City-Data Forum off grid setup (natural, installation, cost, electricity)
 User Name Remember Me Password [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
 View detailed profile (Advanced) or searchsite with Search Forums  (Advanced)

06-22-2017, 07:24 AM
 Location: Forests of Maine 30,612 posts, read 49,226,837 times Reputation: 18982

Quote:
 Originally Posted by guidoLaMoto ... Residential solar installations produced electricity at a cost of \$0.147/kW-hr in 2012 and \$0.132 in 2017-- a fall of 9%-- Great! But will it continue to fall?
Quote:
 ... You'd need to spend ~\$32,000 to install a system capable of giving you the American average use of 900kW-hr /m. If your system keeps producing for 20 yrs, you'd save \$0.132 x 216,000 kW-hr = \$28,000.
Using your numbers, if we assume that you 'need' 900kw-hr/month and that it costs you 13.2 cents per kw-hr then a 900kw-hr/m system would cost \$118.

Quote:
 ... But even at 5%/annum cmpd interest ROI, you'd have accumulated initial capital + interest- grid power cost= \$32,000 + \$45000 - \$28000 = \$49,000 after 20 yrs. So by foregoing a solar installation, you'd be \$21,000 ahead after 20 yrs.
Most people do not try to compare depreciable items to investing.

A 2017 ford f-150 has a MSRP of \$27,110 as time goes by that asset will depreciate, it will gradually lose value. All depreciable assets do this.

Quote:
 ... By installing PV now, after 20 yrs you'd be not only \$21,000 behind, but you'd have to re-invest another \$32,000 to renew your power source.
Why would you decide to replace the entire system after 20 years?

Most people would only replace the failed component.

Even if my batteries die every 10 years, I only spent \$2500 on them.

06-22-2017, 11:55 AM
 4,315 posts, read 2,476,097 times Reputation: 7671
Quote:
 Originally Posted by Submariner Using your numbers, if we assume that you 'need' 900kw-hr/month and that it costs you 13.2 cents per kw-hr then a 900kw-hr/m system would cost \$118. Most people do not try to compare depreciable items to investing. A 2017 ford f-150 has a MSRP of \$27,110 as time goes by that asset will depreciate, it will gradually lose value. All depreciable assets do this. Why would you decide to replace the entire system after 20 years? Most people would only replace the failed component. Even if my batteries die every 10 years, I only spent \$2500 on them.

\$2,500 every 10 years = \$250 per year.

Thus you would lose the savings of over \$20 each month just for battery replacement expense.

For most of the year, \$20 a month battery replacement = 1/3 of my current electric bill.

06-22-2017, 12:20 PM
 Location: DC 6,498 posts, read 6,416,175 times Reputation: 3100
Quote:
 Originally Posted by guidoLaMoto https://www.solarchoice.net.au/blog/...ices-june-2017 Installed Price of Solar Photovoltaic Systems in the U.S. Continues to Decline at a Rapid Pace | Berkeley Lab Residential solar installations produced electricity at a cost of \$0.147/kW-hr in 2012 and \$0.132 in 2017-- a fall of 9%-- Great! But will it continue to fall? Grid power costs \$0.09 per kW-hr, but taxes bring it up to ~\$0.15-- so PV is very competitive IF your system lives up to boiler plate specs-- and they usually only produce at <50%-- unless you live in AZ, NM, etc. You'd need to spend ~\$32,000 to install a system capable of giving you the American average use of 900kW-hr /m. If your system keeps producing for 20 yrs, you'd save \$0.132 x 216,000 kW-hr = \$28,000. But even at 5%/annum cmpd interest ROI, you'd have accumulated initial capital + interest- grid power cost= \$32,000 + \$45000 - \$28000 = \$49,000 after 20 yrs. So by foregoing a solar installation, you'd be \$21,000 ahead after 20 yrs. By installing PV now, after 20 yrs you'd be not only \$21,000 behind, but you'd have to re-invest another \$32,000 to renew your power source.
You should stop with the finance. It isn't your strength.

1. The average residential cost of electricity is 12 cents per kWh.

2. A 5 kW system would cost \$15000 pre tax and \$10000 after tax.

3. You can finance that at home mortgage rate of 3.75% costing pre tax \$375/year in interest . Note that this qualifies as mortgage and is deductible. At my tax rate that lowers the cost to about \$260 per year. Principle repayment varies because mortgages are constant payment, but average if a 30 year mortgage would add another \$333/year in cost.

4. A 5kW system here produces about 7000 kWh per year @ 12 cents per kWh costs \$840/ year if bought from the power company at average country cost.

So the economics are spend \$593 per year for the payments on your pv system or pay the power company \$840 per year. That's assuming electricity costs don't increase in the future. I wouldn't bet on that.

06-22-2017, 12:22 PM
 Location: Forests of Maine 30,612 posts, read 49,226,837 times Reputation: 18982
Quote:
 Originally Posted by David A Stone \$2,500 every 10 years = \$250 per year. Thus you would lose the savings of over \$20 each month just for battery replacement expense. For most of the year, \$20 a month battery replacement = 1/3 of my current electric bill.
It is not practical to replace one battery each month. Once batteries are ganged together the oldest battery will tend to do damage to the newest battery, etc. Batteries are replaced all at the same time.

If you want to invest \$20/month in a fund for this purpose, you could. But again I hate to compare spending on depreciable assets to investing.

Depreciable assets [like a car] are not generally considered to be profit-making investments.

Solar power is never considered to be less expensive than grid power, though a ROI in roughly 10 years is pretty standard.

06-22-2017, 12:52 PM
 Location: DC 6,498 posts, read 6,416,175 times Reputation: 3100
Quote:
 Originally Posted by Submariner It is not practical to replace one battery each month. Once batteries are ganged together the oldest battery will tend to do damage to the newest battery, etc. Batteries are replaced all at the same time. If you want to invest \$20/month in a fund for this purpose, you could. But again I hate to compare spending on depreciable assets to investing. Depreciable assets [like a car] are not generally considered to be profit-making investments. Solar power is never considered to be less expensive than grid power, though a ROI in roughly 10 years is pretty standard.
In Washington DC if you have a south facing unshaded roof, grid connected pv is cheaper.

06-22-2017, 01:16 PM
 Location: Forests of Maine 30,612 posts, read 49,226,837 times Reputation: 18982
Quote:
 Originally Posted by DCforever In Washington DC if you have a south facing unshaded roof, grid connected pv is cheaper.
Hmm, that is interesting.

After installer mark-ups and finance fees it works out to less money than grid power?

In my state it is those mark-ups and banking fees that drive net-metering to be so much more than off-grid installations.

I am on solar power forums, and I had not heard of solar power being cheaper than grid power, anywhere.

06-23-2017, 05:12 AM
 Location: The Driftless Area, WI 2,769 posts, read 1,027,807 times Reputation: 5927
Quote:
 Originally Posted by Submariner Using your numbers, if we assume that you 'need' 900kw-hr/month and that it costs you 13.2 cents per kw-hr then a 900kw-hr/m system would cost \$118. A 2017 ford f-150 has a MSRP of \$27,110 as time goes by that asset will depreciate, it will gradually lose value. All depreciable assets do this

You're confusing installation cost per W capacity with production cost over the life of the system.

Depreciation has to do with the eventual selling value of the asset; not applicable here.

You do make a good point about replacement costs-- only the solar cells themselves would count--but it's still an additional, large expense. You don't have to do that with grid power. And I didn't even bring up the frequent replacement costs of batteries.

Re: DC's comment on tax advantages: you may personally profit by taking that money, but somebody (tax payers) is paying it, so, for intellectual honesty, we must include it in the real cost of PV.

06-23-2017, 05:38 AM
 Location: DC 6,498 posts, read 6,416,175 times Reputation: 3100
Quote:
 Originally Posted by guidoLaMoto You're confusing installation cost per W capacity with production cost over the life of the system. Depreciation has to do with the eventual selling value of the asset; not applicable here. You do make a good point about replacement costs-- only the solar cells themselves would count--but it's still an additional, large expense. You don't have to do that with grid power. And I didn't even bring up the frequent replacement costs of batteries. Re: DC's comment on tax advantages: you may personally profit by taking that money, but somebody (tax payers) is paying it, so, for intellectual honesty, we must include it in the real cost of PV.
It is also a real cost of nuclear, a real cost of clean coal, a real cost of oil & gas, etc. It's also a real cost of owning a home, but you don't whine about mortgage interest deduction on here do you?

What I presented are the actual costs and benefits that face the consumer. If the government provides a means to reduce your taxes, you're foolish not to take the credit. I try not to make foolish financial decisions. You?

06-23-2017, 06:15 AM
 Location: Forests of Maine 30,612 posts, read 49,226,837 times Reputation: 18982
Quote:
 Originally Posted by guidoLaMoto ... Depreciation has to do with the eventual selling value of the asset; not applicable here.
I take depreciation every year, it certainly does apply for my solar power system.

Quote:
 ... Re: DC's comment on tax advantages: you may personally profit by taking that money, but somebody (tax payers) is paying it, so, for intellectual honesty, we must include it in the real cost of PV.
You are confusing systems that have some sort of subsidy to them.

06-23-2017, 08:45 AM
 Location: DC 6,498 posts, read 6,416,175 times Reputation: 3100
Submariner, it is my understanding that off grid solar qualifies for tax credits.
 Please register to post and access all features of our very popular forum. It is free and quick. Over \$68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned. Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.