Author Topic: Would you invest in this? II  (Read 10919 times)

sol

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Would you invest in this? II
« on: June 04, 2014, 03:22:37 PM »
I seek feedback on a potential investment I'm considering making.  It's not a financial product like was discussed in the last thread of the same title.  Details are as follows.

Initial investment amount, which is probably never recovered, is $30k.  In each year the investment pays the following amounts, more or less guaranteed barring worldwide catastrophic economic collapse.

Year 1:  $14.5.
Years 2-5: $5k.
Years 6-30:  $800 in year 6, then indexed for inflation.

So I see several ways of evaluating an investment like this.  One is that your total return over the 30 years is approximately double your initial investment, for an approximate annual return of 2.5%.  This sounds pretty bad to me.

Another way to look at it is that you have total capital recovery in 5 years (so 0% ROI for 5 years), after which you have a free $800 per year indexed for inflation for the next 25 years.  This sounds pretty good to me.  $800/year is a non-trivial percentage of our annual budget, and I only have to give up 5 years of market returns on approximately $20k to get it.  If the market averages 10% for the next five years, I will have forsaken approximately $9k to get $800/year in profit, for an average return of 8.8%.  If the market only only averages 5% for the next five years, I will have forsaken approximately $4300 for the same $800/year in profit, for an average return of 18.6%.  If the market is flat or down over the next five years, this is a gold mine.

So what does the Mustache Hive Mind think?  Is this the worst investment ever?  Have I confused myself with this analysis?


lurker

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Re: Would you invest in this? II
« Reply #1 on: June 04, 2014, 03:46:43 PM »
While I do think you've used some fuzzy math / analysis, overall, it does not appear to be a terrible return.  Assuming the inflation-indexed payments (years 6-30) increase by an average of 3% each year, your internal rate of return on invested capital would be about 12.9%.  The one negative I see, though, is that after year 1 (and further 2-5), you have so little invested capital remaining that you're not earning that 12.9% on a very large balance.

dragoncar

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Re: Would you invest in this? II
« Reply #2 on: June 04, 2014, 05:10:24 PM »
That's an IRR of 10% 9.5 12%, stupid excel rounding and stupid me, right? (plus a CPI bonus depending on inflation)

next edit:  the CPI bonus is around 40-45% of inflation, for reasonable inflation values.  So at 3% inflation, the IRR is 10.74%

So yes, if it's almost risk-free that's a great deal.

If there's also potential to recover the initial $30k on top, slam dunk.
« Last Edit: June 04, 2014, 11:25:42 PM by dragoncar »

KingCoin

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Re: Would you invest in this? II
« Reply #3 on: June 04, 2014, 05:15:00 PM »
Seems outstanding. Are there any risks to that payout profile?

brewer12345

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Re: Would you invest in this? II
« Reply #4 on: June 04, 2014, 07:20:57 PM »
Just curious: solar panels?

sol

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Re: Would you invest in this? II
« Reply #5 on: June 04, 2014, 10:01:54 PM »
Just curious: solar panels?

But of course.

I can install 7700W of solar panels for about 30k, get a 30% federal rebate on the purchase price next April, and then use the state subsidy of 54 cents per kWh produced to get paid approximately $5k/year (incentive plus reduced power costs) until 2020 and offset most of my power bill thereafter.  At our (extremely low) rate of 8.4 cents per kWh in the PNW, and our household power consumption of slightly more than the panels would produce, our power bill will be reduced by about $700 this year and $800 in 2020 (assuming power bill increases with inflation) and onwards for the life of the system, nominally 30 years but potentially much longer.

The risk to the payout profile is that a hurricane might show up in western Washington and destroy my solar panels.  Or energy costs might rise more slowly than inflation.  Or I guess the state might decide to eschew their solar incentive program prior to 2020, though the account currently has ample funding.

Power inverters cost roughly $3k and will probably have to be replaced at least once over that 30 year span, so that's an additional cost I didn't figure in.  The other potential cost is removing the panels to replace your roof when the time comes, at a cost of roughly $1500. 

Though I haven't accounted for the potential resale cost of the panels themselves.  Presumably a house with solar panels that offset most of the power bill should command a slight premium over a similar house without panels.

Then there are the non-financial reasons to have solar power, like not sending a portion of my paycheck each month to terrorist states that want to blow up our buildings.  And not contributing to flooding Bangladesh.  And setting a positive example for our children.  Those are each worth something to me, though I'm not sure exactly how much.

On a straight up financial comparison, I think I'd be better off taking my $30k and investing it in the market and using the proceeds to pay my power bill every month. 
« Last Edit: June 04, 2014, 10:05:10 PM by sol »

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Re: Would you invest in this? II
« Reply #6 on: June 04, 2014, 10:32:34 PM »
Is there a simple cashflow to npv analyser on the web?

be super handy for a lot of these threads...

dragoncar

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Re: Would you invest in this? II
« Reply #7 on: June 04, 2014, 11:24:26 PM »
Is there a simple cashflow to npv analyser on the web?

be super handy for a lot of these threads...

I used Excel, but you can use Google docs to the same effect (NPV and IRR functions).  Oddly, Google gave me a different answer than Excel, which may help explain the discrepancy with lurker above... not sure what I did wrong.  Every time I want a simple online one, I google it and get some website that lets you use a max of 5 periods or something silly like that and then just pull up Excel.

edit:  I forgot to include one of the $5k return periods.
« Last Edit: June 04, 2014, 11:26:15 PM by dragoncar »

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Re: Would you invest in this? II
« Reply #8 on: June 05, 2014, 12:35:46 AM »
Being in Western Washington, you might also have the risk of the PV greatly under performing the solar industry's stated performance due to clouds/rain.  You can try to anticipate that now or blame it on the weather.

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Re: Would you invest in this? II
« Reply #9 on: June 05, 2014, 12:39:34 AM »
Have you calculated in the risk of moving and not having them pay back in higher purchase price?
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Re: Would you invest in this? II
« Reply #10 on: June 05, 2014, 07:44:18 AM »
Well, assuming that you replace the roof and buy a new power converter at year 15, inflation is 2%, and assuming the panel is worthless after year 30 (stops producing power), XIRR gives me 11.77% with this data. I'd go for it, assuming you think you'll be at your current place for at least 5-10 years.

Even assuming it's worthless at the end of year 5, XIRR gives me 6.04%...that's not so bad, and if you moved at that point I'd think you would certainly get some principal back too. Those subsidies seem to really add up in your case.

Year   Cashflow
6/5/2014   -30000
6/5/2015   14500
6/4/2016   5000
6/4/2017   5000
6/4/2018   5000
6/4/2019   5000
6/3/2020   800
6/3/2021   816
6/3/2022   832.32
6/3/2023   848.9664
6/2/2024   865.945728
6/2/2025   883.2646426
6/2/2026   900.9299354
6/2/2027   918.9485341
6/1/2028   937.3275048
6/1/2029   -3543.925945
6/1/2030   975.195536
6/1/2031   994.6994467
5/31/2032   1014.593436
5/31/2033   1034.885304
5/31/2034   1055.58301
5/31/2035   1076.694671
5/30/2036   1098.228564
5/30/2037   1120.193135
5/30/2038   1142.596998
5/30/2039   1165.448938
5/29/2040   1188.757917
5/29/2041   1212.533075
5/29/2042   1236.783737
5/29/2043   1261.519411
5/28/2044   1286.7498

skunkfunk

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Re: Would you invest in this? II
« Reply #11 on: June 05, 2014, 08:13:15 AM »
Wait on the technology. You will want the stuff that is in the pipeline. I would hate to be kicking myself for installing those and have a much better option in 3 years.

sol

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Re: Would you invest in this? II
« Reply #12 on: June 05, 2014, 08:41:14 AM »
Being in Western Washington, you might also have the risk of the PV greatly under performing the solar industry's stated performance due to clouds/rain. 

Solar installers are pretty up front about expected production numbers.  They're much lower here than in the US southwest, and also much more seasonal because we're farther north and get very short daylight hours in the winter.  The reduced available sunshine here is the primary reason why we have such crazy good subsidies.

Have you calculated in the risk of moving and not having them pay back in higher purchase price?

We just the bought this house and have three kids in local schools.  And stable jobs.  And we're stuck somewhere here in the area for at least ten years by court decree.

XIRR gives me 11.77% with this data.

I'm getting similar numbers, though it looks like the inflation rate on power bills here has been more like 3.5%/year since the early 90s.  Hard to say what it might be in the future, and my spreadsheet suggests it totally controls the relative benefit of panels vs investing.

Wait on the technology.

The problem with this idea is that Washington state has a very generous 54 cents/kWh production incentive for residential solar that expires in 2020.  If I wait three years, I give up roughly $15k in subsidy on a $30k system.  I'm pretty sure the total cost of an installation isn't going to drop 50% in three years.


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Re: Would you invest in this? II
« Reply #13 on: June 05, 2014, 08:54:48 AM »
Wait on the technology. You will want the stuff that is in the pipeline. I would hate to be kicking myself for installing those and have a much better option in 3 years.

I remember reading that 3-4 years ago as well.....When is it the RIGHT time? :-)

54 cents a KWH!?!? Insanely awesome! My local provider USED to purchase at 22c/kwh when they sold at 12-13 cents/kwh. Now they just purchase at your billed rate, so it's just an offset. But I've also been considering panels, now that I'm in a house that's ideally located for them. So it's good to see some analysis of this. I've wondered the same thing: How much is it worth NOW to offset unknown prices LATER?

arebelspy

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Re: Would you invest in this? II
« Reply #14 on: June 05, 2014, 10:49:31 AM »
Do it.  Post pictures.
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Re: Would you invest in this? II
« Reply #15 on: June 05, 2014, 11:05:34 AM »
XIRR gives me 11.77% with this data.

I'm getting similar numbers, though it looks like the inflation rate on power bills here has been more like 3.5%/year since the early 90s.  Hard to say what it might be in the future, and my spreadsheet suggests it totally controls the relative benefit of panels vs investing.

Comparing it to investing is great, but if I were you I'd look at it as part of the fixed-income side of the portfolio. It's an extremely high yielding inflation-linked income stream, kind of. So if you need to reduce your equity exposure in order to buy this thing, then maybe it's a difficult decision (although with almost half back the first year, not really). But if you can just take the money out of other bonds and put them into this, seems like you are diversifying your fixed income exposure and getting a higher yield out of it too. I don't want to push you into it or anything, I'm not a solar salesman, but from a financial perspective it just looks like a pretty good win to me!

sol

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Re: Would you invest in this? II
« Reply #16 on: June 05, 2014, 05:37:08 PM »
Do it.  Post pictures.

Yea, I've pretty much talked myself into it by now.  It's just a matter of when we'll get around to it.  $30k is a largish sized chunk of cash to find under my sofa cushions only two weeks after buying a house.

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Re: Would you invest in this? II
« Reply #17 on: June 05, 2014, 06:06:32 PM »
Do it.  Post pictures.

+1

harvest those subsidies!

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Re: Would you invest in this? II
« Reply #18 on: June 05, 2014, 07:07:28 PM »
Wait on the technology. You will want the stuff that is in the pipeline. I would hate to be kicking myself for installing those and have a much better option in 3 years.

I remember reading that 3-4 years ago as well.....When is it the RIGHT time? :-)

54 cents a KWH!?!? Insanely awesome! My local provider USED to purchase at 22c/kwh when they sold at 12-13 cents/kwh. Now they just purchase at your billed rate, so it's just an offset. But I've also been considering panels, now that I'm in a house that's ideally located for them. So it's good to see some analysis of this. I've wondered the same thing: How much is it worth NOW to offset unknown prices LATER?

Yeah, I'm all for tax optimization but that number makes me a bit uncomfortable.

On the other hand, the engineer in me is trying to figure out how I can run an extension cord from my neighbor's house to arbitrage this.

Mr Mark

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Re: Would you invest in this? II
« Reply #19 on: June 05, 2014, 07:31:59 PM »
Do it.  Post pictures.

Yea, I've pretty much talked myself into it by now.  It's just a matter of when we'll get around to it.  $30k is a largish sized chunk of cash to find under my sofa cushions only two weeks after buying a house.

you could work out the optimal time to buy, based on roi

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Re: Would you invest in this? II
« Reply #20 on: June 05, 2014, 07:41:54 PM »
Do it.  Post pictures.

Yea, I've pretty much talked myself into it by now.  It's just a matter of when we'll get around to it.  $30k is a largish sized chunk of cash to find under my sofa cushions only two weeks after buying a house.

you could work out the optimal time to buy, based on roi

Indeed, especially if you consider taking a loan to pay for it.
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Re: Would you invest in this? II
« Reply #21 on: June 05, 2014, 07:50:43 PM »
Do it.  Post pictures.

Yea, I've pretty much talked myself into it by now.  It's just a matter of when we'll get around to it.  $30k is a largish sized chunk of cash to find under my sofa cushions only two weeks after buying a house.

you could work out the optimal time to buy, based on roi

Indeed, especially if you consider taking a loan to pay for it.

Or a gofundme on Facebook to "save the planet!"

sol

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Re: Would you invest in this? II
« Reply #22 on: June 05, 2014, 07:59:25 PM »
you could work out the optimal time to buy, based on roi

I'm pretty sure the optimal time to buy was about six months ago.  Prices on panels had already dropped a bunch, I could have paid off-season installation rates, and I could already be banking production incentives during the long sunny summer days.  But I didn't have a house with a perfect roof six months ago.  Every year that I wait cuts off $5k from my near-term return.  Now is the time.

The 2020 sunsetting on the production incentives is the only thing that makes solar panels price competitive around here.  Our normal power rates are so cheap, and our amount of sunshine is so low compared to other parts of the country, that it just doesn't pencil out here without the state supporting the incentives.

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Re: Would you invest in this? II
« Reply #23 on: June 05, 2014, 09:38:09 PM »

I can install 7700W of solar panels for about 30k, get a 30% federal rebate on the purchase price next April, and then use the state subsidy of 54 cents per kWh produced to get paid approximately $5k/year (incentive plus reduced power costs) until 2020 and offset most of my power bill thereafter.  At our (extremely low) rate of 8.4 cents per kWh in the PNW, and our household power consumption of slightly more than the panels would produce, our power bill will be reduced by about $700 this year and $800 in 2020 (assuming power bill increases with inflation) and onwards for the life of the system, nominally 30 years but potentially much longer.

The risk to the payout profile is that a hurricane might show up in western Washington and destroy my solar panels.  Or energy costs might rise more slowly than inflation.  Or I guess the state might decide to eschew their solar incentive program prior to 2020, though the account currently has ample funding.

Power inverters cost roughly $3k and will probably have to be replaced at least once over that 30 year span, so that's an additional cost I didn't figure in.  The other potential cost is removing the panels to replace your roof when the time comes, at a cost of roughly $1500. 

Though I haven't accounted for the potential resale cost of the panels themselves.  Presumably a house with solar panels that offset most of the power bill should command a slight premium over a similar house without panels.

Then there are the non-financial reasons to have solar power, like not sending a portion of my paycheck each month to terrorist states that want to blow up our buildings.  And not contributing to flooding Bangladesh.  And setting a positive example for our children.  Those are each worth something to me, though I'm not sure exactly how much.

On a straight up financial comparison, I think I'd be better off taking my $30k and investing it in the market and using the proceeds to pay my power bill every month.
Some points to counter the excess conservatism:
1.  It's always easier to reduce your consumption than to raise your production.  Panels are cheap, but inverters & labor can have big breakpoints in the price.  Do you really need 7700 watts, or are there big price breaks on the installation costs if you have "only" 7000 or 6000 watts?

2.  On the other hand, if you ever have an excess 1000-1500 watts of capacity then you're probably able to recharge an EV from your PV.  I don't know gas prices in Washington state but you might be able to buy a cheap used EV in a few years and commute with that instead of with a gas-burning engine.  Of course this currently works best with a commute round trip under ~80 miles.

3.  When's the last time that western Washington had a hurricane?  It's been 22 years over here, but we have high winds all the time and I have yet to read of a PV array damaged by high winds.  I doubt that hurricane-force winds would rip the rails out of the roof trusses, and the panel clips are also rated to hurricane-force loads.  Or maybe your humor went right over my head.

4.  I'm not sure why inverters have to be replaced every 30 years.  I suspect you'll be able to disregard this risk (or use the manufacturer's warranty).  I've had 3350 watts of panels running on a 3000-watt inverter (as approved by the tech manual) for over seven years.  I think capacitor death (or some other IC failure) would have occurred by now.

5.  When do you think you're going to have to replace that part of your roof?  The PV panels are shading it and shielding it from the things that make roofs go bad.  You might be wasting your time (and money) paying to replace the roof under the panels.  And if you decide to re-roof anyway, if the PV installer uses flashed mounts (as they should) then you could just remove the panels and re-roof around the rails. 

6.  Home buyers do not currently pay up for PV arrays.  Manufacturers will sell them as an add-on to the price of a new home, but the average homebuyer will not reward you for the present-value cash flow of the PV system.  Of course this behavior may change if oil gets over $150/barrel.

You could consider your PV array to be a stock with a combination of growth & dividends, or you could consider your PV array to be a dividend-paying asset.  The PV array has a volatility of effectively zero and is unlikely to cut its dividend.  If you find a stock meeting (or exceeding) the performance of your PV array then please let us know.

sol

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Re: Would you invest in this? II
« Reply #24 on: June 05, 2014, 09:50:07 PM »
Do you really need 7700 watts, or are there big price breaks on the installation costs if you have "only" 7000 or 6000 watts?

The break point is at 5.5kW, which is the largest inverter I can currently buy that still qualifies for the crazy high production incentive.  It's about an extra $2k just for the second inverter to go from 5.5kW to 7.7kW.

Quote
if you ever have an excess 1000-1500 watts of capacity then you're probably able to recharge an EV from your PV.

This is certainly on our mind.  Our commute is now about 8 miles each way and and EV as a second vehicle makes a lot of sense for us.  It will happen eventually, though maybe not this year or next.

Quote
When's the last time that western Washington had a hurricane?

To my knowledge, we've never had a hurricane.  I was stretching for potential risks.  I don't think our panels would go anywhere.

The larger potential risk, I think, is a disruptive technology like thin film solar or solar-integrated metal roofing that could potentially make residential solar arrays much cheaper.  The technology hasn't changed all that much over the past 20 years, but I don't know if that will still be true 20 years from now.

Quote
I'm not sure why inverters have to be replaced every 30 years.

Inverters seem to be warrantied for 10 or 15 years, and several people I've talked to have suggested that they are the most likely to fail piece of a solar array.  Maybe they're not making them as well as they used to?

Quote
When do you think you're going to have to replace that part of your roof?

Our current roof is 16 years old and appears to be in great shape.  But I expect my solar panels to outlast my roof, eventually.  I was just trying to figure in future costs, and reroofing will be a little more expensive if I put up panels so that's part of the cost of the system over the long term.


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Re: Would you invest in this? II
« Reply #25 on: June 06, 2014, 07:51:58 AM »
Thanks Sol,

sounds like you should get on with it!

Also sounds like a huge opportunity to finance these things for other people and take a nice piece of those subsidies?I'm surprised the whole state isn't flooded with solar panels... why not?

arebelspy

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Re: Would you invest in this? II
« Reply #26 on: June 06, 2014, 08:15:14 AM »
Thanks Sol,

sounds like you should get on with it!

Also sounds like a huge opportunity to finance these things for other people and take a nice piece of those subsidies?I'm surprised the whole state isn't flooded with solar panels... why not?

People are bad at math, and long term thinking.
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Re: Would you invest in this? II
« Reply #27 on: June 06, 2014, 09:07:59 AM »
True, but with those sort of returns I would have expected the panel installers and suppliers to be aggressively financing this stuff in a way that makes it attractive even for the ignorant and cashless! ;-)

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Re: Would you invest in this? II
« Reply #28 on: June 06, 2014, 09:35:08 AM »
I have been reluctant to add some energy upgrades to the homes I've lived in due to uncertainty about how long I would live there. I have not lived in one location for more than 3 years since I graduated from high school 12 years ago. Payback periods on simple upgrades like insulation and programmable thermostats are simply not fast enough to make it worth my while, since most homebuyers aren't willing to pay extra for them (at least around here). I really look forward to putting some roots down somewhere, just so I can financially justify doing some of these common sense efficiency upgrades.

On a related note, why don't insulation installers offer aggressive financing for their services?

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Re: Would you invest in this? II
« Reply #29 on: June 06, 2014, 10:43:35 AM »
True, but with those sort of returns I would have expected the panel installers and suppliers to be aggressively financing this stuff in a way that makes it attractive even for the ignorant and cashless! ;-)

It's funny, I suspected the state may offer loans for this, and it does.  But the rate was something like 4.7%.  It would be cheaper to just pay with a home equity line of credit.

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Re: Would you invest in this? II
« Reply #30 on: June 06, 2014, 01:06:02 PM »
And we're stuck somewhere here in the area for at least ten years by court decree.

Hopefully that's because of a child custody agreement and not because you're wearing an ankle bracelet that needs period charging from those solar panels.

sol

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Re: Would you invest in this? II
« Reply #31 on: June 06, 2014, 01:13:58 PM »
True, but with those sort of returns I would have expected the panel installers and suppliers to be aggressively financing this stuff in a way that makes it attractive even for the ignorant and cashless! ;-)

Solar doesn't have quite the popularity here as it does other places because people think of the PNW as grey and rainy.  That's probably part of it.  And coming up with $30k cash up front isn't exactly easy for most folks, either.

I think banks and lease companies like Elon's Solar City aren't really interested in this part of the country because they returns are much higher for them in other parts of the country.  California has tiered energy pricing, where you pay more during the summer than the winter and more during afternoon peak period than you do at night.  With lots of sunshine and local utility rates up to 26 cents per kWh and rising 10% per year for peak usage that is easy to offset with even moderately sized solar arrays, California has basically stopped giving out any state incentives to people because it just makes so much financial sense straight off the shelf that they no longer need to subsidize it.

Here it's a different story.  Less sunshine and cheap hydropower make solar less price competitive here.  They only reason it pencils out right now is that the state's solar panel manufacturers got together and lobbied heavily for a strong state incentive for people who install locally made equipment.  It's basically a cash transfer to local manufacturers, as they can charge a premium for their products and still be price competitive because the state subsidies are so high.

AmericanEagle

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Re: Would you invest in this? II
« Reply #32 on: June 07, 2014, 11:52:02 PM »
For me I'd classify solar panels not as an investment, but something for your home.
I've been thinking about building a vacation home, and it would definetly include solar panels.  Even though there's probably no return to them.  Why?  I like the concept of generating my own electricity and being less dependent on fossil fuels.  That's all.  Having lower electric costs is of course a big gain, too. 

I don't consider my personal residence to be an "investment".  It's a home.  And therefore I'll won't fret too much over adding things that I personally like -- within the confines of my budget.

Of course if you live in Arizona or other very sunny parts of the country, there probably is a pure "investment" angle to solar panels.  But for me in the chilly northeast, it's a neat trick that is abour proving a concept.

deborah

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Re: Would you invest in this? II
« Reply #33 on: June 08, 2014, 12:57:50 AM »
Sounds too good to be true - which, by my way of thinking means that the subsidy won't last (that sort of subsidy didn't here, but people already getting it have it for 25 years) - go for it!

Our consumer organization reckons you're best to get an array equal to your minimum daily usage. But that might be since the subsidies went down.


TomTX

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Re: Would you invest in this? II
« Reply #34 on: June 08, 2014, 06:56:00 AM »
Wait on the technology. You will want the stuff that is in the pipeline. I would hate to be kicking myself for installing those and have a much better option in 3 years.

There is ALWAYS something better coming along - and the stuff just announced as a lab success is more in the "5 years to never" time horizon.

Solar panels are cheap now, and the OP has some BIG .gov incentives at the moment.

Sparky

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Re: Would you invest in this? II
« Reply #35 on: June 11, 2014, 07:36:37 PM »
From an electrical perspective solar systems are good investment (they will pay themselves off under normal circumstances and are very reliable overall), but I haven't heard any mention of replacement of batteries in this thread. They do have a relatively short span compared to the rest of the system.

TomTX

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Re: Would you invest in this? II
« Reply #36 on: June 11, 2014, 07:44:02 PM »
From an electrical perspective solar systems are good investment (they will pay themselves off under normal circumstances and are very reliable overall), but I haven't heard any mention of replacement of batteries in this thread. They do have a relatively short span compared to the rest of the system.

I believe most here would be implementing grid-tied solar. Half the price, and maybe a quarter of the upkeep. Plus, you don't have the same sizing issues, or downtime issues. For battery-only solar, you have to scale your system for your worst-case month (often January) and can easily end up with wasted power in the summer.

Sparky

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Re: Would you invest in this? II
« Reply #37 on: June 11, 2014, 07:51:55 PM »
From an electrical perspective solar systems are good investment (they will pay themselves off under normal circumstances and are very reliable overall), but I haven't heard any mention of replacement of batteries in this thread. They do have a relatively short span compared to the rest of the system.

I believe most here would be implementing grid-tied solar. Half the price, and maybe a quarter of the upkeep. Plus, you don't have the same sizing issues, or downtime issues. For battery-only solar, you have to scale your system for your worst-case month (often January) and can easily end up with wasted power in the summer.

Yeah, that's what I'm thinking Sol is doing, just a little curious :)

[Mod Edit: Quote tags fixed.]
« Last Edit: June 11, 2014, 08:16:19 PM by arebelspy »

Nords

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Re: Would you invest in this? II
« Reply #38 on: June 11, 2014, 07:52:26 PM »
From an electrical perspective solar systems are good investment (they will pay themselves off under normal circumstances and are very reliable overall), but I haven't heard any mention of replacement of batteries in this thread. They do have a relatively short span compared to the rest of the system.
I think OP went with a grid-tied system, but that's an interesting question-- if an electrical utility customer goes off the grid, would they still get the generous state/utility subsidies & tax credits? 

I guess I'd do it in two phases-- a grid-tied phase to get all the credits, and then a second off-the-grid phase (with the additional expense of an off-the-grid inverter).  I know some off-the-grid PV lead-acid batteries (deep-cycle marine) will last for two decades with care, but that depends on the number/severity of the cycles.  The homeowners would probably want to be very careful about large surges like air conditioning or furnace motors, refrigerator compressors, and vacuum cleaners.  Not exactly user-friendly.

I'd much rather be relying on rock-steady utility grid voltage than off the grid.

brooklynguy

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Re: Would you invest in this? II
« Reply #39 on: June 18, 2014, 07:23:39 AM »
Does (Elon Musk's) SolarCity's recently announced plan to purchase Silevo and enter the panel manufacturing business change the analysis for anyone?

SunshineGirl

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Re: Would you invest in this? II
« Reply #40 on: June 18, 2014, 09:26:40 AM »
Wait on the technology. You will want the stuff that is in the pipeline. I would hate to be kicking myself for installing those and have a much better option in 3 years.

This is my thought as well, and why I've held off, that what's presently out there is going to soon be old-school (as well as ugly)...but what IS in the pipeline and when will it be ready? Am I waiting for Elon Musk & Tesla batteries?

For me, going solar would ideally mean unhooking from the electric company, at least for the solar portion, but it seems extremely uncommon in my urban city if not impossible with present technology.

skunkfunk

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Re: Would you invest in this? II
« Reply #41 on: June 18, 2014, 09:30:11 AM »
For me, going solar would ideally mean unhooking from the electric company, at least for the solar portion, but it seems extremely uncommon in my urban city if not impossible with present technology.

The utility makes for a great battery. Supply them during peak hours and all. The biggest issue I've noticed is that some legislation is either preventing this or letting them pay an unfair rate back to you when you are supplying them.

Nords

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Re: Would you invest in this? II
« Reply #42 on: June 18, 2014, 04:15:21 PM »
Wait on the technology. You will want the stuff that is in the pipeline. I would hate to be kicking myself for installing those and have a much better option in 3 years.
This is my thought as well, and why I've held off, that what's presently out there is going to soon be old-school (as well as ugly)...but what IS in the pipeline and when will it be ready? Am I waiting for Elon Musk & Tesla batteries?
If you do it now then you'll start generating electricity now and the payback will be that much faster.  If you wait, then there's always going to be a better system in the pipeline.

Our local solar supply company has a "museum" of old panels dating back to the 1970s.  Most of them are perfectly functional, although they have very low power densities compared to modern panels.  I have 45 panels on our roof of varying ages up to 20 years, and the most powerful ones are only 115 watts-- yet they're the same physical dimensions as today's panels that produce over 300 watts.  We started generating power in 2005 (from those used panels) and the system paid for itself by late 2010.  I haven't felt the need to upgrade to higher-power panels, let alone pretty ones. 

It's worth getting a quote today so that you can figure out how much you're going to pay-- and how quickly it's going to pay you back.

For me, going solar would ideally mean unhooking from the electric company, at least for the solar portion, but it seems extremely uncommon in my urban city if not impossible with present technology.
I'm not sure why you'd want to unhook from the grid.  The electric company creates a rock-solid voltage for you to run your grid-tied photovoltaic array, and it's the most cost-effective option. 

Going off the grid (with batteries and a battery-charging controller, as well as a different inverter) leaves you with a system whose voltage is much more affected by power surges like a refrigerator compressor or a vacuum cleaner-- and an air-conditioning compressor would cause a huge voltage fluctuation every time it started up.