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I can't believe I just bought a $38,000 (before massive subsidies) solar system!

Post in 'The Green Room' started by tradergordo, Sep 30, 2010.

  1. webbie

    webbie Seasoned Moderator Staff Member

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    My solar hot water system, which I installed in 1979, was working fine when I sold that house in 2005.
    However, I think it is fair to use design lives of 20-25 years for most of this type of equipment. In terms of payback, 15 years plus is too much, IMHO......I think a rough rule is to make at least a 10% ROI, which compounded would be a 7-8 year payback (as with Trader)

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  2. Dune

    Dune Minister of Fire

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    From what I understand, P.V. panels can last for thirtyfive years. Inverter fries, buy a new one. Anyone putting a new roof on and not using 40 or 50 year shingles has always surprised me, since the labor is the same and the better singles are only a little more expensive. I don't see the problem with re-installing a 38,000 system anyhow, if need be. Pretty funny blaming a roofer for something Ronnie did.

    Seriously Ben, my electric bill now is $3500 or more a year. If a $2000 dollare inverter fried, and I was otherwise getting free electricity, why wouldn't I buy a new one? Same with the roof. Weak argument.
  3. benjamin

    benjamin Minister of Fire

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    I'm just going by experience on this one. Off the top of my head I can't think of a single solar system that has been in operation for more than five years. I can think of a dozen or more that I pass regularly that have been installed in the last five years and a dozen or more that came and went.

    I don't know whether to give Ronnie the credit for sound fiscal management or not for removing the solar panels, but do you think it would have payed off to have a government contractor remove and reinstall hot water panels on the white house with each roofing job? If you were to offset your $3,500 annual electric bill with PV (according to the .gov calculator I used) you would need around 28KW of panels which would cost around $90K and I'm guessing need a little more than a $2K inverter. However if you had $90K plus invested, it would probably insure that they got put back up with the new roof.

    True, it is a weak arguement, but that arguement is strong enough when people are looking at the price to maintain a system that has marginal payback. There are so many ways to get around these drawbacks, but they're often overlooked, in part because of the rush for "free government money".

    On the other hand, it's pretty hard for passive solar features to deteriorate or fail to work. I think it was "In Hot Water" who said something about overglassed solar homes from the 70's, but I have never seen evidence of one. I've never met anyone who was disappointed with the passive solar features they've added to a house.
  4. Dune

    Dune Minister of Fire

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    I hear ya. If I could run a welding machine on passive solar, I probably wouldn't be interested. You might be a little off on your calcs by the way. The only place in the country with higher electric rates than Cape Cod, is Hawaii, AFAIK.
  5. benjamin

    benjamin Minister of Fire

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    Yeah, the calculator used something like 11cents per KWH for MA, which I thought was way low, but I try not to argue with the man.
  6. tradergordo

    tradergordo Minister of Fire

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    These panels have an estimated useful life of 45 years. They are guaranteed to produce 80% or more of spec output for 25 years (or they will be replaced free of charge, the panels are made by a publicly traded company with a 2 billion dollar market cap). By the way, the panels removed from the White House by Reagan were used until 2005 at Unity college - although they were not photo-voltaic, it was a simple water heater collector system). Also, GW Bush installed new solar panels on the white house grounds (not the actual white house).
  7. tradergordo

    tradergordo Minister of Fire

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    My electric rate is $.1686 /kWh * 8423 (actual use in the last 12 months) = $1420
    After subsidies, the initial cost to me for the solar system is just under $15,600.
    The rapid return on investment is due to srecs which should end up being the biggest subsidy of them all. I should generate about 9.3 srecs per year, they are currently worth about $300 each, so that's $2790 per year. I should get a check for the srecs almost every month, for at least 10 years and probably longer.

    So we are talking: $15,600 / ($2790 + $1420) = 3.7 years

    However rate caps come off on our utility company on Jan 1 2011. No one knows for sure what the new rate will be, but I believe it will be close to or above $.20/kwh within a year (yes, I know these are very high rates compared to the rest of the country, I hate it, and that is why I'm doing something about it). Anyway, using the .2 number you get that 3.5 year payback. There is of course an assumption here that the srecs will be worth what they are currently worth for at least 3.5 years - I think this is a very reasonable assumption because the utility companies are forced to buy more of these every year and if they don't buy them they are fined by the state at a rate equal to 200% of the free market value of an srec (average market price over last 12 months). Of course this crazy srec program is causing higher utility rates for everyone else that doesn't have a solar system - but that's another story (like I said, if the government is going to do silly things with money that end up costing the taxpayer, you might as well try your best to benefit from it if you can, I just hope a future populist uprising doesn't come along and burn my house down, heh).

    To answer some other questions - the inverter is the major expense going out into the future, they are normally waranteed for 10 years, mine is waranteed for 20 years, but I've been told they typically die in 13 to 17 years. This thing is a 155 lb. beast that can cost as much as $4,000 today (hopefully in 20 years prices will have come down a lot like they do with most technology).
  8. Wallyworld

    Wallyworld Member

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    Now you've met one :) . I would never do a passive solar house again. While I like the light and the sun in the winter, I'd spend my money on closed cell foam rather than the envelope system I have now. 2 walls of glass with a 1foot airspace in between, that hot air circulates thru a floor of cinder blocks. It doesn't work very well, I doubt I get enough heat out of it to pay the electric bill for the fan blowing the air. I also have Solar domestic hot water, 2 3 by 8 panels, been there since 1990, never had an issue, works great. I'm presently building a collector into a south facing wall of my new shop, can't wait to see how much it contributes to a 30 by 34 well insulated shop . radiant floor hooked to a homemade 9 by 15 collector. I'm hoping it keeps the space above freezing.
  9. eba1225

    eba1225 Feeling the Heat

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    Trader,

    Good for you. I have looked and looked but couldn't get a 'realistic' ROI of less than 10 years as the initial cost was very high. Are the ones doing the installation local to your area? I am in your area and would like to talk to then to see what they have to say.

    If you would be so kind, PM me with their name and address.

    Erik
  10. benjamin

    benjamin Minister of Fire

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    I stand partially corrected. I've never seen an honest to goodness double envelope house, but that one sounds like active solar to me?

    According to this article, the former white house panels were re-installed at Unity College in 1991 and decommissioned in 2005 (no reason given?). So they ARE NOT still in use or producing useful anything but publicity. Not that they couldn't be endlessly refurbished and reinstalled (been there, doin that), but at some point they have to be productive, not just another political football.

    http://www.unity.edu/NewsEvents/News/UCChinaSolar10.aspx

    I'm not saying that the technology is good or bad, it is a lot better than it was thirty years ago, and some of it worked great then. But it is marginal, and wasteful if not installed and maintained correctly.
  11. DaveH9

    DaveH9 Member

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    That's great, another solar electric system will be coming on line. PA is a hot spot right now, but that won't last forever. Good to get in when the getting is good. CT is hot right now for solar hot water. We are seeing almost 60% covered with the ARRA grant and the fed tax credit. I quoted a guy this morning that is replacing a solar hot water system from 1980. Worked flawlessly for 30 years. I installed mine in 1991, it is running just fine. I had to turn the boiler on last week, but I can pretty much just use solar from equinox to equinox. Now solar preheats the water before it goes through the boiler.

    PV has a great reliability record, with no moving parts. It was designed for remote locations where maintenance is expensive. Like satellites, ocean buoys, remote communication towers, etc. Reliability or longevity should not be not a big worry for homeowners.
  12. mbcijim

    mbcijim Member

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    I just built a 200KW system in Pennsylvania.
    Cost $1,094,000
    Expected electrical generation 220,000KW/year. Where it's located it's worth about $.10/KW or $22,000/year.
    That's almost exactly 2% return before subsidies.

    Federal & State Subsidies almost exactly $700,000. So my cost after subsidies is about $400,000 or about 5.5%.
    OP, did you get a sunshine grant? Do you know that you will get a W-2 at the end of the year and owe federal taxes on your sunshine grant, FYI? Since I did it corporate the depreciation outweighs the taxes, but it is an issue on the residential system, but I digress.

    The inverters were $120,000 or about 11% of the project cost. I think I have 14 if my memory serves me correctly.

    One of the things that surprised me was that the system degrades from the moment it's installed. In the beginning it's about 1% a year.

    The way I profit from this system is the sale of SREC's - or Solar Renewable Energy Credit, as 5.5% is unacceptable in the private sector. The SREC is government created and nothing more than a mark in a spreadsheet. Pennsylvania issued a mandate that the utilities must use so much percent solar each year and it goes up every year. The utilities can buy the SREC's or create their own. So far they've been buying them. Right now they are transferable between Ohio, Pa and Maryland I believe. NJ is stand alone and can't transfer them beyond the border. There is a law introduce in the PA Senate that will put the penalty for the REC at $160. That would make the REC worth $150. The OP is correct right now they are worth about $300. Although I question how a small residential system can get the commercial price? I pay about a 3% commission on my REC, but I should generate 270 or so. I'd expect to pay a lot higher than 3% if I had a very small system. I entered into a contract through 2015 to a public utility. That is the only way these large systems will get built. My biggest concern with solar is will the SREC go away. Long term they will generate a huge increase in the cost of power. I don't expect the existing mandate to stay in place. What the government created the government can take away.
  13. Danno77

    Danno77 Minister of Fire

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    I tried to buy a solar system, but they would only sell the right to name a star. Not quite what I was looking for.
  14. Dune

    Dune Minister of Fire

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    Kudos to you sir, and thanks for reporting your progress here. Your project is inspirational.
  15. ihookem

    ihookem Minister of Fire

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    Wouldn't a solar hot water panel be much more efficient and save more energy than a solar panel that makes electricity? I am interested in a solar hot water for summer and to some degree winter for DHW. I guess I could also use the extra hot water to heat my basement. Also, where can I find a plan of some sort to do this?
  16. benjamin

    benjamin Minister of Fire

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    Radiantec is a an excellent place to see some of the different ways you can integrate solar hot water and a little space heating.

    If you're interested I'd sell you a complete used five panel system that Radiantec sold two years ago.

    OR, if you want to do it ALL yourself go to Gary's site builditsolar.com for lots of great ideas, or contact me and I'll tell you some more that are even more out there.
  17. tradergordo

    tradergordo Minister of Fire

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    Well I said I'd post a pic when it was installed. Took 3 months but they finally got the panels up there today. Congrats to anyone in PA that got in while the deal was hot. Subsidy has now dropped by 40%. The do-it-yourselfer could still make out well $ by importing panels direct from China (Suntech Power or EGing) and doing the work themselves but it is a very big undertaking.

    Attached Files:

  18. btuser

    btuser Minister of Fire

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    Looking forward to some numbers.
  19. tradergordo

    tradergordo Minister of Fire

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    So after the panels went up, I couldn't turn the system on until it was inspected and then another wait for my utility company to come out and install a second meter for net metering. The system has been online now for 3 full days. First 2 days, the panels were partially covered in snow and produced 38 kw hours of power (not bad considering). But yesterday the snow had all fallen off (which happens even when it never gets above freezing, we were at 0 degrees yesterday morning) and the system produced 40 kw hours of power! For the dead of winter, that number surprised me, beyond my expectations (40kw per day is 14.6 megawatts annualized). Didn't think I would have a net surplus of energy in the winter but it definitely looks possible to have a surplus in any given month. So I had hoped that I would never have to pay for electricity again, and it looks like that will happen and then some. My utility jacked their supply rate up by 42% I will get compensated at 10 cents per kw h for any net annual surplus.
  20. Dune

    Dune Minister of Fire

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    That is a most awesome report. Do you have enough surplus to recharge a Volt?
  21. DaveH9

    DaveH9 Member

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    PV modules produce more power the colder they are. You might get more per hour in the winter, but less per day because of the short day. What a nice installation.
  22. tradergordo

    tradergordo Minister of Fire

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    I'm extremely interested in electric cars but definitely hesitant about the first generation. From what I've been reading, Ford is going to blow away the volt with their electric car late this year - the electronics are very impressive, it even has a built in teaching program that shows you as you drive, how to get the most efficiency out of it. Lots of bells and whistles:
    http://www.cleanfleetreport.com/electric-vehicles/batteries/ford-focus-electric-ev-review/

    I do worry about the cost of those batteries over time, and I'd much rather have a 200 mile range than a 100 mile range. I will watch with interest.
  23. Dune

    Dune Minister of Fire

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    I hear that. There are a few other models out there as well that should be available this year or next. A couple more japanese and a few european options as well. G.M. kind of blew it with their 40 mile electric range, hopefully they will figure that out, before they get crushed. The thing with the battery replacement cost is that it is offset by not ever having to fix; ignition, exhaust, carberation/fuel injection, radiator/hoses/waterpump, fuel tank, lines, filters, oil change, engine maintainence, etc. Electric motors are incredibly robust and should last for millions of miles.
  24. tradergordo

    tradergordo Minister of Fire

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    Yea, despite apparent complexity given the high tech nature of the electric cars, they are actually quite a bit less complex than a gas car. I love the idea of never again having to worry about gas, fuel filters, fuel pumps, fuel lines, fuel injectors, evap systems, canisters, catalytic converters, rusting mufflers, exhaust leaks, air filters, throttle bodies, pcv valves, spark plugs, O2 sensors, Mass Air Flow Sensors, timing belts, oil changes, oil leaks, burning oil, engine compression, etc. 95% of "check engine light" issues would be GONE. Electric motors are beautiful in their simplicity. These cars are also surprisingly efficient too, 4-5 miles per kilowatt hour:
    http://avt.inel.gov/pdf/fsev/costs.pdf

    So say you drove 10,000 miles a year (I drive twice that unfortunately), with a gas powered car that got 30 miles per gallon and you used $3 for the cost of a gallon of gas, the cost would be 10,000 / 30 * $3 = $1000. With an electric vehicle that got 5 miles per kw hour, and 10 cent per kw hour cost of electricity, you are talking a cost of: 10000 / 5 * $0.10 = $200. So that's $800 per year in fuel savings alone for the average American. Since I drive twice that distance, I'd be saving $1600 per year, and that doesn't take into account that I might be able to get a large chunk of my electricity for "free" from the solar panels, which could mean an electric car could save me over $2000 in fuel costs every year. But then again I could probably find a very nice used fuel efficient gas commuter car for around $8,000, compared to possibly $35,000 for a new electric car! Perhaps a year or two from now the electric cars will sell for $25,000 with a government incentive maybe bringing the price down to $21,000. Even with the fuel savings, and that big discount it might not make financial sense...
  25. Dune

    Dune Minister of Fire

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    Thing is though, Gordo, the usable lifespan of the electric is much longer than a gas model, so that should help defray the initial cost.

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