SOLAR - have you invested or investigated?

[BadeMillsap]

The local utility company is offering some pretty hefty SOUNDING "rebate" incentives for homeowners to invest in solar water heaters and solar photovoltaic systems ... I was thinking those coupled with the federal tax credits available might make this a worthwhile endeavor ... soooo ... I contacted one of the 'approved' (by the utility company) contractors for a "site survey and estimate". Specifically I was interested initially in the solar water heater notion with a casual glance towards what I knew would be a more expensive PV system.

The fellow came out, was very personable and well informed (at least as far as one of my limited knowledge could tell). He very openly showed me the available system types, the pros and cons of each, reviewed my current water heater (which is almost new) and suggested a system that AFTER the local and federal rebates would still cost me ~$3500 out of pocket. He agreed with me that for just the two of us (wife & myself) the payback of about 10 years really didn't make sense.

So we moved on to the PV notion ... I have a fairly large 2 story house (3400sqft heated space), a water well and an inground pool. My electric bills indicated I used about 2500 kwH per month on average ... sometimes about half that sometimes twice that ... and he told me that the most the local utility company would cover as far as rebate was a 12kw system ... the entry cost of a 12 kw system was $63,000 and the utility company would rebate $30,000 then with the 30% federal income tax credit and after determining that the roof of my house would only allow for about 6kw worth of panels so I'd have to go with a ground array which would add about $4000 to the installation cost ... I would be on the hook for about $28,000 ... looking at the current cost of electricity in our area (which is pretty cheap at about 9 cents kwH) I would be looking at about 16 YEARS before I recouped the cost of the system. I fully realize that the cost of power is very likely to go up in 16 years but at my age (58) I really can't see this as a good investment and am beginning to understand why the utilization of these available rebates is so very low.

Have any of you had a different experience?

[BerniePA]

I did some sort of a quick survey once on the system and it would have cost me TENS OF THOUSANDS to install and I would save about $73 A YEAR on my current electric bill, so I know I won't live long enough to recoup my costs on the thing. I don't see that it is very practical for the average homeowner, which is a shame that here in AZ, you can't make a go of using the sun.

[LinuxRandal]

Until photocells improve and are built into some type of roofing system (photovoltic shingles), it seems from what I have seen to me more cost prohibitive then realistic. Granted there are extreme situations.

But what I figured is my dream home design, already is more energy efficient, and doesn't have a roof (monolithic dome) and could utilize other area's that are improving (low voltage lighting, example LED's which are improving).

To make much sense, we would have to do something more like a report I saw on a show on Germany. They were adding systems to add to the national grid, (helps deal with transmission issues and such) in open spaces.

[leehljp]

My dad used to have a 20 acre peach orchard and had a 12 by 16 (inside dimensions) "cooler". This cooler was a double walled cinder/concrete block. It had a 6 inch thick door and well insulated roof.

I was amazed at how cool (cold) one air conditioner could keep that in the heat of the summer. It is my dream to build a house of like that and have a stucco type of finish to it. That, combined with LED lights and very efficient appliances that are already in common use in Japan as compared to what is generally in use in the US - these are just a few of the many ways to reduce the carbon footprint and energy use. I can't wait until the LED lights get as common place in stores in the US as they already are in every home center here in Japan. Very efficient AC/heat pumps, on demand localized water heaters are very common here.

Still, I wish solar panels were more effective and efficient.

[herb fellows]

If that 16 year payback is solid, and based only on the current cost of electricity, I think it still might be worth a look if you have no major objections otherwise.
If you pay it off over time, the value of the money reduces your actual cost. Nobody knows what a dollar will buy in 10 years, but i'm pretty sure it will be less than today:-(.
As you say, the cost of electricity is only going in one direction, so that payback time will definitely shorten, barring the invention of personal nuclear devices to run our homes.
Does the system have a 'lifetime' or is it something that is going to last 50 years or more?
If you find the right buyer when you sell, (and I think this kind of system will only become more desirable as rates increase), it could add considerably to the resale value.
The downside is if you sell 10 + years from now and the technology is outdated.

Then, of course, there is always the intangible benefit of knowing you are helping the planet in your own way.

A lot more to consider than first meets the eye.

[chopnhack]

A 16 year payback would be a deal breaker for many reasons, foremost, PV systems degrade over time, secondly, especially in areas of the country that receive some violent weather.... Texas, Florida, etc, hail and hurricane damage can destroy all or part of your system leaving you with no payback at all! PV is the solution to many problems, however in itself it is still has a problem in being cost effectively implemented. I would love to use it myself and have looked into it several times! Considering we are a family of 4 in a hot climate, under 3k home with a pool we run about 1200 kw monthly. Bills that were once 75-90 are now nearly double and there is no reason to believe that this wont continue. PUHCA was repealed in '06 so all bets are off. Has anyone given thought to wind turbine generation?

[LCHIEN]

I'm sitting here in a hotel in Denver and the bathroom has one of those recessed light fixtures, that in the good old days had a infrared flood light that provided both heat and light to the bathroom.

Yesterday night when i got out of the shower I about froze to death and looked up at the heater light space and lo an behold it had a CFL in it.

[DrChas]

I put in a 4 KW system on my roof. It cost enough that the payback is marginal at current rates, but I decided it was worth it. Sadly, I am in my office, and I can't remember how much it ended up costing me. My reasoning for why it was a good idea:

1) I got a one time pay bonus. I rolled it into this and figured it would continue to pay back long after I had forgotten the cost. Because it was a pay bonus I could pretend it never happened, and it was all around fairly painless.

2) it would be a small (but expensive) matter to install batteries etc. so that I could weather blackouts. I figure if blackouts become a problem I am half way to the solution.

3) I do believe in global warming, I do believe in global warming.

4) I don't believe for a minute that electric rates will stay low. This fixes a portion of my electric costs, essentially forever (I generate all my electricity in the summer, and a bit more than half in the winter, of course we don't use air conditioning in the deep north. . . ). I think the real benefit of this installation will come in about 5 years.

Is it for everybody? I don't think so. The pay back is real, but slow. The bottom line is that it will pay for itself over its life time, but at current rates it will JUST pay for itself. It makes sense if you believe that electric rates will go up, if you for what ever reason have money available now that may not be available in the future, or if you want to be part of the renewable energy solution. I think it doesn't make sense if buying it would cause a financial hardship, if you are planning on moving in a few years, or you for some other reason will not benefit from having it for at least 5 years.

That said, its very cool knowing that on a sunny summer day you are generating twice as much electricity as you use. . .

[jabe]

In Hawaii our elect. rates are high (average mo bill $230.) we have no AC or electr. clothes dryer. I'm currently getting a quote for a solar water heater system tomorrow. They offer a $750 rebate, 35% state tax credit & 30% Fed tax credit if installed by end of this year. So out of pocket would be about 4K to 5K depending on difficulty of installation. Pay back is about 5-7 yrs. due to our high electr. rates. It must be installed by a approved plumbing contractor. Now all new homes built in Hawaii are required to have a solar water heater system or tankless on demand gas water heater system.
As for PV systems, its becoming popular but still costly. As an incentive the utility company will have to buy back any excess electricity your system generates but this is offered on a 1st come 1st serve basis or limited enrollment. With our escalating electr. rates, our pay back time will be shorter. Some of the new homes comes pre-wired for a PV system and a complete system is offered as an option.

[Tom Slick]

I looked into a PV system for an industrial building about 5 years ago. The numbers you were given are close to the info I had. The large system I was looking into had an ROI of 10 years.

Here are a few points to ponder:

Is your roof fairly new? The lifespan of the PV system is about 30 years so if you need a roof in 10 years you're going to pay to R&R the panels along with the roofing costs. Any savings you may have had up to that point are gone.

Panels last 30+ years but 30 years is considered their optimal service lifespan. They'll warranty the panels for a long time but not the inverters. The inverters appear to have about a 10 year lifespan. They won't tell you that unless you ask specifically.

It can add tax-free value to the property because many places don't charge additional property tax on PV improvements.


I really like the idea of PV but they don't pencil out unless you know you are going to be in it for a long time.

[jackellis]

I deal with electricity costs and prices every day.

PV only makes sense in California as a way of shaving the peaks off your electricity bills if you're a large user (A/C plus pool pump). And in Hawaii because the only fossil fuel they use in Hawaii for power is oil, and oil is expensive. If you live in an ares with high electricity costs and you think prices will rise faster than inflation, it might also make sense.

It doesn't make economic sense in most places. Unless, of course, we get either a carbon tax or a cap-and-trade system, in which case it starts looking interesting.

It's actually pretty easy to run some rough numbers on breakeven points. In southern climates, you can expect about 1800 kWh for every kW of capacity. Your annual cost is going to be roughly 12 times the monthly cost of a "mortgage" on your investment net of all the credits, using whatever loan rate you feel comfortable with. Divide annual cost by kWh and you get the cost per kWh in rough terms. At 7% interest, your cost for the electricity provided by a PV system would be 4.435 cents per kWh for every $1,000 of investment. Where I live, the breakeven point is around $3,000/kW.

Right now inverters only do last about 10 years, though that should get better over time. Having to rip up the roof really is something to think about. However, in hot climates you should get a small reduction in air conditioning costs if the panels sit just off the roof surface - the resulting shade should reduce the effectiveness of that big solar collector and keep your attic a bit cooler.

Germany and Spain have subsidy programs for home installations that allow you to sell excess back to the grid at attractive prices, but remember you'd pay some of that back for the electricity you did purchase from the grid and your neighbors would get socked pretty hard if something similar was set up in the US.

There are roof tiles that can produce electricity from solar cells available already, but given how expensive they are, I'd let folks with deep pockets be the guinea pigs. I;m not sure there's been enough field experience to know how they hold up under weather and the wear and tear of homeowners and others sweeping leaves off them.

[chopnhack]

Jack, many states already have "net metering" schemes set up.

<< Germany and Spain have subsidy programs for home installations that allow you to sell excess back to the grid at attractive prices, but remember you'd pay some of that back for the electricity you did purchase from the grid and your neighbors would get socked pretty hard if something similar was set up in the US. >>

[smorris]

I looked at solar electric very seriously a couple years ago. When I did the math I found a 15 year ROI so that was a no go. For solar hot water, I'm in the process of building a batch heater which will provide most if not all my hot water needs. The ROI is under 4 years on that since I can do all the work myself.

[pacwind3]

PV are still a tough sell right now.

In the beginning of 2008 we moved into a new place in the Seattle area. Our first electric bill was like $170 and that didn't include heat. We were heating with a pellet stove. Our old electric bills rarely exceeded like $120 in the worst of winter and that was with electric heat. SO, I blamed the lighting. After replacing pretty much every bulb in the place with CFL, our bill dropped dramatically. Usually at or below $100. Now one thing: local power company was offering instant rebates on the CFL bulbs so I was getting them on the cheap, some of them around $1.00ish each. As you could see: I paid for the bulbs is a month, and happily enjoyed the saving afterwards. I admit some of them are slow to come to full light and it is annoying, but I try to take that as a reminder of the money I am saving.
We've now moved twice since then, I left the old bulbs and am replacing bulbs again, but it's worth it. Right now I feel CFL bulbs are a FAR better ROI then a solar system.