Solar not actually a good investment?

[donald]

[which, I presume, are only available for a professionally approved installation, so DIY might be out of the question].

Nope, AFAIK there aren't any incentives that only apply to professional installations.

Right, but if it isn't professionally approved, then how does the State know you have an installation fitted at all, and aren't just filing a fraudulent claim?
Presumably at some point, someone comes along to certify the power rating of the system and that it is fully, and permanently, installed?

 

[surfingslovak]

Presumably at some point, someone comes along to certify the power rating of the system and that it is fully, and permanently, installed?

Yes. In our case, the city came to inspect and sign off on the installation before it was allowed to go live. I imagine that it's the same for all municipalities.

 

[RegGuheert]

Presumably at some point, someone comes along to certify the power rating of the system and that it is fully, and permanently, installed?

Yes. In our case, the city came to inspect and sign off on the installation before it was allowed to go live. I imagine that it's the same for all municipalities.

+1

Where I live, for a grid-tied PV installation, you must make application to the local government for an electrical permit to ensure you are building to National Electrical Code standards. You also must apply to the local utility to receive permission to put power onto their grid. Their concern is also safety, and they also send an inspector to test that the system shuts down wher there is an outage.

I know that the local utility reports the system to the state government, but I don't know who the local government reports it to. I also do not know if the utility, local or state governments report the system up to the federal level. But the IRS is self-enforcing. I would guess that trying to sneak an over-$10,000 tax credit by them could easily land you in jail.

 

[Burr]

Donald- Each State is different, but in California, if you want the State incentive , it must be professionally installed. Sacramento saw fit to put the State incentives under the control of the utilities companys (kind of like letting the fox guard the hen house). Because of our large and mass debts, the incentive program has deteriorated to 20% of what it was 7 years ago. Forget the California Incentive program.

The Federal incentives are another matter. As long as you have receipts, you are eligible for a 30% credit. This applies even if you add more panels the next year. You'll be eligible again for the next year's tax credit. DIY INSTALLERS CAN USE THIS FEDERAL INCENTIVE. If you can, do it yourself and save thousands.................Good Luck

 

[DaveinOlyWA]

Since the OP has gone ahead with the install; the question is moot but in his case being a 2 EV family; I think we need to move away from the state incentives for solar sellback and look at what he is replacing which is more likely to be a $300+ per month gas bill (actually in his area its probably closer to $400)

but that is only the beginning. what is the cost of the inconvenience of not refueling at home? the extra maintenance costs associated with ICEs? The "feelgood" factor?

I have to dispute any continuous rise in power rates over the next 15 years because historically our rates have gone up but not in a consistent manner.

Also interest rates for borrowing money are very low and the reason is that even the most aggressive investment strategies are not really paying off and I dont expect that to change in the foreseeable future. The days of double digit stock returns are not likely to return (unless its recovering from another huge drop which means not making money but getting your money back) so any prediction of better than 3-4% on return of money would require a HUGE risk that most would not take.

either way; with the advancement of GCC, solar output in the area should be on the rise!

 

[sparky]

Donald- Each State is different, but in California, if you want the State incentive , it must be professionally installed. Sacramento saw fit to put the State incentives under the control of the utilities companys (kind of like letting the fox guard the hen house). Because of our large and mass debts, the incentive program has deteriorated to 20% of what it was 7 years ago. Forget the California Incentive program....

I don't think this is true. Can you provide a link? It's true that my power company handles the incentive paperwork but they clearly state on their webpage that self installs qualify. Plus, they did an admirable job of guiding me throughout the permit process and cut me a single check within 3 weeks of my permit inspection. Considering it is a govt. bureaucracy, the process was concise and efficient; words not usually associated with govt.

The current state incentive for my house is $1.73/W. Of course when I did my self-install the incentive was higher but so was the cost of PV. Also, the paid incentive can't exceed 50% of system cost nor $100k. But, for a self-install, it's pretty easy to keep it around $3.50/W. I think the decreasing value of incentives was designed into the program and is not related to CA state debt.

 

[DaveEV]

if it isn't professionally approved, then how does the State know you have an installation fitted at all, and aren't just filing a fraudulent claim?
Presumably at some point, someone comes along to certify the power rating of the system and that it is fully, and permanently, installed?

How does the IRS know you didn't lie on your taxes if you filed them yourself?

 

[Burr]

Moderater- When I initially investigated, the SCE requirements were blue prints and engineering certification(additional costs about $500). For 1 kW they estimated about $400. The City building department/permit informed me of the Code requirements. They also added that the SCE/rebate program was none of their concern. Conclusion: Why would I want SCE in my business?

Anyone who wants to chance fraud & tax evasion with the State and/or Federal government for a few hundred dollars probably shouldn't be working on roofs or with sharp tools.

 

[QueenBee]

Since the OP has gone ahead with the install; the question is moot but in his case being a 2 EV family; I think we need to move away from the state incentives for solar sellback and look at what he is replacing which is more likely to be a $300+ per month gas bill (actually in his area its probably closer to $400)

but that is only the beginning. what is the cost of the inconvenience of not refueling at home? the extra maintenance costs associated with ICEs?

Dave, sorry but you are looking at it wrong. Installing solar pv replaced buying power from the grid not anything to do with buying gas. Driving EVs is what caused the OP to not have to buy gas and that can be done with or without solar panels.

Being able to refuel at home has nothing todo with solar panels.

ICE maintenance also has nothing todo with solar panels.

 

[sparky]

Anyone who wants to chance fraud & tax evasion with the State and/or Federal government for a few hundred dollars probably shouldn't be working on roofs or with sharp tools.

I have no idea what is meant by this. For someone in my neighborhood the incentive is $1763 per 1 kW. Seems worth some paperwork. The engineering certifications were provided by the PV equip supplier, the permit fees were refunded back to me. The "blue-prints" were just standard electrical sketches (my power company provided examples) and rooftop layout sketches I did on my computer in about 2 hours.
I just don't want the rumor that self-installs don't get a state tax incentive to stick. It appears you are served by SCE. Here's an email from them I received on this topic:

Dear "sparky" [edit],

Thank you for contacting SCE regarding your proposed solar installation.

Please note that the California Solar Initiative Rebate Program
administered by SCE is available for Self "Owner" Solar installations.

If you need further assistance regarding the rebate program please call us
at 1-866-584-7436.

Best,


SCE Customer Generation Team
Net Energy Metering Program
P: 626-302-9680
F: 626-571-4272

 

[QueenBee]

Sparky, thanks for clarifying this. My research had came to the same conclusion so I was wondering if maybe I missed something. One other issue is some AHJ/electrical inspectors do not allow home owners to perform their own electrical work. In cases like that them you need a friendly electrician to give you a hand to get past inspection.

 

[sparky]

Dave, sorry but you are looking at it wrong. Installing solar pv replaced buying power from the grid not anything to do with buying gas. Driving EVs is what caused the OP to not have to buy gas and that can be done with or without solar panels.

I guess I should be careful here since I haven't given this much thought and I think you've posted arguments along these lines before, so presumably, you have given it some thought.
Suppose I have a standalone carport with rooftop PV. It is not grid-tied but has the necessary electronics to charge my EV (I only drive at night in this example). For this case, would you allow that the Solar PV investment can be weighed vs cost of gasoline to drive the same miles?

If true, then I assume your argument is only that the gasoline incentive goes away once the carport is grid-tied. Yes?

 

[QueenBee]

Dave, sorry but you are looking at it wrong. Installing solar pv replaced buying power from the grid not anything to do with buying gas. Driving EVs is what caused the OP to not have to buy gas and that can be done with or without solar panels.

I guess I should be careful here since I haven't given this much thought and I think you've posted arguments along these lines before, so presumably, you have given it some thought.
Suppose I have a standalone carport with rooftop PV. It is not grid-tied but has the necessary electronics to charge my EV (I only drive at night in this example). For this case, would you allow that the Solar PV investment can be weighed vs cost of gasoline to drive the same miles?

If true, then I assume your argument is only that the gasoline incentive goes away once the carport is grid-tied. Yes?

Good scenario! Something I had not considered but my quick analysis is only if there is no grid to tie to and being able to charge at this carport allows you to drive additional miles that you would not be able to otherwise drive. If the grid is available my response would be why not make it grid tied

I encourage you to give it more thought. I'm happy to update my stance on this but I think if you look at ROI calcs the ROI of just grid tie solar and just EV are the same as EV and PV together except under three circumstances. TOU/tiered rates and when your solar produces 100% of your usage. These three things complicate the ROI calcs but will obviously have some impact.

 

[PV2leaf]

A friend of mine has been telling me for ages that solar panels at home are not a good investment. I didn't believe him, and instead believed what I hear from companies that install solar panels, that they are a great investment. Eventually I got around to create a spreadsheet to figure out who I should actually believe.

I started with these assumptions:

• Located in Bellingham, WA, I could produce 1028 kWh per year for each 1 kW of installed system.
• I would install a system at my house rated at 8.75 kW
• I would install a Washington-build system, so the state would pay me $0.54/kWh produced through June 2020.
• 30% federal tax credit on installed system price
• Install price of $5 per rated Watt
• I pay $0.11/kWh flat rate to the power company (and would get credit via net metering for the same amount)
• I use about 1500 kWh of power per month (average).
• Having solar panels will increase my property value by $20,000
• General inflation is 3%
• Electricity cost inflation is 4%
• Property value inflation is 5%

With these assumptions, I can calculate:

• Cost of install = $43,750
• Federal tax credit = $13,125
• Generated kWh per year = 8,995
• State production credit per year: $4,857.40 (through June 2020)
• Saved grid cost per year = $989.45 (today's dollars, first year)

Using these, I can figure cashflow for each year:
2013: Install at very end of year, cost $43,750, tax credit $13,125, net cashflow -$30,625.00
2014: Save $989.45 in my power bill, get $4,857.30 in state production credit, net cashflow $5,846.75
etc...

The cumulative cashflow starts at -$30,625.00, then gets bigger (less negative) until it becomes positive in 2019, at which point the system has "paid for itself". If you include my property value (as if I was going to sell my house), it "pays for itself" in just a couple years.

After 10 years, I will have gained (in cash flow and property value) $45,404.79, in 2023-dollars, which is about $33,785.42 in today's dollars.

If I had instead taken my original $30,625.00 and invested it in stocks, real estate, etc. earning 10% APY, in 10 years it would be worth $79,433.36 in 2023-dollars.

So the question then becomes: WHY would I put solar panels on my roof? I can't say it's because I don't want to use fossil fuels and such -- I already don't. I subscribe to "Green Power" from Puget Sound Energy, and of course I have an electric car. The only other primary reason would be to save money. But as my calculations demonstrated, if I wanted to do that, I'd be better off investing it in something else.

Don't get me wrong -- I WANT to have solar panels at my house. I just need to be able to justify it to myself (and my wife) somehow. How can I do it?

I have a PV system with a 7Kw inverter and just under 8Kw in DC capacity. I came to a different conclusion.

My installed price was under $5.00 a watt BEFORE any state and federal incentives --- prices have come down since my system was installed.

Regarding .11 per kilowatt ..... divide your total electric bill by your total total kilowatt used for the real rate. Then multiply by 1.(your tax rate). This is what a KwH costs you !!

In Connecticut we pay "only" >10 a KwH but it totals to .20 with all the delivery fees and taxes. So I have to earn .26 to pay for a Kwh.

My system has generated just under 30 Mwh in 3 years, saving $6k in post tax dollars.

I figured a 6-7 year break even with current power and tax rates, also panel degradation in the first 5 years is something to take into account.

 

[smkettner]

I am lucky to produce 40% of my usage. But due to TOU rates my bill has dropped 90%. Just saying.

 

[DaveinOlyWA]

Since the OP has gone ahead with the install; the question is moot but in his case being a 2 EV family; I think we need to move away from the state incentives for solar sellback and look at what he is replacing which is more likely to be a $300+ per month gas bill (actually in his area its probably closer to $400)

but that is only the beginning. what is the cost of the inconvenience of not refueling at home? the extra maintenance costs associated with ICEs?

Dave, sorry but you are looking at it wrong. Installing solar pv replaced buying power from the grid not anything to do with buying gas. Driving EVs is what caused the OP to not have to buy gas and that can be done with or without solar panels.

Being able to refuel at home has nothing todo with solar panels.

ICE maintenance also has nothing todo with solar panels.

hard to see it from your perspective. He is essentially trading a 10+ cent per mile vehicle for at 2½ cent per mile vehicle. Yes; every kwh put into his LEAFs means another 11 cents he has to pay to run the lights but even if he had to buy every single kwh his household uses, he is still far ahead.

To compare; if he is averaging 4 miles per Kwh that is 9 cents a mile cost. he would have to have a 40+ mpg car to meet that in fuel costs alone. throw in extra maintenance costs for the gasser and that just tips it more into EVs favor.

How anyone adds it up is up to them but the money all comes from the same place and is spent towards the same end. So where its reallocated to doesnt really matter in the long run other than his panels will be paid in just gas savings alone

 

[swaltner]

How does the IRS know you didn't lie on your taxes if you filed them yourself?

The same way they know you didn't lie on your taxes in regards to any other deduction which isn't reported in other ways to them, they audit a random sample of the population. Having a huge deduction like a solar system *might* increase your chance of getting selected for an audit, although it isn't a guarantee.

 

[QueenBee]

Since the OP has gone ahead with the install; the question is moot but in his case being a 2 EV family; I think we need to move away from the state incentives for solar sellback and look at what he is replacing which is more likely to be a $300+ per month gas bill (actually in his area its probably closer to $400)

but that is only the beginning. what is the cost of the inconvenience of not refueling at home? the extra maintenance costs associated with ICEs?

Dave, sorry but you are looking at it wrong. Installing solar pv replaced buying power from the grid not anything to do with buying gas. Driving EVs is what caused the OP to not have to buy gas and that can be done with or without solar panels.

Being able to refuel at home has nothing todo with solar panels.

ICE maintenance also has nothing todo with solar panels.

hard to see it from your perspective. He is essentially trading a 10+ cent per mile vehicle for at 2½ cent per mile vehicle. Yes; every kwh put into his LEAFs means another 11 cents he has to pay to run the lights but even if he had to buy every single kwh his household uses, he is still far ahead.

To compare; if he is averaging 4 miles per Kwh that is 9 cents a mile cost. he would have to have a 40+ mpg car to meet that in fuel costs alone. throw in extra maintenance costs for the gasser and that just tips it more into EVs favor.

How anyone adds it up is up to them but the money all comes from the same place and is spent towards the same end. So where its reallocated to doesnt really matter in the long run other than his panels will be paid in just gas savings alone

Dave, yes you are correct he is trading a 10+ cent mile vehicle for 2.5 cents per mile vehicle but this is because he is buying an EV not because he is installing PV. This benefit gets attributed to buying an EV which costs more upfront than a non-ev. This savings happens because he bought an EV and is not impacted by if solar PV is on his house.

Try thinking about it this way:
If he just buys an EV he saves 7.5 cents per mile driven and whatever is saved from maintenance.
If he just buys solar PV he saves 10 cents per kilowatt hour it produces.
If he buys both an EV and solar PV he does not save any more than the two combined so his savings is still 7.5 cents per mile driven and 10 cents per kilowatt hour it produces.

There is no doubt that the ROI calculations will pan out for buying a LEAF and installing solar. The ICE maintenance cost savings are 100% attributable to buying an EV and have nothing todo with installing solar.

I disagree that it doesn't matter. It matters a lot to me as I want people to be making logical sound financial decisions. The solar industry, like any sales business, has people in it who care more about their commission than about being honest and up front. There are also others who truly believe that buying solar PV and an EV makes the ROI better attributing the solar panels to gas savings.

Dave, I believe you are renting so using your logic I could say this. Since you are saving so much in gas you should install solar panels on your rental house. How it adds up doesn't matter because the money all comes from the same place and is spent towards the same end so where it is reallocated doesn't really matter in the long run other than that the panels will be paid in just gas savings. Clearly that'd be a poor financial decision unless you were going to live there for a long time.

I disagree that the the money is spent towards the same end. My electricity budget is(was) spent towards buying electricity from the utility. My transportation budget is(was) spent towards buying gas. Installing solar PV does not decrease the amount spent on gas. Driving an EV does not decrease the amount spent on electricity.

Obviously I'm highly highly for both home solar PV and EVs but I just want people to be doing it for the right reasons and for most people spending $20k one of those reasons is that it is a sound financial decision.

 

[RegGuheert]

If he buys both an EV and solar PV he does not save any more than the two combined so his savings is still 7.5 cents per mile driven and 10 cents per kilowatt hour it produces.

- Purchasing PV without an EV limits the amount of savings which the PV can generate in most net metering arrangements like the one I have since you do not get paid for production beyond usage.
- Purchasing an EV without PV limits how much the fuel cost can be reduced by the EV because I must pay the utility rate.
- Only if I purchase BOTH can I realize the maximum fuel cost savings for the EV. Moving the vehicle fuel to electricity unlocks additional savings that PV can provide.

 

[QueenBee]

If he buys both an EV and solar PV he does not save any more than the two combined so his savings is still 7.5 cents per mile driven and 10 cents per kilowatt hour it produces.

- Purchasing PV without an EV limits the amount of savings which the PV can generate in most net metering arrangements like the one I have since you do not get paid for production beyond usage.

Agreed, I did cover that under the caveat that it does matter if you are producing 100% of your usage.

- Purchasing an EV without PV limits how much the fuel cost can be reduced by the EV because I must pay the utility rate.

And I would argue that you still must pay the utility rate, except you are paying it to your PV investment instead of the utility.

- Only if I purchase BOTH can I realize the maximum fuel cost savings for the EV. Moving the vehicle fuel to electricity unlocks additional savings that PV can provide.

I agree that likely having PV covering 100% of your usage and an EV will give you the best return from both but this is a fraction of the investment and my biggest pet peeve is the PV does NOT save any money with regards to the cost of gas. As far as I've seen everyone who tries to make an argument that PV and EVs go together for finanancial reasons is not making the argument that an EV allows you to install a larger PV system. They are like Dave saying that all the money you save on gas by driving an EV makes the PV payback shorter.

100% PV production of usage, tiered rates, and TOU rates make the interaction between PV and EV ROIs more complicated and this is the only area where PV and EVs will impact each other but this is never what is really being talked about. Also as sparky brought up if you don't have a grid to tie to.