Thinking solar PV system - Anyone else?
 

I've been watching solar panel pricing for the past few months. The price drops have been dramatic. The 30% federal tax credit and other incentives are starting making a PV system a viable investment.

Best panel pricing I'm seeing (UL, CE listed panel) is around $2.60/watt. I'm seeing grid tied systems (ready to install) for around $4/watt (10kw system).

Tennessee's only incentive is through Tennessee Valley Authority's Green Switch Program where green power is purchased for $0.12/kwh over the retail rate, which is currently around $0.09/kwh. Given a 30% federal tax credit and a higher rate for solar power, I am seeing return on investment of ~5%. That isn't bad.

Anyone else working the numbers? I thinking about making the jump when panel pricing reaches $2/watt. If TN had aggressive cash rebates I'd have already made the jump.

So I'm getting that you're currently paying about $.09/kwh through TVA? But they'll allow net metering for $.12/kwh? I can be certain that at $.09/kw (similar to what we pay here) that your payback calculation is going to be WAAAAYYY out there. How much of your total usage would you like to offset? I ask because I recently went around the house taking readings and doing the math on what I call day-to-day usage, the normally used lights, appliances, etc. (without factoring in A/C or heat). I say this because although I acknowledge that not only have PV prices fallen dramatically, and system efficiency has steadily improved over the years, you'd be shocked at just how little power these systems can effectively produce to offset your current usage. Not sure where you live in TN but amount of overcast skies/year and daylight hours and sunlight angles have a huge bearing.
Jesus I sound like a lobbyist for the petroleum industry. The reality is that I come from the electrical industry and I'm a huge proponent for solar and wind technologies. I've been where you are for the last couple of years, but after putting pen to paper and doing the math, it's a longshot, especially around here where they won't allow net metering! GRRR!

$0.12/kwh + $0.09/kwh = $210/MWh. Wholesale power is selling for about $40/MWh right now, so why would TVA buy for $210?

I think the federal tax credit for renewable power is $25/MWh so that wouldn't make up the difference.

probably depends on whether TVA has to buy power or not. IF they have to buy power and IF they don't have a set contract for it then maybe the .12 premium is less than what they've been paying for peak loads beyond capacity (again, assuming they have to buy anything).

I presume TVA is getting grant bucks to go "green." TVA does not have net metering contracts in place with the utilities, so connecting solar under their program requires installation of a second meter. I would be buying all household electricity from the utility for retail rate (9 cents/kwh), but TVA/utility would be buying ALL solar power I generate at 12 cents over retail via the second meter($0.21/kwh, currently). This is a substantial gain over net metering. TVA agrees to this rate plan for 10 years after the solar system is put into operation.

If I were faced with net metering, this would be a dud from the get-go.

A 10kw system would make around 12000 kwh per year, according to the calculator at IMBY, http://www.nrel.gov/eis/imby/ which seems more conservative that other estimates I've seen. Net yearly income from selling power, 12000 kwh x $0.21/kwh = $2520.

Still struggling with how to evaluate the investment. Do I consider only payback time? Return on investment? Depreciate the system cost over how many years?
jurgen

What affect do the panels have on your roof? And what happens to the panels if you have to re-roof?

Because it makes the greenies feel better to force others to pay too much for something.
The government makes laws requiring power companies to have a percentage of the power they supply come from "renewable" green sources.
It costs more to make, so it costs the power company more, and in turn it costs the consumer more.

The government knows that solar power is inefficient and overly expensive, so they offer tax incentives. in other words they are using taxpayer money to pay for someone else's SNAFU.

To summarize: the green wackos think they win, but in actuality everyone loses.

The environment does not benefit (creating and installing a solar system consumes resources and in that process ends up being no cleaner than using electricity from an existing natural gas fueled generation plant) , consumers are forced to pay more for electricity, the taxpayers are forced to waste money on something that doesn't make sense.

Everyone loses because the weak-minded enviro-tards have allowed themselves to be brainwashed into thinking that anything green must be good and worth paying extra for. That in itself would bother me if the extra cost was only to them. But no, they can't let it be that simple or logical.
They have to force their misguided, illogical, and emotionally driven values on everyone else. They actually think it's their responsibility to tell everyone else how to live.

Been using it for a while out here in Arizona. With the tax help and so on its a no brainer here. Friend of mine in Tucson has been doing it for a while, selling power back to the grid 350 days a year.

I find it hard to believe that you are money ahead in this endeavor unless the govt HEAVILY subsidized you're initial purchase. Even in mass production, PV panels are very expensive to produce due to the sputtering process all of them require. No way does PV make financial sense without govt "funny business".

Right now with all the rebates we have between state and federal, we are getting refunded about 80% of our costs.

Joe A

$2520 is a 7% return on an initial investment of $36k.

Of course the $36k investment in equipment is going to be worth -0- at the end of its useful life so.....you gotta get that $36k back as well. If useful equip. life is 10yrs (just guessing) then you want $3600/yr back in pocket before you put one dime towards ROI.

And IMO given the risky/new/fragile/unproven nature of solar equipment i suggest you discount the 'claimed' useful life of the equipment. Most likely the claimed useful life of the panels was arrived at by playing with ROI net of tax credits.

Useful life is NOT 10 years. Most people are getting 25-30+ years out of their systems.

i pulled 10yrs out of thin air as a admittedly pessimistic guess. but the concept remains the same regardless of what life you plug in. my caution is that my general impression of the folks involved in this racket on the retail side tells me it is a b.s. business with lots of details left out on purpose.

i could certainly be wrong.

but i don't think i am.

I think you are wrong because I have worked with this for years now.

Please try not to be an expert on something you are not familiar with! Or if you keep posting things that you are not sure of does not help your standing on forums.

One of the companies below even guarantees their systems for 25 years. That kinda shoots a BIG hole in your argument my friend.

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"The solar modules have up to a 25-year warranty"
http://www.sunwize.com/products/Power-Ready-Solar-Systems.php

"30 year useful collection system life time"
http://www.dawnsolar.com/power.html

"over the expected 30-year lifetime of the systems"
http://investors.sunpowercorp.com/releasedetail.cfm?ReleaseID=374597

Tim,

BTW, the price of solar panels have been coming down to about 30% lower than they were a year ago, so its a lot easier to get into something like this.

Also we have sun 350 days a year out here so being productive with them is a lot easier than someone in the mid-west where you might have only 200 days of sun every year.

Joe A

Panels would reduce heat/radiant load on shingles. Any decent roofing material will survive at least 20-25 years around here, so the roof would need work when the panels go tits up.

shotgunfan, agree with you on the snake-oil aspect to the solar industry. I am depreciating the system over 20 years, so return drops to ~5% with tax credit and higher rate for selling power. Given the variables and hassle of going solar, I do not see jumping until the return hits 7-8% after depreciation.

Basically, I would need panels at $2/watt or less AND be able to save money on the inverters ($8000 for a 10 kw system).

A prime reason for considering solar PV panels is the artificial government forces. The government sees fit to create an artificially low interest rate environment that punishes savers(me). I see little shame in taking advantage of a heavily subsidized solar marketplace, so that I am not forced to accept 1.5% on a savings account. Eat or be eaten.

Regardless, at the pace of price declines, it is very possible to see panels drop to under $2/watt by the middle of next year, if not sooner.

Joeaksa, few of these companies have been around for decades. The value of the warranty lies in the strength of the company. I would be putting down a nice chunk of change, and I would be an idiot to trust the sales pitch word for word.

Joe, I am truly happy for you personally if you are coming out ahead financially by purchasing solar panels. That said, I know the costs involved in the production of these panels and with out govt subsidies and cap and trade type legislation, PV solar has zero chance of being a financially viable large scale energy source (even in Arizona). So you might be OK, but only because of tax dollars being used to prop this BS up. While it makes sense to use some tax dollars to fund research of future alternate energy sources, wasting tax dollars on production of existing technologies that are not economically feasible (ethanol, PV solar) is simply foolish.

Turbo,

Thats why I only buy panels from good firms. The ones on my house now are made by a small company named GE, as in General Electric. Believe that they have been around for a while! :)

Tim, love you like a brother, but do not agree and feel that we are silly for not using solar and wind power. Europe has been doing it for years, why not here? I also have two 400 watt wind mills that are going up shortly. It blows around here for 2/3rds of the year so might as well use it.

Joe A

Joe the fundamental difference in our perspectives here is you place greater value in claims of useful life than i do. i believe the appropriate response to these claims is turbo's. the claim is as strong as the company and with so many new co's...well it's hard to figure; hence my recommendation to discount claimed useful life.

I have NEVER claimed to be an expert on solar panels, am simply sharing my views. I am most certainly an expert on working through cost/benefit analysis however and in such things i suggest you'll find my logic to be useful.

I am somewhat involved in this game as i volunteer on my towns utility commission (we own our electric utility) and while my participation tends towards the numbers side of things i am nevertheless exposed to a reasonable amount of industry 'noise'.

In fact, i dare say that if solar energy were the answer i'd have companies calling me at my office daily begging to come pitch their wares. In short if you want to sell solar energy to the town i live in the absolute BEST place to start would be the commission i serve on. our business is conducted in public meetings and i have, in the past on more than one occassion, invited ANYONE who has 'the answer' to request a spot on the agenda.

My sole requirement for granting such a spot is that you promise me you can show that your system makes $$ sense.

Heck, i'd even welcome a pitch by somebody who says 'it doesn't make sense....by $xxxx, but let me tell you why you should still consider it'. at least by quantifying the net cost there would be an impression of good faith.

But Joe, don't tell me i'm compromising my standing on this forum by claiming expertise in areas in which i have none. I am very careful to qualify my opinions as such (note the 'IMO') so as not to mislead anyone.

I like ya man, but that's going too far.

Turbo i'm sorry to have derailed the thread with this bit. Please carry on.

Beretta,

Never mind. I do not have the time to argue with someone who is not open to facts.

I have a friend who has a 22 year old solar system on his cabin. Paid for itself the minute it started working as he got fed and state money for most of it, then the remainder of the $8000 cost were a moot point. The utility company wanted to charge him over $10k to run a utility line into the place so he was money ahead from day one. For 22 years he has not paid a penny in a electric bill, and his only costs have been three sets of batteries (about $400 every time) and one charge controller which was an upgrade, costing $499. Thats it in 22 years and he has seen no loss of power in his panels even at this age.

Suppose you are going to call him and his ideas stupid as well? Is your utility bill for the last 22 years the same as his is? Not factoring in the fed and state tax breaks, this has cost him about $35 a month in utility costs. With the fed and state tax breaks he has paid less than $10 a month for electricity.

Believe that I will be stupid like my friend and continue using solar and wind power as possible to power my world.

Joe A

how may kwh does the cabin use?

you wanna discuss facts then present the entire story.

MAYBE this unquantified (we can't quantify it w/o a consumption figure) efficiency your friend has been enjoying isn't linear with respect to increases in load. MAYBE it is?

The only reason it may be working out for you financially is that the govt is subsidizing it to make it closer in cost to other cheaper forms of energy. I am no expert on Europe, but I am pretty sure their govts tax the bejesus out of other forms of energy, so the less efficient alternatives are viable there.

I am intrigued by wind, geothermal and hydro power where applicable, but PV solar is a waste of time IMO. While ultimately I don't like the idea of govt propping up what should be a mainly private competitive energy business, I would much rather the money be spent on proven viable nuclear energy.

Nope, am tired of discussing it with someone who is not interested in the field. Frankly my time is too important to waste.

Joe A

PS its a 3000 sq foot "cabin" with two car garage, basement, "man cave" and big screen television and surround sound. Its bigger and better appointed than most people's houses.

So you have a potentially fantastic example of a guy who pays an amortized $10/mo to power a luxury cabin but you're too upset to get into the details of how it works?

Or do you just not want to talk about how often it sits empty and how the scale of his usage might translate to a principle residence?

Why can't we explore this and learn from it?

Joe and his buddy are not stupid for taking advantage of the govt subsidies, but the govt is stupid for offering them.

I would probably do the same, but it does not make it a smart path for our govt to be heading down. Ultimately my tax dollars are being used to help fund Joe's friend's cabin. Not exactly my idea of how govt should spend tax dollars.

Jurgen, last I read, appx 1/2 of the coming years' panel production will go to invtry because too much supply had come online. So, panels should sell at manufacturers cost or lower sometime in the next 12 months. IMHO.

When you stop playing around and are ready to learn come on back. You do not sound like you are the least bit interested at this time.

you are misreading my posts then. i could understand your response if i were just shouting 'i can't hear you!' but i'm not. i'm trying to engage you in a meaningful discussion of solar power economics. i can read the sales brochure any time but don't care to. what i think you should bring to the table here is facts and figures as you clearly have relevant experience.

as Tim pointed out our gov't is using OUR money to subsidize this industry. what we, the unwashed masses, want to know is did you get bamboozled or are you really one of the first to find the solution!

Yeah, every article I've read points to lower costs ahead. The Chinese are flooding the market as production increases and a favorable currency exchange rate continues.

berettafan, the only way this pencils out is with massive subsidies. I recently read large-scale solar farms are not going in as originally planned, because the tax rebates are not there for the commercial projects. The equipment oversupply and enhanced tax credit structure has created a boost on the residential side. We will not see a self-supporting industry until retail pricing of solar panels hits ~$1/watt. Then, we won't need subsidies.

Don't understand why states are subsidizing alternative energy so aggressively. Many states are running massive deficits and are throwing rebates around like candy.

I've decided the go price for a 10 kw system is $30k. At that price, I will see net return of ~7-8% after depreciating equipment. I just saw an ad for a 7kw system for $26k, so my target is definitely realistic.

Joeseka's numbers are what we experienced about 5 years ago with a megawatt facility out in Santa Clarita CA. The panel life was about 27 years. The capital costs with the government subsidies and the power credit vouchers would have been a no brainer. Without that help, it did not add up. Inverters have about a 9 or 10 year life and that was factored in over the project life. We got into a pissing contest with the bean counters because they wanted to recapitalize the project at the end of its service life, which it was never designed to do. Also panels at the end of their service life still produce power to the array and that was a hard cost to capitilze on present value. Bottom line is the bean counters won and a year later rates went up significantly and a big opportunity was lost. I think there is a huge value in solar for an individual to consider, but don't listen to the salesmen, get an engineer and finance person that knows utilities and you will have the information that you need. Also, remember that new utility infrastructure is far more expensive than the old stuff that we already have per unit of service. The permitting alone of such facilities is going to heavily impact the project and there is the incentive, maybe not at this time but in the future.

So the only demonstration of learning here is that he buys into your Kool-aid right?

Right.

That thought crossed my mind. However, I doubt new generation would cost anywhere near the rebates and incentives currently being offered.

The price of systems has dropped again. sunelec.com had 10kw systems priced around $41k before haggling. A couple days ago, they dropped pricing on their grid tie systems to $3.26/watt. That 10250 watt setup is now $33415. Yet again, the price drops are staggering. I remain firm to my target of $3/watt, although I am beginning to wonder, "where is the bottom?" Will we see $2/watt for a complete system? jurgen

My experience is about 5 years ago and I would expect that the prices and competition may be moving it to fiscal viability. For example, I just replaced my pool pump with a variable speed, permanent magnet motor and it has lived up to every bit of hype that it promised. Very happy, with the $200 rebate it will pay off in 7 months!!! What a deal. I suspect that the solar is moving in that direction and at a rate that is looking very good!

Not at all ya jerk! :)

Berettafan makes up his ideas out of thin air, then defends them. Most people would go on the internet or ask someone who knows about it, but not him.

"i pulled 10yrs out of thin air as a admittedly pessimistic guess. " Come-on, pulling something out of your rear end then defending it to the end is not my idea of doing responsible due diligence.

Prove me wrong bucko. Show all of us where Bfan is correct that solar arrays last 10 years and not the 25-30 that experts say.

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For systems put "into service" between 2009 and 2016, the federal tax credit is 30%. That means that for solar electric systems put into service between Jan 1 2009 and Dec 31 2016, you will be able to get back 30% of the total cost of the system, with no cap for residential systems.

In most of Arizona, you can also get a $2.70 to $3.00 per watt rebate from APS or SRP. The federal 30% tax credit is total cost AFTER the rebate. Just for example, for a 5000 watt system where the total installed cost is $35,000, you would get (for example) $13,500 back from APS, so your cost for the system would be $21,500. You would get a 30% Federal tax rebate on that, so your total cost would be ($21.500 x .70) $15,050.

We then have another rebate from our state where you get:

Maximum Incentive: PV: 50% of project costs. Up-front incentive payment is limited to $75,000 SWH: 50% of system costs

The above quotes are directly from the state and federal rebate programs for solar energy here in Arizona.

~~~~

Lets see now.... 30% Federal rebate, 50% state rebate, that adds up to 80% of your costs, then you get from $2.70-$3.00 rebate per watt from the electricity company.

Guys we are getting close to 90-95% here. Just how expensive were you guys saying it was and when it would repay itself??? Hmmm wonder about how much this is going to help the value on my house?

Hey Ice guy, believe that I will just continue drinking that cool aid, as its putting money in my back pocket.

Joe A

Put the effing kool aide down and rmfp! You are so married to this concept you fail to recognize context.

I was discussing this thread with my FIL this evening. I am trying to get myself off the grid as much as possible but, unfortunately, I have to deal with potential hurricanes here so putting solar arrays on my roof is risky at best.

I just talked to a good friend and I am converting my a/c from its current 10 year old seer 12 to seer 19.5, the cost? About $6000 but the rebates from FP&L and the Gov will pay me back close to 60% of that. On top of that the cost to cool my home will drop 50% so this will pay for itself in about 3 years.

I am about to go solar on my hot water heater as well. I am currently electric and considering switching to propane + solar. Again, I am thinking hurricane as well here and this would be an optimum setup for me.

Now on to household electric, I would love to go windmill + solar and I am about to explore this but I do not think a windmill will go over well here in a subdivision.

Thanks for cranking out those number I am going to do more research here in Florida and see what incentives I have.

Hey Joe pass the cool aid this way. ;)

:rolleyes:Jesus do you guys need to get out more. 2 pages and everyone has their underwear in a knot.....over solar power.

This is a big deal hd. Lots of your tax dollars are being thrown at this and you have an interest in making sure its right.