Solar City - is it worth? (renting, credit, how much)

[Josseppie]

Solar is advancing exponentially and its becoming on par with fossil fuels but not quite there yet. My goal is to be on solar by 2020.

Here is a article about it:

If the trend continues for another 8-10 years, which seems increasingly likely, solar will be as cheap as coal with the added benefit of zero carbon emissions. If the cost continues to fall over the next 20 years, solar costs will be half that of coal. These predictions may in fact be too conservative given that First Solar have reported internal production costs of 75 cents (46 pence) per watt with an expectation of 50 cents (31 pence) per watt by 2016.

When applied to electricity prices this predicts that solar generated electricity in the US will descend to a level of 12 cents (7 pence) per kilowatt hour by 2020, possibly even 2015 for the sunniest parts of America.

The link: When Solar Becomes Cheaper Than Fossil Fuels | azizonomics

[jward89]

I did need to get a permit for the work in order to protect my homeowners insurance, and I also have to get someone from Xcel to come in and approve it before you are allowed to connect it to their grid. Easy permitting would also be a plus to having a professional come in and install it for you, which looking back I would have done to avoid that headache. The rest of the installation was a piece of cake though, I'm just not much of an amateur electrician.

[sammy87]

Originally Posted by Josseppie

Solar is advancing exponentially and its becoming on par with fossil fuels but not quite there yet. My goal is to be on solar by 2020.

Here is a article about it:

If the trend continues for another 8-10 years, which seems increasingly likely, solar will be as cheap as coal with the added benefit of zero carbon emissions. If the cost continues to fall over the next 20 years, solar costs will be half that of coal. These predictions may in fact be too conservative given that First Solar have reported internal production costs of 75 cents (46 pence) per watt with an expectation of 50 cents (31 pence) per watt by 2016.

When applied to electricity prices this predicts that solar generated electricity in the US will descend to a level of 12 cents (7 pence) per kilowatt hour by 2020, possibly even 2015 for the sunniest parts of America.

The link: When Solar Becomes Cheaper Than Fossil Fuels | azizonomics

Not too sure about that article. Solar manufactures are actually pulling out of the market. A German company has delayed a facility in TN for several years now. Companies like Solar City are taking advantage of federal tax credits for being "green" mining silicon and manufacturing solar panels is not green at all. Over 50% of US electricity is generated through coal. Solar panels are nowhere near as efficient or as cheap enough to put a dent in coal, nuclear or NG. The whole solar/wind business is a bit of a scam. Wind companies rushed to build turbines that are now failing at alarming rates due to poor QC and design. Their actual lifespan is about 50% of what it was designed for and the load requirements aren't quite what they advertised and therefore cant operate in high wind situations. They can handle a breeze. Drive through WY on a windy day, they are shut off.

[Josseppie]

Originally Posted by sammy87

Not too sure about that article. Solar manufactures are actually pulling out of the market. A German company has delayed a facility in TN for several years now. Companies like Solar City are taking advantage of federal tax credits for being "green" mining silicon and manufacturing solar panels is not green at all. Over 50% of US electricity is generated through coal. Solar panels are nowhere near as efficient or as cheap enough to put a dent in coal, nuclear or NG. The whole solar/wind business is a bit of a scam. Wind companies rushed to build turbines that are now failing at alarming rates due to poor QC and design. Their actual lifespan is about 50% of what it was designed for and the load requirements aren't quite what they advertised and therefore cant operate in high wind situations. They can handle a breeze. Drive through WY on a windy day, they are shut off.

That is because today it is not cost effective to have solar. However solar is advancing exponentially, not linearly, so by 2020 it will be and by 2030 it will be 50% cheaper. That is why I am not going to switch my house and business to solar until 2020 when its cost effective to do so.

[ThatGuyInHR]

I recently had panels installed on my home. We considered SolarCity (along with 4 other installers) but ultimately went with another company on an outright purchase. The long-term savings are significantly higher on a purchase, the impact on home resale value is better, and you have more control over the specifics of your installation. All three of those were important to us. That's not to say that SolarCity doesn't have advantages--$0 up front is a compelling offer.

Our system has been energized for about ten days, and so far is performing very well. If anyone here is considering a solar install and has questions about the process, local installers, etc, I'm happy to share my perspective and notes.

I do have to say that while the earlier comments about costs continuing to drop is valid, it's absolutely the case that at today's prices solar can be very cost-effective. The payback periods that I calculated on the bids I received varied from 7 years to 3 years, using rather conservative assumptions for Xcel price increases and home value impacts. On an improvement that should last 20-30 years with minimal maintenance costs, even a 7-year payback is quite a sound investment.

[brown_dog_us]

If you don't mind me asking, how many KW's is your system and what did it cost?

[ThatGuyInHR]

4.2 kW, after tax credit just shy of $10k.

[lurtsman]

Originally Posted by ThatGuyInHR

I do have to say that while the earlier comments about costs continuing to drop is valid, it's absolutely the case that at today's prices solar can be very cost-effective. The payback periods that I calculated on the bids I received varied from 7 years to 3 years, using rather conservative assumptions for Xcel price increases and home value impacts. On an improvement that should last 20-30 years with minimal maintenance costs, even a 7-year payback is quite a sound investment.

Hi, that guy in HR.
A payback period from 3 to 7 years would potentially be attractive, particularly if the revenue stream was growing. However, are you planning to sell your house within 7 years? If you are not going to sell the property within that time frame, home value impacts should not be used in calculating a payback period. If a sales rep tried to calculate a payback period for you combining the value of home improvements with the cash flows, they have lied about the concept. The payback period is the period of time for the CASH FLOWS, and nothing but the cash flows, to cover the initial investment and any subsequent maintenance costs. If it took 3 to 7 years to reach your break even point counting an increase in home value, that would be an absolutely terrible deal.

I'm not considering leasing schemes because they are pretty much always a net loss. They rarely provide any REAL gain to the home owner. As cute as the "no upfront costs" crap is, if I was buying a house and found out it had panels that wouldn't transfer to me on it, I'd be reducing my bid. I'm a huge fan of combining solar and wind energy to reduce our emission of green house gasses and avoid destroying the planet for future generations, but I'm not a fan of financial contracts designed to benefit the party that understands the contract at the expense of whomever their underlings manage to con into the deal.

~lurtsman - A guy in finance.

[ThatGuyInHR]

Originally Posted by lurtsman

Hi, that guy in HR.
A payback period from 3 to 7 years would potentially be attractive, particularly if the revenue stream was growing. However, are you planning to sell your house within 7 years? If you are not going to sell the property within that time frame, home value impacts should not be used in calculating a payback period. If a sales rep tried to calculate a payback period for you combining the value of home improvements with the cash flows, they have lied about the concept. The payback period is the period of time for the CASH FLOWS, and nothing but the cash flows, to cover the initial investment and any subsequent maintenance costs. If it took 3 to 7 years to reach your break even point counting an increase in home value, that would be an absolutely terrible deal.

This is not necessarily the case. Unless one is sure of the date they plan to sell the house, it's smart to consider both sides of the issue. I agree with you that if you plan to remain in the home for a very long time, then home value impact should not be given much weight--as you won't see that money for a very long time, and the system may have aged enough by the time you sell where it no longer brings a significant impact. In that case, it makes sense to consider only the cash flow impact, as that's likely to be the great majority of the benefit the homeowner sees.

But in the first 10ish years of a solar system's life, a homeowner-owned solar PV system absolutely has a significant impact on home value ($1400-$2700/kW for the Denver area per a Colorado Energy Office report from 2013, much higher per other studies that I don't necessarily agree with). If one plans to sell in that time frame, it makes sense to include that value in the payback calculation, in addition to the tax credit, REC payments, and energy savings. This is no different from other home improvement projects--a kitchen remodel's only positive impact is in home appreciation, and it would be foolish to fail to consider that impact when planning a remodel.

Speaking of the payback calculations that sales folk present, I also agree that they tend to be junk. Most of the bids I got included annual Xcel rate increases of 4.5-5.5%, which may happen but I'm not comfortable banking on.

In the end, any payback calculation will by necessity be incorrect--it relies on a large number of assumptions that are impossible to quantify accurately: home appreciation, utility company rate increases, PV production, system maintenance, and inflation / performance of opportunity cost investments one would have placed the money into in lieu of purchasing a system. I arrived at my guesstimate by researching local home value impacts and plugging that information along with what I view as relatively conservative estimates on the other variables.

That analysis gives me a break-even timeframe that I'm comfortable with. In the end, I didn't go solar to save a ton of cash. Rather, I wanted to lower my household's usage of fossil fuels. The important part of my own cost-benefit analysis results is that after the 2nd year, even if my assumptions prove optimistic I will not be in the hole by a large amount.

[Modification Specialist]

To the OP there is misconstrued information on this post. Reaching out and reading what people say that don't have solar energy. It is more beneficial to talk to people who do have solar power. PM me if you have any questions.

Solar energy is dependent on the amount of sunlight that is converted into electrical power. Summer months more sunshine, rainy days and winter months less. Producing more power meter goes backwards selling back to the utility company.

Before solar electric our bill was budgeted at $240 per month, paying $2800 yearly. Estimating what we spent over the last year, we save 90% from what our bill was. May electric bill was $10.95 (below).

Is it worth it? My solar installation was paid off in two years what I paid for it. Panels are warrantied for 25 years. Knowing power output slowly diminishes over the years. As the prices do come down, hopefully the cost to replace in the future will be signify less..... (20/25 years down the road....lol!!)

See post Solar Energy - Net Metering being charge more for energy used?




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