Can solar be worth it??

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adam61
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Can solar be worth it??

Post by adam61 »

I’ve been looking at solar just to see since I have a great roof for it and reasonable usage 1500-200kWh of monthly use. I only pay about $1600-2000 a year for electricity. Most of the quotes have been 40-60k fora 5-8KW system. They keep using inflation and other things to make it seem like an 8-10 year payback but I just don’t see it. Unless costs are down or electricity goes way up even with the 30% credit I can’t find a way to justify it. Am I missing a variable? Texas if that matters for credits/costs.
Marathon Man
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Re: Can solar be worth it??

Post by Marathon Man »

Break even really depends on the cost per Kwh. I believe Texas is know for pretty cheap electricity. Here in California with PG&E at 18 cents a kwh, it pays for itself pretty quickly (5-9 years). If you are only paying 6-9 cents per kwh I wouldn't think it is too good of an investment. With gov't tax incentive a typical system here would be under $20k. Your estimates seem very expensive.
mmcmonster
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Re: Can solar be worth it??

Post by mmcmonster »

First of all, put your address in here to get a rough idea: https://www.google.com/get/sunroof#p=0

Second, I got Tesla/SolarCity solar panels and PowerWall battery backup.

For me, in North East PA, the estimate is ~12 year break even. With the inverters generally lasting ~15 years and the panels rated for 35 years with 25 year warranty, it's definitely playing the long game.

Then the price of electricity went down in the year since I got the panels and the break even point moved out. :oops:
Topic Author
adam61
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Re: Can solar be worth it??

Post by adam61 »

The site you listed again listed it as a great spot, but less than $1,000 savings over 20 years with a 7.5Kw system. That’s with quotes lower than I got initially as well.
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quantAndHold
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Re: Can solar be worth it??

Post by quantAndHold »

Your electricity is cheap, and the quotes you’re getting are about double the national average. I wouldn’t expect the math to work.
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RickBoglehead
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Re: Can solar be worth it??

Post by RickBoglehead »

I looked at this some years back here in Michigan, and it never paid off until panels and other equipment is due for replacement.
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GTBuzz
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Re: Can solar be worth it??

Post by GTBuzz »

I paid $24,000 ($16,800 after Federal Tax Credit) in Florida at the end of 2017 for a 10kW system. Definitely get lots of quotes, as different installers are all over the board. I'd recommend getting quotes on EnergySage to get an idea of what you should be paying.
Quaestner
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Re: Can solar be worth it??

Post by Quaestner »

Get more quotes. I spent $15,000 (after all the tax credits) for a $25,000 6.25 kW system in New Mexico. That was 5 years ago - should be a bit cheaper now. I got some renewable energy credits for 7 years that made this cost effective. You are right to be skeptical of their inflation estimates for energy. Make sure your roof is relatively new if you do this (re-roofing with solar adds expense!). It was worth it to me financially, and its been fun having solar, too. Other posters are right to point out Texas' low electric rates impact your decision.
NewOldGuy
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Re: Can solar be worth it??

Post by NewOldGuy »

Basically, if I was 32 instead of 62, I'd invest in solar... right after I bought a new roof.
Typ997S
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Re: Can solar be worth it??

Post by Typ997S »

As others have pointed out, the answer to solar being worth it can be "yes," but as with everything in life, it depends. You have to live somewhere where electricity is somewhat, to very expensive, and you have to use a fair amount, for it to be worthwhile. It helps if you live somewhere sunny too and/or in a state with generous incentives.

In my case, living in a big house with air conditioning, in sunny (300 days a year!) San Jose California, it made a lot of sense, and I installed a system in 2009 which has more than paid for itself already. (I calculated a 6 year payback period when I installed.)

I would also add, as a previous poster did, that the quotes you've gotten for installation look very high to me. I paid a lot less 10 years ago, and I think costs have decreased since then. Good luck!
chw
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Re: Can solar be worth it??

Post by chw »

Get quotes on Energysage.com . Very easy to use and informative website. We installed a 6.6 KW system (20 panels) last year for 20K in MA. Found the installer on Enersage, and system was installed in about 40 days from contract signing to turning on the system. Quality components, great warranties, and payback should be about 5 years. Some of our payback are from SREC credits which were replaced recently by a less lucrative program, but still with credits paid by the utility for solar production. Also, be aware the 30% federal tax credit ends this year- being reduced to 20% in 2020.
mervinj7
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Re: Can solar be worth it??

Post by mervinj7 »

Sure, solar can be worth it but it depends on your own situation (e.g. electricity rate, usage, the sun). Here's my breakdown based on a $3/W system. I eventually installed a 7.26kW system for $2.93/W before ITC. That was the quote I got from energysage.com but I used a local contractor for the actual install.

1. Upfront System Cost
$3.00/Watt * 8.04kW = $24,210
After ITC (30% Federal Tax Credit) -> $16,884.00

2. AC Energy Generated
Using PVWatts and based on our panel type, system efficiency, and roof orientation, we expect 12,060 kWh produced per year
https://pvwatts.nrel.gov/

3. Average Retail Rate with Net Metering and an Electric Vehicle rate plan
Due to the Net Metering Plan available to us as part of our Community Owned Electricity Provider and being on an EV-Rate, the average retail rates during electricity generation is $0.29/kWh. During the night, when we charge our EV, we pay $0.13/kWh.
https://www.svcleanenergy.org/solar/
https://www.pge.com/tariffs/assets/pdf/ ... 0(Sch).pdf

4. Annual Electricity Value
$0.29/kWh *12,060 kWh/year = $3,535.75/year

5. Simple Breakeven
$16,884/$3535/year= 4.8 years
Topic Author
adam61
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Re: Can solar be worth it??

Post by adam61 »

Used EnergySage got $2.60/w with new LG panels. Very nice company. With 30% Federal and a 15% electric provider incentive and a 10.5KW system I’m looking at 30k*.85*.7=$18,000 installed. Texas rates vary a lot but 7-9c/KWh is realistic. The company that does full net metering is 11.3c both directions. Estimate is 15,500 production so my bill should net around $0-100 annually. About 10-12 year payback which isn’t awesome but very doable.
dsmil
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Re: Can solar be worth it??

Post by dsmil »

I'm considering solar panels and I do like that energysage website, but they are assuming 5.4% increases in electricity costs in Maryland. My proposed savings of $26k over 20 years, would go down to $16k, simply by assuming a 2.5% increase rate instead. I feel like this is more realistic considering that prices have been very stable lately. I know that this shouldn't be strictly a financial decision, but the numbers do matter. With our electric use being fairly low anyway, maybe I''ll wait until we buy an electric car down the line.
welsie
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Re: Can solar be worth it??

Post by welsie »

Keep in mind, there is also institutional risk for your investment. At least in California, there has been a pretty consistent (and I would argue logical) move to transfer more of customers energy payments from variable to fixed costs, as well as moving to TOU (time of use) rates which credit for energy produced at the prevailing rate for that time period. As both these factors change, the benefit of roof top solar will decline as an "investment" so just keep this in mind. I would not recommend rooftop solar to any member of my family who lives in California for these reasons.
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Re: Can solar be worth it??

Post by welsie »

dsmil wrote: Fri Feb 22, 2019 2:02 pm I'm considering solar panels and I do like that energysage website, but they are assuming 5.4% increases in electricity costs in Maryland. My proposed savings of $26k over 20 years, would go down to $16k, simply by assuming a 2.5% increase rate instead. I feel like this is more realistic considering that prices have been very stable lately. I know that this shouldn't be strictly a financial decision, but the numbers do matter. With our electric use being fairly low anyway, maybe I''ll wait until we buy an electric car down the line.
Be wary of this logic, there is no particular reason why: i.) you should assume energy costs will rise faster than the rate of inflation and (more importantly) ii.) that the rate of increase will be borne through variable kWh rates and not through fixed charges. If they are borne largely/partially through fixed charges, you will still end up paying the rate increase, with or without panels.

People who sell solar panels are not particularly forthcoming about this fact, and it really undermines their logic. In fact, as we move to TOU rates and weight utility rates more heavily to fixed costs your variable rate may actually go DOWN over the next few decades!
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quantAndHold
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Re: Can solar be worth it??

Post by quantAndHold »

welsie wrote: Fri Feb 22, 2019 5:47 pm Keep in mind, there is also institutional risk for your investment. At least in California, there has been a pretty consistent (and I would argue logical) move to transfer more of customers energy payments from variable to fixed costs, as well as moving to TOU (time of use) rates which credit for energy produced at the prevailing rate for that time period. As both these factors change, the benefit of roof top solar will decline as an "investment" so just keep this in mind. I would not recommend rooftop solar to any member of my family who lives in California for these reasons.
First, I haven’t seen any mass move in CA to fixed costs, unless you consider my minimum monthly bill increasing from $6 to $10 over the past 10 years to be that.

TOU billing actually helps people with solar, since the highest rates are at exactly the same time that their solar panels are generating the most electricity.
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SmallCityDave
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Re: Can solar be worth it??

Post by SmallCityDave »

We are also looking the 2 most compelling estimates are 6kw system for $17.5k/$11k after tax credit or 10kw for $27k/17k after tax credit.
welsie
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Re: Can solar be worth it??

Post by welsie »

quantAndHold wrote: Fri Feb 22, 2019 6:09 pm
welsie wrote: Fri Feb 22, 2019 5:47 pm Keep in mind, there is also institutional risk for your investment. At least in California, there has been a pretty consistent (and I would argue logical) move to transfer more of customers energy payments from variable to fixed costs, as well as moving to TOU (time of use) rates which credit for energy produced at the prevailing rate for that time period. As both these factors change, the benefit of roof top solar will decline as an "investment" so just keep this in mind. I would not recommend rooftop solar to any member of my family who lives in California for these reasons.
First, I haven’t seen any mass move in CA to fixed costs, unless you consider my minimum monthly bill increasing from $6 to $10 over the past 10 years to be that.

TOU billing actually helps people with solar, since the highest rates are at exactly the same time that their solar panels are generating the most electricity.
Your example is pretty massive, that is a 66% increase in fixed charges, I am pretty sure your variable rate didn't increase by 66% in the last decade. I don't think the last 10 years is a good indicator of what the next 20 years will look like in California. We are going to 60% renewable by 2030 and 100% renewable by 2045. By way of reference, the current goal is 33% renewable by 2020. So in the next few decades that $10/month charge may end up being $20/$30, which will be graduated in by either decreasing or keeping variable rates constant. This is my critique of a model which assumes 6% variable rate increases, when it may in fact be i.) much smaller, ii.) zero or iii.) negative. This undermines the business case for solar as a homeowner.

With TOU it depend on the profile of generation of your utility (which impacts how rates are determined), but in California the most expensive energy to acquire for most utilities is between 4-8PM. This is because renewable solar is going offline (the sun is going down) and gas generation/open market purchases, are going up. This is usually explained by something called the duck curve (https://en.wikipedia.org/wiki/Duck_curve). The solar panels on your roof are not producing heavily during this time (or at all for part of it). This issue will become more pressing over the next decade or so. Right now, at 33%, there are days when California utilities are selling excess solar generation at a loss. As a result, they have continued incentive to lower rates/encourage usage during solar generation hours. Utilities are grappling with this right now, so past performance is not a very good measure.

At a high level, net metering made sense when you wanted people to use renewables. Now we have a policy mandate in California and roof top solar is most costly than utility scale solar...as a result the utilities have little incentive to overtly subsidize this and they are slowly moving away from it. They are doing it slowly in part so as not to piss off people who put in solar systems already, but they are moving none the less. This is why I don't think it is good investment right now because of policy risk (at least in California) if your goal is purely financial.
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Re: Can solar be worth it??

Post by jabberwockOG »

Solar investment on the grid in California with its high rates may can be worth it. In Texas solar payback is way too long.
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laughlinlvr
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Re: Can solar be worth it??

Post by laughlinlvr »

I am considering solar on a new addition. I currently live in a location that has the second lowest electricity rates in the US. So why consider solar?
Redundancy if grid goes out especially in winter.
Electric cars are coming and who wants to “refuel” at residential rates?
[Edited to add] I lived through superstorm Sandy on the Atlantic. We lost power for five weeks. The electrical infrastructure had to be rebuilt. Redundancy takes on new urgency with such an experience.
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FrugalInvestor
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Re: Can solar be worth it??

Post by FrugalInvestor »

I live in AZ and had many of the same concerns, even before state subsidies were substantially reduced. The sales pitches seemed to be assuming perfection and ignoring many important and often unknowable factors such as length of time you'll be in the house, cost of maintenance, roof life, future changes in power costs/subsidies, etc. Rather than invest in a very costly system with so many unknowns I opted to replace my A/C (which needed replacement anyway) and perform some energy upgrades at the same time and am convinced that I'll come out ahead of 90% of those who purchase or lease solar.

It seems to me that many people I know are chasing extremely low monthly electricity bills without much consideration for the necessary up-front cost or ongoing lease payments. Low monthly bills provide great 'bragging rights' and the story often ends there.
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Big Dog
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Re: Can solar be worth it??

Post by Big Dog »

one other thing not discussed is the condition of your roof. If your roof shingles are 10+ years old, and you spring a leak, it can be mighty expensive to disassemble the solar panels to fix the roof.
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Re: Can solar be worth it??

Post by letsgobobby »

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Creditcardguy
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Re: Can solar be worth it??

Post by Creditcardguy »

I think it’s hard to justify solar without a big tax incentive, at least in Louisiana.

I bought a 7.5kW system (30 panels, 2 inverters) in 2013 which was $25000 but with 80% tax rebate/credit only cost me $5000. Save about 150mth average so I’m in the green. Never had a problem but changing an inverter will be about $1500 supposedly.

Edit: I had no idea, but Louisiana has the lowest electricity rates in the country. Nice to be #1 at something besides alcoholism and obesity! :mrgreen:

http://www.neo.ne.gov/statshtml/204.htm
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HIinvestor
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Re: Can solar be worth it??

Post by HIinvestor »

We got solar because the fed govt was giving a 35% rebate on the system cost and our state was giving 30%, so total 65% discount. We are happy because it protects us from the highest energy rates in the US. We recently bought a plug in hybrid electric car and rarely ever need to buy gas. :-)
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Re: Can solar be worth it??

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squirm
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Re: Can solar be worth it??

Post by squirm »

quantAndHold wrote: Fri Feb 22, 2019 6:09 pm
welsie wrote: Fri Feb 22, 2019 5:47 pm Keep in mind, there is also institutional risk for your investment. At least in California, there has been a pretty consistent (and I would argue logical) move to transfer more of customers energy payments from variable to fixed costs, as well as moving to TOU (time of use) rates which credit for energy produced at the prevailing rate for that time period. As both these factors change, the benefit of roof top solar will decline as an "investment" so just keep this in mind. I would not recommend rooftop solar to any member of my family who lives in California for these reasons.
First, I haven’t seen any mass move in CA to fixed costs, unless you consider my minimum monthly bill increasing from $6 to $10 over the past 10 years to be that.

TOU billing actually helps people with solar, since the highest rates are at exactly the same time that their solar panels are generating the most electricity.
I was thinking the same thing. Four relatives have solar in CA and all they pay is a $10 interconnect fee monthly. Their on TOU and haven't paid any electrical charges except the $10.

I'm not sure who would decline a solar array cause they have to pay ten bucks instead of six bucks per month, esp if they're with PG&E or SDE.
My FIL had a $13k (before incentive) system installed on his southern face roof two years ago and hasn't paid a dime in charges, except the interconnect fee.
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Re: Can solar be worth it??

Post by squirm »

adam61 wrote: Sun Feb 10, 2019 6:23 pm I’ve been looking at solar just to see since I have a great roof for it and reasonable usage 1500-200kWh of monthly use. I only pay about $1600-2000 a year for electricity. Most of the quotes have been 40-60k fora 5-8KW system. They keep using inflation and other things to make it seem like an 8-10 year payback but I just don’t see it. Unless costs are down or electricity goes way up even with the 30% credit I can’t find a way to justify it. Am I missing a variable? Texas if that matters for credits/costs.
wow, that's very expensive. My FIL had a 5kw system installed for $13k.
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unclescrooge
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Re: Can solar be worth it??

Post by unclescrooge »

adam61 wrote: Sun Feb 10, 2019 6:23 pm I’ve been looking at solar just to see since I have a great roof for it and reasonable usage 1500-200kWh of monthly use. I only pay about $1600-2000 a year for electricity. Most of the quotes have been 40-60k fora 5-8KW system. They keep using inflation and other things to make it seem like an 8-10 year payback but I just don’t see it. Unless costs are down or electricity goes way up even with the 30% credit I can’t find a way to justify it. Am I missing a variable? Texas if that matters for credits/costs.
I paid $18k for a 6kw system in Los Angeles.
I'm make 2 points.
1.You're being ripped off.
2. With $2k in annual electricity costs you should not get solar panels
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Re: Can solar be worth it??

Post by boomer_techie »

laughlinlvr wrote: Fri Feb 22, 2019 9:09 pm I am considering solar on a new addition. I currently live in a location that has the second lowest electricity rates in the US. So why consider solar?
Redundancy if grid goes out especially in winter.
The standard inverters used with solar panels shut down when the power fails. There goes your redundancy!
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Re: Can solar be worth it??

Post by snackdog »

I don't understand the economics presented in this thread. The breakeven dates do not account for the time value of money nor opportunity cost.

I'm in Texas and EnergySage quotes me $9,000 installed at $2.90/w for 20 year savings of $6,700. I pay about $.092/kwh or $75/month. Nearly 12 year payback! ES doesn't give me enough details to work out the full economics but I assume the $6700 is not discounted so discounting to present value will drive it down to something like $5000. Seems like a terrible deal to wait more than 12 years just to break even.
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Re: Can solar be worth it??

Post by TomatoTomahto »

boomer_techie wrote: Sat Feb 23, 2019 3:52 am
laughlinlvr wrote: Fri Feb 22, 2019 9:09 pm I am considering solar on a new addition. I currently live in a location that has the second lowest electricity rates in the US. So why consider solar?
Redundancy if grid goes out especially in winter.
The standard inverters used with solar panels shut down when the power fails. There goes your redundancy!
There are solutions to that problem. In my case, I have 32kw of battery storage on order and the solar used to charge them stays up when grid is down. No danger to linemen. Plus, incentives to install solar storage.
I get the FI part but not the RE part of FIRE.
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Re: Can solar be worth it??

Post by knpstr »

mervinj7 wrote: Mon Feb 11, 2019 6:11 pm the average retail rates during electricity generation is $0.29/kWh.
Holy Smokes! In Michigan my cost of electricity usage is $0.10/kWh. $0.29 is crazy high!
Even including all other charges on a bill (like being charged a flat fee for just being hooked up) the cost last month was $0.13/kWh
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Re: Can solar be worth it??

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Re: Can solar be worth it??

Post by Valuethinker »

snackdog wrote: Sat Feb 23, 2019 6:19 am I don't understand the economics presented in this thread. The breakeven dates do not account for the time value of money nor opportunity cost.

I'm in Texas and EnergySage quotes me $9,000 installed at $2.90/w for 20 year savings of $6,700. I pay about $.092/kwh or $75/month. Nearly 12 year payback! ES doesn't give me enough details to work out the full economics but I assume the $6700 is not discounted so discounting to present value will drive it down to something like $5000. Seems like a terrible deal to wait more than 12 years just to break even.
You have to take into account the cash flows thrpugh entire system life (say 25 years) to work out your IRR. Then compare that to expected returns of other investments to see if it is worth doing.

Otherwise you work out an NPV of the system again using whole life cash flows and a discount rate. Assuming we are using real cash flows not nominal real TIPS yields of 1.0 per cent plus say 1.0 per cent so 2.0 to 2.5 per cent discount rate would be justified.
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Re: Can solar be worth it??

Post by Valuethinker »

laughlinlvr wrote: Fri Feb 22, 2019 9:09 pm I am considering solar on a new addition. I currently live in a location that has the second lowest electricity rates in the US. So why consider solar?
Redundancy if grid goes out especially in winter.
Electric cars are coming and who wants to “refuel” at residential rates?
[Edited to add] I lived through superstorm Sandy on the Atlantic. We lost power for five weeks. The electrical infrastructure had to be rebuilt. Redundancy takes on new urgency with such an experience.
Most solar installations will cut out if the grid cuts out.

You will also need battery pack to give yourself useful off grid power. And a storm might damage your system.

Generally if you want significant useful emergency power you are going to go down the generator route. A solar panel arrangement w batteries won't give you enough hours of reserve power.
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Re: Can solar be worth it??

Post by mrb09 »

TomatoTomahto wrote: Sat Feb 23, 2019 6:23 am
boomer_techie wrote: Sat Feb 23, 2019 3:52 am
laughlinlvr wrote: Fri Feb 22, 2019 9:09 pm I am considering solar on a new addition. I currently live in a location that has the second lowest electricity rates in the US. So why consider solar?
Redundancy if grid goes out especially in winter.
The standard inverters used with solar panels shut down when the power fails. There goes your redundancy!
There are solutions to that problem. In my case, I have 32kw of battery storage on order and the solar used to charge them stays up when grid is down. No danger to linemen. Plus, incentives to install solar storage.
I also have a hybrid solar system. We have special dual mode inverters and and a generator switch on our main panel, when the power goes out it physically transfers from the power company grid-tied line to a separate line to the inverters in their off-grid mode as if it were a generator. Then the inverters run from solar if they can, otherwise the batteries. The hybrid models are definitely more expensive, plus you need to deal with battery maintenance. But if you have flakey power, it is convenient.
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Re: Can solar be worth it??

Post by dodecahedron »

Paid $12,600 (after state incentives and federal tax credit) for 6.8 kW system (20 panels) as part of a community solar farm, projected to generate 8500 kWh per year.

The farm is a 45 minute drive from my home but I still get all the same net metering benefits as if the panels were on my roof and even have a real time internet link that allows me to view how much solar the system is generating at any given time. (My panels are 3.3% of the total in the farm, so I get 3.3% of the net metering credits.) Just for kicks, I carpooled to a ribbon-cutting ceremony (on the winter solstice!) when it opened. I was allowed to autograph the underside of ¨my¨ panels with a Sharpie.

No worries about interaction issues of roof repair. Also, the site was chosen to optimize solar exposure (in a big flat open field with no nearby hills or trees facing a large pond that reflects additional sun on to the panels.) The rack-mounted panels were installed on the ground at an angle and orientation that optimizes the solar exposure (as opposed to being forced to adopt the slope of my preexisting roof.)

If I move to another home in the same (large) regional load zone, my net metering credit rights are portable and can be moved to my new home. Alternatively, I can transfer them as part of the sale of my home to the new owner. I can also just transfer the credit rights to anyone else of my choosing (as long as they are in the same regional electric load zone), so if the buyer of my new home is not interested (for whatever reason), I could sell them to someone else or donate them to a nonprofit of my choice, etc.

Edited to add: further details: after a little over a year, the system has been performing better than projected. My retail net metering surplus credits roll over indefinitely. (Unlike some arrangements elsewhere, there is no annual true-up where the utility would have the right to buy the unused surplus at wholesale prices.) Production has somewhat exceeded expectations, particularly in the winter, despite some heavy snows. I am pleasantly surprised. Got off to a slow start because the project started up in the winter, but by April production was in excess of my needs and surplus started building up which is likely to carry me through the remainder of this winter until the surplus can start up again. Since last April, my electric bill has simply been the fixed $17/month charge that all electric customers pay (plus tax & reg charges = $18.05 month.) I have paid no variable charges since last April and if the system continues to operate as it has done this past year, I expect to just have bills with the fixed charge going forward.

Also, I do have a $10 per panel annual fee to the solar farm operator, so for me with 20 panels that is $200/year. This covers insurance on the panels and maintenance (stuff like replacing inverters as needed.)

It is a 20 year contract, with possibilities to extend at that point at a newly negotiated price if the technology still makes sense.)

It seems worth it for me. The return (in future electric bill savings) is tax-free.
Last edited by dodecahedron on Sat Feb 23, 2019 9:58 am, edited 2 times in total.
mervinj7
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Re: Can solar be worth it??

Post by mervinj7 »

knpstr wrote: Sat Feb 23, 2019 7:33 am
mervinj7 wrote: Mon Feb 11, 2019 6:11 pm the average retail rates during electricity generation is $0.29/kWh.
Holy Smokes! In Michigan my cost of electricity usage is $0.10/kWh. $0.29 is crazy high!
Even including all other charges on a bill (like being charged a flat fee for just being hooked up) the cost last month was $0.13/kWh
Just to be clear, that's our solar net metering credit rate since we are on an electric vehicle rate plan. The cost of electricity at peak times (2-9PM) is 47c/kWh in the summer while the off-peak charge is only 12c/kWh. We try to minimize our electric usage in the evening, and charge our EV overnight. However, the majority of our solar energy is generated and credited at part-peak and peak pricing. Thus, 10kWh generated during peak hours can potentially offset 37kWh of overnight charging!
letsgobobby
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Re: Can solar be worth it??

Post by letsgobobby »

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Mike Scott
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Re: Can solar be worth it??

Post by Mike Scott »

I really tried to make the numbers work on solar but the combination of some of the cheapest electricity available and the lack of state and local incentives just don't work. I may do solar at some point in the future, but it will not be for financial reasons.
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TomatoTomahto
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Re: Can solar be worth it??

Post by TomatoTomahto »

mrb09 wrote: Sat Feb 23, 2019 9:30 am
TomatoTomahto wrote: Sat Feb 23, 2019 6:23 am
boomer_techie wrote: Sat Feb 23, 2019 3:52 am
laughlinlvr wrote: Fri Feb 22, 2019 9:09 pm I am considering solar on a new addition. I currently live in a location that has the second lowest electricity rates in the US. So why consider solar?
Redundancy if grid goes out especially in winter.
The standard inverters used with solar panels shut down when the power fails. There goes your redundancy!
There are solutions to that problem. In my case, I have 32kw of battery storage on order and the solar used to charge them stays up when grid is down. No danger to linemen. Plus, incentives to install solar storage.
I also have a hybrid solar system. We have special dual mode inverters and and a generator switch on our main panel, when the power goes out it physically transfers from the power company grid-tied line to a separate line to the inverters in their off-grid mode as if it were a generator. Then the inverters run from solar if they can, otherwise the batteries. The hybrid models are definitely more expensive, plus you need to deal with battery maintenance. But if you have flakey power, it is convenient.
The Sonnen batteries are supposed to be maintenance free, and have a generous warranty. They’re expensive, but with 30% ITC and, in our case, >$0.05/kWh SMART credit, it’s not that much for the peace of mind. Since we are moving towards an all electric house (geothermal in a few weeks, baby!), reliable electricity is a must, so we have solar, solar storage, and propane generator.
I get the FI part but not the RE part of FIRE.
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quantAndHold
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Re: Can solar be worth it??

Post by quantAndHold »

welsie wrote: Fri Feb 22, 2019 6:37 pm
quantAndHold wrote: Fri Feb 22, 2019 6:09 pm
welsie wrote: Fri Feb 22, 2019 5:47 pm Keep in mind, there is also institutional risk for your investment. At least in California, there has been a pretty consistent (and I would argue logical) move to transfer more of customers energy payments from variable to fixed costs, as well as moving to TOU (time of use) rates which credit for energy produced at the prevailing rate for that time period. As both these factors change, the benefit of roof top solar will decline as an "investment" so just keep this in mind. I would not recommend rooftop solar to any member of my family who lives in California for these reasons.
First, I haven’t seen any mass move in CA to fixed costs, unless you consider my minimum monthly bill increasing from $6 to $10 over the past 10 years to be that.

TOU billing actually helps people with solar, since the highest rates are at exactly the same time that their solar panels are generating the most electricity.
Your example is pretty massive, that is a 66% increase in fixed charges, I am pretty sure your variable rate didn't increase by 66% in the last decade. I don't think the last 10 years is a good indicator of what the next 20 years will look like in California. We are going to 60% renewable by 2030 and 100% renewable by 2045. By way of reference, the current goal is 33% renewable by 2020. So in the next few decades that $10/month charge may end up being $20/$30, which will be graduated in by either decreasing or keeping variable rates constant. This is my critique of a model which assumes 6% variable rate increases, when it may in fact be i.) much smaller, ii.) zero or iii.) negative. This undermines the business case for solar as a homeowner.

With TOU it depend on the profile of generation of your utility (which impacts how rates are determined), but in California the most expensive energy to acquire for most utilities is between 4-8PM. This is because renewable solar is going offline (the sun is going down) and gas generation/open market purchases, are going up. This is usually explained by something called the duck curve (https://en.wikipedia.org/wiki/Duck_curve). The solar panels on your roof are not producing heavily during this time (or at all for part of it). This issue will become more pressing over the next decade or so. Right now, at 33%, there are days when California utilities are selling excess solar generation at a loss. As a result, they have continued incentive to lower rates/encourage usage during solar generation hours. Utilities are grappling with this right now, so past performance is not a very good measure.

At a high level, net metering made sense when you wanted people to use renewables. Now we have a policy mandate in California and roof top solar is most costly than utility scale solar...as a result the utilities have little incentive to overtly subsidize this and they are slowly moving away from it. They are doing it slowly in part so as not to piss off people who put in solar systems already, but they are moving none the less. This is why I don't think it is good investment right now because of policy risk (at least in California) if your goal is purely financial.
Interesting that you registered a Bogleheads account just to dump on solar in California, but anyway...

The $10 interconnect fee is only charged if I don’t buy at least $120 worth of power during the course of the year. My system is intentionally sized to provide 85% of my power. So I do buy enough power to soak up that $10 fee. When I was getting bids, the installers were well aware of current laws, prospective laws, and the best options financially.

In the summertime, my electric meter is still running backwards until after 6 pm. As the sun goes down, so does my need for air conditioning, and hence my power usage.

The contract I have with SDG&E is grandfathered in. Newer contracts are better in some ways, and worse in others. The net is about the same, however.

You’re leaving out the fact that the state of California wants very badly to be carbon neutral, and isn’t above using regulation to achieve that. There’s always going to be a push/pull between what the utilities are trying to do and what the state says they can do. I would expect the future of solar in California to be different than the present, but I would expect it to rhyme.

The bottom line is that places with high electric rates and a lot of sun are going to benefit from solar. Much of California fits that criteria.
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Epsilon Delta
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Re: Can solar be worth it??

Post by Epsilon Delta »

mrb09 wrote: Sat Feb 23, 2019 9:30 am
TomatoTomahto wrote: Sat Feb 23, 2019 6:23 am
boomer_techie wrote: Sat Feb 23, 2019 3:52 am
laughlinlvr wrote: Fri Feb 22, 2019 9:09 pm I am considering solar on a new addition. I currently live in a location that has the second lowest electricity rates in the US. So why consider solar?
Redundancy if grid goes out especially in winter.
The standard inverters used with solar panels shut down when the power fails. There goes your redundancy!
There are solutions to that problem. In my case, I have 32kw of battery storage on order and the solar used to charge them stays up when grid is down. No danger to linemen. Plus, incentives to install solar storage.
I also have a hybrid solar system. We have special dual mode inverters and and a generator switch on our main panel, when the power goes out it physically transfers from the power company grid-tied line to a separate line to the inverters in their off-grid mode as if it were a generator. Then the inverters run from solar if they can, otherwise the batteries. The hybrid models are definitely more expensive, plus you need to deal with battery maintenance. But if you have flakey power, it is convenient.
There should be solutions to this that don't require a battery.
Once you've had a prolonged power outage you realise that even a kilowatt for 8 hours a day would be very useful (to run the furnace, fridge etc.). Most solar units could provide this with a software only change so that the system tracks the needed power instead of maximum power. The only hardware required would be a transfer switch.
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TomatoTomahto
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Re: Can solar be worth it??

Post by TomatoTomahto »

Epsilon Delta wrote: Sat Feb 23, 2019 1:39 pm
mrb09 wrote: Sat Feb 23, 2019 9:30 am
TomatoTomahto wrote: Sat Feb 23, 2019 6:23 am
boomer_techie wrote: Sat Feb 23, 2019 3:52 am
laughlinlvr wrote: Fri Feb 22, 2019 9:09 pm I am considering solar on a new addition. I currently live in a location that has the second lowest electricity rates in the US. So why consider solar?
Redundancy if grid goes out especially in winter.
The standard inverters used with solar panels shut down when the power fails. There goes your redundancy!
There are solutions to that problem. In my case, I have 32kw of battery storage on order and the solar used to charge them stays up when grid is down. No danger to linemen. Plus, incentives to install solar storage.
I also have a hybrid solar system. We have special dual mode inverters and and a generator switch on our main panel, when the power goes out it physically transfers from the power company grid-tied line to a separate line to the inverters in their off-grid mode as if it were a generator. Then the inverters run from solar if they can, otherwise the batteries. The hybrid models are definitely more expensive, plus you need to deal with battery maintenance. But if you have flakey power, it is convenient.
There should be solutions to this that don't require a battery.
Once you've had a prolonged power outage you realise that even a kilowatt for 8 hours a day would be very useful (to run the furnace, fridge etc.). Most solar units could provide this with a software only change so that the system tracks the needed power instead of maximum power. The only hardware required would be a transfer switch.
There probably are solutions like you describe. I went through two outages longer than a week before having solar, a generator, or a battery. It was miserable.

If no other solution is available, you could always get a very small battery, and when it runs down, wait for the sun the next day to charge again.
I get the FI part but not the RE part of FIRE.
Ykcor
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Re: Can solar be worth it??

Post by Ykcor »

Are the solar shingles that Tessa was to make available yet? Might be a good option for new house or one needing a new roof.
mrb09
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Re: Can solar be worth it??

Post by mrb09 »

TomatoTomahto wrote: Sat Feb 23, 2019 1:52 pm
Epsilon Delta wrote: Sat Feb 23, 2019 1:39 pm
mrb09 wrote: Sat Feb 23, 2019 9:30 am
TomatoTomahto wrote: Sat Feb 23, 2019 6:23 am
boomer_techie wrote: Sat Feb 23, 2019 3:52 am The standard inverters used with solar panels shut down when the power fails. There goes your redundancy!
There are solutions to that problem. In my case, I have 32kw of battery storage on order and the solar used to charge them stays up when grid is down. No danger to linemen. Plus, incentives to install solar storage.
I also have a hybrid solar system. We have special dual mode inverters and and a generator switch on our main panel, when the power goes out it physically transfers from the power company grid-tied line to a separate line to the inverters in their off-grid mode as if it were a generator. Then the inverters run from solar if they can, otherwise the batteries. The hybrid models are definitely more expensive, plus you need to deal with battery maintenance. But if you have flakey power, it is convenient.
There should be solutions to this that don't require a battery.
Once you've had a prolonged power outage you realise that even a kilowatt for 8 hours a day would be very useful (to run the furnace, fridge etc.). Most solar units could provide this with a software only change so that the system tracks the needed power instead of maximum power. The only hardware required would be a transfer switch.
There probably are solutions like you describe. I went through two outages longer than a week before having solar, a generator, or a battery. It was miserable.

If no other solution is available, you could always get a very small battery, and when it runs down, wait for the sun the next day to charge again.
Makes sense, but double check the system requirements first. Mine requires a minimum of 440 Ah of batteries even in grid-tie mode, since the panels float the charge to the inverters over the batteries. But my system is over ten years old, there's probably better ones now.

(440 Ah = 16 golf cart batteries)
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Epsilon Delta
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Re: Can solar be worth it??

Post by Epsilon Delta »

TomatoTomahto wrote: Sat Feb 23, 2019 1:52 pm
Epsilon Delta wrote: Sat Feb 23, 2019 1:39 pm There should be solutions to this that don't require a battery.
Once you've had a prolonged power outage you realise that even a kilowatt for 8 hours a day would be very useful (to run the furnace, fridge etc.). Most solar units could provide this with a software only change so that the system tracks the needed power instead of maximum power. The only hardware required would be a transfer switch.
There probably are solutions like you describe. I went through two outages longer than a week before having solar, a generator, or a battery. It was miserable.

If no other solution is available, you could always get a very small battery, and when it runs down, wait for the sun the next day to charge again.
I don't think a small battery will work. A standard solar system will try to shove the maximum power into it. If it manages it's very bad for the battery. If it can't dump the power most systems will trip a protection rule and not produce any power. What is needed is for the system to cut back on the power but I don't think most inverters do that.
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