Author Topic: Anyone installed solar panels specifically for an investment?  (Read 7633 times)

strider3700

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I've been researching solar electric generation recently  and have come across a few pages pushing solar electric installs in Ontario not for the green aspect or the independence aspect  but for the ROI.

Here's one page laying out the numbers
http://solardirectcanada.com/solarpowersystems.php
there power generated number is reasonable for Ontario in a good install location.  Not insane outright lies.   I see various dealers advertising a ROI of 7% - 9%.  Ontario isn't the only place that offers really good prices on power generated.  I'm wondering if anyone here has done an install like this?   If I was in Ontario I'd seriously consider this.  Here in BC net metering pays the same as using and it's a pathetic 6.9 cents/kwh compared to ontario's 80.2 cents/kwh for solar produced.

gooki

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Re: Anyone installed solar panels specifically for an investment?
« Reply #1 on: May 14, 2012, 03:31:50 PM »
I've done a fair bit of research into this. In my country we don't get buy back for feeding into the grid, so ROI is purely based on power saved.

Which means if you're opting for a high power system (3kw or above), it's generally worth the expense of adding a battery bank.

Also be aware most solar suppliers are running 100% mark-up. So if you're a qualified electrician or are friends with one, importing your own gear can be very lucrative. 5kw of panels inc battery bank, inverters, regulators etc is approx $20,000 USD. Sub $15,000 if you don't need the battery bank.

With solar direct charging $80,000 for 10kw system (assume $40,000 for 5kw), and no battery banks, they're making a killing (assuming they are installing enough systems).

In my situation our annual expenditure on power is around $1,500. It's not financially viable to add solar to our existing house, but if I was to build new, I'd be looking at a 3kw system (around $10,000), and constructing a home that could run completely off grid with that amount (5kw is generally the target for off grid on a average sized house).

sol

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Re: Anyone installed solar panels specifically for an investment?
« Reply #2 on: May 14, 2012, 04:43:26 PM »
We haven't installed anything, but I've looked into it.  For us, it was purely a matter of cost and it didn't pencil out.

Even accounting for all of the various government rebates, I was still looking at 30 or more years to break even on the power generated, largely due to the relatively low cost of hydropower in this part of the country depressing electricity costs. 

If we had a bigger family that consumed more power, or were located farther south and got more sun, or were located farther east and paid more for power, then I would probably take the plunge.  Even a 15 year return on investment is superior to what you get without a solar system, which is basically an indefinite-term contract to rent your power forever.


strider3700

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Re: Anyone installed solar panels specifically for an investment?
« Reply #3 on: May 14, 2012, 05:44:01 PM »
The long term effectively fixed price is what got me interested in the finances of a system.  I started tracking my electricity bills from day 1 of getting my first house in December of 2004.   since then when you include all fees, taxes and so on my price/kwh has moved from a low of $0.067 to a current high of $0.088 or a 31% increase in 8 years. 

I was looking at enphase micro inverter systems where you buy 1 inverter per panel and can add on at any time without difficulty.  Even using solar direct The inverter is $180. a 240 watt panel is $460 and you can technically add them 1 at a time if you wish.  I'm not sure what the legal paperwork involved on adding one at a time is like though.  Some places may require a reinspection every time you make a change...

that 1 panel should provide about 295 kwh a year.  at $0.088  that means a payback of $26/year or 25 years... but there is other misc needed beyond 1 panel and 1 inverter.

if you use the packages from the US based wholesalesolar they charge $1,300 for 1 panel giving a payback of 50 years.  It gets a lot better when you start adding modules not 1 at a time but in groups of 4.    A 4 panel package comes to $3215 and will generate 1180 kwh in my selected location.  worth $104 giving a payback of 31 years.  Couple that with some of the rebates  like the one I want to try for of farmers get 50% off and a payback of 15 years seems like a safe long term investment. 

Also the location I'm looking at relocating to charges 12 cents/kwh as far as I can find.  so that reduces the 4 panel payback to 22 years  11 with massive rebate. 

This all ignores fees, and costs of getting the system installed and running.  I'd do as much as I legally can but I bet a certified installer/electrician needs to sign off at the end.   Also none of these costs include federal tax (provincial is rebated) and the rack costs and wires to hook it all up...

James

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Re: Anyone installed solar panels specifically for an investment?
« Reply #4 on: May 14, 2012, 07:44:26 PM »
I'd consider solar, but like everyone is saying the numbers don't add up at this point.  I do see a convergence though, between the drop in energy consumption and the drop in panel prices.  As China ramps up production it will be interesting to see how far prices drop.  LEDs are dropping and will soon be low enough to outfit my entire house, and if I was running natural gas for all my heating and cooking needs, I really wouldn't need a ton of electric power.


So I'll watch the convergence of the two points and jump in when the time is right.

strider3700

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Re: Anyone installed solar panels specifically for an investment?
« Reply #5 on: May 14, 2012, 07:48:33 PM »
expectation is panels to be close to $0.50/watt when china is done ramping up in the next year or two.  Since the plants are government subsidized they may get hit by customs in some sort of trade war though.

really with CFL's lighting is a very very low chunk of my power usage already.   I like LED's but they make zero financial sense for me.

sol

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Re: Anyone installed solar panels specifically for an investment?
« Reply #6 on: May 14, 2012, 07:49:53 PM »
I'd consider solar, but like everyone is saying the numbers don't add up at this point.  I do see a convergence though, between the drop in energy consumption and the drop in panel prices. 

I think it already makes sense in some corners of the country, where sunlight is abundant and power is expensive.  I'm really not sure why home solar isn't more popular in the south, or in places like California that have questionably reliable power grids anyway.  Local power generation would help stabilize that problem.

People complain about having to wait 15 years to turn a profit, as if they were somehow magically going to make money off of continuing to pay the power company forever?  Isn't turning a profit in 15 years better than losing money indefinitely?

iwannaretire

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Re: Anyone installed solar panels specifically for an investment?
« Reply #7 on: May 14, 2012, 08:55:21 PM »
We're in So Cal and looked into solar recently.  For us, the payoff time was about 10 years after factoring in the rebates.  We decided not to do it because of the large cash outlay and the fact that we plan to sell our house in about 10 years.

We were told that the rebates are disappearing fast.  Once the rebates are gone, the prices of solar panels should drop considerably.

Bakari

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Re: Anyone installed solar panels specifically for an investment?
« Reply #8 on: May 14, 2012, 09:19:21 PM »
The much simpler and cheaper way is to dramatically lower your electricity use.

Unless you are already an energy miser, this may be much easier than it sounds.  Your already on a MMM forum.  Just start thinking of every second that lights / TV / computer / electric heat or AC / etc are on is actual pennies, adding up to dollars a day, and only use what really does increase quality of life.
I wrote a guide of a few ways to cut down on energy costs with little or no upfront investment:
http://www.instructables.com/id/Not-your-average-save-energy-advice-use-less-en/

Thing is, if one is serious about using solar for energy - whether for environmental or financial reasons, this should be your first step anyway.  Solar installers won't always tell you this, or help you get your use down as low as possible first, because they make more the bigger the system you buy.  Often they will base the size you "need" on your current usage, and that's why you end up with ridiculously high estimates.

Anyway, once your kWh are as low as you can comfortably get them, then an alternative to an expensive grid-inter-tie system is a separate independent 12v system.  That's what I have.  It powers my lights, fans, modem, router, and a few other little things, while the computer and TV are still on 120v grid power.  Last bill we used 149kWh, just under $20.
Total soral system cost is under $1000 (mine was about $400)
I did a write up of it also:
http://www.instructables.com/id/NON-grid-intertie-independant-solar-photovoltic-/

velocistar237

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Re: Anyone installed solar panels specifically for an investment?
« Reply #9 on: May 15, 2012, 08:55:56 AM »
My thought is, like MMM's post on LED bulbs, until the annual price drop is less than the annual savings from getting solar, it doesn't make sense to buy. Does anyone have numbers for these?

Anyway, once your kWh are as low as you can comfortably get them, then an alternative to an expensive grid-inter-tie system is a separate independent 12v system.  That's what I have.  It powers my lights,

Are your LEDs bluish white or a more pleasing color temperature?

Bullseye

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Re: Anyone installed solar panels specifically for an investment?
« Reply #10 on: May 15, 2012, 09:35:51 AM »
For the other Canadians here, there is a long post on RedFlagDeals.com forum about a guy going through the MicroFit Ontario solar program, with lots of good details.  Search on MicroFit there, it'll pop up. 

I haven't pulled the trigger, and it looks like a missed the boat, or at least the most profitable option.  All applications are on hold now, pending program changes.   At $.80/kwh, the payback is quite short!

Bakari

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Re: Anyone installed solar panels specifically for an investment?
« Reply #11 on: May 15, 2012, 09:41:19 AM »
Anyway, once your kWh are as low as you can comfortably get them, then an alternative to an expensive grid-inter-tie system is a separate independent 12v system.  That's what I have.  It powers my lights,

Are your LEDs bluish white or a more pleasing color temperature?

Blueish white.
I also have some low power incandescents  for when I need more light than the 1W LEDs put out, but in general, I try to be awake when the sun is up, so I use as little of any kind of light as possible

Praxis

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Re: Anyone installed solar panels specifically for an investment?
« Reply #12 on: May 15, 2012, 09:56:51 AM »
There was a guy on Reddit who bought broken solar panels and soldered the pieces back together to make his own solar panels for under $200.  They looked kind of ugly, but it was brilliant and had an ROI of around 100% annually (he built a couple to power his house); wish I had the experience and time to do so.

strider3700

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Re: Anyone installed solar panels specifically for an investment?
« Reply #13 on: July 24, 2012, 02:24:16 PM »
Ok I'm dragging this back up because I was playing with numbers after getting my most recent bill  I think I've been viewing this all wrong. We were thinking all about the payback period but really ROI is all that matters on dividend investments.

Last year I spent $836.94 of electricity  This amount of electricty can be generated using a system that currently sells at wholesalesolar for $15,830.  Rebates will cut that price down a lot.  Install/permits/misc will increase it.  Lets take the easy way out and say that rebates and other costs balance out and we'll round the numbers to whole dollars. 

so we've got an investment of $15830 producing a savings of $837.  That gives us a payback period of 18.9 years. This works out to a ROI of   5.29%.  All of this assumes that electricity rates won't be going up.   Rate increases for the next 3 or 4 years are already announced,  so we know that not to be true.  The numbers only get better in the future.  Electric rates have not been directly linked to inflation here  but they have only gone up.

The only way the payback gets worse is if we have equipment failure or other expenses not covered by the warranty. I'd consider this to be a very safe investment.
As well  there are no taxes coming into effect when we get our $837 in savings each year.

So how many other investments are out there that can be considered very safe, and pay 5.29% after taxes are taken into account and their ROI is increasing yearly?   

The only ways I could see this being a bad idea (at these numbers) is if the warranty period is less then the payback period, you intend to move within the payback period and won't recoup the cost of the system on the sale or you sometimes need to draw money out of your investments for whatever reason(solar isn't an overly liquid investment)

Disagreements? 

Fuzz

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Re: Anyone installed solar panels specifically for an investment?
« Reply #14 on: July 24, 2012, 07:28:36 PM »
There is the strict financial return to your investment and then there are your badass points. You get a lot of badass points for moving off the grid. I also think it's a nice hedge against natural disasters. So I think there is a nice nonfinancial self-reliance bump to doing it as well. Perhaps it's the sort of thing where you could help a friend set up a similar system and you could get some sort of additional in kind compensation for your new skill? Keep us posted.

James

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Re: Anyone installed solar panels specifically for an investment?
« Reply #15 on: July 25, 2012, 09:53:00 AM »
Ok I'm dragging this back up because I was playing with numbers after getting my most recent bill  I think I've been viewing this all wrong. We were thinking all about the payback period but really ROI is all that matters on dividend investments.

Last year I spent $836.94 of electricity  This amount of electricty can be generated using a system that currently sells at wholesalesolar for $15,830.  Rebates will cut that price down a lot.  Install/permits/misc will increase it.  Lets take the easy way out and say that rebates and other costs balance out and we'll round the numbers to whole dollars. 

so we've got an investment of $15830 producing a savings of $837.  That gives us a payback period of 18.9 years. This works out to a ROI of   5.29%.  All of this assumes that electricity rates won't be going up.   Rate increases for the next 3 or 4 years are already announced,  so we know that not to be true.  The numbers only get better in the future.  Electric rates have not been directly linked to inflation here  but they have only gone up.

The only way the payback gets worse is if we have equipment failure or other expenses not covered by the warranty. I'd consider this to be a very safe investment.
As well  there are no taxes coming into effect when we get our $837 in savings each year.

So how many other investments are out there that can be considered very safe, and pay 5.29% after taxes are taken into account and their ROI is increasing yearly?   

The only ways I could see this being a bad idea (at these numbers) is if the warranty period is less then the payback period, you intend to move within the payback period and won't recoup the cost of the system on the sale or you sometimes need to draw money out of your investments for whatever reason(solar isn't an overly liquid investment)

Disagreements?


What if you bought $15830 of a dividend fund and it paid $837 per year, but you knew in advance the value of the companies themselves would diminish each year by 10% or more each year, would you consider that a "safe" investment?  The ROI needs to take into account the value of the whole pot, not just the returns. 


What if you could get that exact same setup in 5 years for $10,000, in that case you would be better off financially just waiting for the panels to drop in value and buying your electricity from a company.  You could invest your $15830 in a CD, and in 5 years when you purchase the setup for $10,000 you will have $5830 left over along with whatever that money earned (probably over $7000 total), and would have spent only around $4000 on electricity.  Possibly less if you have switched to LED lights, etc, but also possibly more if the cost of electricity went up.  There are lots of unknowns, I just wanted to point out some of the issues involved that make "ROI" less clear.