Commercial Solar System #2

mbcijim · Jul 15, 2011

So I have proposal for my solar system #2 sitting on my desk. First system was 200KW, this system will be 100KW.
Anybody else on here do solar systems on this scale?

Interesting fact for system #2: Cost per watt installed is $3.39/KW. System #1, contract signed May, 2010, was $5.50/KW. So there have been major, major price drops. Mostly due to the solar installers not making as much profit and cost of the panels collapsing. Panels + Inverters are on the order of $2.00/Kw, labor, electrical connections, paperwork bureaucracy, mounting are the other $1.39/KW. Once the system cost gets down to $2.00/KW (preferably $1.50/KW) solar energy becomes self sustaining. I'm not sure the last $1.50/KW in cost cuts is as easy as the next $1.50/KW.

Should be live by September.

If you're considering your own solar system, you need to have a handle on SREC costs. I have a very, very good contract that I signed last year that has about 100 extra SREC credits in it that I can fulfill with this system. Just because it's a good investment for me doesn't mean it's a good investment for you. Also, if you put the system in the name of your business you can depreciate 100% of the cost this year. If it's in your personal name, no depreciation. That's a huge difference.

begreen · Jul 15, 2011

Most residences don't get anywhere near this size system. They may not get the business deduction, but they do qualify for a 30% tax rebate which is pretty helpful.

karl · Jul 15, 2011

I'm confused here. Cost per watt installed is $3.39/KW. ? Is that $3.39 a watt or $3.39 a kilowatt? The slash kw is confusing me. It that's a kilowatt then the pay back on the system is like 30 hours. That can't be right. If it's per watt. That's still like a two to four year pay back. That's still self sustaining at that, isn't it?

Oops. I forgot we don't get sun 24 hours a day.

begreen · Jul 15, 2011

The cost is per watt installed or about $4 for each watt installed. That is a good price. Residential installs out here are going for $7-9/W of capacity installed. Ours is a premium system and came in after credits and rebates at about $6/W installed or $18K for a 3KW system. We could have done it for less, but there was greater solar gain by putting it out in the field and we chose all WA manufactured components to get the maximum annual payback of .64/KWH. We also overwired it so that we can increase capacity in the future.

DaveH9 · Jul 15, 2011

mbcijim said:
So I have proposal for my solar system #2 sitting on my desk. First system was 200KW, this system will be 100KW.
Anybody else on here do solar systems on this scale?

Interesting fact for system #2: Cost per watt installed is $3.39/KW. System #1, contract signed May, 2010, was $5.50/KW. So there have been major, major price drops. Mostly due to the solar installers not making as much profit and cost of the panels collapsing. Panels + Inverters are on the order of $2.00/Kw, labor, electrical connections, paperwork bureaucracy, mounting are the other $1.39/KW. Once the system cost gets down to $2.00/KW (preferably $1.50/KW) solar energy becomes self sustaining. I'm not sure the last $1.50/KW in cost cuts is as easy as the next $1.50/KW.

Should be live by September.

If you're considering your own solar system, you need to have a handle on SREC costs. I have a very, very good contract that I signed last year that has about 100 extra SREC credits in it that I can fulfill with this system. Just because it's a good investment for me doesn't mean it's a good investment for you. Also, if you put the system in the name of your business you can depreciate 100% of the cost this year. If it's in your personal name, no depreciation. That's a huge difference.

that looks like a good price. I keep thinking that we hit a bottom as far as price goes. but not yet! Is it screw or pile type footings as opposed to concrete? Have you considered a PPA? If you are looking for a competing quote I can get you one. September install on a July deal is fantastic, PA must have a streamlined rebate program.

mbcijim · Jul 16, 2011

karl said:
I'm confused here. Cost per watt installed is $3.39/KW. ? Is that $3.39 a watt or $3.39 a kilowatt? The slash kw is confusing me. It that's a kilowatt then the pay back on the system is like 30 hours. That can't be right. If it's per watt. That's still like a two to four year pay back. That's still self sustaining at that, isn't it?

Oops. I forgot we don't get sun 24 hours a day.

Mea Culpa! You're exactly right $3.39/WATT not KW!

It's an easy way to compare upfront system cost and handy.

On the payback, with 30% ITC, and full depreciation in the first year my return on investment before taxes is about 12% and after taxes is about 8%. Pennsylvania's SREC market is making all difference. Right now it's in the crapper with no prediction for an upswing for at least year. You'd probably have to live with those returns if you don't have an existing SREC contract.

mbcijim · Jul 16, 2011

DaveH9 said:
that looks like a good price. I keep thinking that we hit a bottom as far as price goes. but not yet! Is it screw or pile type footings as opposed to concrete? Have you considered a PPA? If you are looking for a competing quote I can get you one. September install on a July deal is fantastic, PA must have a streamlined rebate program.

It's going on the roof of a Pennsylvania DEP (Dep't of Environmental Protection) building that I built in 2002. I own it and lease it back to them, that's how it's done in Pennsylvania. It has a Gold LEED rating and was built with a standing seam roof facing due south for daylighting purposes. The building basically doesn't need overhead lights during the day. Conveniently, it makes for a good place to put solar. I pay the electric as part of the rent agreement so I am essentially doing a PPA with myself.

The Pennsylvania rebate isn't making a difference either way, they will send me $.50/watt when complete. I have to finance the whole thing up front then get all my money back from the government on the back end.

We may end up doing another ground mount (that's what the first system was). Which system do you recommend? I did concrete and probably wouldn't do it again.

DaveH9 · Jul 18, 2011

mbcijim said:
DaveH9 said:

that looks like a good price. I keep thinking that we hit a bottom as far as price goes. but not yet! Is it screw or pile type footings as opposed to concrete? Have you considered a PPA? If you are looking for a competing quote I can get you one. September install on a July deal is fantastic, PA must have a streamlined rebate program.

Click to expand...

It's going on the roof of a Pennsylvania DEP (Dep't of Environmental Protection) building that I built in 2002. I own it and lease it back to them, that's how it's done in Pennsylvania. It has a Gold LEED rating and was built with a standing seam roof facing due south for daylighting purposes. The building basically doesn't need overhead lights during the day. Conveniently, it makes for a good place to put solar. I pay the electric as part of the rent agreement so I am essentially doing a PPA with myself.

The Pennsylvania rebate isn't making a difference either way, they will send me $.50/watt when complete. I have to finance the whole thing up front then get all my money back from the government on the back end.

We may end up doing another ground mount (that's what the first system was). Which system do you recommend? I did concrete and probably wouldn't do it again.

Aha, it's a standing seam roof. that explains the price, that's the least costly places to install on. we even don't use rails. Personally I like the ground screws, but the driven pylons are pretty popular. If you do another ground mount take a look at tracking, in a SREC type market it might makes sense.

xman23 · Jul 19, 2011

I was talking to a guy the other day that put in a 10KW residential solar system in his part time house. It is located in the Catskill region of NY state. It cost him 86K. It cost him more due to the ground mount he did. The roof didn't face the correct direction. He said all was good, month 1,2, his calculations were about $400 - $500 a month the big electric co owed him. They refused to pay, after a year they offered him $125. My understanding, he was saying the electric co has no intrest in buying electric from him and will do whatever they can not to. He now uses the system to heat the house and sends no power back.

I assume the issue is what they will pay / KW and what you believe they will pay. How typical is this?

Tom

mbcijim · Jul 19, 2011

xman23 said:
I was talking to a guy the other day that put in a 10KW residential solar system in his part time house. It is located in the Catskill region of NY state. It cost him 86K. It cost him more due to the ground mount he did. The roof didn't face the correct direction. He said all was good, month 1,2, his calculations were about $400 - $500 a month the big electric co owed him. They refused to pay, after a year they offered him $125. My understanding, he was saying the electric co has no intrest in buying electric from him and will do whatever they can not to. He now uses the system to heat the house and sends no power back.

I assume the issue is what they will pay / KW and what you believe they will pay. How typical is this?

Tom

It varies from utility to utility. In Pennsylvania, I believe that the public utilities have to take everyone who wants it. I deal with the big utilities in our state and can say with certainty that they have to take my couple 100 KW systems.

However, we also have 5 town owned electric systems in Pennsylvania. They are unregulated and can do what they want. These aren't co-ops. These are city/borough owned electric systems. They don't have to take the electric. Here's the result: http://republicanherald.com/news/ordinance-preventing-haven-man-from-using-solar-panels-1.1175678

peakbagger · Jul 19, 2011

As stated, the benefits vary utility by utility state by state. And many of the programs, are only temporarily funded or subject to the whim of the legislature. Anyone seriously looking at it as a business, is going to have to do a lot of due diligence to make sure that the rate and incentives today are going to be true several years out. It looks like mbcijim has done his homework, and it looks like he will make out well.

In NH, there is a net metering law that the utility has to buy the power at retail rate from small systems up to a set limit (I would have to look up the limit but its low, possibly 5 KW). Anything larger than that requires a contract with the utility and that is negotiated on a case by case basis, generally at a very low rate. Included in the net metering rules is that the utility never has to pay for excess power, you can build up a credit but they never have to pay for the credit, if you don't use it you lose it. Other states have a 12 month limit, if you don't use the power, any credit is reset to zero after 12 months. States with Feed In tariffs, are subject to political pressure and there have been numerous reports of FITs being dropped substantially a few years after they were offered.

The reality is that utilities are offering these deals because the state regulators are forcing them, so they offer the high rate or FIT and then make it back by a surcharge on everyone's electric bill. They can generate or buy power for far less with conventional fuels and don't have to worry about a cloudy day. If you can lock in long term a long term contract with no room for the utility to wiggle out, great but if you are depending upon the good intent of the politicians and regulators to continue these deals, dont consider it an investment, its a gamble for every KW you sell over what you use to run your house.

xman23 · Jul 19, 2011

Excellent explanation guys, what a can of worms this is. I believe this is what the fellow I met was saying. Bottom line is he gave up with the power co. He now has a $86K system that makes some heat for the house when he's not there. I really wanted to know what the ROI was now, but I didn't want to bring up a sore point so I didn't ask. I can only imagine the tactics vendors are using to sell these systems to people with limited knowledge.

Caveat Emptor !!!

!!

Tom

mbcijim · Jul 19, 2011

xman23 said:
Excellent explanation guys, what a can of worms this is. I believe this is what the fellow I met was saying. Bottom line is he gave up with the power co. He now has a $86K system that makes some heat for the house when he's not there. I really wanted to know what the ROI was now, but I didn't want to bring up a sore point so I didn't ask. I can only imagine the tactics vendors are using to sell these systems to people with limited knowledge.

Caveat Emptor!!

Tom

My 200KW system was paid for in 6 months. I received a 35% sunshine grant and the federal government changed the rules so that I could depreciate the system in one year and I sold my SREC's for $315 for 4.5 years.

My 100KW system will be paid for in 3 years, after taxes.

The items you need to consider are:
1. ITC (30% Fed Grant)
2. State Subsidies (PA still has a good one)
3. Depreciation (businesses only)
4. SREC value
5. Upfront cost

The number one thing I think people aren't understanding right now is the drop in supply cost is a better help right now than the SREC cost. However, if residential guys are still installing 10KW systems for $60-$80k they aren't passing the savings on to you and they are making A LOT of $$$$$$$$$$.

In my opinion, a 10KW system should sell for no more than $55k, and I'd be shooting for $40-$45k upfront. Before any subsidies that will mean a 3-3.5% return depending on your electric rate.

DaveH9 · Jul 20, 2011

xman23 said:
I was talking to a guy the other day that put in a 10KW residential solar system in his part time house. It is located in the Catskill region of NY state. It cost him 86K. It cost him more due to the ground mount he did. The roof didn't face the correct direction. He said all was good, month 1,2, his calculations were about $400 - $500 a month the big electric co owed him. They refused to pay, after a year they offered him $125. My understanding, he was saying the electric co has no intrest in buying electric from him and will do whatever they can not to. He now uses the system to heat the house and sends no power back.

I assume the issue is what they will pay / KW and what you believe they will pay. How typical is this?

Tom

Actually it is pretty typical. Once you make more power than you use, most NE utilities will pay only the avoided wholesale cost for the excess. Or about .06 kWh. I try to never design a residential system that will produce more in a year than what is consumed. In MA you can assign any excess solar kWh to another party. In NY you can roll it into the next month, but trying to get money for it is a hassle and not worth it. I tell folks that if they want bigger than their needs to get a mini split AC heat pump or an electric lawnmower. I hardly ever run into that in MA as the rebates max out at 5kW. I did in NY and CT as the residential rebates max out at 10Kw.

velvetfoot · Jul 20, 2011

It cost him $86k. How much did other ratepayers, perhaps without the scratch or location to install their own system, kick in? Another $86k?

DaveH9 · Jul 20, 2011

velvetfoot said:
It cost him $86k. How much did other ratepayers, perhaps without the scratch or location to install their own system, kick in? Another $86k?

I would speculate that 86k was the full price, Most likely the system is a few years old, based on that price. The rate payers probably kicked in a about 20k-30k, the tax payers another 25k. The incentives are working, increasing the market size and driving down prices. We all benefit from the money this guy put into his system.

He should have been told by his installer that the system was too large for his bill and what the ramifications would be. Just like that guy in PA who's system is locked out. Systems that do not live up to expectations just make the solar industry look bad.

GaryGary · Jul 20, 2011

xman23 said:
Excellent explanation guys, what a can of worms this is. I believe this is what the fellow I met was saying. Bottom line is he gave up with the power co. He now has a $86K system that makes some heat for the house when he's not there. I really wanted to know what the ROI was now, but I didn't want to bring up a sore point so I didn't ask. I can only imagine the tactics vendors are using to sell these systems to people with limited knowledge.

Caveat Emptor!!

Tom

Hi Tom,
The $86K seems a bit out of date.

I put in a 2.2 KW system a bit over a year ago for $10K ($6K after federal rebate).

All the economics for the system are spelled out here:
http://www.builditsolar.com/Projects/PV/EnphasePV/Economics.htm

In a nutshell:
- The system makes a modest, tax free return, and protects you from electricity price inflation -- also a good CO2 emissions saving.
- For us conservation and efficiency paid FAR FAR better than PV -- emphasis on FAR

- The systems are fun to build and fun to own.
- Check with the http://www.dsireusa.org/index.cfm to see what the rebate and net metering rules are for your state -- varies a lot.

My PV system is on the cover of Mother Earth News this month

Gary

xman23 · Jul 22, 2011

I don't know any more details about his installation. I will say he wasn't blaming the people who sold it to him or any one else. It did seam like the installation may be a few years old.

My only knowledge of solar is from my partner. When he was fresh out of school he got a job working for the solar division, of Exxon I think. He had some story's. This was the late 70 early 80. He was selling solar to remote tribal villages in a Africa. His last project was the PV roof on the Disney's Epcot's Exxon exibit. I think it's still there, but I don't if it's still working. It was amazing the building hasn't burned to the ground.

So what's new in solar? I thought recentlly I heard something about advancements in PV. True or hype?

Tom

DaveH9 · Jul 23, 2011

xman23 said:
I don't know any more details about his installation. I will say he wasn't blaming the people who sold it to him or any one else. It did seam like the installation may be a few years old.

My only knowledge of solar is from my partner. When he was fresh out of school he got a job working for the solar division, of Exxon I think. He had some story's. This was the late 70 early 80. He was selling solar to remote tribal villages in a Africa. His last project was the PV roof on the Disney's Epcot's Exxon exibit. I think it's still there, but I don't if it's still working. It was amazing the building hasn't burned to the ground.

So what's new in solar? I thought recentlly I heard something about advancements in PV. True or hype?

Tom

There is plenty new with solar. There is some new developments every week, better efficiency panels, lower cost methods, etc. A lot of these announcements are geared towards attracting capital. These advancement may be years away or may never be commercialized. The BIG NEWS in solar electric is the cost has dropped dramatically. 40% in 2 years. With continued support from state and federal government solar is ready now, no need to wait for the new wave of promised technologies. The current technologies are are real world proven, robust and efficient. So advancements are true but hyped up. As costs go down so do government incentives, the people that do the best have the best timing.

mbcijim · Jul 25, 2011

I'll agree it's very exciting that solar costs are down 40% in 2 years, in my case to $3.50/watt. However, it still only represents a 3% return on investment without any subsidy. In my case, I'm mounting on a standing seam roof, the cheapest installation method available, yet my racking, electrical, installation, permit and profit cost is still roughly $1.50/watt (or a 10% return on investment). The panel + inverter are another $2.00/watt.

I don't see any way to trim the first cost ($1.50/watt). It sort of is what it is. Copper wire, clips, labor of putting 420 panels on the roof, etc... There isn't a whole lot of room left for innovation. Installation is very, very simple.

At $2.00/watt for the panel + inverter, that's where all the savings has to come from. I hope the cost does come down, but it seems unlikely in it's current technological format. A major technological breakthrough of creating AC power directly would be a good step (technically impossible?) or some other form of a panel would help. At basically $400 per solar panel it seems like their is some room for innovation.

It comes down to this, until solar sees a further price reduction of 40% ($2.00/watt construction cost), thus boosting returns to a minimum of 6%, solar is dead without government subsidies. Preferably I'd like to see a 9-10% return, but then we are talking $1.50/watt.

Then when that issue is resolved, we have to start putting solar up so that it produces power when we need it the most, which is 4:00-6:00PM in the afternoon. Generally it currently shuts down about 4-5 PM. Think about this, we should only be building power plants for peak power, right? I hope we can agree on this. Otherwise for every MW of solar (whatever) we build, then we have to shut down an equivalent MW (of say nuclear, hydro, coal). It really only makes sense to improve your grid for when you need it the most.

GaryGary · Jul 25, 2011

mbcijim said:
I'll agree it's very exciting that solar costs are down 40% in 2 years, in my case to $3.50/watt. However, it still only represents a 3% return on investment without any subsidy. In my case, I'm mounting on a standing seam roof, the cheapest installation method available, yet my racking, electrical, installation, permit and profit cost is still roughly $1.50/watt (or a 10% return on investment). The panel + inverter are another $2.00/watt.

I don't see any way to trim the first cost ($1.50/watt). It sort of is what it is. Copper wire, clips, labor of putting 420 panels on the roof, etc... There isn't a whole lot of room left for innovation. Installation is very, very simple.

At $2.00/watt for the panel + inverter, that's where all the savings has to come from. I hope the cost does come down, but it seems unlikely in it's current technological format. A major technological breakthrough of creating AC power directly would be a good step (technically impossible?) or some other form of a panel would help. At basically $400 per solar panel it seems like their is some room for innovation.

It comes down to this, until solar sees a further price reduction of 40% ($2.00/watt construction cost), thus boosting returns to a minimum of 6%, solar is dead without government subsidies. Preferably I'd like to see a 9-10% return, but then we are talking $1.50/watt.

Then when that issue is resolved, we have to start putting solar up so that it produces power when we need it the most, which is 4:00-6:00PM in the afternoon. Generally it currently shuts down about 4-5 PM. Think about this, we should only be building power plants for peak power, right? I hope we can agree on this. Otherwise for every MW of solar (whatever) we build, then we have to shut down an equivalent MW (of say nuclear, hydro, coal). It really only makes sense to improve your grid for when you need it the most.

Hi,
I suppose that a doubling in the cost of power might also make the return much more attractive -- that might be more likely than a 40% reduction in cost of PV? The 15% efficicency of the PV panels seems like a obvious target, but it has gotten a lot of attention without a lot of progress, so it must be a hard one.

I'll admit to being biased toward DIY solar thermal, so just take this for what its worth...

- Our 2.15 KW PV system cost me $10,000, and $6000 after rebates (this is 1.5 years ago with me doing the install). It produces about 3200 KWH a year in electrical energy.
http://www.builditsolar.com/Projects/PV/EnphasePV/Main.htm

- Our dIY solar water heating system cost $1000, and $500 after rebates. It also produces about 3200KWH a year of energy.
http://www.builditsolar.com/Experimental/PEXColDHW/Overview.htm

Clearly not for everyone, but its a great return if you like to build stuff.

Gary

mbcijim · Jul 25, 2011

Good point on the doubling of electricity cost, just doesn't seem very likely. Our grid is built and the transmission/distribution charge is about $.04/KW. I don't know how you get that cost to double, even if you try really hard. Generation cost I guess doubling is possible, but at $.10/KW, you'd truthfully have to get it to go to $.24/KW to account for the fact you won't get the grid cost to double. I just don't see how the government would allow that to happen. Wind is more economical than solar, I suppose that would happen first.

The Solar Hot Water is a dam good return. If I had some southern exposure at my house I'd be doing it!

DaveH9 · Jul 25, 2011

I put in my own solar hot water system in 1991 using used panels built in 1978. It is ground mounted. Still going strong, 100% of our use May to Oct. . Solar hot water is not as sexy PV, but it is really the best of the 2.

When will pv become viable without government help? Good question, it involves many factors. The cost of the technologies vs. the cost of competing technologies. Fossil fuels should go up as worldwide demand increases. I never would have predicted of rate of the fall in PV prices, they are dropping much faster than the rise of electricity prices. The drop will probably level out and the cost of power we continue to increase.

If they end subsidies for oil, gas and coal and end solar subsides then we could tell what is what. The subsidies for for the fossil guys are so entwined we really can't tell what they are. How do we calculate the health care cost from air pollution or the cost of military actions as hidden oil costs that we pay as taxes. Or the cost of mountain top removal to the local economies. There are just so many factors. Solar is simple and sunlight is abundant. Trouble is we pay for 25-40 years of solar power mostly upfront.

Lets hope that a breakthrough in solar happens soon.

Commercial Solar System #2

Member

Mooderator

Minister of Fire

Mooderator

Member

Member

Member

Member

Minister of Fire

Member

Minister of Fire

Minister of Fire

Member

Member

Minister of Fire

Member

Feeling the Heat

Minister of Fire

Member

Member

Feeling the Heat

Member

Member

Similar threads