Is Solar really worth it?


Works in theory! Practice? That's something else
Sep 20, 2019
Key Largo
PV Solar systems, fully installed, average around $3/watt depending on where you live. See What should you pay for a Solar Installation?

So, what do you pay for power? The cheapest states in the U.S. are Washington/Louisana, around 9.73 cents kWh.

So, let's run through the math for the cheapest state, then you can look up your state for the costs and see.

Let's assume you live in lake Charles, Louisana and have $100/month electric bill for just the power (not taxes or other charges) over 30 days. In that case:
$100 / 0.0973 / 30 = 34 kWh/day

Using an insolation map you can get a precise number, for Lake Charles that looks like it's about 5. So 34 kWh/d / 5 = 7kW array to zero out your bill. For Louisana the average install cost is around $3.03/watt, so a 7kW array installed would cost $21,210. If you do parts of this yourself, you can reduce the prices.

At $100/month, and not counting for inflation, that's $1200/year. So, the system would pay for itself in 17 and a half years. Since the panels would last 25 years that doesn't sound too bad. But, in 2020 the federal government has a 26% tax credit, is $15,700; so it pays for itself in 13 years. A lot of states also have incentives that can also reduce your costs.

Solar is usually cheaper then the grid and generally has a positive ROI
That is if your house uses 34 kWh/d it's generally cheaper to use solar to generate that 34 kWh/d than buy it from the grid.

Increases the value of your Home
Finally, there are other credits often overlooked such as how much will it increase the resale value of your house? If you go DIY, neatness really counts here. Current estimates are that it will increase the value of your house by 3.74%. So, on a $250,000 home it's like a $9,000 credit.

Why doesn't everyone go solar?
The statement above doesn't include energy storage, so you need the grid for non-solar hours. Some locations have "net metering", which means you can generate that 34 kWh/d during sunshine hours and run the meter backwards, then at night the meter runs forward and you end up not owing energy charges (but you'll still have a utility bid that charges for the energy distributions and such). Still, if you can get that sort of deal solar can be well worth it, but beware as some states that had it are doing away with it.

On the other hand, if you can't then solar is only good to provide the power you need during the day. Most people are at work during the day, so generally that's not a whole lot of power savings. The cost savings of solar don't yet overcome the costs of storing energy, so typically any storage system kills the cost savings.

Costs of Time
Obviously that's not the whole story. There's inflation on the cost of electricity which will make the payback period shorter. If you put the money you'd spend on solar into a CD at a fixed rate of 5% how does that compare to the cost of solar? Some states have time of use rates; some states are doing blackouts for days at a time. You have to look at it all to know if it's right for you.
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I don't think you can just calculate based on the power company's cost per kwh. I pay about 14 cents/kwh, and my actual power usage costs me about $45-50, but I get a bill for almost double that. You have to add in the fees, surcharges, and everything else in that long list of itemized billing items. The way to do it would be to calculate the cost by using the actual kwh used against the whole bill for a much more accurate cost per kwh. I don't have a bill (shred them immediately on paying them) or I'd provide the numbers.

You cost for solar above uses the "installed system", which includes the cost of the hardware.
Even in sunny Florida the answer is NO, unless you buy cheap/used and DIY most of it. We get a lot of sun hours, but only pay about 10 cents per Kwh. The local FPL does pay full rate for energy produced, but limits your solar array size to 115% of your current usage so you can't "make money" producing a lot.

Even with the tax credits, getting a system professionally installed would have an average ROI of 13-15 years. That's not too bad, but there is much more to it, such as:

-You might move. You might be able to sell your house for a bit more though, but maybe not.
-Panels get damaged by an act of God. I know most insurance companies down here don't cover your panels.
-Your electric co. reduces or eliminates the buyback/SRECs, that would suck.

-The biggest one, svet touched on, is the cost of not investing your money instead: Let say your system only costs $15k, and after 14 years it "paid for itself". You now broke even, and have a 15 year old outdated solar system that still works...great! Right? Not so fast. If you invested that $15k instead, at 5% compounded, after 14 years you'd have $30k in your pocket. 14 years from now solar systems will probably be twice as good for half the cost, so you take $7.5k of your "winnings" and buy a state of the art solar system with it and still have $22.5k in your pocket!

So, the answer is no. And if you don't have the cash and would have to finance the solar system, the answer is hell no!
We used to have quite high feed in tarrifs in Australia when solar was being promoted as a cure-all by the government. They've slowly been reducing but payback for a properly rated new system now is usually around the 5 year mark with feed in around 8 cents/kWh. Battery isn't a viable economic proposition here for anyone with access to mains power at the moment.
Well, being that this a DIY forum, I thing the majority of us are doing our own installs, and probably starting with a small system and building it up as we learn. You really can't compare that to the cost of writing a check for the install. In about a month, I'll be switching from mostly grid power to mostly solar power. It's a bit difficult to calculate exactly due to the number of variables, but my system will pay for itself in 18-24 months. I previously used electric heat and air conditioned a basically non-insulated space, so I'm not the typical user, but the DIY'ers will recover their costs substantially quicker. It seems to me that the only way to "turn a profit" on a solar system is to do it yourself.
And what about when the power companies rightfully shut down service to prevent fires like here in California. Whatever the system cost it is worth it now to have electricity when most others do not.

Question do the big grid tie system installed by solar city and the likes work when the grid is down?
I dont think they do but I really don't know for sure.
I don't know of anyone in my area that can standalone for solar power. They are all grid tied and shutdown on loss of mains. There was one guy that lept on the bandwagon early in a big way. He had a large array on his roof and a power shed with a large battery bank and could go standalone. Unfortunately his house burnt down, not related to solar.

That was one of the reasons I have a DIY system. For the amount of power I use any solar installation was going to need to work off line for me to even consider doing it rather than buying a small seldom used genny.
Is it worth it? My 5 cents...
Grid-tie (with no Batts) will not supply power in an outage! Story time... :rolleyes:
In 2013 the small town I live in was almost wiped by a wild fire or inferno our power was out for two weeks, we had to hire a gennie to power the fridges/freezers and pump to drink and shower!
Then only having two UPS's 2200VA 1.32KW ea they powered the big screen (watch the news) the other a laptop to be connected with the world, it was not easy by any means...
That's where I decided to go solar OFF GRID for this reason when the GRID is down I can safely move the system closer to what needed power for however the Batteries will last and or what the sun will give.
This came useful when the grid went down for 8+ hours and things got edgy with the fridges/freezers warming up, no drinking water "COFFEE" and communication was only the "now gone" copper phone line, it was in many ways a saviour to the food in the fridges/freezers ($$$), pumping water for my COFFEE and powering the laptop, keeping me up to date with the world "when is the power coming back on"!
The cost of the food going off would have cost close to $1000, although insured.
The point for me if the town gets engulfed by fire again like that in California, it my be nice and green now give it a month or two and kindling (Fire Starter), the power goes out I have POWER, if need be power the pump ? to fight fire?!
Also that is where I invested in a solar-focused energy provider, promising to cut power bills for solar customers.
Only if you do it yourself and you can get 30% back from Uncle Samantha. There are plenty of things in life people waste their money on. How many vacations or recreational purchases eliminate or lower a monthly bill for 20 years? Of course folks who have frequent power outages have other legitimate concerns. We don’t have many outages that last more than a few hours. People buying new homes almost never consider the monthly electric usage or costs. My new neighbors found out that they had 2 mortgages when the summer heat arrived. It was not uncommon for us to have a $550 electric bill at the end of summer. Those days are gone now thankfully. Last bill was under $100 and I suspect my next bill will be lower stil.
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Only if you do it yourself and you can get 30% back from Uncle Samantha. There are plenty of things in life people waste their money on. How many vacations or recreational purchases eliminate or lower a monthly bill for 20 years? Of course folks who have frequent power outages have other legitimate concerns. We don’t have many outages that last more than a few hours.
Didn't you mean aunt Samantha, uncle Sam's wife?
If you have a grid-tied system and want solar power when the grid is down, you can retrofit it with an AC Coupling solution.
If you're just thinking about putting a grid-tied system in now, but want power when the grid is down, there are "hybrid" inverters that give you the best of both worlds (e.g., Sol-ark, Skybox, and next year the IQ8), but you'll need a way to store power for when the sun is out and that moves the price needle a lot.

For example, the tesla powerwall (not including installation or accessories which can double the initial price) is about $700/kWh. Battleborn $1000/kWh, new cells DIYers use to build packs around $200 kWh, and used cells frequently a whole lot less.
I always kept my PV justification calculation simple: If a electric bill was $2,000 per year and the cost of installing a PV system capable of replacing the grid is $35,000 plus another $5,000 for maintenance over the duration of the payback period, that's 20 years to break even; might as well pay the greedy grid. I am not on grid at all, nor did I spend $40,000 to replace the grid, but I have adjusted my electricial power requirements to a level that would be considered unsuitable to arrogant, instantly gratifying first world society.
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Oops, twenty years payback, the edit feature is missing when I post using my personal device, at least I can't find it!
Oops, twenty years payback, the edit feature is missing when I post using my personal device, at least I can't find it!

Next to the report link is 3 little dots with a down arrow. Tap that and the edit function is there.
One consideration I rarely see included in these theoretical posts is the home owner's age. Will at 28 has a different perspective than me at 68. I would never live long enough to see the break even point. You youngins would.
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I'd like to know where you guys are getting 5% on your savings!
The most simple of answers is investing in index / mutual funds. 5% is very conservative.

Vanguard target retirement ages for example:

Opportunity cost is real; but I do enjoy the little bit of solar I just installed even simply as an accomplishment, Education, and slight amount of emergency prep. (800 watts, tied to residential in an "off grid"/automatic transfer switch scenario).
Earlier we just said, $100 per month for 15 years is a cost of $18,000 in electricity bills. But, when you factor inflation in, the real number is ~$21,882.

So far this century the average U.S. rate of inflation for electricity is 2.73% per year. So, if your average bill this year is $100/month, what will it be in 25 years?

Year 1: 100x12= $1,200
Year 2: $1200*1.0273 = $1,233
Year 3: $1232*1.0273 = $1,266
Year 5: ... = $1,337
Year 10: ... = $1,529
Year 15: ... = $1,750 ($21,882)
Year 20: ... = $2,002 ($31,273)
Year 25: ... = $2,290 ($42,233)

That is, in 25 years with 2.73% inflation you will have paid a total of $42,233. Over 30 years, it's $54,658.

What @SolarRat's numbers showed you were the future value of a lump sum. It's not a bad way to do it, but it's not quite an apples to apples comparison as there is an erosion to the sum because you're making monthly utility payments. I'll see if I can't find a spreadsheet where I worked it out. Can't swear to it, but for Florida's power rates I think the investment value was actually up around @Sammeh's VTXVX fund (that is, around 7%).