Switching To Solar Power, One Year Later

ThinSkin writes "Slashdot readers may recall Loyd Case's series of articles illustrating his experiences after switching to solar power for his family home. Loyd shared his one month update, a six month update, and now finally concludes his series after one year of solar power. Despite the $38,000 initial cost for the setup, Loyd is very optimistic after a $3,000 savings in one year, meaning that in about 12 years he will break even — though he suspects ten years is a better estimate considering other factors. Other reasons such as feeling 'green,' increasing the property value of his house, and the 'spousal acceptance factor' all support Loyd's decision on why he'd do it all over again if he had to." The article is spread annoyingly over multiple pages, like everything at the site, and the print version omits the graphs.

Comments

Return on investment

[Geoffrey.landis]

Three thousand dollar savings per year on a 38000 investment is a 7.8 percent rate of return on investment-- not bad, as long as the investment itself dosn't depreciate in value.

ROE is a much better way of calculating economics than "payback time," by the way

Re:Return on investment

[dk90406]

Assuming the man had the money in his pocket to start with. If a loan was required for the initial investment, that has to be taken into account.
A little off topic: If I went to any business today and promised them a 10 year ROI, they would laugh. In this economic climate 1-2 year ROI seems to what they are willing to risk.

Re:Return on investment

[hansraj]

...as long as the investment itself dosn't depreciate in value.

which in this case it surely will. In fact the way technological things change in general I would assume that his solar-power setting would have pretty much depreciated to some small fraction of 38k.

PS: I don't disapprove of this guy spending 38k on solar powering of his house even a tiny bit, but I think it is quite interesting to evaluate this stuff as parent suggested-

Re:Return on investment

[spun]

Ah, what? He's not reselling the damn thing, he is making money off of it every month. So what if it depreciates, we were never measuring the value of the thing over time anyway. Though I'm guessing many of the components will not depreciate much, just the batteries and photovoltaics. Having his house set up to run off of photovoltaics will let him easily take advantage of whatever advances come along in module and energy storage. The power modules will last at least 30 years. See, he would never be reselling the thing independent of his house. The thing is a part of the house now, and the entire house will continue to appreciate. As people become more interested in solar, a house with solar already in place will appreciate faster.

Funny how so many people seem to want to find fault with solar energy, and use incomplete reasoning to look at only the possible negative consequences without looking at all the positives. Why do you think some people have such an irrational hatred of solar energy? I think the hippies are to blame. Nobody likes them, and they never fight back when you blame them, so I am going to go with definitely the hippies fault.

Re:Return on investment

[rs79]

" Despite the $38,000 initial cost for the setup, Loyd is very optimistic after a $3,000 savings in one year, meaning that in about 12 years"

Might want to look up the lifespan of solar cells.

"Cost of Solar Panels
Solar panels have an effective lifespan of about 20 to 25 years, and their value and wattage output decrease steadily over time. The solar cell that has ...
www.solarpanelinfo.com/solar-panels/solar-panel-cost.php "

I have them too, but to be rigorous one needs to take their lifespan into consideration.

Re:Return on investment

[rev_sanchez]

If he'd gotten a loan and the loan payments were near $3,000/yr (which is pretty unlikely) or his average electricity savings increased over the life of the loan (more likely) he could offset his loan with his electricity savings and have a cost of little to nothing. I don't think solar is the best energy saving home improvement most people could make for their dollar but it's starting to get competitive.

Re:Return on investment

[crmarvin42]

IIRC from the 6 month write up, he splurged and got the pricier (i.e. longer lasting) panels because he was getting either a grant or tax break from California for putting the panels in.

Re:Return on investment

[hedwards]

Because this sort of thing doesn't scale in a linear fashion. It's a lot easier to do this sort of thing for a couple of houses, assuming a reasonable amount of light and willingness to cut back on consumption. It gets a lot more complicated when you start having to pay for extra land, land use studies and worry about transmission wires.

Re:Return on investment

[dgatwood]

With the exception of the part where you said their output decreases over time, that's simply not true. Most of the current generation of solar panels guarantee a minimum of 80-85% output after 25-30 years, depending on manufacturer. That's in the warranty for the panels. If they fall below that level within 25-30 years, you get new panels. The effective lifespan before they produce no power at all is probably 100+ years, though most people would replace them with more efficient panels well before that time....

Re:Return on investment

[paeanblack]

If that ROE is reasonable, why aren't zillions of commercial solar farms popping up everywhere? Or at least co-located with the wind farms that are being installed?

That 7.8% doesn't factor in the risk. Most of the initial investment is unrecoverable. The 10-12 years for return on the principal is based on many variables, most of which are volatile and unpredictable. The specific technologies are relatively new and bring their own unknowns. He wins big if electricity costs skyrockets and solar/alternate energy tech stagnates. Those are unlikely to both occur. He loses if power gets cheap or solar/alternate energy tech has some rapid advances.

He has essentially exchanged his exposure to energy price fluctuations for host of new risks. The rate of return is pretty decent in today's economy, but not by a huge margin. At 5% or 6%, it wouldn't fly.

At least this means residential solar is nearing viability.

On the other hand, viable residential solar is not good news for the nuclear industry because of the political externalities involved. Large numbers of voters entering the energy generation business will sharply increase the nimby factor.

Re:Return on investment

[vlm]

According to it's decreased output overtime? ...... and you expect zero output after 50 years

Check out a typical actual warranty for a kyocera module:

http://www.kyocerasolar.com/pdf/specsheets/kc_warraty.pdf

They guarantee 90% at 20 years since manufacture, or 80% at 20 years after sale date (from reseller or whatever)

So, at about 30 grand, at least for the first 20 years, it loses about $150 of output per year.

Basically decreased output is no longer economically relevant compared to disaster type problems. Now that we get "100 year floods" every year for the past 4 years, the house will rot out from underneath. Or a 'nado will blow it away. Or X percent of homes burn down per century, so in twenty years across millions of homes you'd lose X*20/100 percent due to fire vaporizing the entire structure including panels. Insurance for theft. Hail destroys the entire roof including the panels (note that panels are actually tougher than "old" asphalt shingles)

Re:Return on investment

[Gospodin]

The system wouldn't just lose $760/year in value, it would also lose 2% in efficiency per year, which means that if he saved $3,000 the first year, he could expect to save only $2,940 the second, and so on (all else - electricity usage, cost of electricity, etc - being equal). The revenue stream then looks like this (over 10 years):

Year 0: Cost of $38400.

Year 1: Benefit of $3,000.

Year 2: Benefit of $2,940.

Year 3: Benefit of $2,880.

Year 4: Benefit of $2,820.

Year 5: Benefit of $2,760.

Year 6: Benefit of $2,700.

Year 7: Benefit of $2,640.

Year 8: Benefit of $2,580.

Year 9: Benefit of $2,520.

Year 10: Benefit of $2,460.

Value of system after 10 years: $30,400.

Plugging these numbers into the IRR formula gives you a 5.7% return per year.

If we make a slightly different assumption that the decreased output is geometric (not arithmetic) and still use the idea that the depreciated value equals the original cost times the current efficiency, then you can show that D + R = 7.9%, where D = depreciation rate and R = rate of return. So if you assume D = 2%, then R = 5.9%. But if D = 4%, then R = 3.9%, which is not great.

Doesn't sound to me like an obvious win for solar power. On the other hand, it's not an obvious money sink, either, so that's good. I'm sure things will continue to improve.

Would be interesting to see a subsidy-free comparison of both methods of electricity generation, but that's pretty hard. You can easily handle the consumer tax breaks, but how much do the producer's tax incentives affect the cost? And how much of his local coal/natural gas/hydro/nuclear generation is subsidized?

Re:Return on investment

[camperdave]

Also, since its a house, you have to consider resale.

You only have to consider resale if you plan on selling. If you've found the home you're going to spend the rest of your life in, then solar panel resale values are a moo point.

Re:Return on investment

[Space cowboy]

Panels generally last 25 years at which time they're at 80% of their initial efficiency.

I spent $78k (with no loan, so no extra payback) putting solar panels on my house late last year. My highest bill (August last year) was ~$1000 and I was averaging ~$700/month over the year; my May bill this year was $49. I estimate payback for my system to be ~10 years or so. There's a few things to consider if you're thinking of doing it yourself:

• The cost of electricity is only going up. If you graph it over time, it's been steadily increasing for the last 10 years or so in my area (Bay area, CA)
• You put yourself on the 'expensive electricity in the day, cheap electricity at night' and get a meter that sells your over-production back to the utility
• It puts a significant value on the house should you want to sell it, because the new owner gets to spend less per month on electricity.
• Your state will give you a chunk of change back (I got $15k or so) if you invest in solar power for your house
• You'll also get a 30% tax credit (ie: taken off your tax bill, not off your earnings-before-tax) if you go solar this year. Last year it was capped at $2k, so I lost out on ~$20k. Oh well.
• The more electricity you use, the more expensive each unit becomes. The cost of the top 50% of my electricity-use per month was costing 2x as much as the bottom 50% because prices are tiered. If you can get yourself out of that top-tier, it can really be worth it.

We use a lot of electricity. This is a nice, green way to offset that and still have the toys I like (heated swimming pool, air-conditioning, pond in the back yard, server-room in the garage,...). Example: last month (1st May -> 31st May), the power production (I have the monitoring system all set up :) was 1,260 kWH. That matches nicely with our average 40 kWH/day with air-conditioning on. And if it's not being soaked up by your solar panels, it's just warming the roof and causing your air-con to go into overdrive... :)

The payback calculation is pretty easy. Maintenance is essentially zero, so total cost including permits, installation, etc. was ($78k - $2k - $15k) = $61k. Savings per year are ~$6000. Payback in ~10 years, assuming electricity costs are static (unlikely) and after that it's all gravy :)

Simon

Re:Return on investment

[Maxo-Texas]

Panels are not the likely issues.
Panels are in the 20-30 year range (tho at 80% power).

Inverters and batteries are the issue.
Inverters can go bad every 5-7 years and batteries more frequently than that.

On the plus side... power seems to be ~280% more expensive over 20 year periods that I researched. 2 cents in 1968, 5 cents in 1988, 15 cents in 2008.

So in 10 years, presumably, his power bills will be about double what they are now.

And that assumes no period of high inflation-- recent government printing of money could lead to a period of high inflation. If we return to 1980's inflation, his project could pay off very quickly.

And no period of energy bill increases-- if oil quickly returns to over $100 a barrel and natural gas doubles-- then electric bills could go up a lot.

Of course if we get a period of hyperinflation (20%-70%+), then he will have hit the jackpot.

Re:Return on investment

[Zalbik]

Doesn't sound to me like an obvious win for solar power

It is an obvious win, because you are failing to compound the savings.

He can invest the savings on electricity each year and substantially increase his ROR.

The IRR formula does NOT account for the potential re-investment of interim cash flows.

Re:Return on investment

[Loki_1929]

It's called "we want electricity but we're going to protest any time someone wants to build something that produces electricity in our state because we're so super environmentally friendly that we'd rather drag power from halfway across the country from an ancient, smog and carbon spewing coal plant losing tons of power to transfer loss rather than build clean energy production in our own back yard".

Californomics - not for the feint of heart, the light of wallet, or the comprehending of basic math.

Re:Return on investment

[Zalbik]

Or, he could just invest the original $36K and make a LOT more. Investing the few thousand dollars he saves every month is like spending $50K on a sports car and investing the money you would have spent on bus fare in a savings account instead...

$36k invested at 5% for 12 years returns $68,000.
$3000/year invested each year at 5% for 12 years returns $47,000

With option A, he still had to pay $36,000 in electricity payments as well. He doesn't get a lot more, he gets a lot less.

Kudos for adding a car analogy though!

It's more like spending $50,000 on a sports car to get rid of your $500/month lease.

Re:Return on investment

[Pikoro]

Sounds like my reasoning. I would invest in a solar power system simply to be able to regularize my power bill. Right now, it fluctuates between $100 a month and $300 a month. I would trade that all for a stead, calculable flat rate payment. Who cares about ROR. For the next 30 years, my power bill could be $120 a month. Makes planning a budget around a mortgage, 5 kids, and a spend happy wife a bit easier...

Solar panel longevity

[royallthefourth]

So maybe it'll pay for itself in 12 years, but how long before those panels need to be replaced? That's what we really need to know in order to decide if he's actually saving money.

Re:Solar panel longevity

[sexconker]

They lose efficiency over time, and will never offset his initial costs before needing to be replaced.

Oh, and don't forget maintenance (they get dusty).

Re:Solar panel longevity

[eldavojohn]

So maybe it'll pay for itself in 12 years, but how long before those panels need to be replaced? That's what we really need to know in order to decide if he's actually saving money.

Well if you want to be a financial stickler, you might want to factor in the standard rate of inflation if it's going to be 12 years. The funny thing is that inflation has been going down in the past three months according to this site. But you need to remember the pert formula and assume that most of the time you're looking at an average of what about 3% inflation per year? On your original investment of $3800, right? So that's like a 42% increase in the value of that 2008 money assuming inflation continues at an expected yearly rate and a bank will give you that return.

Re:Solar panel longevity

[Scutter]

I believe the $38,000 cost was for the entire conversion. I doubt replacement panels would cost that much. I think you're right that it would significantly extend the ROI, though. I think 12 years is optimistic.

Re:Solar panel longevity

[sexconker]

If it's blocking light, it is making a difference.
If you can see the dust, it's a noticeable difference.
If it's noticeable to your eye, it's definitely affecting the efficiency of the panel.

Your story would have been much better if you had suggested rain instead of a hose.

Re:Solar panel longevity

[h4rr4r]

Learn to read. His cells are warranted for 30 years with a guarantee that they will output 80% of rated at hat power. This 50% drop in 10 years was never true. You are also not factoring in the almost assured rise in electrical costs.

Re:Solar panel longevity

[dwywit]

Just cherry-picking here - BP have a huge investment in the Solar PV industry, and I think they'll be around for a while. One of my 80 watt panels (11 years' warranty left) developed some corrosion on one of the junctions. I took a photo of it, sent it to them with the serial number, and a new panel was installed within a week. Cost to me? $0

Like everything else, you get what you pay for.

Time value of money

[Anonymous Coward]

The whole solar argument still has to grapple with its high up front costs. Doing calculations on money savings with such a long time to "break even" means that you need to take into account the time value of money. Even using a small interest rate such as 4.5% as an example (which is the cost of capital of a bank's home equity loan that I saw advertised recently near my house) means that he won't break even in over 19 years. Over 50% longer than the statistic the summary uses.

Re:Time value of money

[zippthorne]

At the moment, though, you have to factor in the fact that we're about to hit some mondo inflation due to the money Obama's been printing. So, it's actually a good idea right now to get into things that aren't pegged to the actual dollars. This guy is basically buying his electricity up front before his $40k is worthless.

Re:Time value of money

[mugnyte]

Except that we're not. Seriously off-topic, but inflation isn't unpredictable. Right now, the double-digit unemployment and positive savings rate we have suggests people are hording their cash, not shopping with abandon.

  As soon as any of the indicators go up (these are pretty reliable predictors of activity), the FED simply filters the money out of the banks, rates go up for daily business paper and money is more scarce.

  It's been managed this way for 3 decades, and fairly stable since 1983. Check for yourself.

Re:Time value of money

[BeerCur]

It can and has been argued that the Fed's "printing" of money is simply replacing the money that was lost in the economy. This additional cash has a negligible impact on the total availability of money in the economy, therefore has caused little inflationary pressure and at least in the near term will not.

The egregious aspect is that the average Joe lost a bundle in 401K's and other investments, but only a little bit of the Tarp, or the extra cash being printed is being trickled down to them. By and large it's going to the banks and Wall Street entities, to keep them solvent. They were the main culprits, guided by greed, that lead to the economic melt down, and they got a bail out and the average person is financing it through their economic losses.

Bad Math

[Itchyeyes]

He sums the article up by claiming that his return will be sooner than 12 years based on changes in his electricity usage (like his daughter leaving for college). This is bad math. He would have changed his usage either way, so he can't really count those watts as impacted by his investment in the solar panels. Overall though it seems like he's getting a decent return on his investment.

Re:Bad Math

[T Murphy]

His return will be sooner than 12 years based on changes in his electricity usage (like his daughter leaving for college). This is bad math.

He installs big ugly solar panels on his roof, making his daughter decide to go away for college to get away from her dorky dad, which reduces electricity usage. I don't see what the problem is.

Re:Bad Math

[maeka]

This is guaranteed money, that always pays less than risky money.

Not it isn't.
The risks are different, but this is not without risks.
Panels could prematurely fail, and the provider go out of business leaving him with no warranty.
Price of electricity could fall, greatly extending his ROI.
Interest rates could climb, increasing the opportunity cost of his investment.
Far superior panels could be released next year.
Poor installation could lead to water damage to his house.

The possible risks are numerous, far from a guaranteed ROI.

Re:Bad Math

[xlotlu]

He sums the article up by claiming that his return will be sooner than 12 years based on changes in his electricity usage (like his daughter leaving for college). This is bad math. He would have changed his usage either way, so he can't really count those watts as impacted by his investment in the solar panels.

Or he'll pump the surplus electricity into the grid, and get paid for it. That's ignoring the increasing cost of electricity.

Re:Bad Math

[jeff4747]

He would have changed his usage either way, so he can't really count those watts as impacted by his investment in the solar panels.

You're forgetting one detail.

Before putting on PV panels, when his daughter leaves, he'd just use less electricity. After adding the PV panels, when his daughter leaves he can sell more electricity to the power company.

Adding your own generating capability means a reduction in usage is also an increase in sales.

Re:Bad Math

[PhotoGuy]

I'm sure it varies state by state (and province by province), but last time I checked, the power companies don't pay you penny-for-penny for the kwh you sell back to them. If memory serves, they pay you something like 10% of the going rates, which doesn't really amount to much. However, every bit of power you *reduce* your power company usage by, is pure gain. Counting on selling excess just doesn't factor in practically at this time.

Industy Standard Warranties

[spun]

Most manufacturers guarantee that their panels will give at least 90% of peak power at ten years, and 80% of power at 25 years. Yes, he's saving money.

Re:Industy Standard Warranties

[snowraver1]

He might be saving money, but in part because he is getting raped for electricity. His rates were 11 cents to 30 cents+ per kWh. I pay 7 cents per kWh all the time.

Re:Industy Standard Warranties

[h4rr4r]

Which is why solar is a good investment in those areas and not where you live.

A ten year ROI?

[spun]

I don't think return on investment is measured in the units you think it is measured in.

Re:A ten year ROI?

[icebike]

Exactly.

It means Return ON Investment.
Not Return OF Investment.

No money will be saved on this scheme until AFTER 10 or 12 years.

However even this is optimistic, because what is eventually returned on this investment will be worth far less than an equivalent amount today.

Further, maintenance costs will start to accrue well before that, and replacement parts will be needed for stuff that was obsolete the day it was installed, and may not even be available then.

There may be better equipment and cheaper equipment then. But more likely the failing part will be some obscure little piece requiring the replacement of some expensive big piece.

This is the risk of buying into a developing technology. The payoff is a long way down the road. Usually beyond the next generational change in the technology.

Still, it takes people like Loyd to go out there and do it with what is available, because we can't wait for the perfect solution or we would all still be living in Caves.

Re:A ten year ROI?

[Mitchell314]

IIRC, solar panels lose significant power and become unreliable around 20 years. However this isn't a one-moment-it's-brand-new to the-next-moment-it's-junk. As time goes on, the returns decrease. My guess is that for the average household set up, if you are looking for it to pay itself off in nominal terms, 15 years is probably as far as you would want to go (naturally, there are exceptions). A trick is figuring out a cheap way to keep these panels reliable until then.

That somebody would brave a risky expensive project with not-too-golden financial rewards over such time is commendable, especially in the not-exactly-guaranteed chance that it works as planned over a decade.

Re:A ten year ROI?

[dwywit]

Quality solar PV (such as mine from BP Australia) are warranted for 20 years. The terms of the warranty regarding output are basically: no less than 80% of rated output for said 20 year period. There's no cheap way - you pay big $$$ upfront for quality panels, and they'll last a long time - excepting severe accidents, of course.

I'm in a situation where I'm not looking for ROI - I'm off-grid, and getting the mains connected has been quoted at AUD$33,000 PLUS tree-clearing costs. My latest upgrade (new 1320ah battery bank, 6x165w panels, regulator, frames & installation) cost AUD$23,000. It was subsidised at 50% so we only paid AUD$11,500, but even if it wasn't, it's still cheaper than getting the mains on.

Price of certainty.

[GammaStream]

To all the people mocking his investment, your missing one thing. You do not know what the price of energy is going to do in the next few years. The guy in the article however is guaranteed a minimum amount of power each year from his solar panels at a rate he knows. (His initial investment / Life time of the panels). If the companies decide to hike the prices in two years time due a deterioration in Gulf politics for example, he is sheltered from its effects and lets be honest it's very unlikely the price is going to go down per kwh. He is also sheltered to a certain extent from the failure of the power network so if a situation does arise where there are rolling blackouts again, he knows he will a least have some electricity each day. One of the things that people constantly underestimate the price of is certainty.

Re:Price of certainty.

[afidel]

The big cost looming for electrical generation has nothing to do with the Gulf, it has to do with a Carbon tax/cap. Unless we go crazy building nuclear plants there WILL be a significant increase in electric rates if we are at all serious about stopping CO2 buildup.

Re:Price of certainty.

[jimbogun]

Electric companies shouldn't be directly linked to Gulf politics. Most of the electricity in the U.S. is produced by coal, natural gas, nuclear, and hydroelectric energy sources according to the Department of Energy. Petroleum makes up only 1.3% of U.S. electricity production. http://www.eia.doe.gov/cneaf/electricity/epm/epm_sum.html

Your point is a good one though, that energy prices will most likely go up per kWh.

Re:Price of certainty.

[pixelpusher220]

Actually, he probably won't have any electricity when the grid is out. We just went to an alternative energy show this weekend and learned the following:

There are 3 types of systems for connecting to the grid:

Off-grid - self explanatory

Hybrid - can use battery power when the grid is out

Sync'd - they must be sync'd so that when the grid is out, the power from the panels is not used..otherwise you'd be trying to feed the grid yourself.

The last is the most common setup since the idea is to conserve electricity usage, not replace the need for the grid. If all the panels in a neighborhood were feeding energy into the, now dark, grid imagine the power company technician trying to work with the wires that are 'live' from the client side. They could shut off power from the distribution source, but it would still live from the residences preventing it from being safe.

I imagine it would be bad to run A/C stuff inverted from a variable DC line as well. If you are trying to run normal household stuff straight off the power output of the panels, as it gets later in the day, you'd start getting your own 'brownouts' in the house wouldn't you? And since this guys setup never produced more power than he needed it was always below demand.

Re:Price of certainty.

[Altus]

I thought when the grid went down that synced panel set ups just cut them selves off from the grid, not that they cut them selves off from powering your home.

Re:Price of certainty.

[jollyreaper]

To all the people mocking his investment, your missing one thing. You do not know what the price of energy is going to do in the next few years. The guy in the article however is guaranteed a minimum amount of power each year from his solar panels at a rate he knows. (His initial investment / Life time of the panels). If the companies decide to hike the prices in two years time due a deterioration in Gulf politics for example, he is sheltered from its effects and lets be honest it's very unlikely the price is going to go down per kwh. He is also sheltered to a certain extent from the failure of the power network so if a situation does arise where there are rolling blackouts again, he knows he will a least have some electricity each day. One of the things that people constantly underestimate the price of is certainty.

And the price of energy is artificially low since we don't really factor the environmental cost into things. If you factor in environmental remediation, health care for people poisoned by the power plant pollution, etc, etc, fossil fuels would be very expensive. Just imagine how much gas would cost if we didn't pay for the military with payroll taxes but with a gas tax -- total out of pocket for the tax payer being the same, just let them see what they're really paying to make sure they have gas at the pump. Because the main reason we have a military is to protect our access to foreign oil. Don't tell me we need a military bigger than the rest of the world combined to protect us from Mexico and Canada.

Re:Price of certainty.

[bcrowell]

I have a residential PV system.

He is also sheltered to a certain extent from the failure of the power network so if a situation does arise where there are rolling blackouts again, he knows he will a least have some electricity each day.

This is incorrect. Unless you're in an area where grid power is not available, you buy a PV system that's grid-tied, and then if there's a blackout, you have no power. A non-grid-tied system is significantly more expensive and complicated, so you don't want one unless its your only option.

One of the things that people constantly underestimate the price of is certainty.

This is true, but the uncertainty argument isn't all in favor of getting PV. When people ask me how long my system will take to pay for itself, I always answer that I have absolutely no way of knowing, because I don't know what electricity will cost for the next 25 years, which is the design life of the system. If we get a big spike in electricity prices, I'll come out looking like a genius. But there are also other sources of uncertainty that work against PV. The price of the panels is expected to go down, and their efficiency is expected to go up. I don't know how much the price and efficiency will improve in the next 25 years, which is the design lifetime of my system. That's an uncertainty that argues against buying a PV system now.

I live in an area with expensive electricity and lots of sun. I have a south-facing roof with no shade. Given those factors, getting PV is a fairly reasonable investment, but there's no way to pin down exactly whether or not it's really going to look like a winner for me with hindsight in the year 2032 when the system's design lifetime is over.

What I do know is that (a) it's in the right ballpark to be a reasonable investment in purely financial terms, and (b) when my grandkids ask me what the **** I did to try to reduce global warming, I'll have at least one reasonable thing I can point to.

Re:Price of certainty.

[vlm]

I imagine it would be bad to run A/C stuff inverted from a variable DC line as well. If you are trying to run normal household stuff straight off the power output of the panels, as it gets later in the day, you'd start getting your own 'brownouts' in the house wouldn't you?

I suppose you could intentionally buy stuff that fails that way. I don't.

Most switching mode supplies don't care as long as it's above a certain minimum.

For example, I have a perfectly nice "twelve volt" input ATX supply in my server from powerstream. It doesn't much care as long as the input voltage is above 9 volts and below 18. At 9 volts the lead-acid backup batteries are about 99.99% empty so theres not much lost capacity. If the battery is above 18 volts, its probably on fire or something. So pretty much, as long as there's the tiniest fraction of a KWh left in the batteries, my server runs.

http://www.powerstream.com/DC-PC-12V.htm

This is all off the shelf stuff, no big deal, nothing special.

Re:Price of certainty.

[AK Marc]

The last is the most common setup since the idea is to conserve electricity usage, not replace the need for the grid. If all the panels in a neighborhood were feeding energy into the, now dark, grid imagine the power company technician trying to work with the wires that are 'live' from the client side. They could shut off power from the distribution source, but it would still live from the residences preventing it from being safe.

The hookups should disconnect from the grid when the grid is down. It is silly to turn off your power when the grid is down, rather than just run it separately. Then, once the grid is back up, connect them together again. Oh, and all electrical workers are aware of this, and all electric lines are treated as hot. Yes, treating a hot line as hot is less safe than treating a dark line as hot, but it isn't like the unsuspecting electrical workers are grabbing them with their bare hands and getting fried.

Re:Price of certainty.

[eriks]

Um, no, not really. There's no reason to stop producing power when the grid goes down. You, however really do have to have an automated Transfer Switch (these are sometimes integrated into the inverter with a solar system) with any on-line power system, so that when the grid goes down, you stop powering the GRID. You can do whatever you want with power you are generating inside your home, which if the power goes out when it's sunny, or if you have a battery system, or a generator, feeding the inverter, should be plenty to run your fridge, and maybe a few lights, even if you are producing less than you need to run everything. This is vastly under-appreciated I think, in terms of the value it adds to your home.

Re:Price of certainty.

[Buelldozer]

I'm not sure how you got modded "Interesting" since your main point "Sync'd" is incorrect.

Apparently they didn't explain the function of a transfer panel at your alternative energy show. A transfer panel will decouple your home energy generation system from the grid in the event of utility power failure.

Some panels do this automatically and others are manual. Either way a solution exists and is commonly used for just the situation you're describing. Also, AFAIK almost every municipalities electrical code requires the installation of these when you install your own power generation capability.

Also even if he doesn't have batteries he can always reduce demand to equal his output and have SOME of his stuff going. Maybe he has to turn off the home LAN/WLAN, his big screen TV and not run the dryer or microwave but it's almost certainly possible for him to stay at or below his generation capacity unless it's the dead of the night.

Re:Price of certainty.

[ceoyoyo]

The rest of the world does usually manage to get their oil without large militaries.

Re:Price of certainty.

[adolf]

It would be really easy for you to be trying to draw 4kW while your system could only make 3kW, which would probably result in relatively nasty results.

Haven't you heard? They've got these new-fangled current-limiting devices. I heard a wizard -- I mean, an electrician -- talking about them the other day. I think he called them "fuses." He also said something about working on a new invention called a "circuit breaker," but he wouldn't tell me what it was supposed to do.

*ahem*

We could even get fancy, and build a device that automatically breaks the circuit when the voltage drops too low (which is really just a simple way of measuring current availability vs. usage). The cheapshit inverter in my work truck does this nicely. It'd even be fairly simple: Power goes out on a nice sunny day, PV system can't keep up with the load, and drops out. Mr. Homeowner then simply turns off the electric drier, tells the kids not to use the microwave and the TV at the same time, and pushes the reset button. If load gets to high (and voltage drops sufficiently), it cuts out again.

I do question the utility of such a system, on the basis that I've only experienced meaningful power outages during occasions when it is decidedly NOT nice OR sunny. And if it goes out during the day, who cares anyway? You've still got light. *shrug*

RTFA

[Kneo24]

If you had RTFA you would see that the panels are quoted as having a 30 year warranty. So in 30 years. If they break down before that, he gets freebies, and I imagine those will produce more electricity. All in all, it's worth it.

Futhermore, Wikipedia has this to say about Solar Panels and how efficient they are at a certain time frame:

Solar panels must withstand heat, cold, rain and hail for many years. Many Crystalline silicon module manufacturers offer warranties that guarantee electrical production for 10 years at 90% of rated power output and 25 years at 80%.

http://en.wikipedia.org/wiki/Photovoltaic_module

"Spousal acceptance factor"

[blind biker]

Most of the time, if you care for your family, that's the #1 factor in your decisions. Unless your ambition is one of those short-lived, Hollywood marriages.

SunRun

[syphax]

Affordable solar for little money down

If you live in CA, MA, or AZ, and have a roof with decent sun exposure, please check SunRun out.

I've got nothing to do with them; I just think they have a winning method of making the cash flow of solar very attractive.

No, he's NOT saving money

[chatgris]

Why people still routinely neglect compound interesting I'll never know. If he took that $38,000 and put it in a long term investment at a mere 5%, he'd had 68242.54 at the end of 12 years. Yes, it's green, yes, it's cool, but no, he's not saving money.

Re:No, he's NOT saving money

[Grishnakh]

And what long term investment would that be that reliably makes 5%? If he had invested that $38k in just about any stock or mutual fund in the past year, he'd have lost at least 30% of its value.

Re:No, he's NOT saving money

[AuMatar]

Also factor in taxes. If you invest and make $1000, you owe taxes on it. If you save $1000 there's no additional taxes as it was already your money.

Re:No, he's NOT saving money

[Guysmiley777]

And what long term investment would that be that reliably makes 5%?

This guy, Bernie Madoff, has a sure-fire guaranteed investment strategy that makes WAY more than 5% annually. He hasn't been returning my calls lately though, I'm sure he's just busy...

Re:No, he's NOT saving money

[Zalbik]

And what long term investment would that be that reliably makes 5%? If he had invested that $38k in just about any stock or mutual fund in the past year, he'd have lost at least 30% of its value.

Historically, almost any indexed fund provides 5%.

Yes, the past year has been bad, but if we are discussing long term investments, there are numerous funds he could invest in to get a 5% rate of return.

Re:No, he's NOT saving money

[Zalbik]

Why people still routinely neglect compound interesting I'll never know. If he took that $38,000 and put it in a long term investment at a mere 5%, he'd had 68242.54 at the end of 12 years. Yes, it's green, yes, it's cool, but no, he's not saving money.

Why people still routinely neglect compound interest I'll never know.

If he takes the $3000 he saves in electricity costs every year and invests that at 5%, he'll have $47,751.38 at the end of 12 years.

With your scenario, he has $68,242 but he will have paid $36,000 in electricity, leaving him with $32,242 if he "cashes out".

Personally, I'd take $47000 over $32000 any day.

Re:No, he's NOT saving money

[jonbryce]

The last 70 years or so ago takes you from just after the wall street crash. That's probably not the most representative time frame. If you had invested just before the wall street crash, your investment would still have underperformed compared to a cash investment after all this time.

Re:No, he's NOT saving money

[jonbryce]

It took until 1954 for the stock market to recover to its 1929 peak.

A lot of good that warranty is going to do...

[Lead Butthead]

Now I read his initial article close to a year ago, so I don't remember what type he got, or if it even specifically mentions it. However his panels are rated to last 30 years. I imagine the warranty specifically mentions how much they will output as their life increases. It should be fairly obvious to see if it's putting out what it should be in those 30 years. If they don't, well, his warranty will cover that.

... if the company in question is still around to stand behind it. I get a laugh out of roofers that offer 50 year guarantee on roofs when they know full well they themselves are unlike to be around by then. A lot can happen in 30 years.

If anyone is interested in a solar water heater...

[ericberm]

I've written a blog on my solar water heater which covers about the same year period as Loyd's solar panels about 100 miles north of Sunnyvale. Loyd's story is very useful to me as I've been debating if solar panels would improve the efficiency of the solar water heater. I'm still not sure this was a wise financial investment, but I do like how I get free hot water when the sun is out and the hot water never runs out (like with a tankless). Anyway, for those interested in solar water heating: http://suburbiasolarwaterheating.blogspot.com/

Re:Going green takes some green.

[Eponymous Coward]

Check into your state and local programs. I live in Texas and there are some very significant incentives available. I copied this from http://www.solarpowerrocks.com/texas/

EXAMPLE 3kW SYSTEM HOME INSTALL IN AUSTIN TEXAS

So, if you were to install a 3 kW system that would be about $27,000 ($9.00/Watt x 3,000 Watts). In this example youâ(TM)d be in line to receive the maximum incentive of $13,500. The Fed offers a 30% incentive in the form of a tax credit with no cap. Assuming you have the tax liability, youâ(TM)re in line to deduct another $8,100 (30% x $27,000). Now, youâ(TM)re at a net cost after year 1 of $5,400. This is a lot more palatable. Just think, this energy upgrade is also property tax exempt and youâ(TM)ll realize an immediate property value increase of 20 times your annual electricity bill savings. In this example, a 3kW system will increase your property value by about $9,600 ($40/mo savings x 12 = $480; $480 x 20 years = $9,600).

Re:Energy prices are unstable

[j79zlr]

But there's no hard guarantee. Sure there is. Go read up on Peak Oil. Then go read what anybody's doing about it. (Hint: Apart from mostly singular projects like the one in TFA, mostly jack shit.) Electricity prices will go up.

Except for the fact that only around 1.5% of the US electricity generation comes from the use of oil. Take a look here: Net Generation by Energy Source by Type of Producer. Out of a little more than 4,000,000 MWH of electricity generated, about 65,000 MWH came from petroleum.

Overengineered waste of money

[NuShrike]

He could've spent a fraction of that $38K to reduce his power bills to something closer to $100 per month. Better insulation, more energy efficient PSs in his computers, not leaving electronics on 24/7, change out to CF bulbs, and so on -- seriously!

He's going to hit Jevon's Paradox and end up not actually saving anything, IMO.

I'm more in support of community solar (have the HOA do it, or in a park, etc) which is more beneficial and lower cost. Mass solar.

Re:12 year payback?

[ChefInnocent]

Why would they? That would dry up the revenue generated by the "sin".

I'm in my 5th year and have statistics

[skidisk]

I deployed solar panels when I replaced my roof in 2004; the total out of pocket cost after state rebates and federal and state taxes was $14,612. The system generates about 15 KwH on a good day; I live in a tract home in Mountain View, CA. So far, the panels have generated 19,225 KwH, which reduced my energy bill by $10,392 as of May, 2009. I've not seen the expected degradation in the power production, but it's difficult to measure due to changes in the weather -- it's entirely possible that 2004-2005 were cloudier than 2007-2008, or something like that. In any event, the system has delivered between 3819 and 3930 KwH every year. I'm extraordinarily happy with the way this has worked out.

I got the same results with no investment

[frankgod]

I also live in Sunnyvale and my power bill is even less than his post-solar level. The reason is that I live in a small apartment instead of a house!

Living green is nice, but living small is far better.

Cheaper, Greener ways to improve your house

[Laoping]

Now I don't want to criticize to harshly, but I think he could have done been much more green for less money. Now the obvious thing he could do would be to downsize his house once his kids are a ways. How big of a house do two people need.

Apart from that there are several other cheaper things you can do. I have tried to "Green" up my house a lot too, however I live in Minnesota so solar panels are even a worst investment. But here goes.. list of cheaper green things that I do.

1. When a bulb goes out I replace it with a CFL. hen can be expensive so when I see them on sale for a $1 each I grab a few. I do not recommend replacing all you light bulbs at once because that gets expensive, but when one goes out, go for it.

2. New windows - this was my most expensive energy improvement. $9,000, but it did make my house quieter and drop my heating bill by 45%... My old windows will really bad.

3. My furnace and A/C.... probably don't need that efficient of a furnace where he lives, but in Minnesota, I am rocking the 95% efficient furnace. The furnace and new windows dropped my worst heating bill (January) from $240 to $105. I save between 500 and 600 a year in heating. (Again my windows were REALLY bad)

4. Whole House Fan.. I got one from http://www.airscapefans.com/

You turn off your A/C at night, and pull in fresh air. It uses much less power than you A/C, on low the smallest model only uses 38 watts. And for a cost between $500 - $1300, they do not hurt the wallet too much.

Well anyway..

Still not practicle

[NIK282000]

The power output on this is still pitiful. His system is supposed to give him 8,721kW hours per year (see his installation article). So that means the numbers work out like this if you wanted to know how much you could power from such a setup.

(((8721 kW) * 1 hours) / (365 * 24hours)) = 995.547945 watts.

That is less then 1 regular circuit (8.2962 amps on a 120 volt load). That is just about enough to power your fridge given that it cycles on and many times a day. 38,000$ is a lot of money to spend running your fridge.

The real reason this works for him is that he was taking it in the hoop from the power company and he has that "green mentality" where quality of life can be compromised in favor of "being green." He would have probably saved more in the long run if he invested the money (some where that didn't tank in the past year) and just turned off lights and switched to lower power devices. For the average geek power consumption of desktop PCs routers, battery changers and home entertainment equipment exceeds the the total amount of power generated over the year, its just not worth it for the average person.

Re:Still not practicle

[maxume]

My fridge, TV, laptop and external monitor were the big devices running when I ran out and timed my power meter (I wanted to catch the fridge while the compressor was on, so I only timed it for 1/5 of a revolution, so these numbers are probably only decent).

Anyway, it turns out they were drawing a total of less than 350 watts (my meter has a Kh of 7.2 and 1/5 of a turn took 16 seconds, making one revolution 80 seconds; (3600 * 7.2) / 80 = 324.

If your refrigerator averages 900 watts, freaking replace it.

Re:1363kWh in one month?!

[avandesande]

the article conveniently left out mention of the 'grow room'

SOLAR PANELS ARE CHEAP AND EASY TO REPLACE!!

[DRAGONWEEZEL]

All I keep seeing around here is the depreciating power generation of solar panels... blah blah blahh...

It takes maybe an hour of your time, and ~$100-200/panel to replace 20 panels.

If in 15 years, he buys new panels, with better efficiency, for 4k, and an hours worth of his time, he's just reset his investment with a MUCH better payoff. The cabeling, and inverter will not fail that fast. The inspection won't change for a replacement. There'll be virtually 0 costs.

I have 600w of grid tied, net & production metered solar on my house. The coolest part? I did it for almost nothing. Bought everything on E-bay. Hardest part was complying with code, which looking back was really just a mere nuisance.

This isn't rocket science. If you pay someone to do it, they have to charge a ton because they are
1. Licensed electricions,
2. It's a business
3. they require certain bonds and insurances.

If you do it yourself (can you understand parallel & series circuits and do you know how to count, add, multiply, etc volts, amps & watts? you're qualified!) to your own house, you can get a system for MUCH less than 50K. bonus as your ROI is better, even better is that it makes more extreme lattitudes viable.

It's not ton's of $, but it does keep the house cool.

Re:SOLAR PANELS ARE CHEAP AND EASY TO REPLACE!!

[Sabriel]

Sadly, in Australia it is illegal to DIY so much as a broken light socket connected to nothing at all, let alone build a grid-tied solar power system.

Re:SOLAR PANELS ARE CHEAP AND EASY TO REPLACE!!

[dbIII]

Since it's so easy to mix up active and neutral I don't think it is quite so sad. You can still do it all but just get an electrician to check your work. As for the "trade only" suppliers, they like cash as much as anyone else although it's a good idea to not look wildly out of place and know what you are looking for before you go in.
Also I don't think the electrical safety laws apply to 12V installations - that's how I would wire things up. There is a lot of lighting and appliances designed to run off 12V and not need an inverter, you might just have to hunt around at places that fit out boats etc.

Re:SOLAR PANELS ARE CHEAP AND EASY TO REPLACE!!

[Zakabog]

Since it's so easy to mix up active and neutral I don't think it is quite so sad.

The black wire (positive) goes to the black wire, the white wire (neutral) goes to the white wire, and it's quite obvious that the ground goes to neither. If you have three wire in your house then by the process of elimination you can determine that the red wire (switched positive if it's hooked up right) goes to the black wire.

I was fully capable of wiring a light fixture around the age of 10, electrical outlets are much more tricky (since it's not obvious that the black wire goes to copper screw, and the white wire goes to the silver screw.) Switches are really easy too, the only reason I can see it being illegal to do any of this in Australia is lobbying by an electricians union.

Re:I am not so sure...

[sjames]

Because the money spent needs to be factored as, how much could he have made investing it and provided he didn't take a loan to get it all change the equation.

Currently, all he needs to do to make his investment match an equivalent stock or real estate investment is go up on the roof and smash the panels with a hammer. Of course, since it's already paid back a portion, he'll have to smash out his windshield as well to break even.

waste of electricity, that's for sure

[roesti]

I knew I couldn't have been the only person here who thought that way.

From the original article about the installation itself, they use 17,400kWh per annum - about 47.7kWh per day. This is a staggering amount, even considering that they do work from home as well and have two teenage daughters living at home. By their own figures, their $38,000 solar installation only covers half that electricity (although about three quarters of the bill). As I'm sure NuShrike wondered, what the hell are they spending that electricity on? Do they run the air conditioner all the time? If so, wouldn't they be better off buying ceiling and wall insulation and some decent curtains?

My housemate has been considering a photovoltaic installation at home. (Since the Australian federal government suddenly pulled the rug out from underneath the $8000 rebate, I don't know whether he's still considering it.) By my measurements, he'll waste at least half of the electricity they generate on standby power for the computers and such, and nearly as much again on halogen downlights for the main living area. He's just not in the mindset that having PV power means being more responsible for electricity use. In other words, I suspect he believes that it will give him more electricity to spend as he pleases (invoking Jevons' Paradox, as NuShrike suggested), whereas the sibling post by hoojus shows how easy it is to develop the mindset of having less and using it more efficiently.

Of course, if you can save that amount of electricity, but without solar panels and for a fraction of the cost, it hardly seems worth bothering. You can still have both, though, even if it means a few new habits towards cleaning up after yourself.

Oh, and NuShrike, the idea of scaling renewable energy, rainwater catchment and the like for a community is a fantastic idea and one I have been hoping would see a bit more support. Let me know if you've got any ideas.

Re:WTF is this madness?

[aXis100]

That's bogus. Repeating from my other post -

Simple economics - the cost of manufacture is factored into the sale price. If the panels eventually pay for themselves, then that covers the manufacture costs - electrical, raw materials or otherwise. Sure the factory might get a better price for electricity than regular consumers, but there's also raw materials, labour and profit that's included in the price tag.

Re:This is not a lot of power....

[benjamindees]

He doesn't consume a low amount of energy. He's actually pretty close to average for a household that isn't 100% electric appliances. You, on the other hand, consume an ungodly amount of energy.

Since I'm guessing you don't live in a desert, 2500 kWh in a 2000 sq ft home during a rainy month is ridiculously high. What do you do for a living that allows you to be able to afford such lunacy and still not recognize that your AC isn't working properly or you have something wired wrong? Do you grow pot in your house or something? Are you a stripper?