Author Topic: Community Solar?  (Read 4123 times)

kudy

  • Pencil Stache
  • ****
  • Posts: 945
  • Age: 36
  • Location: RV Traveling the U.S.
Community Solar?
« on: October 05, 2014, 12:00:48 PM »
I am hoping to get some info from all of you residential solar experts.

My electrical co-op built a community solar array a few years ago, and it's been "sold out" for years. They are now planning a 2nd array, which is quite a bit larger. I am very interested in buying into this round. The benefits seem to be:

  • They do all maintenance for the lifetime of the equipment
  • Equipment is guaranteed for projected lifetime
  • Doesn't go on my not-so-ideal roof, instead gets maximum sun in a dedicated array

Here's the blurb they've included on the sales website:

"Each community solar panel costs $930. Each community solar panel will generate an estimated lifetime savings of $8,331. Taking into account the cost of the solar panel, the net lifetime savings are estimated to be $7,401 per panel. This equates to an average annual payback of 16.7%!"

I am allowed to purchase, "customers can purchase a minimum of 1 solar panel(s), all the way up to offsetting your entire energy usage."

Their sales rep will be calling me tomorrow or Tuesday to discuss. I haven't researched solar very well, so I am not sure what questions to ask. Obviously, I want to know what the $930 panel is, and to verify their math on my own - what are the typical numbers I need to know? Average hours of sun? Energy produced with an hour of full sun? Rate I will earn for the energy? Anything else I am missing?

My only other concern is how easily I could sell the panels to someone as a package deal when selling my house in the future? Or, if I decide to turn my house into a rental, could I somehow maintain ownership of the electric utility account, but charge tenants for electric usage? It isn't likely that the next house I buy will be with the same electric company, so I probably won't be able to do a transfer, and the panels will need to remain "attached" to this house's electrical account. I guess that's one more question to ask... can I own panels if I am no longer a customer? It doesn't seem like I'll be able to, since they only want to allow "up to" offsetting my bill.

CowboyAndIndian

  • Handlebar Stache
  • *****
  • Posts: 1470
  • Location: NJ, USA
    • KOWines: Deep discount wine/spirits store.
Re: Community Solar?
« Reply #1 on: October 06, 2014, 08:21:27 AM »
Like any investment, do the due diligence.

  • Verify their numbers. How did they come up with the $8331 number. Did they use real returns for the last few years to get this number?
  • If you turn it into a rental, you can always charge extra for the electricity.
  • How easy will it be to sell this investment? Is there a secondary market for it

From my research, electricity prices seem to be going up constantly. So, if the other numbers line up, I would definitely go for this.

Bob W

  • Magnum Stache
  • ******
  • Posts: 2947
  • Age: 60
  • Location: Missouri
  • Live on minimum wage, earn on maximum
Re: Community Solar?
« Reply #2 on: October 06, 2014, 08:43:14 AM »
Love Solar!  I've never come close to penciling it out in Missouri though.   

Something to consider first is.

1.  Have you had a whole house energy audit from a certified Hers person?  (many utilities pay or subsidize this).  That will give you a very clear picture of what steps you can take and what the payout ratios are. 

They will also run the numbers independently on the solar for you.

2.  Reduce your electric dramatically.   There are probably a hundred steps you could take --  Heat blanket water heater,  LED lights,  caulking leaks,  leak seals on sockets and switches,  heat pumps,  in line water heaters,  washing clothes in cold water,  low flow shower heads,  turning the heat/AC down/up,  using a watt meter on all your electric items,  higher efficiency refrigerators,  on and on.   

If you don't currently have a heat pump,  I would consider that before solar. 

Good Luck

Takk

  • 5 O'Clock Shadow
  • *
  • Posts: 16
Re: Community Solar?
« Reply #3 on: October 06, 2014, 08:59:56 AM »
Lowering power use is much more beneficial than buying power (up to a point, which is different depending on situations), but to do a quick calc, http://pvwatts.nrel.gov/ is the place to do it in the states. they've recently updated to allow for more inputs that the panel provider should be able to give, and defaults for generalizations as well.  This is what most industry professionals use for a quick go-to calculation, while there are more in depth analysis that can be performed, they usually involve site constraints, which it sounds like we are removing with this community solar array.

kudy

  • Pencil Stache
  • ****
  • Posts: 945
  • Age: 36
  • Location: RV Traveling the U.S.
Re: Community Solar?
« Reply #4 on: October 18, 2014, 02:36:25 PM »
Quote
Like any investment, do the due diligence.

    Verify their numbers. How did they come up with the $8331 number. Did they use real returns for the last few years to get this number?
    If you turn it into a rental, you can always charge extra for the electricity.
    How easy will it be to sell this investment? Is there a secondary market for it


From my research, electricity prices seem to be going up constantly. So, if the other numbers line up, I would definitely go for this.

I've recently written a blog post that details some of the numbers - the last step is to ask if they will send me real data from the first solar array they built a few years ago. It seems to be really low cost per watt, when compared to some other numbers I've seen - I just want to make sure the kWh estimates they are giving are accurate.

There is a secondary market for the panels, but I don't have any details on how it works... in their sales copy they mention being connected to buyers if necessary, but they don't detail it at all. Another thing I should ask about...

Quote
1.  Have you had a whole house energy audit from a certified Hers person?  (many utilities pay or subsidize this).  That will give you a very clear picture of what steps you can take and what the payout ratios are.

They will also run the numbers independently on the solar for you.

2.  Reduce your electric dramatically.   There are probably a hundred steps you could take --  Heat blanket water heater,  LED lights,  caulking leaks,  leak seals on sockets and switches,  heat pumps,  in line water heaters,  washing clothes in cold water,  low flow shower heads,  turning the heat/AC down/up,  using a watt meter on all your electric items,  higher efficiency refrigerators,  on and on.   

If you don't currently have a heat pump,  I would consider that before solar.

I have not had an audit done - will look into this, to see if there are good options. Overall, I am happy with the efficiency of my house - I spent $500 bumping up the attic insulation when I moved in, I've got newer windows, and it's never drafty - seems pretty well sealed.

The worst offender for my electric use is baseboard heating. I think your point about getting a heat pump system first is valid... I have definitely considered them in the past, and that'd probably be a good first step.

There is a bit of urgency around this decision, as the array can "sell out" and has already sold 60%+, even though construction only just began. Still hemming and hawing over the idea.
« Last Edit: October 18, 2014, 02:45:58 PM by kudy »

sol

  • Walrus Stache
  • *******
  • Posts: 8492
  • Age: 42
  • Location: Pacific Northwest
Re: Community Solar?
« Reply #5 on: October 18, 2014, 03:05:38 PM »
"Each community solar panel costs $930. Each community solar panel will generate an estimated lifetime savings of $8,331.

What is the size of the panels?  You can usually find specs from the manufacturer, but around here most panels cost something like $500-600 each and (for new panels) are rated to something like 275W.  The rest of the cost is installation, which is usually 30-50% of the total cost for a solar install and I'd expect the lower end of the range for a dedicated community array.  There is also some cost for the inverters that convert the solar DC into residential AC, but on a large community array they're probably using industrial inverters and the cost per panel shouldn't be more than $50.

The next step is to look up the production for a panel of that size in your location.  The link posted above to PVwatts is a good place to check, but there are others online as well.  They account for you latitude and local weather and panel efficiency to determine how many kWh you can expect from a given panel at a specific location, over the course of a year.  Here in Washington, a 275w panel is expected to produce about 280 kWh of electricity annually with only a tiny fraction of that in Dec/Jan when it is typically rainy and the sun is only up for eight hours per day.  Most of it comes in the sunny summers.

Once you know the expected production, multiply it by your current or projected energy costs over the lifetime of the panel.  So if they're warrantying a 275w panel for 25 years and your power costs 10 cents per kWh, I'd expect 25*28= 7k Kwh times ten cents per Kwh is $700 in savings.  That's a far cry from the $7401 you mentioned.

Big numbers like that $7401 are usually the product of government incentives, and Colorado has some of the best ones.  There's the 30% federal tax rebate, plus a variety of state and local incentive programs (check out http://dsireusa.org/incentives/index.cfm?re=0&ee=0&spv=0&st=0&srp=1&state=CO).  Without them, the payback on solar panels is usually between 20 and 30 years unless you have very expensive electricity rates like Hawaii or California.

So I'd ask if you will qualify for the 30% federal tax credit, or if they're taking that credit and rolling it into your purchase price.  I'd check your current utility bill to see what you currently pay for power.  I'd check your local incentives very carefully to make sure you understand what programs their using, and whether that money flows to your community group or to you personally, and whether it comes from the state coffers or from the utility company by way of tax breaks. 

In my case, my local utility company writes a check to residential solar system owners based on how much my roof produces.  The utility company gets a tax break equal the size of the check they write me.  And I have no city or utility-specific programs, so my case is probably simpler than yours. 

kudy

  • Pencil Stache
  • ****
  • Posts: 945
  • Age: 36
  • Location: RV Traveling the U.S.
Re: Community Solar?
« Reply #6 on: October 18, 2014, 03:51:56 PM »
Thanks Sol - the sales materials they've given me so far, and the sales reps are both short on a lot of details, so it's awesome to know what questions to ask.

They've told me that they are 300W panels.  It appears the $930 covers everything, including maintenance over 50 years.

It's tough to run the PVWatts or other calculators without more info from them, but I will ask for specific details and see what I get. Their estimates peg production at about 56kWh per month (I am assuming that's not realistic, but don't know what is closer to actual). Using their numbers, and your formula 50*672 = 33.6k kWh times 13 cents per kWh is $4368 in savings. I wonder if their calculations include an inflating utility cost over time? I believe that my credit will increase with the cost of electricity, so that may be the missing exponential number here? Assuming 50 years isn't realistic, and 56kWh per month is overstated, I think I won't move forward without some real details or historic numbers from the array they built a few years ago.

kudy

  • Pencil Stache
  • ****
  • Posts: 945
  • Age: 36
  • Location: RV Traveling the U.S.
Re: Community Solar?
« Reply #7 on: October 18, 2014, 03:59:16 PM »
P.S.

Using the default values on PVWatts, for my location and a 300W panel, they estimate an average of 38.25kWh per month, instead of the 56kWh that the company is using for their estimates. It's possible they have a bunch of optimizations and fancy equipment in place at the commercial level, but that's a good comparison.

Nords

  • Magnum Stache
  • ******
  • Posts: 3186
  • Age: 58
  • Location: Oahu
    • Military Retirement & Financial Independence blog
Re: Community Solar?
« Reply #8 on: October 19, 2014, 12:10:27 PM »
Using the default values on PVWatts, for my location and a 300W panel, they estimate an average of 38.25kWh per month, instead of the 56kWh that the company is using for their estimates. It's possible they have a bunch of optimizations and fancy equipment in place at the commercial level, but that's a good comparison.
I'd say it's more likely that PVWatts is conservative (perhaps even more accurate) and the company is excessively optimistic. 

DarinC

  • Bristles
  • ***
  • Posts: 308
Re: Community Solar?
« Reply #9 on: October 19, 2014, 03:25:30 PM »
Big numbers like that $7401 are usually the product of government incentives, and Colorado has some of the best ones.  There's the 30% federal tax rebate, plus a variety of state and local incentive programs (check out http://dsireusa.org/incentives/index.cfm?re=0&ee=0&spv=0&st=0&srp=1&state=CO).  Without them, the payback on solar panels is usually between 20 and 30 years unless you have very expensive electricity rates like Hawaii or California.
The payback depends more on the installation, DIY or paying someone, than the location.

The cost of a DIY a grid-tie system (http://www.wholesalesolar.com/gridtie.html) is ~$2/W, which has a ~7-14 year (South compared to North) payback time in most parts of the country with no incentives at the average US electricity price ($.13/kWh). WA is the worst in the country at ~20 years (9c/kWh).

Paying an extra $2-$4/Watt for installation is what really drives up the payback period.

theSchmett

  • Stubble
  • **
  • Posts: 214
  • Location: New Jersey
Re: Community Solar?
« Reply #10 on: October 20, 2014, 06:31:03 AM »
Where are you? Colorado? This kind of setup isn't available everywhere. Wish it would come to NJ.