Solar panels installed today.

BlueFox

In my case, part of the sales process was providing one years worth of PG&E electricity use data, and this is easily obtained from their web-site. The contractor plus the data into a spreadsheet, and generates various graphs, which shows the cost of doing nothing, versus adding solar.

In my case, the initial cost is $23,660, with a tax credit $7,098 this year, for a total initial cost of $16,562 this year. The cash flow payback period is 4 years. The PI, profitability index, is 4.9, and investing $16K in solar has a Net Present Value of $65K, with an Internal Rate of Return of 27.2%, and cash gained over the 25 year life of the system is $142,993. Add in the increase of property value, and the psychological value of not paying for electricity, then purchasing solar appears to be a good investment.

This assumes electricity rates will continue to increase, and the law requiring PG&E to pay for electricity will not change.


I did ask about leasing, and was advised it is not as cost effective as buying. The biggest drawback in my mind is you are responsible for the lease. If you sell the home, and the buyer isn't interested in the lease, then you have to pay while the buyer gets free electricity. You can take it with you, but you have to pay for the removal and installation, either at the time, or have the cost built into the lease.

tonyb

BlueFox wrote: »

This assumes electricity rates will continue to increase, and the law requiring PG&E to pay for electricity will not change.

....and to my other point, that assumes a lot.

WLDock

dpowell wrote: »

I ended up leasing a 9.1kw system which is fully warranted (including the inverter) for 20 years. I'm not out a dime anytime something breaks during that time period. Should save upwards of six figures for an initial upfront investment of just over $15k.

Did you lease with Solar City by chance? It seems that most lease programs take the customers through the hard numbers.

I don't know on this one? If it were me...I would really have to run the "hard" numbers sevral times to see what makes the most sense. I would guess a 9kW system would cost about $30K installed before any credits or rebates. I would have to see if it was better to spend the $15K on a smaller 4k-5K system paid in full or lease a 9k system with $15K down and a monthly payment? Most panels have a 20 year warranty and most inverters come with a 10 year warranty upgradable to 20 years. The feed in tariff for Cali is about $0.09 a watt right?

I talk to people all the time that seem to want to put a lot into solar...when there are other areas of the home that still need to be addressed. But your energy usage is key...I guess with 9K systems the house is large and the usage high.

tonyb

Just a suggestion, don't lock yourself into a 20 yr agreement. On the lease program they'll probably give you mediocre panels to begin with plus I suspect in the years to come the panel technology would change considerably. Kinda like locking yourself into those old cell phone plans when everyone else has the latest and greatest. Just a thought.

BlueFox

BlueFox wrote: »

This assumes electricity rates will continue to increase, and the law requiring PG&E to pay for electricity will not change.

tonyb wrote: »

....and to my other point, that assumes a lot.

There is an element of risk in any investment. I have no doubt that at some point so many people have solar that PG&E will start complaining. Hopefully, that will happen years after I have recouped my investment. Once PG&E starts to complain, it will still be some number of years before anything changes, since solar owners also vote. The worst that will most likely happen is the rate which PG&E pays to third party power generators will be lowered. A big benefit with solar is, baring a nuclear or impact strike winter, it stills provides a payback even if PG&E were to stop paying for electricity.

An alternative scenario is PG&E is able to reduce its costs by reducing and/or closing expensive power plants, and focuses on energy distribution. Then it seems reasonable that PG&E will continue to pay at a higher rate, and if they lower their generating costs enough then perhaps pay a higher rate. Since they already have the distribution infrastructure in place, this seems like a reasonable scenario.

dpowell

No, not Solar City. We went with a Sunpower dealer and used their 'made is USA' 320 watt panels. In my case, it was a one time up-front payment with no monthly payments and it zero's my electric bill. No feed in tarrif for us.

As for not locking yourself into something for 20 years, I went back and forth on it but came to the conclusion that when you put that kind of money out, you're locked into a system regardless of whether you paid for a system and own it up front and await the payback or you lease it because it is not cost effective to swap systems out everytime the technology changes. The ROI makes sense when you actually keep the system long enough to realize the savings anyway. I have the option of purchasing it outright for less than $1k at year 7 which means I could actually own a $50k system for around $16k if I wanted to but my opinion is that they structure the lease that way to get out from under having to replace the inverter around year 10. I'd rather they own it and maintain it and after 20 years, I'll look into what is available then.

One other factor that some may not be able to take advantage of is that by switching to electric heaters vs. my propane furnace during the winter, I saved $1k in propane cost the first year.

...and with regard to rate increases, SDG&E has notified customers of up to 40% rate increases starting next month to pay for the fire they started a few years ago. My system will just pay for itself faster now.

WLDock

dpowell wrote: »

No, not Solar City. We went with a Sunpower dealer and used their 'made is USA' 320 watt panels. In my case, it was a one time up-front payment with no monthly payments and it zero's my electric bill. No feed in tarrif for us.

OK, now that sound better! And is your inverter a Sunpower SPR-10001f? If so, its one of ours, Fronius...its a nice box.

BlueFox

Finally I got my net meter, or whatever it is called, from PG&E today. Now they have to start buying my electricity instead of getting it for free. Of course, now the days are getting shorter, and if it rains there is even less electricity generated, but watch out next summer. I guess my October bill will be the first full month bill as a generator/consumer, so it should be interesting. No AC, no heat, just Pass amps cranking out music.

GlenLove

BlueFox wrote: »

Last month I had a shocker of an electric bill from using my new Pass Labs X600.5 amps for a little over two weeks in July. The electric bill was almost $250 more than June's bill. Total was $450 for electricity versus a little over $200 pre-Pass. Anyway, I freaked out, and investigated solar cells as as option.

Well, I took the plunge, and they were installed today. These guys worked hard from 8 AM to about 8:30 PM, and everything is done. However, the solar cells aren't doing anything. I guess they need sunlight.

Anyway, I got a 6.5kW system for 23k (only 1k more than the amps list price, but who pays list). I get a little over 7k tax credit this year for it, making the effective price 16k. Based on past energy use, I should recoup the 16k in 4-5 years, and then start generating income by having no electric bill, and selling excess to PG&E. At least that's the plan. Anyway, now the amps are cooking, the AC is running, and tomorrow I will start compensating for tonight's excess.

Awesome choice,,. Apart from cost of installation, solar panels does produce very cheap electricity.. Good work

GlenLove

GlenLove wrote: »

Last month I had a shocker of an electric bill from using my new Pass Labs X600.5 amps for a little over two weeks in July. The electric bill was almost $250 more than June's bill. Total was $450 for electricity versus a little over $200 pre-Pass. Anyway, I freaked out, and investigated solar cells as as option.

Well, I took the plunge, and they were installed today. These guys worked hard from 8 AM to about 8:30 PM, and everything is done. However, the solar panel aren't doing anything. I guess they need sunlight.

Anyway, I got a 6.5kW system for 23k (only 1k more than the amps list price, but who pays list). I get a little over 7k tax credit this year for it, making the effective price 16k. Based on past energy use, I should recoup the 16k in 4-5 years, and then start generating income by having no electric bill, and selling excess to PG&E. At least that's the plan. Anyway, now the amps are cooking, the AC is running, and tomorrow I will start compensating for tonight's excess.

Awesome choice,,. Apart from cost of installation, solar panels does produce very cheap electricity.. Good work

Looking to get similar panels now

Erik Tracy

We will probably go solar very soon.

Been getting some quotes from different contractors.

We can do a 75% usage system (based on our monthly average) that would keep the residual usage in the bottom price tier for electricity plus our gas that would result in a 6 year loan with payments that match our current monthly payment to SDG&E.

And with our kids moving out in about 6 years, our usage will go down, so a 75% system now will probably be 100% later, so all we would be paying is for gas (about $15/month: for stove, dryer, and water heater).

Been crunching the numbers....it makes sense.

Erik Tracy

So - been doing a deep dive analysis of solar for cost, power generation, efficiency, warranties etc.

It all sounds really good on paper, but then it occured to me that my 'typical' usage profile may not really result in a drastic drop in my electric bill if I go solar.

For my family - the wife and I work during the day, and the kids are at school during the day.

A solar setup would be generating its most power during the day, but no one is home using the power, so most of the power being generated will go back to 'the grid' at a much reduced rate (only 4 cents per kw hour from SDG&E).

When everyone comes home - energy use spikes, but in the evening and during the night, the panels are not generating power, and so I'm drawing from the SDG&E grid at their rates (base rate at 14.8 cents per kw hour).

I will get good offsets in cost during the weekends when the family is at home and using power.

But I guess my question is - for those that do have solar have you really seen your bill drop down close to zero for the electricity portion?

And what is your usage profile - are you at home during the weekdays?

BlueFox

My first solar bill was for October, and I have a $10 surplus. Double check the program in your state. In CA, the power is sold back during the day at the same rate as if you were consuming it. The low rate comes into play at the end of the year. Then any surplus you have generated is reimbursed at the rate it costs PG&E to generate power, which is 3 or 4 cents per kilo-watt hour. So, I should have zero electric bill each month, and make a few dollars at the end of the year.

Erik Tracy

Ok - I think I understand.

So, my utility co (Sempra Energy - aka SDG&E) charges me monthly based on a Tiered rate system.

If I typically use say 700 kW hours per month and I get a solar setup that is say 550 kW hrs per month, then I get 'credit' for the 550 kW hours for that month, regardless of what time of day it is generated and what my usage is during the day or night.

Then at the end of the month, SDG&E bills me the difference of 250 kW hours -which would keep me in the lowest tier of charge - and I get a bill for that.

IF I do have a month where I actually generate more power than I consume, then SDG&E keeps track of that and we have a 'true-up' at the end of the year for any surplus. And that surplus is re-imbursed to me at the lower rate.

Is that right?

BlueFox

Sounds correct, but if I understand our system correctly, we are billed once a year. At that point, depending on useage you either pay or get a rebate. Sometimes it seems as if you need a PHD in Economics to understand the tiers and rate structures.

Erik Tracy

So, most all of the bids I got are based on a system size that provides about 75% of our average monthly usage - which keeps our remaining usage in the lowest tier of charges for kw hours used.

Some months would have a surplus, but most have a nominal usage still owed to SDG&E.

So - what you are saying is that I would have a yearly bill that could be several hundreds of dollars all at once?

[edit]
Found this for CA 'net metering'
http://www.gosolarcalifornia.ca.gov/solar_basics/net_metering.php

We have the option of monthly or yearly 'settling up'

WagnerRC

This is still on the top of my to so list. any updates or comments since your install? I appreciate any information.

Erik Tracy

Sorry - meant to post a follow-up.

We went with BuiltGreen in San Diego. They did a 22 solar panel install with Enphase microinverters promising to deliver 4.7kW - $19,800 total(purchased/owned - not leased). We got 3 other bids, some cheaper, some more expensive, some bigger, some smaller. BuiltGreen was the 'goldilocks' of the bids.

We got permission to operate from SDG&E on Dec 22, '13 and we've been generating power since then.

The sun angle is not optimum yet, but I have been monitoring the peak output, the highest I've seen was 4.4kW - so we are getting close to the spec'd output. I expect to get really close to the max later in the year during summer when the sun angle is higher.

Last week the panels produced 156kWh, so roughly 624kWh per month - and that is about 95% of what we consumed on avg for the month of January.

For the full month of January our electric bill was $5. Plus $30 for gas, hookup, & transmission costs.

As the days get longer and when our boys are out of High School - and not consuming more power - we should actually net back $.

Oh and we got the 30% Federal Tax Credit so that will be $5,940 off of our 2013 tax bill.

And we got lucky - CA kicked down some more rebate money in late 2013 se we are expecting $970 back.

BlueFox

That is good to know about the extra rebate from CA. I still need to get my taxes done, and I will mention that.

recoveryone

I have had mine going on 2 yrs now and I could not be happier, but you do have to watch out for the cumulative cost (amount they will charge you if you go over what you produce) it mostly happens during the summer months if you run the AC a lot. I had mine put in by SolarCity and have a dual setup that produces an avarage of 900Kw-1100 per month. we normally use about 800-1k, but those hot summer days in the Inland Empire can be a killer. The cumulative bill normally comes on your annunal install date.

Erik Tracy

recoveryone wrote: »

I have had mine going on 2 yrs now and I could not be happier, but you do have to watch out for the cumulative cost (amount they will charge you if you go over what you produce) it mostly happens during the summer months if you run the AC a lot. I had mine put in by SolarCity and have a dual setup that produces an avarage of 900Kw-1100 per month. we normally use about 800-1k, but those hot summer days in the Inland Empire can be a killer. The cumulative bill normally comes on your annunal install date.

So far, SDG&E sends two bills in the same envelope: 1) for the electric with a running balance from when our system started late December, so we were carrying a $127 balance which has gone up by the $5 we consumed in January - minus what we produced), and 2)the gas portion of the bill.

We have the option, I guess, because of the two bills, to 'settle up' monthly, or just wait to December for a total settling up.

tonyb

Curious Fox, wondering if the solar panels has had any effect on your homeowners insurance at all.

exalted512

recoveryone wrote: »

I have had mine going on 2 yrs now and I could not be happier, but you do have to watch out for the cumulative cost (amount they will charge you if you go over what you produce) it mostly happens during the summer months if you run the AC a lot. I had mine put in by SolarCity and have a dual setup that produces an avarage of 900Kw-1100 per month. we normally use about 800-1k, but those hot summer days in the Inland Empire can be a killer. The cumulative bill normally comes on your annunal install date.

can you explain the cumulative cost more? I'm not following you.

Erik Tracy

exalted512 wrote: »

can you explain the cumulative cost more? I'm not following you.

The utility company will keep track of whether they owe you or you or them at the end of the 12 month period based on system activation.

Then you 'settle up' - so if you have slowly been consuming more than you generate you could still end up with a sizable bill at the end of 12 months.

WagnerRC

Thank you for the follow up. I appreciate it.

BlueFox

tonyb wrote: »

Curious Fox, wondering if the solar panels has had any effect on your homeowners insurance at all.

Not yet. The insurnace company just did an external look around the outside and said there are no issues.

tonyb

BlueFox wrote: »

Not yet. The insurnace company just did an external look around the outside and said there are no issues.

Hmmm....I find that unusual. Here, anything attached to the house, added to the property is another liability for the insurance company.

txcoastal1

tonyb wrote: »

Hmmm....I find that unusual. Here, anything attached to the house, added to the property is another liability for the insurance company.

As much as I would like to venture into solar panels my fear would be hurricane damage

tonyb

txcoastal1 wrote: »

As much as I would like to venture into solar panels my fear would be hurricane damage

Given your locale, a legitimate concern. Out in Cali, you have earthquakes, if solar panels are attached to a structure or located on the property how does that not effect an insurance policy. By me, a tree too close to the house can raise rates, or simply too many trees. Guess we'll find out when someone puts in a claim for 15g's worth of panels.

txcoastal1

So where did you install these, roof, on the ground???