We're looking at solar for our home and the numbers are phenomenal. We live in the Willamette Valley of Oregon which, unbeknownst to almost everyone, gets more average yearly foot-candle-hours of sun than the town in Germany where all the solar panels are made and baselined. Because solar hasn't caught on up here yet, the local utility, PGE, pays handsome sums to net metering providers (which I hope to become). If I recall correctly, they're subsidized by a state program to do so. Anyway, here are the numbers:
The 10KW system with a 25 year warranty on all components installed is $42,000.
It will make a yearly average of 30kWh/day
PGE will reduce my monthly bill by $0.11/kWh (or an average of about $100/month)
On top of this, PGE will pay me an average monthly cash refund at the rate of $0.39/kWh (or an average of about $351/month).
This scenario results in the system paying itself back in under 8 years - if inflation is zero.
But that's before I factor in the 30% federal tax credit ($12,600) and the $1500 Oregon state credit. Those two items reduce the system cost to $27,900, which results in a payback of just over 5 years.
The contract with PGE is 15 years. The net metering rates I mention above are pegged to PGE's published current rate per kWh. If they charge more, my pay rates go up. If they charge less, my pay rates go down. Electricity rates in my area have averaged 7% inflation over the last 20 years.
Over its 25 year life - even assuming the cash payments disappear at year 15 and we just get the prevailing per/kWh rate as a refund thereafter - this system will pay itself many times over and factoring inflation into the mix, it's even more so.
Any Mustachians have a good argument against doing this? I'm about to pull the trigger.
Thx!
Based on your numbers, you should do it.
Your main risk is political, but even with an eight-year payback that's a pretty small risk. Many utilities have found that their net-metering rates are overly generous, especially when their customer base shrinks as everyone is netting out to zero. This gives the utility a motive to raise rates on the "evil PV owners who aren't paying for their share of the grid".
Check the DSIREUSA.org website for the latest on your federal/state/locality tax credits. As another poster mentioned, $42K is a pretty big price tag and the credit may be capped at a certain dollar figure. The way around that cap is to do the installation in separate tax years. Install all of the rails this year, along with half of the panels, and then do the rest next year.
I looked into solar about 5 years ago so some of my info may be old:
Solar panels lose a portion of their 'effectiveness' each year. Might be 1-5%.
Similarly solar panels must be either kept clean or reduced by a percentage to account for dirt/grime.
Solar panels can be easily damaged by hail/falling limbs, etc.
Are you looking at a fixed or tunable system? If it moves to track then sun then there are more components to break.
Today's PV panels (and most of yesterday's PV panels) don't lose any significant capacity until they're 25 years old. And frankly that data is based on projecting less than 25 years of experience.
I have never cleaned my PV panels. The weather takes care of that. Some of the panels are over 20 years old and all of them have been on our roof for 6-9 years.
PV panel cover glass is rated for hurricane impacts, major hail, and human bodyweight. We've had wind gusts of over 60 knots several times during the last nine years, along with an earthquake, and we've had more damage to the rest of the roof than to the part with the PV panels on it.
I haven't seen a sun-tracking system on a residence in years. I don't think it's worth the extra expense anyway.
You will need to get additional insurance for your home (ours amounts to an extra 30$ a year or so) to cover the solar panels.
Check how expensive it will be to remove the panels if/when you need to replace your roof.
Our solar panels are warrantied not to drop below a certain level of effectiveness depending on age. Check the warranty of the equipment you get for both the panels and inverters. Our panels are also warrantied against hail smaller than a softball.
As far as equipment goes, I like micoinverters much more than the regular string ones. If something goes wrong with a microinverter it doesn't affect a whole bunch of panels, just the one it's connected to. They also perform much better if you have any pipes/chimneys/overhanging trees that might shade a couple panels in a string.
Work out your break even point, figure out how long you plan to be staying where you're currently living (I'm not convinced that having the panels on your house will necessarily be a selling feature, being somewhat of a pessimist). Also check about tax write-offs for depreciation of equipment (since you're now basically being an energy reseller). For us it was a no-brainer.
We don't insure our panels. If the insurance makes you sleep better at night, then great, but if you're getting a payback within 5-8 years then PV panel insurance is analogous to buying an extended warranty on a TV or a computer.
When we decided to renovate our roof (more insulation), we had to take down over 40 PV panels and all the hardware. The entire removal took one workday. The complete re-installation (starting from scratch with drilling holes and routing new rails/clips) took about 20 man-hours spread out over a week.
I'd only worry about the roof if it's in sad shape now. The PV rails actually strengthen the roof framework and the panels protect the roof from a lot of weather problems. If you re-roof before installing a PV system then the roof under the panels will probably last longer than the roof on the rest of the house. If you have 5-10 years of life left in your existing roof (and no bad shingles or roof leaks) then you can probably just go ahead and re-roof now. A compromise would be bringing out a roofer to do an inspection & minor repairs, and then install the PV system.
Some microinverters will clip at their max wattage. I think there are 300-watt microinverters, but some panels put out a higher power than the microinverter can convert. The best advice is to ensure the panel is matched to the microinverter (no clipping) and do the price comparison against a string inverter. A string inverter with more than one microprocessor (more than one conversion algorithm) can also do a great job with shaded panels.
Home buyers do not pay extra for a PV system. They don't see the future value and they're just not willing to dicker over the $10K-$40K difference.