But I'm not sure most home-buyers would view it this way.

z0r
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Re: My solar investment experience

Post by z0r » Wed May 01, 2019 1:28 am

thedane wrote:
Tue Apr 30, 2019 7:26 pm
I live in sunny Arizona and this does not make financial sense as I am in "SRP" territory (local power company) and they jack up the rates for solar customers with peak charges.
I've tried 3 times, but each time the calculation ends up with me paying more with solar than without. Mind boggling.
If they're charging you too much to grid tie then... don't grid tie? Are you really entitled to use the grid as a huge battery at some favorable rate?

Valuethinker
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Re: My solar investment experience

Post by Valuethinker » Wed May 01, 2019 3:09 am

Finridge wrote:
Wed May 01, 2019 12:46 am
vg55 wrote:
Tue Apr 30, 2019 5:43 pm
In 2017 I participated in a local program by installing a 7kWp solar system on our roof and now have some results that to share. The answers are: 13,746; 15,298; 385; 84.56 and zero. $13,746 was our net investment for the solar system. 15,298 is the pounds of CO2 emissions NOT emitted. 385 is the number of equivalent trees planted; and $84.56 is the total cost for a full 12 months’ supply of electricity from Eversource. Zero is the number of complaints. Each month we pay an energy delivery cost of $9.21 and in March of each year, Eversource pays us for the excess power we generated. In addition to getting a tax-free savings each month – we also immunized ourselves from the newly announced 19% increase in electricity rates.

Rather than sell my excess power to the utility for pennies; I have now purchased a used plug in hybrid. Figure I can save even more money putting the power in my tank.

So I look at the 14k investment as part of my portfolio in which it pays me about $1,200 in triple tax free savings every year. Pretty good return. methinks.

Hmmm. What is the life of the system?

Plugging this into Excel as a $13,746 investment generating $1,200 per year and assuming this income stream continues for 25 years, I see the internal rate of return is 7.2% That's a better return than we can expect from bonds but less than equities. And that is assuming that you continue to get the returns for 25 years. If for a lessor period of time, the IRR will be less. Also, these calculations assume that the there won't be any maintenance or repair costs.
In fact there probably *is* a terminal value - panel life is not magically limited to 25 years. As long as the system generates revenue, it's worth something (classic example: there will emerge a market for taking used solar panels and reinstalling them in land-rich places, or shipping them to emerging markets. Container shipping (back) is dirt cheap, so the only cost becomes the removal -- which happens anyways with replacements).
Of course, to compare apples to apples, we'd need to also include how much you're saving in taxes. And initially, you might see an increase in annual returns per year. But this might be mitigated by a declining market for the excess power. As solar power gets more prevalent, in come places the power companies are paying less.
Yes you have to look at after tax cash flows. A dollar saved is worth $1/(1-marginal tax rate) on a pre tax basis.

I'd make a pretty strong case that 7% *pre tax* is about what one would expect for equities going forward, from here -- it's consistent with the global average for equities 1900-2016 (Dimson Marsh Staunton data) of 5% real.
Also, I am curious how much of the cost of a solar system is recoverable when you see the house. If I add a $15,000 solar system to my house, does it increase my sale price by $15,000? Rationally, if people see it as a cash-generating investment, it should. But I'm not sure most home-buyers would view it this way.
I think this very much depends on where you are located.

For example, in high cost electricity areas like Southern California, I could see a homeowner getting full value back. Perhaps not so in more conservative housing markets.

The UK is (infamous) for its strictness of planning rules, neighbourhood conservation etc - the country sprouts identical looking boxes (that look like cheap copies of the historic homes they are modelled after). Yet, solar panels do not lower values, and in fact probably raise them - people can see the cash flow benefit.
Last edited by Valuethinker on Wed May 01, 2019 3:14 am, edited 1 time in total.

Valuethinker
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Re: My solar investment experience

Post by Valuethinker » Wed May 01, 2019 3:11 am

z0r wrote:
Wed May 01, 2019 1:28 am
thedane wrote:
Tue Apr 30, 2019 7:26 pm
I live in sunny Arizona and this does not make financial sense as I am in "SRP" territory (local power company) and they jack up the rates for solar customers with peak charges.
I've tried 3 times, but each time the calculation ends up with me paying more with solar than without. Mind boggling.
If they're charging you too much to grid tie then... don't grid tie? Are you really entitled to use the grid as a huge battery at some favorable rate?
If you look at the Kw draw on an Arizona-sized AC system, you are very unlikely to be able to do that on battery storage. Both in the Kw and in the Kwhr (i.e. the amount of energy stored).

If the house is designed with truly massive masonry walls, maybe a hot water store (for winter), maybe it can be made to work.

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TomatoTomahto
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Re: My solar investment experience

Post by TomatoTomahto » Wed May 01, 2019 4:53 am

Finridge wrote:
Wed May 01, 2019 12:46 am
Also, I am curious how much of the cost of a solar system is recoverable when you see the house. If I add a $15,000 solar system to my house, does it increase my sale price by $15,000? Rationally, if people see it as a cash-generating investment, it should. But I'm not sure most home-buyers would view it this way.
We might not be typical home buyers, but when I saw the 37 kWp ground installed solar system, it clinched the deal.
Okay, I get it; I won't be political or controversial. The Earth is flat.

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TomatoTomahto
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Re: My solar investment experience

Post by TomatoTomahto » Wed May 01, 2019 5:00 am

z0r wrote:
Wed May 01, 2019 1:28 am
thedane wrote:
Tue Apr 30, 2019 7:26 pm
I live in sunny Arizona and this does not make financial sense as I am in "SRP" territory (local power company) and they jack up the rates for solar customers with peak charges.
I've tried 3 times, but each time the calculation ends up with me paying more with solar than without. Mind boggling.
If they're charging you too much to grid tie then... don't grid tie? Are you really entitled to use the grid as a huge battery at some favorable rate?
In MA, you are not allowed to go off grid. Power wise, we could. We are installing our own battery (32 kw), but must remain grid attached. The grid benefits from the battery, and pays us for exercising it, because the battery smooths out production/demand.
Okay, I get it; I won't be political or controversial. The Earth is flat.

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RickBoglehead
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Re: My solar investment experience

Post by RickBoglehead » Wed May 01, 2019 5:01 am

Solar on a house I would consider buying would make me question things like:

- what is the life left on the equipment? Is it near the end?

- will the economics change in the future, i.e. the electric company pay less?

Etc.

More unknowns. Likely a disincentive.

In Michigan, the utilities are fighting to lower the mandated amount they pay per kwh, i.e. net metering, from 15 to 17 cents to 10 cents. Existing systems grandfathered for ten years. It was supposed to take effect in 2019, but I didn't follow it. https://energynews.us/2019/03/04/midwes ... -michigan/

I believe other states are doing similar.
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fru-gal
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Re: My solar investment experience

Post by fru-gal » Wed May 01, 2019 5:21 am

I would consider solar on a house an attraction, were I house shopping.

Valuethinker
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Re: My solar investment experience

Post by Valuethinker » Wed May 01, 2019 5:27 am

RickBoglehead wrote:
Wed May 01, 2019 5:01 am
Solar on a house I would consider buying would make me question things like:

- what is the life left on the equipment? Is it near the end?

- will the economics change in the future, i.e. the electric company pay less?

Etc.

More unknowns. Likely a disincentive.
That would be an argument for attributing little or no value to it, not a reduction in value?

The cost and returns to the original homeowner are a sunk cost, for the buyer it is merely the discounted value of future benefits.

The reduction in value would be the decommissioning cost - cost to pull it off the roof.

One complication might be leasing - that's much more common in USA than other countries. That might encumber the property with another charge.
In Michigan, the utilities are fighting to lower the mandated amount they pay per kwh, i.e. net metering, from 15 to 17 cents to 10 cents. Existing systems grandfathered for ten years. It was supposed to take effect in 2019, but I didn't follow it. https://energynews.us/2019/03/04/midwes ... -michigan/

I believe other states are doing similar.
See above. Sunk cost from the point of view of the buyer. All the next buyer will care about is the prospective returns, discounted back to the present day.

wilked
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Re: My solar investment experience

Post by wilked » Wed May 01, 2019 5:31 am

As long as the panels are still within their lifespan I can’t see why solar panels would be a detriment to a buyer unless they have a specific issue with the aesthetics. I’m not sure who doesn’t like a $10 electric bill...

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RickBoglehead
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Re: My solar investment experience

Post by RickBoglehead » Wed May 01, 2019 5:44 am

If owned equipment, maybe. If leased equipment, a whole other story.

My point is, when a buyer is looking at inspections, property survey, financing, moving, neighbors, etc., this adds complications. For some, that would be a disincentive.
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Valuethinker
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Re: My solar investment experience

Post by Valuethinker » Wed May 01, 2019 5:50 am

wilked wrote:
Wed May 01, 2019 5:31 am
As long as the panels are still within their lifespan I can’t see why solar panels would be a detriment to a buyer unless they have a specific issue with the aesthetics. I’m not sure who doesn’t like a $10 electric bill...
1. possibility might be the financing - if leased, does that mean an obligation new home owner has to take on? Encumbrance on the property?

2. what matters to the new buyer is the discounted value of future benefits (taken after tax). However if there is uncertainty re future payments that may have an impact (lowering value).

3. aesthetics seems to vary. If a percentage of homes in an area already has them then it's likely not a negative or a net positive*


* Virtue Signalling. I remember, this was about 12-13 years ago, a Berkeley professor noting how many homes in his 'hood seemed to drive Toyota Priuses (Prii?). Nowadays it would probably be Tesla, and the 'hood would be a Silicon Valley one (or parts of Hollywood, perhaps)? Analogous to the effect that made Volvos & Saabs the most common non-American car in Vermont (and maybe NH too) back in the 1980s. Volvo nailed the safety-conscious market before it was a significant factor in car demand in N America.

I doubt its Priuses now, given that taxi cabs & limos are probably their largest single market - that's more of a blue collar ethos 'hood?

Somewhere else no doubt the reverse effect (to having solar panels) applies - affluent 'hoods in Dallas, perhaps. Denver- yes. Phoenix - no?

You get to places like Australia & Hawaii where retail prices of electricity are very high, and the question becomes "why doesn't the homeowner have these?" (I think Australia has fastest growing home solar market in world).

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Re: My solar investment experience

Post by Jack FFR1846 » Wed May 01, 2019 6:31 am

This sounds really good, except the upcoming 19% electricity increase (I don't have solar). For those concerned about overproduction of electricity, that isn't our environment in New England, where we are undersupplied and electricity is mostly generated with natural gas which is strangled coming into the region, so more expensive than the rest of the country. Looking at my own bill, we're paying a bit over 19 cents per kWHr. Massachusetts state government has been very solar friendly with accelerated payments for installation based on expected electric generation. It's difficult to get into a big box store without being approached by one of the solar companies offering 100% free net cost for installation. There are solar farms all over Massachusetts despite our low solar exposure compared with southern states. We have no coal burners in the state anymore.
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Nate79
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Re: My solar investment experience

Post by Nate79 » Wed May 01, 2019 7:48 am

We recently purchased a home in the Delaware area. A number of homes had solar and it was really a mixed bag to understand if they added any value to the home. The ones that were leased had a negative impact (and we discarded these homes inmediately). Otherwise we saw homes with solar on older roofs (negative) and solar on newer roofs (a positive). But even for homes with newer roof and solar I saw very little home price impact. Probably no more than a 25% (of the solar install cost) increase in the value to the home price.

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TomatoTomahto
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Re: My solar investment experience

Post by TomatoTomahto » Wed May 01, 2019 8:09 am

Nate79 wrote:
Wed May 01, 2019 7:48 am
We recently purchased a home in the Delaware area. A number of homes had solar and it was really a mixed bag to understand if they added any value to the home. The ones that were leased had a negative impact (and we discarded these homes inmediately). Otherwise we saw homes with solar on older roofs (negative) and solar on newer roofs (a positive). But even for homes with newer roof and solar I saw very little home price impact. Probably no more than a 25% (of the solar install cost) increase in the value to the home price.
I think that there’s probably a slow pace of change in perception. Having never had solar, I didn’t know it would matter. Seeing an installation at a prospective house, and looking at the utility bills, made the house more attractive. Having lived in it, I don’t think I’d buy another house that didn’t have solar or be suitable for a post purchase installation. In addition to the low or zero utility bills, there is the wonderful feeling of self sufficiency. Having gone through two week-long power outages in the past (in NJ), it’s awesome to think that we are no longer vulnerable to grid outages, oil delivery issues, etc. This change in perception took 3 or 4 years, going from not averse to mildly interested to considering to purchasing to “won’t live without it”
Okay, I get it; I won't be political or controversial. The Earth is flat.

Point
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Re: My solar investment experience

Post by Point » Wed May 01, 2019 8:43 am

I think every location is different. Solar output, electric provider rate plans, etc. We put in solar several years ago. Our electricity cost went from 350/month to 11/month for SCE grid connection. Net installation cost was about 15K. Less than 4 years to recover that in monthly fees saved, and no increase in fees over time either. That grid connection fee pays for our use of SCE’s infrastructure and using them as a battery. Investing in batteries makes no sense at this rate.

As far as the Carbon offset, sure its positive. But remember there was a huge carbon impact to make the equipment, ship it, warehouse it, ship it again, and to install it. It’s not all carbon roses.

An 8% yield on 15k would be 1200/year. We are way ahead in this with this solar investment. But, cash is king- the leasing numbers did not make sense from any of the solar dealers.

AnonJohn
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Re: My solar investment experience

Post by AnonJohn » Wed May 01, 2019 8:46 am

Some data: I purchased a system in the fall of 2015 in Washington DC. I have just hit break even (3.5 years in) after the Fed tax credit. 73% of my return has come from SRECs, the balance in avoided electrical costs [implication: 10 year break-even w/o SRECs]. The system has produced just over 100% of my electricity needs and 95% of what I calculated prior to installation. No problems.

I put my IRR at over 20%; it may continue to rise if DC's SREC market stays strong. The IRR is calculated given an asset value model that accounts for a buy-back option I have from my installer and an academic study of solar asset depreciation from LBNL. The latter found that (a) the tax credit was priced in (the market valued solar panels at 70% of purchase price on day 1) (b) the asset depreciated linearly over 10 years (regardless of a warranty much longer than that). As others have noted, real estate valuation of solar assets is still evolving.

desiderium
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Re: My solar investment experience

Post by desiderium » Wed May 01, 2019 8:56 am

OP has made a good investment. Mine is more of a lucky situation

Washington state pays a feed-in tariff, initially 54c per KWH generated, up to $5000 per year. This is the highest tier rate for panels and inverters made in the state. It has worked out in fostering manufacturing and installation jobs. (The tariff was prorated downward a few cents this year based on more systems coming on line). So in addition to net metering from the utility, I get a check from the state once a year. My utility charges ~$8 monthly for basic hookup, and my home is all electric

My rough numbers going on 4 years are as follows:
10KW System cost, after 30% federal credit 23K (was exempt from 9% sales tax)
1 partial and 3 full years of State incentive 17.3K
Electric bill Savings 3.7k
Regarding maintenance, there was a safety recall on the inverters so they are being replaced (free) in a couple of weeks.
The panels need washing every spring. It is a bit of work to get sticky pollen off and improves their performance.
The system is nearly paid for. Depending on how the incentives adjust I expect to continue receiving 5-6k annually in energy savings and incentives going forward.

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dodecahedron
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Re: My solar investment experience

Post by dodecahedron » Wed May 01, 2019 9:47 am

I got a deal pretty similar to the OP, but for community solar, not on my rooftop. It is 20 year deal, though. It is transferable if I move. If I stay in same load zone I can keep it after moving or I can transfer rights to anyone else of my choosing (e.g., buyer of my home, or just a random person who wants green energy or their home in my load zone.)

Valuethinker
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Re: My solar investment experience

Post by Valuethinker » Wed May 01, 2019 9:59 am

Point wrote:
Wed May 01, 2019 8:43 am

As far as the Carbon offset, sure its positive. But remember there was a huge carbon impact to make the equipment, ship it, warehouse it, ship it again, and to install it. It’s not all carbon roses.

I'd have to check, but I believe if your electricity comes from coal-fired generation, then the return in terms of carbon offset v. carbon cost is around 25:1 over lifecycle -- in 1 year of use you pay back the emissions cost of creating & installing the panel*. As you can imagine, this one has been debated & researched to death - the Life Cycle Analysis of solar power ;-).

And the carbon intensity of your grid electricity is not simple. Because it's more the *marginal* intensity of the grid than the *average*. What that next kwhr costs.

Thus California has fairly clean electricity supply to the grid. But it imports coal fired electricity generation at peak times, and also uses NG (about half as polluting as coal on a carbon basis, and less than 1/10th for other pollutants). So that solar panel max production at 4.30 pm in the hot season? Environmentally that is very valuable. On the other hand in middle of winter when the wind is blowing? Not so much.

* it is however not at all simple. Because to the extent there is a subsidy to that installation, there is a corresponding reduction in economic activity somewhere else (but only if there are no slack economic resources). That reduction will reduce another carbon emitting economic activity. Your panel will be created, shipped, warehoused, shipped again & installed, and so something else will not be.

Typ997S
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Re: My solar investment experience

Post by Typ997S » Wed May 01, 2019 12:23 pm

Ok, I'll throw my numbers into the mix for fun. As others have mentioned, whether or not solar makes sense depends on many factors, including the magnitude of your electricity usage, the cost of electricity where you live, a climate favorable to solar, and your state/local tax and incentive situation. For me, in California, with a large house, expensive electricity, and lots of sun, it makes sense.

My system is now coming on 10 years old (115 months to be precise.) It is a 7.7 kW DC system, single 7000W SMA inverter. Peak AC power I've seen is about 6200 W. Net cost to install was $24,000. Maintenance costs thus far have been $500 to fix a failed board in the monitoring box. I probably will need a new inverter in the next few years. I haven't observed any drop off in panel output yet. Here we go:

111,594 kWh generated (total)
970 kWh/Month (average)
11,645 kWh/Year (average)
$266 Monthly Electricity Savings
$3191 Yearly Electricity Savings
13% Simple ROI (tax-free)
19% Taxable Equivalent ROI

...and, oh yeah, the virtue signalling part: 189,710 lbs of CO2 emission avoided. :happy

riverguy
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Re: My solar investment experience

Post by riverguy » Wed May 01, 2019 3:20 pm

Solar only makes sense with generous subsidies and super high electric rates.

Typ997S
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Re: My solar investment experience

Post by Typ997S » Wed May 01, 2019 3:41 pm

riverguy wrote:
Wed May 01, 2019 3:20 pm
Solar only makes sense with generous subsidies and super high electric rates.
Come, join the 21st century, where we will move away from fossil fuels. It won't happen overnight, and it won't always be easy, but it's where we have to head. I offer the following quote:

"Solar energy has already reached price and performance parity in roughly half of the United States and in regions around the world, meaning that power is generated at a cost level equal to, or less than, conventional methods. According to a U.S. Residential Solar Economic Outlook Report published by Greentech Media Research, solar grid parity is anticipated in 42 states by 2020. As technology quickly increases in efficiency, clean energy sources are expected to transition from an acceptable energy source to a preferred, more cost-effective source."

Source: https://www.mintz.com/insights-center/v ... watch-2019

dknightd
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Re: My solar investment experience

Post by dknightd » Wed May 01, 2019 4:27 pm

dodecahedron wrote:
Wed May 01, 2019 9:47 am
I got a deal pretty similar to the OP, but for community solar, not on my rooftop. It is 20 year deal, though. It is transferable if I move. If I stay in same load zone I can keep it after moving or I can transfer rights to anyone else of my choosing (e.g., buyer of my home, or just a random person who wants green energy or their home in my load zone.)
I also went the community solar route. Mine is a 25 year contract (which may or may not get extended up to 30 years).
I pay about $200/year for maintenance, and land lease. That will go up 2% per year.
I bought my panels on a 15 year 0% loan. I also took a 0% loan for 1 year while I was waiting for tax incentive.
I assume the 0% was built into the price of the panels - but they likely got them for cheaper than I could since they were buying in bulk. I priced out the panels they used, I could not get them for cheaper than what I paid.

Result so far. My cost for electricity is a little less than it was before. Not a lot less, maybe a few hundred/year. That includes all costs - lease, loan payback, grid tie fee. So far so good. As long as electricity costs do not fall (seems unlikely) or grid tie fees do not increase (possible, but regulated) I'll save a little money each year for 15 years, then get very very cheap electricity for at least 10 more years. Win Win. Plus get that warm fuzzy feeling ;)

If I decide to move out of this load zone, I'll probably pay off the panels and advertise the home as including very low cost electricity.

This message sent from a solar powered computer ;)

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vg55
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Re: My solar investment experience

Post by vg55 » Wed May 01, 2019 4:29 pm

Pu239 wrote:
Tue Apr 30, 2019 11:03 pm
OP - what were your annual electrical costs before installing solar? We considered it back in 2012 it but the payback numbers, based on actual rates and usage over the previous 15 years, weren't all that great. Conservation through energy efficiency and smart use, however, has resulted in halving our annual usage and resulted in significant savings. 2019 is the last year for the full Federal tax credit so maybe it's time for another look.
We spent about $1,300 per year in electricity. Now we spend less than $100 per year. Hence a $1,200 per year savings. Given that Eversource announced a 19% increase in prices, my savings grew considerably. Agree that conservation is the best first step with the best financial and environmental returns. We did that first with an extensive energy audit.

I looked at solar, not from a payback standpoint but as a portfolio decision. I had 14k cash. I didnt want more real estate, stocks or bonds. This 14k investment returns tax free savings every year; the savings increase with electricity price increases; and it is not tied to the markets. I feel more diversified than having bought more REIT, stocks or bonds.

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Re: My solar investment experience

Post by michaeljc70 » Wed May 01, 2019 4:39 pm

It sounds like a good deal for you depending on the future maintenance and lifespan. I wonder how much of that is subsidized by the power company and if the installation and purchase costs were subsidized also. A power company buying power from you it doesn't need and cannot store isn't practical for them.

Rattlesnake
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Re: My solar investment experience

Post by Rattlesnake » Wed May 01, 2019 4:42 pm

" Each month we pay an energy delivery cost of $9.21"

We have a seasonal cottage in Canada that is closed down (water is shut off by the municipality) and no one lives there; from November 1 thru March 31...

Each month we pay $116.87 (CA) for a delivery charge when we are not there...

Sounds like you have a good deal there....

BTW... There are Ontario Hydro wind turbines everywhere in the vicinity....

Just my $0.02....
9th Infantry Division LRRP (Ranger) | 1968-69

sedonashine
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Re: My solar investment experience

Post by sedonashine » Wed May 01, 2019 5:04 pm

I have lived in Arizona for 17 years....our "sunshine" could really help the nation's grid...a shame the old mentality still prevails here. We get punished as individuals by Salt River Project and Arizona Public Service (APS) for trying to harness a natural resource. Old greedy farts without much wisdom still seem to govern these utilities~I want better for my country~

dknightd
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Re: My solar investment experience

Post by dknightd » Wed May 01, 2019 5:15 pm

michaeljc70 wrote:
Wed May 01, 2019 4:39 pm
It sounds like a good deal for you depending on the future maintenance and lifespan. I wonder how much of that is subsidized by the power company and if the installation and purchase costs were subsidized also. A power company buying power from you it doesn't need and cannot store isn't practical for them.
The power companies probably get a kickback for demonstrating some of their power comes from renewable.

My peak electric use is during the summer, during the day, when the sun is shining. Mostly for AC. I suspect that usage is not uncommon. And that works out well for them. Solar panels are providing power just when they need it. That saves them from building new power plants. Solar is somewhat predictable. A smart utility will be able to roughly estimate how much power their solar customers can generate. And adjust their generation accordingly.

Eventually, since the Sun never sets on the Earth, electric power companies will mostly redistribute electricity.

dknightd
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Re: My solar investment experience

Post by dknightd » Wed May 01, 2019 5:19 pm

Rattlesnake wrote:
Wed May 01, 2019 4:42 pm

Each month we pay $116.87 (CA) for a delivery charge when we are not there...
At those rates I'l look at the cost of disconnecting, then reconnecting every year.
I'd also look at the potential of going completely off grid.

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willthrill81
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Re: My solar investment experience

Post by willthrill81 » Wed May 01, 2019 5:26 pm

RickBoglehead wrote:
Wed May 01, 2019 5:01 am
In Michigan, the utilities are fighting to lower the mandated amount they pay per kwh, i.e. net metering, from 15 to 17 cents to 10 cents. Existing systems grandfathered for ten years. It was supposed to take effect in 2019, but I didn't follow it. https://energynews.us/2019/03/04/midwes ... -michigan/

I believe other states are doing similar.
Indeed they are. There's certainly no guarantee that the current setup will continue for 20 years; it very likely won't. As more people are getting on board with power generation from home, utilities are pushing back to reduce or even eliminate what they pay for power for surplus power generated. Some utilities are trying to get net metering eliminated altogether, charging you for whatever you 'take' but not crediting you anything for what you 'give'.

The rules are certainly changing.

I'm glad that it's worked out for the OP so far. In our area, our local utility estimates that the payback period on our home would be around 20 years, and it would only reduce our power bills by an estimated 20%. No thanks.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

Valuethinker
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Re: My solar investment experience

Post by Valuethinker » Wed May 01, 2019 5:38 pm

Rattlesnake wrote:
Wed May 01, 2019 4:42 pm
" Each month we pay an energy delivery cost of $9.21"

We have a seasonal cottage in Canada that is closed down (water is shut off by the municipality) and no one lives there; from November 1 thru March 31...

Each month we pay $116.87 (CA) for a delivery charge when we are not there...

Sounds like you have a good deal there....

BTW... There are Ontario Hydro wind turbines everywhere in the vicinity....

Just my $0.02....
Hi

Ontario Hydro has not existed for nearly 20 years?

They might be OPG or more likely privately financed wind farm?

Your lines will either belong to Hydro One (privatised grid operator) or more likely the municipal power co (H1 has absorbed some of those).

In truth your line cost sounds very reasonable. What you are paying for is availability. That you can flick a switch and electricity comes on.

And also reliability. Lines in Ontario must be maintained in no joke winter weather, ice storms etc. But there is also vegetation control in the summer months and again that is very expensive in cottage country where you have scattered sites in remote and hard to access locations (sometimes w no roads).

AFAIK consumers in Ontario enjoy very high reliability compared to many American jurisdictions. I cannot remember the last time someone told me their power was out for more than 12 hours. I have friends and relatives all over southern Ontario.

As per household consumption falls w greater efficiency and "behind the meter" generation grows the model of electricity distribution is becoming the broadband model where what you pay for is capacity and reliability not per unit usage.

Ontario per kwhr prices have become an election issue and there's no doubt the Harris (conservative) government and McGinty (Liberal) govt screwed up privatisation and deregulation. Feed In Tariffs in particular.

But Ontario prices are still not excessive compared to other East Coast utilities like Niagara Mohawk or Con Ed.

And Ontario is not naturally energy rich. It has c 35 per cent hydro electric (Quebec is 90 per cent) but otherwise all of its energy is imported. It has a large nuclear estate which post writeoff is clean and relatively low cost. But all of its gas is imported. Nanticoke (coal fired) is closed but even setting aside greenhouse gas targets it was a major source of air pollution in southern Ontario.

I would argue you are getting off cheaply for a line charge for cottage country.

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Re: My solar investment experience

Post by dknightd » Wed May 01, 2019 5:46 pm

willthrill81 wrote:
Wed May 01, 2019 5:26 pm

Indeed they are. There's certainly no guarantee that the current setup will continue for 20 years; it very likely won't. As more people are getting on board with power generation from home, utilities are pushing back to reduce or even eliminate what they pay for power for surplus power generated. Some utilities are trying to get net metering eliminated altogether, charging you for whatever you 'take' but not crediting you anything for what you 'give'.

The rules are certainly changing.

I'm glad that it's worked out for the OP so far. In our area, our local utility estimates that the payback period on our home would be around 20 years, and it would only reduce our power bills by an estimated 20%. No thanks.
I purposely slightly under sized the system I bought for this reason. At the time it was not clear they would buy back power from a community farm. It turns out they will, for now. But I sized my system assuming no buy back, and for increased energy efficiency in my home. So in the winter I have to buy a little electricity. I'm OK trying to reduce my consumption so that I never have to buy electricity again. I'm also OK if I end up making more than I need and do not get paid for it.

It is complicated. Partly a financial decision. Partly an emotional decision. There is no "right" answer. I'm not sure why you would not want to reduce your energy costs by 20%.

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Re: My solar investment experience

Post by bottlecap » Wed May 01, 2019 6:00 pm

OP, does your "cost" include the cost of federal, state, and local subsidies and, if not, what are they? It makes sense that you wouldn’t include them as a cost to you in the context of your post, but also makes sense to include them as a cost of the system in evaluating the total real-world cost/benefit.

JT

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Re: My solar investment experience

Post by FrugalInvestor » Wed May 01, 2019 6:21 pm

thedane wrote:
Tue Apr 30, 2019 7:26 pm
I live in sunny Arizona and this does not make financial sense as I am in "SRP" territory (local power company) and they jack up the rates for solar customers with peak charges.
I've tried 3 times, but each time the calculation ends up with me paying more with solar than without. Mind boggling.
Contact one of the solar system salespeople, they'll make it pencil out for you!

Just kidding of course. :beer
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

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Re: My solar investment experience

Post by willthrill81 » Wed May 01, 2019 6:24 pm

dknightd wrote:
Wed May 01, 2019 5:46 pm
willthrill81 wrote:
Wed May 01, 2019 5:26 pm

Indeed they are. There's certainly no guarantee that the current setup will continue for 20 years; it very likely won't. As more people are getting on board with power generation from home, utilities are pushing back to reduce or even eliminate what they pay for power for surplus power generated. Some utilities are trying to get net metering eliminated altogether, charging you for whatever you 'take' but not crediting you anything for what you 'give'.

The rules are certainly changing.

I'm glad that it's worked out for the OP so far. In our area, our local utility estimates that the payback period on our home would be around 20 years, and it would only reduce our power bills by an estimated 20%. No thanks.
I purposely slightly under sized the system I bought for this reason. At the time it was not clear they would buy back power from a community farm. It turns out they will, for now. But I sized my system assuming no buy back, and for increased energy efficiency in my home. So in the winter I have to buy a little electricity. I'm OK trying to reduce my consumption so that I never have to buy electricity again. I'm also OK if I end up making more than I need and do not get paid for it.
I agree that for many folks, it's not a slam dunk one way or the other. The OP is a great example as well of the fact that investing in solar setups is appealing to many for hedonic (i.e. feel good) purposes.
dknightd wrote:
Wed May 01, 2019 5:46 pm
It is complicated. Partly a financial decision. Partly an emotional decision. There is no "right" answer. I'm not sure why you would not want to reduce your energy costs by 20%.
Primarily, I'm not interested because it will be a utility-company-estimated 20 years to break-even. It might have a little more appeal if I knew that we wouldn't get a power bill again, but we wouldn't even get that benefit. Further, we buy natural gas from the same company, and solar panels aren't going to do away with that need at all. It just doesn't make financial sense to us, and we don't get any warm fuzzies about it.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: My solar investment experience

Post by willthrill81 » Wed May 01, 2019 6:28 pm

thedane wrote:
Tue Apr 30, 2019 7:26 pm
I live in sunny Arizona and this does not make financial sense as I am in "SRP" territory (local power company) and they jack up the rates for solar customers with peak charges.
I've tried 3 times, but each time the calculation ends up with me paying more with solar than without. Mind boggling.
That's not at all uncommon in many places in the country. People love to opine that solar power is 'free' because 'sunshine is free', but by the same token, coal we dig out of the ground is 'free', wind is 'free', etc. Virtually all of the costs associated with power generation are in capturing and distributing the power. Until recently, it was a pretty sure thing that the power you got from a solar system was the most expensive electricity you could obtain outside of buying batteries. It's only been in the last few years that the cost per kWh has dropped to the point that it may make financial sense for those who (1) pay high rates for electricity and (2) get copious amounts of sunshine.

All of our power comes from locally generated hydro-electric, and we pay an average of about 8.5 cents per kWh. Solar just can't compete with that yet.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: My solar investment experience

Post by FrugalInvestor » Wed May 01, 2019 6:35 pm

willthrill81 wrote:
Wed May 01, 2019 6:28 pm
It's only been in the last few years that the cost per kWh has dropped to the point that it may make financial sense for those who (1) pay high rates for electricity and (2) get copious amounts of sunshine.
And (3) are highly subsidized.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

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willthrill81
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Re: My solar investment experience

Post by willthrill81 » Wed May 01, 2019 6:37 pm

FrugalInvestor wrote:
Wed May 01, 2019 6:35 pm
willthrill81 wrote:
Wed May 01, 2019 6:28 pm
It's only been in the last few years that the cost per kWh has dropped to the point that it may make financial sense for those who (1) pay high rates for electricity and (2) get copious amounts of sunshine.
And (3) are highly subsidized.
:sharebeer
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: My solar investment experience

Post by SimonJester » Wed May 01, 2019 6:40 pm

One item I have not seen mentioned here has anyone had to remove and replace their panels to redo their roof? I have seen some numbers online as high as $6K extra :shock: :shock:

I guess if you have the space there are a number of advantages to a ground mount system...
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin

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Re: My solar investment experience

Post by dknightd » Wed May 01, 2019 6:42 pm

willthrill81 wrote:
Wed May 01, 2019 6:24 pm

Primarily, I'm not interested because it will be a utility-company-estimated 20 years to break-even.
The Utility company will probably estimate a longer pay back period, partly because they assume the rates will remain the same. The solar companies will estimate a shorter pay back period because they assume the rates will increase. It is a crap shoot. Do what makes you happy :)

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willthrill81
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Re: My solar investment experience

Post by willthrill81 » Wed May 01, 2019 6:46 pm

dknightd wrote:
Wed May 01, 2019 6:42 pm
willthrill81 wrote:
Wed May 01, 2019 6:24 pm

Primarily, I'm not interested because it will be a utility-company-estimated 20 years to break-even.
The Utility company will probably estimate a longer pay back period, partly because they assume the rates will remain the same. The solar companies will estimate a shorter pay back period because they assume the rates will increase. It is a crap shoot. Do what makes you happy :)
Actually, that estimate was based on rates increasing at their historic average.

As an investment, solar appears to me to be both illiquid and potentially not very marketable in the sense that you probably won't get even the depreciated value of the system's cost when you sell, though you might in some areas.
SimonJester wrote:
Wed May 01, 2019 6:40 pm
One item I have not seen mentioned here has anyone had to remove and replace their panels to redo their roof? I have seen some numbers online as high as $6K extra :shock: :shock:
Very good point. I've not heard of that one before, but it makes complete sense. It will certainly increase the cost of replacing a roof by some amount.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

dknightd
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Re: My solar investment experience

Post by dknightd » Wed May 01, 2019 6:53 pm

willthrill81 wrote:
Wed May 01, 2019 6:28 pm
... coal we dig out of the ground is 'free',
...

All of our power comes from locally generated hydro-electric, and we pay an average of about 8.5 cents per kWh. Solar just can't compete with that yet.
Not until the rivers run dry. For you it might make no sense. I guess it depends on where you live and what you pay for electricity.

edit: Think about your kids. You are investing in the future.
Last edited by dknightd on Wed May 01, 2019 6:57 pm, edited 1 time in total.

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