How Can a Tier 1 System Make Financial Sense?

[markpj23]

I've been soaking up as much information as I can on this forum - many thanks to the community! I live where it costs me $0.17 per kwh (thank you Duke Energy...) and I am trying to get a handle on the financials involved.
A Tier 1 system can be no more than 10kw (or 12kw of panels using the 120% rule as I understand it). So estimating the PV output using the 75% rule of thumb and a conservative 4 hrs of sunlight per day (4hrs x 12kw x .75) I get 36Kwh per day.
I have an all-electric home in central Florida with a new variable speed pool pump, a new high-efficiency heat pump water heater, a new induction cook top and a 9 year old 14 seer heat pump cooling 2,850 sq ft. My average daily electrical usage for the past 6 months since we bought the home has been 64 Kwh. I understand that the average usage will go down during the cooler months, but I still expect my annual average daily usage to be in the 60 - 70 Kwh range.

Even a DIY 12k PV system with no storage will cost ~$12k yet only reduce my electric bill by half. Am I getting this right? Even with the tax credits I'm looking at a 5-year payback period. And I still get to pay the electric bill each month....

Am I missing something? How do folks justify throwing $30 - $40k at the solar salesmen who promise "free electricity?"

 

[Nobodybusiness]

Am I missing something? How do folks justify throwing $30 - $40k at the solar salesmen who promise "free electricity?"

Not always about ROI. Just happens to figure into it.
Everyone has different reasons for doing what they do.

Mine is about 10 year ROI but I will never be without electricity and the rates can do whatever they like.

A Tier 1 system can be no more than 10kw

Is this a local thing?
You mean you can’t push back more than a 10kw system?

You can make as much as you use. I use about as much as you do and generate that on a daily basis.
More in the summer.
I do not net meter.

 

[BentleyJ]

A Tier 1 system can be no more than 10kw (or 12kw of panels using the 120% rule as I understand it). So estimating the PV output using the 75% rule of thumb and a conservative 4 hrs of sunlight per day (4hrs x 12kw x .75) I get 36Kwh per day.

Seems like there is a mash-up of several concepts in that sentence. Lets untangle it.
1) Tier 1 is considered the higher priced, full featured, UL approved, name brand, good reputation and warranty type systems. They can be turn-key, proprietary, professionally installed or partially or fully DIY. This terminology has nothing to do with AC vs. DC coupled systems or Grid-Tie vs. full or partial battery back up systems.
2) The 120% rule only applies when there are 2 sources of power feeding into a breaker panel such as with a Grid-Tie system that does not have any batteries to absorb some or all of the solar production. Depending on the load calculation for a given breaker panel it may be possible to down size the main breaker thus freeing up more capacity for a larger grid-tie solar system. Alternatively a higher capacity panel can be installed.
3) With a DC coupled battery back-up inverter or combination of an AC and DC coupled system it is possible to install much larger PV arrays (depending on roof or ground mount space) because not all of the solar generation is has to be pushed through the panel. Some of it goes directly into the batteries and is used for self consumption and time of use offsets.

 

[JRH]

Not always about ROI. Just happens to figure into it.
Everyone has different reasons for doing what they do.

Mine is about 10 year ROI but I will never be without electricity and the rates can do whatever they like.


Is this a local thing?
You mean you can’t push back more than a 10kw system?

You can make as much as you use. I use about as much as you do and generate that on a daily basis.
More in the summer.
I do not net meter.

I think your correct….ROI was never in the top ten of my considerations when buying stuff..and I don’t have any real money at all…it’s not when buying a car.. or a $100 per head steak dinner ..how about back in the day when nose candy was everywhere…haaa …talk about blowing money..or a case of ammo … or case of fine wines…. or a cruise Trip…
somthings you enjoy doing.
somthings are stuff you do to have a life…or learn….OR HAVE INSURENCE in thst you are independent and free. One can’t have a peace of mind if others control your future and what you are able to do…or might not be able to do…
A man has to have control of his own affairs and future ability’s in life or he lives on a chain..…when one is vulnerable to some clerk in a faraway office clicking off the power or an event happens that limits your water or heat or food or the ability to defend yourself , then I say you are not free….
You are someone’s pet…

If you can afford it , worrying about ROI on some things can be a hinderance to doing things right...you can’t always live life based on a spread sheet…that is a first world trendy concept……

some things don’t make economic sence but are important as things in life may not always be as predictable as they have been in the past 70 years…

End of rant..!
J.

 

[45North]

Tier 1, to me, means paying a premium for a name-brand, reliable western-made product - as opposed to a bargain basement Chinese one. Worth it for your mission-critical applications if you can afford it.
Otherwise, if you're price-sensitive (as many are) then roll the dice on the cheaper one and mebbe keep a spare on hand and have a backup plan.
And, yes the ROI and breakeven will be worse on the tier 1 so you'll have to decide if that's justified for your particular use case.

 

[pollenface]

ROI means nothing to me.

Solar is my hobby. I like making and using my own power, I like it even more when the grid goes down, and so does my wife

 

[Solar Guppy]

Even a DIY 12k PV system with no storage will cost ~$12k yet only reduce my electric bill by half. Am I getting this right? Even with the tax credits I'm looking at a 5-year payback period. And I still get to pay the electric bill each month....

One can do better than that, I did in 2020.

You can do today:

Santan 12kw for a pallet delivered is 3K ( just bought another one )
Racking using IronRidge XR100 and Flashfoot 2 is ~2K
Solis 10Kw GT inverter 2K
Balance of system / Permit stuff ~2K

Then discount for Tax credit ~6K net

That what I did and it covers close to 100% and I'm on Duke 10K tier

 

[Zapper77]

Zero return on investment for me.

ROI may occur around the 20-25 year mark for my system.

 

[Oldphile]

Tier 1, to me, means paying a premium for a name-brand, reliable western-made product - as opposed to a bargain basement Chinese one. Worth it for your mission-critical applications if you can afford it.
Otherwise, if you're price-sensitive (as many are) then roll the dice on the cheaper one and mebbe keep a spare on hand and have a backup plan.
And, yes the ROI and breakeven will be worse on the tier 1 so you'll have to decide if that's justified for your particular use case.

True, but who defined what is Tier 1? To me tier 1 is an arbitrary label.

 

[markpj23]

The Tiers for solar are defined in the Florida Administrative Code 25-6.065 - not applicable to those outside of FL.

25-6.065 : Interconnection and Metering of Customer-Owned Renewable Generation - Florida Administrative Rules, Law, Code, Register - FAC, FAR, eRulemaking

www.flrules.org

Tier 1 = 10kw AC or less. Requires $100K liability insurance
Tier 2 = 10kw to 100kw AC. Requires $1M liability insurance
Tier 3 = 100Kw to 2Mw AC. Requires $2M liability insurance

 

[markpj23]

Not always about ROI. Just happens to figure into it.
Everyone has different reasons for doing what they do.

Mine is about 10 year ROI but I will never be without electricity and the rates can do whatever they like.


Is this a local thing?
You mean you can’t push back more than a 10kw system?

You can make as much as you use. I use about as much as you do and generate that on a daily basis.
More in the summer.
I do not net meter.

How large is your PV array?

 

[Nobodybusiness]

How large is your PV array?

I have mine paneled for winter. 30kw right now.
It was 18kw but that wasn’t enough for December.
I just now finished adding 12k in panels. We will see how that does.

 

[Solar Guppy]

The Tiers for solar are defined in the Florida Administrative Code 25-6.065 - not applicable to those outside of FL.

25-6.065 : Interconnection and Metering of Customer-Owned Renewable Generation - Florida Administrative Rules, Law, Code, Register - FAC, FAR, eRulemaking

www.flrules.org

Tier 1 = 10kw AC or less. Requires $100K liability insurance
Tier 2 = 10kw to 100kw AC. Requires $1M liability insurance
Tier 3 = 100Kw to 2Mw AC. Requires $2M liability insurance

Tier One has no liability insurance requirements in Florida, I am on this tier with Duke energy

 

[Hedges]

If you have true 1:1 net metering, or a reasonable plan, it is possible to beat than even your moderate $0.17/kWh price.
But check to see if there is a mandatory rate plan change when you install PV.

Grid-tie PV hardware can be had for about $1/W. Maybe 1/3 more than that, maybe 1/2 of that if you buy panels direct from China for less than $0.20/W and don't require RSD.

At $1/W for hardware, with free DIY labor, you can make power for $0.025/kWh (amortized over 20 years).
If you pay for turnkey installation, might cost $4/W and $0.10/kWh over 20 years. Depends heavily on installation cost.

So either of those offers savings, but I'd hesitate to buy a system without at least 50% discount from utility rates.
And now that mortgage interest is 7% not 2%, you have to consider time value of money.

A system with batteries, and battery inverter able to start loads, can't compete with $0.17/kWh.
Batteries typically cost $0.05/kWh (amortized over their cycle life.) Some brands cost $0.50/kWh. Some forum members feel their DIY batteries are as low as $0.025/kWh.

It is those of us paying the utility $0.50/kWh (and climbing!) who find it a no-brainer to install solar. But the utilities have an army of lobbyists trying to eliminate the cost benefit (e.g. charge us $100/month whether we use power or not.)

I would suggest looking for a hybrid inverter that is batteries optional and supports zero export. SolArk would be one; there may be other bargain priced models. That way you can have backup during power failures and you can change how you interact with the grid if rules and pricing changes. I'm going to be installing Sunny Boy Smart Energy, which I think will (with an added component not yet announced) do that as well.

 

[KITROBASKIN]

One is hard pressed to put a price on maintaining reliable electricity when grids fail. Price increases will happen. Duke Energy claims they will increase their production of renewable energy. That is going to cost money.

“ In 2022, Duke Energy’s enterprise-wide fleet (a combined 50 GW) generated 263,812 GWh, mostly (42%) from natural gas, followed by nuclear (33%), and then coal and oil (17%). Renewables produced 8% of its total generation.”

Duke Energy to Shed 3.4-GW Unregulated Renewable Business Segment in $2.8B Deal

In a bid to transition to a fully regulated business, Duke Energy will sell its unregulated utility-scale solar and wind group—a portfolio of 3.4 GW—for

www.powermag.com

Admirably, you are on track with energy efficient appliances. Why not take it to the next step providing your own power directly from the sun? Prices for solar have never looked better. Ask more questions from diysolar members like Hedges and determine if there is a formulation of solar energy that fits in with who you are; where you want to be in the coming years.

 

[SamDeleted]

RIO is very important to me , I'm not really interested if it's not financially viable

 

[Nobodybusiness]

RIO is very important to me , I'm not really interested if it's not financially viable

Ok I’ll bite. What’s RIO?

 

[Q-Dog]

I've never been to Rio, but the first time the power went out and we were able to have dinner, watch TV and otherwise get through our evening without having to start a generator, my wife said the system was worth whatever it cost to get to where we are. Not only that but we just ordered more solar panels, and I'm still not sure what I am going to do with them.

 

[KITROBASKIN]

RIO is very important to me , I'm not really interested if it's not financially viable

How much will financial viability matter if UK gets more killer hot summers and blackouts get worse?

 

[Nobodybusiness]

I've never been to Rio, but the first time the power went out and we were able to have dinner, watch TV and otherwise get through our evening without having to start a generator, my wife said the system was worth whatever it cost to get to where we are. Not only that but we just ordered more solar panels, and I'm still not sure what I am going to do with them.

Same exact thing my wife said after a night with no power.