iman:
I just spent a week picking the brain of a sales mgr. for one of the largest solar integrators in the country. I did this to prepare to interview him for a special Earth Day radio show I hosted, on solar power.
Okay, here's your question:
I have thought that wind and solar power are great. The cost seems a little high for the equipment. My question is how long does it take before you break even with solar and with wind. Is it months, or years. Is solar more reliable than wind? Do all wind turbines have to be 100 feet in the air? You also hear about people selling the power back to the power company how many panels do they have? Is that really even hapening?
just a few questions that I hope you could anser
And here's Colin's answer, which I thought was RIGHT ON with everything I just learned.
I believe there are a few select areas where people are saving money - but like you say, only with generous state incentives, and very high power costs from “conventional” sources. I looked into it a bit and it seems like the returns are in the mid single-digits. But that is only possible because in NY, you can get a ~$32,000 system for about $10,000 after state rebates to the PV supplier (passed to customer), state income tax credits, and the federal income tax credit. This is the sweet spot that maximizes your tax benefit since some are capped at flat values. Start taking any of those away, and it becomes a tough proposition. Then again, if your current power cost was $0.18/kWh versus our $0.10-$0.12/kWh, it could be quite attractive.
-Colin
I'm going to assume that everything I learned from this sales mgr. is correct, despite his position in
sales (Yes, I realize that if the only tool you have is a hammer, everything starts looking like a nail. OTOH, in a litigious society such as hours,
if you go around bilking consumers, and USING STATE AND FEDERAL TAX CREDITS AND INCENTIVES to do it, you will not be in business very long, right? This company has 130 employees and was launched in 1999, focusing on grid-tied solar by about 2001.) So, if everyone's okay with that, I'm going to toss out some of what I believe are FACTS, about solar, much of which directly contradict some of what I read elsewhere in this thread, despite the fact that it was said with absolute conviction.
Everything I'm about to say applies to NYS, but your state may differ.
Alright--I am speaking ONLY about a batteryless, grid-tied system, in NYS.
Why? Because batteries add A LOT of expense, don't last forever, require a charge controller (in addition to the inverter you'll need) and really KILL the economic viability of solar. That is why there may be as much negativity in this thread as there was--people should not attempt to discuss solar as one animal--it's TWO DIFFERENT BEASTS, economically: battery-backup and grid-tied systems. Grid-tied is by far the winner, economically.
Keep in mind that, if you can't site it on the roof, you WILL pay more, as each one of those frames, set on a 4" steel pipe (in poured concrete), and holding 4 solar panels, is about $780.--without the panels. So, keep it on the south-facing roof.
Myth One: Payback time is 25 Years:
Residential--10-12 years
Commercial-5-6 years. (Much better tax credits for businesses, plus I believe you can go higher before they quit paying you retail rates for excess power.)
In one of the systems I learned about, it produced 3kw, which is apparently a low-to-average usage per year. It cost $29,000., but after state and fed. tax credits and incentives, your cost is approx. $10,500.
And you don't lay out the $29,000. You pay the $10,500., and your rebates, etc...go directly to the solar co., who also handles all permitting, etc....
Myth 2: The Utility Will Only Pay You Wholesale Rate.
Not true, with some exceptions. Some states, it's true, will only pay wholesale rates. However, NYS, NJ and CT are a few that DO pay retail rates to you. And there are more states than that.
IN THESE "RETAIL STATES," IF you do not produce more than you USE, in a year, everything you produce will be "bought back" from you, AT RETAIL RATE (up to an upper limit of 10kw, I believe, but am not certain). Above those limits, all you get is the wholesale rate.
Now...this is not instantly apparent, but what this means is *drum roll*: YOU CAN MAKE YOUR ELECTRICITY BILL DISAPPEAR.
Actually, that is the goal. Why? Because part of that wonderful, 8% ROI and 10-12yr. payback depends upon maximizing your buyback at retail pricing. If you produce more than you use, IT MEANS YOU BOUGHT TOO MUCH CAPACITY. And, since you will only be "rewarded" for that excess capacity at a wholesale rate (typically 1/4 what you paid) this is not good.
Myth 3: Solar Panels Don't Last Long
Hmmm...let's start with this: a 25 yr guarantee that, after that amount of time, the panels will still be producing 80% of their rated output.
Then there's the fact that the projected lifespan of a solar panel is 40-to-50 years.
I just read in Home Power mag. (
http://www.homepower.com/) that some of the modules installed in the 1970's and '80's were recently found to be putting out 90% of their rated power--10% better than industry estimates.
And then there's the 10 yr guarantee on the inverter, which my expert said might have a 20 year life. Okay, so it looks like you will be buying an inverter at some point.
Myth 4: The Systems Aren't Economically Viable
The ROI (return on investment) of a residential system: 8%
The $32,000. system that Colin was talking about sounds remarkably like the 3kw, $29,000. system my guy was talking about, in that, the 3kw system does a little better than the bigger 5kw system, due to how the gov't. incentives are structured. The 5kw system earns only 7% ROI.
My guy did point out that you don't want to go over a 5kw system, because the way the incentives are structured, they just won't offset the greater costs of a bigger system.
40-50 yr life - 12 yr. payback = 28-38 yrs free power.
Oh! Before I forget, yesterday (Tues.) NOVA/PBS, (channel 13 here, near NYC) did a 1 hr special on solar power--I taped it. Perhaps you could get your library to buy it for circulation.
I could go on, but I'd suggest you read the above mag., and see a pro for a free consultation.
Peter