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When they have increases or changes in the next 20 years, yours is "grandfathered" into the old price plan. So basically you're locked into the old rules and rates.
Also,it's the home that's grandfathered (not the customer) so if you're looking at homes and want solar look for one that's been grandfathered in.
Not quite. The electric rates with the rate plans will change same as everyone else. The grandfathering is the additional rates/fees and the net metering (the big one is the net metering).
Net metering means the power company gives you a 1 to 1 credit for kWh produced and sent to the grid and used from the grid. Under net metering if you send 1 kWh to the grid you get back 1 kWh when you use it (if you go back through I posted two pictures of my APS bill which shows my credits. Without net metering the utility company will pay you what it costs them to produce that kWh when you send it to the grid then charge you full retail when you take it back from the grid. In 10 years non-grandfathered solar will be getting about $0.04 per kWh sent to the grid and be charged $0.12 per kWh used from the grid (just an example but probably not too far off in ratio).
It probably won't be that bad with where storage is expected to go, so instead of sending to the grid you store it yourself and use it yourself. For the valley heat and our AC demands battery storage needs a pretty drastic leap to be economical though. My household for example would need about 100 kWh of battery storage to make it through the worst of monsoon season to go completely off grid which just isn't possible but for day to day I'd need about 30 kWh of storage which is like $15k-$20k right now. I'm not in the industry just a very interested observer but I'd bet battery options that make sense for us in the valley will be around in the next 7-10 years at the latest.
The other part of the grandfathering is the grid connection fees, I could be wrong but I'm pretty sure this is part of it. These fees are why I pay $22 a month with zero usage and they will be higher for new solar installs. My lowest payment for the next 20 years will always be $22 a month because of the grandfathering but new solar customers will be higher, same with older solar customers theirs is lower because there was a previous round of grandfathering. These fees are based on installed system size so a smaller system pays less and a larger system pays more.
There is no reason to pass up on a grandfathered solar home. If you purchased my home your APS bill for the first 17.5k kWh of usage would cost you $264 ($22 a month times 12) or $0.015 per kWh; the current going rate for off peak electric is around $0.10-$0.13 per kWh and that will rise over time (about every 4 years on average APS raises rates). Also, because solar accounts for so much of my usage I'm on the standard rate plan not a time of use plan which means I can run a load of laundry whenever I feel like, keep the AC wherever I want it (I keep mine at 74), and do whatever else I want without worrying about what time it is all while saving a considerable amount of money.
Not quite. The electric rates with the rate plans will change same as everyone else. The grandfathering is the additional rates/fees and the net metering (the big one is the net metering).
Net metering means the power company gives you a 1 to 1 credit for kWh produced and sent to the grid and used from the grid. Under net metering if you send 1 kWh to the grid you get back 1 kWh when you use it (if you go back through I posted two pictures of my APS bill which shows my credits. Without net metering the utility company will pay you what it costs them to produce that kWh when you send it to the grid then charge you full retail when you take it back from the grid. In 10 years non-grandfathered solar will be getting about $0.04 per kWh sent to the grid and be charged $0.12 per kWh used from the grid (just an example but probably not too far off in ratio).
Yea, I meant to say the service plan structure is grandfathered in but not future rate increases. I still get 1-1 credits and I don't have to worry about demand charges and time differences (on/off peak) being grandfathered in.
Not quite. The electric rates with the rate plans will change same as everyone else. The grandfathering is the additional rates/fees and the net metering (the big one is the net metering).
Net metering means the power company gives you a 1 to 1 credit for kWh produced and sent to the grid and used from the grid. Under net metering if you send 1 kWh to the grid you get back 1 kWh when you use it (if you go back through I posted two pictures of my APS bill which shows my credits. Without net metering the utility company will pay you what it costs them to produce that kWh when you send it to the grid then charge you full retail when you take it back from the grid. In 10 years non-grandfathered solar will be getting about $0.04 per kWh sent to the grid and be charged $0.12 per kWh used from the grid (just an example but probably not too far off in ratio).
It probably won't be that bad with where storage is expected to go, so instead of sending to the grid you store it yourself and use it yourself. For the valley heat and our AC demands battery storage needs a pretty drastic leap to be economical though. My household for example would need about 100 kWh of battery storage to make it through the worst of monsoon season to go completely off grid which just isn't possible but for day to day I'd need about 30 kWh of storage which is like $15k-$20k right now. I'm not in the industry just a very interested observer but I'd bet battery options that make sense for us in the valley will be around in the next 7-10 years at the latest.
The other part of the grandfathering is the grid connection fees, I could be wrong but I'm pretty sure this is part of it. These fees are why I pay $22 a month with zero usage and they will be higher for new solar installs. My lowest payment for the next 20 years will always be $22 a month because of the grandfathering but new solar customers will be higher, same with older solar customers theirs is lower because there was a previous round of grandfathering. These fees are based on installed system size so a smaller system pays less and a larger system pays more.
There is no reason to pass up on a grandfathered solar home. If you purchased my home your APS bill for the first 17.5k kWh of usage would cost you $264 ($22 a month times 12) or $0.015 per kWh; the current going rate for off peak electric is around $0.10-$0.13 per kWh and that will rise over time (about every 4 years on average APS raises rates). Also, because solar accounts for so much of my usage I'm on the standard rate plan not a time of use plan which means I can run a load of laundry whenever I feel like, keep the AC wherever I want it (I keep mine at 74), and do whatever else I want without worrying about what time it is all while saving a considerable amount of money.
BUT and this is a big BUT, one has to also take into account if the system is sized properly like yours is and mine wasn't. ANY changes to the system OR plan will cancel out any "grandfathering" and puts you on the new and improved plan.
BUT and this is a big BUT, one has to also take into account if the system is sized properly like yours is and mine wasn't. ANY changes to the system OR plan will cancel out any "grandfathering" and puts you on the new and improved plan.
Even an improperly sized system will provide benefits. Your rate plan just needs to be correct to start with, same as any non-solar household. If the system was half the size that was needed you just go on a normal time of use plan so you would avoid half the cost of electricity from APS by generating it. By going on a time of use the generation during peak hours is credited toward peak hour usage and same for off peak. The rates don't change just because there is solar installed though so even a small system is going to have benefits.
Yes, you will lose the grandfathering if you modify the system.
When they have increases or changes in the next 20 years, yours is "grandfathered" into the old price plan. So basically you're locked into the old rules and rates.
Also,it's the home that's grandfathered (not the customer) so if you're looking at homes and want solar look for one that's been grandfathered in.
Thank you for your response. Unfortunately, I was not very clear. I understand the concept of "grandfathering", I just am not sure what is being "grandfathered". We are moving from Virginia to the Phoenix area next month and will be buying a home. We will be downsizing drastically, but want a pool again. The Kwh cost there is mind boggling so solar power appears to be a reasonable alternative.
Here is what I have gleaned from this thread:
Own, if possible, as opposed to leasing.
Purchase a home at least 3 years old with owned panels to take advantage of old rates etc. (grandfathering).
If home to purchase has leased panel, include a payoff requirement in purchase offer.
Do serious research.
Suck up to AZ Manager if possible for good advice.
Thank you for your response. Unfortunately, I was not very clear. I understand the concept of "grandfathering", I just am not sure what is being "grandfathered". We are moving from Virginia to the Phoenix area next month and will be buying a home. We will be downsizing drastically, but want a pool again. The Kwh cost there is mind boggling so solar power appears to be a reasonable alternative.
Here is what I have gleaned from this thread:
Own, if possible, as opposed to leasing.
Purchase a home at least 3 years old with owned panels to take advantage of old rates etc. (grandfathering).
If home to purchase has leased panel, include a payoff requirement in purchase offer.
Do serious research.
Suck up to AZ Manager if possible for good advice.
Again, thank you for your response.
Owning is always better than leasing if you can afford to do so but since you're buying an existing home I would personally only look for homes with owned systems. That's not to say a leased one is bad but make sure you include the payoff in the purchase offer.
I was wrong in my first post that the rates are grandfathered (they're not) but corrected it in post #32. I was trying to post quick as I was heading out the door and my brain and fingers weren't working together!
AZ Manager actually summed it up well in post #31. If you're system does 100% offset you will only pay the fees. Those will be different for everyone as they're based partially off the size of your system plus taxes. I can't remember the formula but it's so many cents x your systems total kWh. So that's why I only pay around $18.00/month while AZ Manager pays around $22.00/month,his system is larger.
Post #6 says what I paid and how much I'm saving a year. That is entirely irrelevant when purchasing a home with solar.
.
I commend you on your honest evaluation of this question. Most people who have committed themselves to solar installations suffer from Festinger's Theory of Cognitive Dissonance and refuse to admit the down side of their choice.
You made a very quick illusion to, but have otherwise ignored, the problem of lost investment potential when making a large capital investment on a solar system. Your $16.5K investment could have been invested in some instrument that would return dividends/increase in value. Even at a simple 5%, you will have lost $16K over the 20 yr lifetime of your system, thus effectively doubling your cost. (Compounding interest would increase that lost amount even more, and had you been investing in the Dow during this bull market, you may have lost 3-5x your initial investment.)...not nearly offset by electric bill savings.
...and potential buyers of solar or wind systems need to remember that after 20-25 yrs they have to shell out the capital again to replace the system. After two cycles of that, their lost investment potential could reach $200,000+ while they only would have saved $50,000 in electric bills. There's also the maintenance costs and replacement costs of batteries 2-3 x during the useful life of the system.
Buyers of homes with solar already installed may be paying some premium for that system over the value of the house without such a system, but they won't get it back at resale because the usefulness of the system deteriorates with time and won't be worth as much as time goes by.
I commend you on your honest evaluation of this question. Most people who have committed themselves to solar installations suffer from Festinger's Theory of Cognitive Dissonance and refuse to admit the down side of their choice.
You made a very quick illusion to, but have otherwise ignored, the problem of lost investment potential when making a large capital investment on a solar system. Your $16.5K investment could have been invested in some instrument that would return dividends/increase in value. Even at a simple 5%, you will have lost $16K over the 20 yr lifetime of your system, thus effectively doubling your cost. (Compounding interest would increase that lost amount even more, and had you been investing in the Dow during this bull market, you may have lost 3-5x your initial investment.)...not nearly offset by electric bill savings.
...and potential buyers of solar or wind systems need to remember that after 20-25 yrs they have to shell out the capital again to replace the system. After two cycles of that, their lost investment potential could reach $200,000+ while they only would have saved $50,000 in electric bills. There's also the maintenance costs and replacement costs of batteries 2-3 x during the useful life of the system.
Buyers of homes with solar already installed may be paying some premium for that system over the value of the house without such a system, but they won't get it back at resale because the usefulness of the system deteriorates with time and won't be worth as much as time goes by.
There are downsides to almost every choice we make. In my case I have well diversified investments and yes,I do consider my solar system an investment. But each individual case is different just like in regular investing no two people have the exact same strategies.
For me my systems ROI will be in less than 8 years and my equipment is covered for 25 years. It's not like in 20-25 years the system just quits,the amount produced has just declined from the manufacturers specs. There are also many different grades of panels which will have better warrantees,produce more kWh's and have a longer life span. Sure every year the technology get better but if you can't sit on the sidelines waiting for the perfect system or you will never own one. It's no different than computers or smartphones,they're outdated usually within the first year. Also,my system isn't susceptible to market losses either so I know exactly what my ROI is and after year 8, I have free electricity minus taxes and fees. Even doing some quick math from years 8-25, saving an average of $1,500/year on electricity (17yrs x $1,500.00) I'm still ahead $25,500. Plus by owning it I was able to get the Fed/State tax credits. By year 25 I'll be in my mid 70's and if I'm still in my home (doubtful) I'm sure there will be many more options in alternative energy.
Case in point that you could cherry pick this argument with everything you buy. Why buy a new car when it depreciates 20% right when you walk out the door? Why buy a new smartphone when next years will be bigger and faster and now mines worth 50% less? Solar isn't for everyone but your numbers are flawed because no 2 homes are the same and no 2 people use the exact same amount of electricity.
Quote:
What is the lifespan of a solar panel?
The industry rule of thumb, based on advanced testing by manufacturers, is that your solar panels will last 25-30 years. However, this doesn’t mean that they stop producing electricity after 25 years – it just means that energy production has declined by what manufacturers consider a significant amount.
Even an improperly sized system will provide benefits. Your rate plan just needs to be correct to start with, same as any non-solar household. If the system was half the size that was needed you just go on a normal time of use plan so you would avoid half the cost of electricity from APS by generating it. By going on a time of use the generation during peak hours is credited toward peak hour usage and same for off peak. The rates don't change just because there is solar installed though so even a small system is going to have benefits.
Yes, you will lose the grandfathering if you modify the system.
Also if you modify the rate plan in any way. This is per APS, I tried all angles to see what would benefit us the most and was repeatedly told "if you change in any way you lose your status". All I can say is "SURPRISE"...
It's my observation of the whole Solar deal in AZ that as of this year it does not make any financial sense to purchase or lease a system as the utilities (SRP/APS) have tilted the benefits totally in their favor. AZ Manager is a wonderful source of information BUT one has to remember that in a lot of cases the purchasers were fed a line of B.S. by the Solar companies to get them to sign up.
Most Solar installers/sellers are not as upfront as AZ Manager is, that is a fact, with a few exceptions (AZ Manager being one) they are no better than a used car salesman.
Secondly, most people do not stay in their homes long enough to achieve any ROI forget about total ROI.
I guess the best advice I could give to anyone at this point is to look at the absolute worst case scenarios and plan on them being the case and if you're good with that then go for it.
I don't trust the utilities OR the Rate Commission to do anything to benefit the residential customer given their past history.
Just my observations after investigating doing this over the last few years, the utilities have and are fighting back to keep their profits going and the state is helping THEM not us...
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I still get 1-1 credits and I don't have to worry about demand charges and time differences (on/off peak) being grandfathered in.
plan.
