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Does Solar Pay for Itself? Is it worth it?

BentleyJ

Solar Wizard
Joined
Jan 13, 2022
Messages
2,972
Location
Riverside County, CA
I got curious today as to how much solar electricity our panels have actually produced, at what cost, compared to the production guarantees and projections on the Solar City lease. Not sure if this will be interesting to any one, it is little different than the typical cost benefit analysis as this is looking back vs. looking forward trying to predict future price trends and what the pay back period will be. Our Solar City 11 panel, 2.82kW DC string system was turned on in April of 2011. Then March through November 2016 I added a total of 11 more panels with Enphase M250 microinverters, approx 3kW. So 5.8kW total. Here are the numbers.

We are in the 12th year of a 20 year lease that has an escalating payment plan of approx. 3% per year. So far the system has produced(according to the Fronius Inverter) 55,334kWh with total payments of $9,298 made so far. This works out to 16.9 cents per kWh on average. However, because the lease payments started out lower and production was slightly higher, the first year our solar electricity cost was only 13.5 cents and has now increased to 19.5 cents. While during that same time SCE rates were approx. 16 cents per kWh in 2011 and now have increased to 28 cents. Electric utility rates are clearly increasing at a higher rate than previously projected making the cost of electricity from legacy solar systems even more attractive. As the lease payment continues higher each year for the next 8 years the total paid will be just over $19,000 and the guaranteed solar production totals up to 85,333kWh. This is about 22.2 cents per kWh but so far the system is ahead of the guaranteed minimum production by 2,500kWh. If this trend continues the realized solar production cost will actually end up at about 20 cents per kWh average over the 20 years. In retrospect, the escalating payment plan was nothing short of genius because it ensured that the customer would always be paying less than utility rates for their solar electricity. With no down payment, the system started saving money the first month and every month thereafter.
Bottom line: Installing solar in 2011 even when panel prices were much higher and considering the extra system cost of interest attached to the lease, it was absolutely worth it and has saved real dollars.

The Enphase System has produced 27,700kWh and was a DIY install paid for up front in cash, $5,213.23. Avg. cost per kWh as of today (4 years in operation) is 18.8 cents but will continue to decrease as the kWh add up but the investment is fixed. Rough estimate indicates that about 30% of the cost has been recovered already and as rates continue to go up I expect another 50% pay back over the next 4 year period. So I would have to say this was well worth it also.

Two other positive factors that I cannot put a dollar value on because the data is lacking: 1) Due to having the solar system supply a substantial portion of the electrical demand during summer air conditioning months, utility usage was kept well within the lower Tier 1 pricing structure. 2) Having the Calif. NEM 1.0 agreement in place has so far prevented the utility from forcing Time of Use metering at this location. ToU rates between 4 to 9 pm can be over 50 cents per kWh.

Lastly, In 2018 a DIY whole house back up inverter & batteries (AC Coupled) was installed at a cost of approx. $11,000. While it is capable of providing peak load shaving for ToU rates, this feature is not currently needed. As such this item can only be considered a convenience and there is no pay back to justify the expense. Not to mention I really wanted to do the DIY project. I believe this belongs in the same category as ordering your new truck with ALL the options when the standard model would have been fine.
 
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Hindsight is 100 percent.
Looks like you made a good decision at the time but that's not to say it would be good in the future.
Rates change and incentives disappear once the desired effect has been realized.
Anyone considering signing up now should take a long hard look at the numbers for their particular case.
 
Hindsight is 100 percent.
Looks like you made a good decision at the time but that's not to say it would be good in the future.
Rates change and incentives disappear once the desired effect has been realized.
Anyone considering signing up now should take a long hard look at the numbers for their particular case.
Yes, you are absolutely correct. In fact, if I was starting over today I would seriously consider going with a self consumption system rather than grid tie. I wasn't trying to be a solar cheerleader just kind of pointing out that sometimes people look at things from too short of a time period.
 
Sounds like so far so good, and will continue to be good.

I have to wonder with the huge advances in PV panels if a big hailstorm wouldnt take a bunch of people in the first 10 years of their older systems from red to black overnight by increasing their production 50%..
 
Hindsight is 100 percent.
Looks like you made a good decision at the time but that's not to say it would be good in the future.
Rates change and incentives disappear once the desired effect has been realized.
Anyone considering signing up now should take a long hard look at the numbers for their particular case.
If you think rates will ever go down I have a bridge to sell you.

Incentives by the US gov't are baked in for the next 10 years.
 
If you think rates will ever go down I have a bridge to sell you.

Incentives by the US gov't are baked in for the next 10 years.
it seems that electricity may become the next gasoline, or water or food or Rx, or ( whatever). It’s already happening in other countries and here in some places… he who controls the energy controls everything.
Electricity is a mighty tempting target to those in power to use for more control, power and money…( yea,I know….they would never do that).

Build your solar systems while you can…while they are cheap…forget the silly discussions about ROI, PROBABLE PAY BACK, NET SAVINGS….bla bla bla ...anything good and affordable never lasts…
Oversize them if you can, buy spare parts for key components if possible…learn all you can how to maintain them…buy the proper tools… don’t depend on others for what you should be able to do yourself ….
jus my opinion …J.
 
After 15 years I expect our Fronius grid tied system to have generated close to 200 MWh. It cost AUD 12.8k (USD 8.9k) in 2018.
That's a bit under USD 4.5c/kWh. 3 years 10 months in and it has generated 50.65 kWh.

It will have paid for itself in bill reductions at about 4.5 years after installation.

In Australia grid tied solar PV is almost a no brainer.
 
It's not quite accurate but close enough to show our progress (Aussie pesos).

Yield is earnings from exporting excess energy to the grid. Savings is the value of self consumed solar PV at the time avoiding the cost of grid imports. Self consumption is worth that exports more since the export tariff is only a fraction of the import tariff. Most savings come from not having to import energy during the day. We are 78% of the way to having recovered the installation cost after 3 years 10 months.

Screen Shot 2022-08-27 at 5.23.24 pm.png
 
There is no place for solar to go other than up!
I just read that in the UK they are planning a 40% hike in power prices.
My own bill has been creeping up. 10KW of panels and 26 KW batterie of storage and my bill is now down by 80%.
 
I have an early grid tie system about 20 years old. Panels were the first of the amorphous panels (Sharps) at the "bargain price of $6.60 a watt. The 1 Kw grid tie inverter was around 1.7K. The array was a whopping 660 Watts. Federal tax credit was 10% of installed cost with my state chipping in $400. From a financial perspective it was not a great investment. I would have been far better off putting the money in the bank and collecting interest. At the time, I was working in the Pulp and Paper Industry and knew the writing was on the wall for the industry in the US. I caught the tail end of the pulp and paper boom in the US early in my career, but the internet and offshoring doomed it. I wanted out of the industry but swapping industries is always a challenge. That little 660 watt array was part of my resume that got my foot in the door into renewables. Sure there were plenty of other factors but that got my resume to top of the pile and showed that I was not looking for a life raft from a dying industry, I was looking for a new career. Had I hung around much longer in pulp and paper I would have been condemned moving around the country from remaining mill to remaining mill working for increasingly 3rd rate owners trying to make one last buck. Instead, I got close to 20 years in the rapidly growing renewable energy field, the majority of it working from my house. It let me bank up a few bucks and I could have retired when I was 60 but I am hanging around working 3 days a week until a couple of combined heat and power projects get completed. No doubt if I wanted to work another ten years I could do so. So for me the payback was a new career track in a growing interesting industry. So it's not just financial payback to look at.

I subsequently designed and installed two additional arrays at home using surplus panels from bankrupt companies or companies that got out of the business. The federal tax credit was 30%. and I did all the labor. The old 660 Watt system is still running albeit the original inverter died after 17 years so I bought some used enphase 215s microinverters and got the panels lit up again. Total array capacity is around 4.6 KW. The local utility just raised the energy service supply charge 112% to 22.56 cents per KW. The systems I have are grandfathered true net metering with no mandatory true up so as long as I live in the house, I can carry forward a credit and am isolated from increased power rates. I burn up a portion of my summer surplus heating my house with a minisplit in the fall/early winter and then fire off my wood boiler until about the end of March and run the minisplit again until I do not need the heat. My utility grandfathers the inverter rating not the panels installed so I could my total inverter capacity is 6 KW so I could repanel and probably end up with a 7 KW array.
 
I have a vague notion that as more and more large commercial operators start to repanel old installations, the flood of used PV (due to a lack of subsidy to profitably recycle it) combined with rising utility operations cost from aging equipment going into an era of more frequent ‘acts of god’ as your insurance would say… will be a confluence of rising prices for grid and dropping prices for home solar such that the threatened utility operators will become more and more antagonistic to home solar and leverage their influence in local governments to legislate against it and make it harder and harder as time goes by to DIY a home system, while licensed and permitted installations will be required by code etc to end up being you buying the utilities free equipment with a forever lease on your roof. At some point someones house will burn down and the utility will sue them for damages from ‘loss of service’ or some such bs.

So i agree the payoff argument is not the only factor and it might end up being far more important to get grandfathered into whatever the current situation is in your area, even IF you don’t do a legal installation, because the penalties will be grandfathered too. Going forward it may become easier to ask for forgiveness than permission. ?
 
1. Mostly no.
2. Worth is a subjective thing and you can not use hard math to figure with.

To make it pay you need a market to sell to. You also need enough size to get benefit of scale.

I would say that lacking grid tie (with a really good offset over wholesale grid prices) and government incentives the average solar power setup is not a pay for itself situation.

All that depends on grid price and grid availability. If you are in Europe you might be selling your first born this Winter to pay your Utility Bill.
 
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In regards to the thread title, electricity is cheap here (for now) at $0.11 KW. My small system had a payback of about 10 years. However, after about 9 years, due to upgrades, failures, etc., payback is still about 6 years away (provided nothing else needs to be replaced).
 
First system was $5 watt for the panels in 2002, still running I believe, sold that home long ago, but the State of Florida had a rebate program that cover most of the costs at the time ( as I recall was $4 watt rebate )

5 other systems from 2003 - 2011 using used/off spec panels, as it was used for my business and did everything myself was paid off the first year. When the roof started having leaks due to my DYI racking :oops::rolleyes: stripped everything off and sold all the parts, netted positive just on the materials, not including 6 years of free energy

Current 11kw system was 21 cents watt for the new solar panels. Racking, inverters and 10kw storage was about $1.50 watt. It has made 17Mwh so far, basically free energy ( and home backup ) as long as it keeps running, electric bill is Dukes 30 dollar minimum, even if no net energy is used.

Moral of the Story, lease a system, and they make the money, build it yourself and payback with Santan Solar panels can be less than a year
 
I have a vague notion that as more and more large commercial operators start to repanel old installations, the flood of used PV (due to a lack of subsidy to profitably recycle it) combined with rising utility operations cost from aging equipment going into an era of more frequent ‘acts of god’ as your insurance would say… will be a confluence of rising prices for grid and dropping prices for home solar such that the threatened utility operators will become more and more antagonistic to home solar and leverage their influence in local governments to legislate against it and make it harder and harder as time goes by to DIY a home system, while licensed and permitted installations will be required by code etc to end up being you buying the utilities free equipment with a forever lease on your roof. At some point someones house will burn down and the utility will sue them for damages from ‘loss of service’ or some such bs.

So i agree the payoff argument is not the only factor and it might end up being far more important to get grandfathered into whatever the current situation is in your area, even IF you don’t do a legal installation, because the penalties will be grandfathered too. Going forward it may become easier to ask for forgiveness than permission. ?
You are correct….The tightening of laws and regulations will happen. The method by which most laws come into play is the work of a skilled bunch of very well paid critters , known as LOBBYIST and Lawyers…
The big utility companies will not go peacefully into that goodnight.…..They will nip away at DIY and reform it into somthing they can control , regulate and profit from.

it’s always been that way …
 
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