Making money with oversized rooftop solar system?

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softwaregeek
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Making money with oversized rooftop solar system?

Post by softwaregeek » Wed Oct 09, 2019 12:01 am

I just signed a contract to have a rooftop solar system installed.

The cost of power is extremely high here, about 21c per KWH.

I also have an ideal roof for solar panels, at exactly the right tilt and no shade.

I recently discovered that through an "energy choice aggregator" I can sell surplus power back to the utility at full retail rate.

I have room for an extra 4KW of Solar on my roof, which should generate about 5000-6000 KWH per year. This should generate about $1150 per year indefinitely, for a cost of about $6k net of my federal tax credit of 30% to upsize the system. This is a 19% rate of return.

What am I missing here? Obviously, this deal is so good that other people would have jumped on this so what am I missing?

targetconfusion
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Re: Making money with oversized rooftop solar system?

Post by targetconfusion » Wed Oct 09, 2019 12:12 am

softwaregeek wrote:
Wed Oct 09, 2019 12:01 am
Obviously, this deal is so good that other people would have jumped on this so what am I missing?
Possibly nothing. It's not out of the question for rooftop PV to make economic sense. Plenty have jumped on it. It tends to do so for (1) high electricity rates, (2) high irradiance (combination of geographic location and installation site) (3) the ability to sell surplus electricity at retail, rather than wholesale, rates, and, (4) favorable tax incentives. It seems as though you have all of those.

The harder cost to estimate is the hassle/maintenance. More stuff on the roof is more to go wrong, not just with the apparatus itself but with the roof. Anecdotally people seem to have every version of that experience - some with problems, others with trouble-free systems humming away for years.

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dgm
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Re: Making money with oversized rooftop solar system?

Post by dgm » Wed Oct 09, 2019 12:14 am

one thing you are missing potentially is whether those rates you can sell for are guaranteed.

if not, in 2 years its possible they change what the rates are and you make far less than you thought you would

curmudgeon
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Re: Making money with oversized rooftop solar system?

Post by curmudgeon » Wed Oct 09, 2019 12:23 am

softwaregeek wrote:
Wed Oct 09, 2019 12:01 am
The cost of power is extremely high here, about 21c per KWH.

I also have an ideal roof for solar panels, at exactly the right tilt and no shade.

I recently discovered that through an "energy choice aggregator" I can sell surplus power back to the utility at full retail rate.

I have room for an extra 4KW of Solar on my roof, which should generate about 5000-6000 KWH per year. This should generate about $1150 per year indefinitely, for a cost of about $6k net of my federal tax credit of 30% to upsize the system. This is a 19% rate of return.

What am I missing here? Obviously, this deal is so good that other people would have jumped on this so what am I missing?
Look closer at the details. If you are in PG&E territory, for example, a large part of your kwh rate is "distribution charge". Another large chunk is paying for the old power plants. The actual power generation retail rate may be more like 8c per kwh. Still potentially worthwhile, but not a "gimme". Overly generous compensation also tends to cause squeals from other ratepayers eventually, and may get cut back as well.

kacang
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Re: Making money with oversized rooftop solar system?

Post by kacang » Wed Oct 09, 2019 2:34 am

I think you might be missing the regulatory aspect. To build a larger system for the expressed purpose of selling energy for profit sounds like one would be going into power generation business.

A home rooftop system's annual production is restricted to your approximate usage over the previous 12 months & projected future increase. Thus you can build a larger system than current needs but you'll have to justify it's for personal use, and declare that under penalty of perjury per CA laws in your application for connection to the grid.

Sconie
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Re: Making money with oversized rooftop solar system?

Post by Sconie » Wed Oct 09, 2019 5:03 am

dgm wrote:
Wed Oct 09, 2019 12:14 am
one thing you are missing potentially is whether those rates you can sell for are guaranteed.

if not, in 2 years its possible they change what the rates are and you make far less than you thought you would
Exactly! Not sure where you are located, however, I've seen "supposedly guaranteed" sell-back electrical rates both in the upper midwest and southwest U.S. suddenly change----and change drastically. Sell-back rates are NOT something that you can "take to the bank."
I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant. - Alan Greenspan

mmcmonster
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Re: Making money with oversized rooftop solar system?

Post by mmcmonster » Wed Oct 09, 2019 5:08 am

curmudgeon wrote:
Wed Oct 09, 2019 12:23 am
Look closer at the details. If you are in PG&E territory, for example, a large part of your kwh rate is "distribution charge". Another large chunk is paying for the old power plants. The actual power generation retail rate may be more like 8c per kwh. Still potentially worthwhile, but not a "gimme". Overly generous compensation also tends to cause squeals from other ratepayers eventually, and may get cut back as well.
Bingo.

Here in North East Pennsylvania, electricity costs are broken down into distribution, transmission, and generation.

For myself:
Distribution: 4.295¢/kWh
Transmission: 1.330¢/kWh
Generation: 5.709¢/kWh

Excess production was sold back at 7.04¢/kWh in early May.

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TomatoTomahto
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Re: Making money with oversized rooftop solar system?

Post by TomatoTomahto » Wed Oct 09, 2019 5:59 am

In MA, it’s also complicated. Once we figure out our net excess, we can donate a fixed percentage of future excess production to a non-profit. You can’t donate (or sell to an aggregator) “banked” credits, only credits going forward. We want to see how much excess there is through a full year.
Okay, I get it; I won't be political or controversial. The Earth is flat.

fru-gal
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Re: Making money with oversized rooftop solar system?

Post by fru-gal » Wed Oct 09, 2019 6:39 am

Sconie wrote:
Wed Oct 09, 2019 5:03 am
dgm wrote:
Wed Oct 09, 2019 12:14 am
one thing you are missing potentially is whether those rates you can sell for are guaranteed.

if not, in 2 years its possible they change what the rates are and you make far less than you thought you would
Exactly! Not sure where you are located, however, I've seen "supposedly guaranteed" sell-back electrical rates both in the upper midwest and southwest U.S. suddenly change----and change drastically. Sell-back rates are NOT something that you can "take to the bank."
I'm quite hazy about this, but I've read something or other about utilities in some areas making it very difficult for homeowners with solar power generating installations by adjusting prices unfavorably. They seemed to need cooperation from some part of the local government, but got that. It's obviously in the utility's interest to clobber other "energy suppliers" or energy independence.

Still, if it were me, and I were young enough for the payback time and not so near the water that my house's days were numbered, I would certainly have at least a solar system that would supply my own house's needs and maybe an electric car's needs.

kacang
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Re: Making money with oversized rooftop solar system?

Post by kacang » Wed Oct 09, 2019 10:33 am

kacang wrote:
Wed Oct 09, 2019 2:34 am
I think you might be missing the regulatory aspect. To build a larger system for the expressed purpose of selling energy for profit sounds like one would be going into power generation business.

A home rooftop system's annual production is restricted to your approximate usage over the previous 12 months & projected future increase. Thus you can build a larger system than current needs but you'll have to justify it's for personal use, and declare that under penalty of perjury per CA laws in your application for connection to the grid.
Found the reference. From California Public Utilities Commission, section 7.4 in http://docs.cpuc.ca.gov/PublishedDocs/ ... 308_93684

"... customers cannot oversize their solar or wind electrical generating facilities to create additional revenue. Moreover, the utilities note that other compensation mechanisms exist for customers who want to generate electricity to sell to the utility, such as feed-in tariffs. CALSEIA/EC agree with the utilities, suggesting that customers who oversize their systems would not qualify for NEM, and therefore would be ineligible for NSC."

Is OP from CA? This would be relevant.
-

Topic Author
softwaregeek
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Re: Making money with oversized rooftop solar system?

Post by softwaregeek » Wed Oct 09, 2019 1:54 pm

Yes, from ca in pge territory. And the system is probably a little oversized right now, because I sized it for a future electric car. But not intended for resale.

WS1
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Re: Making money with oversized rooftop solar system?

Post by WS1 » Wed Oct 09, 2019 2:18 pm

Can you increase your electric usage to match your rooftop potential?
I’m thinking heat pump hot water heater, induction stove, and an electric vehicle.

kacang
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Location: CA

Re: Making money with oversized rooftop solar system?

Post by kacang » Wed Oct 09, 2019 2:33 pm

softwaregeek wrote:
Wed Oct 09, 2019 1:54 pm
Yes, from ca in pge territory. And the system is probably a little oversized right now, because I sized it for a future electric car. But not intended for resale.
You should be good then. Peninsula Clean Energy, a Bay Area community energy provider, advised in its FAQ that "PG&E does not generally allow customers to interconnect systems that exceed 110% of on-site electric demand". Without this regulation, it would be attractive to oversize since PCE's NEM rate is so favourable (retail + 0.01 bonus).

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TomatoTomahto
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Re: Making money with oversized rooftop solar system?

Post by TomatoTomahto » Wed Oct 09, 2019 2:59 pm

WS1 wrote:
Wed Oct 09, 2019 2:18 pm
Can you increase your electric usage to match your rooftop potential?
I’m thinking heat pump hot water heater, induction stove, and an electric vehicle.
I switched from oil burner for forced air heat to geothermal, oil burner for domestic hot water to electric, oil burner to heat water for radiant and baseboard to electric boiler, propane pool heater to air sourced heat pump, propane stove to induction, and substituted my Tesla for the previous owner’s ICE vehicles. I don’t know how much more electricity I’ll use than the previous owner, but utility agreed to my increase in solar capacity.
Okay, I get it; I won't be political or controversial. The Earth is flat.

MathWizard
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Re: Making money with oversized rooftop solar system?

Post by MathWizard » Wed Oct 09, 2019 3:47 pm

In my town, you only get wholesale price not retail.
(E.g. what it costs them to produce the electricity, not what they sell it for.)
So you would not make money here.

Here, the best you can get is a net-zero metering cost, where you have
the power plant as a backup generator in case the sun does not shine or
your solar setup breaks down.

The retail cost includes amortized capital cost of the power plant and distribution
network, and the ongoing cost of maintenance of both.

Topic Author
softwaregeek
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Re: Making money with oversized rooftop solar system?

Post by softwaregeek » Thu Oct 10, 2019 4:06 am

WS1 wrote:
Wed Oct 09, 2019 2:18 pm
Can you increase your electric usage to match your rooftop potential?
I’m thinking heat pump hot water heater, induction stove, and an electric vehicle.
I do have an electric stove, but I drive a beater as my daily driver. I also tend to buy used. I drive less than 5000 miles a year so car isn't a big deal for me. I have a new tankless gas heater so not worth it to replace. I could mine bitcoin, I suppose. Bitcoin mining isn't that profitable but it can heat your house in the winter so from that viewpoint the power is free.

motorcyclesarecool
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Re: Making money with oversized rooftop solar system?

Post by motorcyclesarecool » Thu Oct 10, 2019 5:06 am

Where I live, the utilities have broken down the bill into a rate per kWH, and a daily fee to access the grid. Additionally, grid connected solar users can zero out their electric bills, but they cannot collect a profit. So you’d have to do something else with the excess electricity to actually turn a profit, like mining bitcoin or running a fleet of Nissan Leaf / Tesla Uber cars.
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.

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TomatoTomahto
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Re: Making money with oversized rooftop solar system?

Post by TomatoTomahto » Thu Oct 10, 2019 5:33 am

motorcyclesarecool wrote:
Thu Oct 10, 2019 5:06 am
Where I live, the utilities have broken down the bill into a rate per kWH, and a daily fee to access the grid. Additionally, grid connected solar users can zero out their electric bills, but they cannot collect a profit. So you’d have to do something else with the excess electricity to actually turn a profit, like mining bitcoin or running a fleet of Nissan Leaf / Tesla Uber cars.
Or donating it to a non-profit and claiming a deduction.
Okay, I get it; I won't be political or controversial. The Earth is flat.

smitcat
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Re: Making money with oversized rooftop solar system?

Post by smitcat » Thu Oct 10, 2019 8:29 am

motorcyclesarecool wrote:
Thu Oct 10, 2019 5:06 am
Where I live, the utilities have broken down the bill into a rate per kWH, and a daily fee to access the grid. Additionally, grid connected solar users can zero out their electric bills, but they cannot collect a profit. So you’d have to do something else with the excess electricity to actually turn a profit, like mining bitcoin or running a fleet of Nissan Leaf / Tesla Uber cars.
Same here - and all subject to future changes at any time.

lomarica01
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Re: Making money with oversized rooftop solar system?

Post by lomarica01 » Thu Oct 10, 2019 10:50 am

In CA with pge if you have a negative bill (produced more electricity than you used) at the end of your one year true up, the credit goes to zero. Be sure this will not happen where you are at. Also they can change the rules on you.

I would not over do it with the goal of making money.

mervinj7
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Re: Making money with oversized rooftop solar system?

Post by mervinj7 » Thu Oct 10, 2019 11:29 am

lomarica01 wrote:
Thu Oct 10, 2019 10:50 am
In CA with pge if you have a negative bill (produced more electricity than you used) at the end of your one year true up, the credit goes to zero. Be sure this will not happen where you are at. Also they can change the rules on you.

I would not over do it with the goal of making money.
For now, at true-up PG&E will credit net surplus compensation at $0.03 to $0.04 per kWh with their current net surplus compensation scheme.
https://www.pge.com/en_US/small-medium- ... ation.page

That said, some folks with CCAs (which I believe softwaregeek has), have slightly different policies that will credit excess generation at the full retail rates. Here's an example. I'll update my solar post with live numbers in Jan after I get my true-up.

https://www.svcleanenergy.org/solar/

Topic Author
softwaregeek
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Re: Making money with oversized rooftop solar system?

Post by softwaregeek » Mon Oct 14, 2019 8:33 pm

mervinj7 wrote:
Thu Oct 10, 2019 11:29 am
lomarica01 wrote:
Thu Oct 10, 2019 10:50 am
In CA with pge if you have a negative bill (produced more electricity than you used) at the end of your one year true up, the credit goes to zero. Be sure this will not happen where you are at. Also they can change the rules on you.

I would not over do it with the goal of making money.
For now, at true-up PG&E will credit net surplus compensation at $0.03 to $0.04 per kWh with their current net surplus compensation scheme.
https://www.pge.com/en_US/small-medium- ... ation.page

That said, some folks with CCAs (which I believe softwaregeek has), have slightly different policies that will credit excess generation at the full retail rates. Here's an example. I'll update my solar post with live numbers in Jan after I get my true-up.

https://www.svcleanenergy.org/solar/
Yep, that's my provider.

mervinj7
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Re: Making money with oversized rooftop solar system?

Post by mervinj7 » Mon Oct 14, 2019 10:53 pm

softwaregeek wrote:
Mon Oct 14, 2019 8:33 pm
mervinj7 wrote:
Thu Oct 10, 2019 11:29 am
That said, some folks with CCAs (which I believe softwaregeek has), have slightly different policies that will credit excess generation at the full retail rates. Here's an example. I'll update my solar post with live numbers in Jan after I get my true-up.

https://www.svcleanenergy.org/solar/
Yep, that's my provider.
Hi neighbor! Unless you have EV-A tariff, the bulk of your excess generation retail rate at non-peak hours should be much smaller than 21c.

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