Thinking solar PV system - Anyone else?

turbo6bar · 08-25-2009, 05:50 AM

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.

Talewinds · Talewinds's Garage

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!

David · David's Garage

$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.

berettafan · 08-25-2009, 06:34 AM

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).

turbo6bar · 08-25-2009, 07:06 AM

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

daepp · 08-25-2009, 07:11 AM

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

sammyg2 · 08-25-2009, 07:44 AM

Quote:

Originally Posted by 125shifter

$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.

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.

Joeaksa · 08-25-2009, 07:51 AM

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.

Tim Hancock · 08-25-2009, 08:43 AM

Quote:

Originally Posted by Joeaksa

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".

Joeaksa · 08-25-2009, 08:51 AM

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

Joe A

berettafan · 08-25-2009, 08:56 AM

$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.

Joeaksa · 08-25-2009, 09:09 AM

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

berettafan · 08-25-2009, 09:27 AM

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.

Joeaksa · 08-25-2009, 09:39 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.

~~~~

"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

Joeaksa · 08-25-2009, 09:43 AM

Quote:

Originally Posted by Tim Hancock

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".

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

turbo6bar · 08-25-2009, 09:57 AM

Quote:

Originally Posted by DAEpperson

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

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.

Tim Hancock · 08-25-2009, 10:10 AM

Quote:

Originally Posted by Joeaksa

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

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.

Joeaksa · 08-25-2009, 10:18 AM

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

berettafan · 08-25-2009, 10:23 AM

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'.

berettafan · 08-25-2009, 10:31 AM

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.