Computerizer
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Re: Solar not actually a good investment?

Mon Sep 16, 2013 10:11 pm

QueenBee wrote:A. Just Driving an EV
B. Just Installing PV
C. Driving an EV and installing PV

Unless you consider the impact of tiered rates or were installing a system that would cover 100% of your usage I'm hoping this exercise will help demonstrate the point I'm trying to make.


Alright, this was hard because it's later in the evening AND I just got back from vacation, but I managed to do some math...

Savings over 20 years, in today's dollars:

A. 2 EVs only: $52,000
B. PV only: $0. 20 years is actually our second break-even due to the loan structure and such. (We profit immediately, but then have some negative time while we're still making loan payments but not getting the state incentives after 2020.)
C. 2 EVs and PV: $52,000
Tyrel Haveman
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DaveinOlyWA
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Re: Solar not actually a good investment?

Tue Sep 17, 2013 4:29 am

not really a fair analysis when the impact of EVs verses ICE is not included here...
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ERG4ALL
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Re: Solar not actually a good investment?

Tue Sep 17, 2013 8:36 am

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.


In economics there is a concept called "Opportunity Cost". I think this what is in contention. Opportunity cost is the consequence of taking one course of action versus another. Thus, I could put my money in a bank with a CD yielding perhaps 1%. So in a year's time it would yield $100 on an investment of $10,000. Or I could put that same money into a different investment that may yield $200 per year. If I decide on the CD my opportunity cost would be $100. Of course there are many reasons one may want to forego the $200 investment, but the exercise helps to analyze each investment.

In a sense both sides have a point. For example, someone buys a TV set on sale. The retail price was $500. The savings on the sale amounted to $100. The purchaser says, "I saved $100". The other person says, "You didn't 'Save' any money, you spent $400". As far as the purchaser was concerned his opportunity cost of purchasing the set for $500 versus for $400 is $100.

So it seems that if putting in a PV system and driving an EV versus not putting in a PV system and driving an ICE causes the person to "save" $300 per month, then that is the opportunity cost of the two courses of action. On top of that however, one needs to weigh the opportunity cost against the total investment to see if the course of action is still financially advisable.
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QueenBee
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Re: Solar not actually a good investment?

Tue Sep 17, 2013 12:35 pm

ERG4ALL wrote:
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.


In economics there is a concept called "Opportunity Cost". I think this what is in contention. Opportunity cost is the consequence of taking one course of action versus another. Thus, I could put my money in a bank with a CD yielding perhaps 1%. So in a year's time it would yield $100 on an investment of $10,000. Or I could put that same money into a different investment that may yield $200 per year. If I decide on the CD my opportunity cost would be $100. Of course there are many reasons one may want to forego the $200 investment, but the exercise helps to analyze each investment.

In a sense both sides have a point. For example, someone buys a TV set on sale. The retail price was $500. The savings on the sale amounted to $100. The purchaser says, "I saved $100". The other person says, "You didn't 'Save' any money, you spent $400". As far as the purchaser was concerned his opportunity cost of purchasing the set for $500 versus for $400 is $100.

So it seems that if putting in a PV system and driving an EV versus not putting in a PV system and driving an ICE causes the person to "save" $300 per month, then that is the opportunity cost of the two courses of action. On top of that however, one needs to weigh the opportunity cost against the total investment to see if the course of action is still financially advisable.


To extend this what I'm trying to say is that the two actions are not dependent or economically related to each other* so to look at the ROI/opportunity cost/etc. of each them together as a whole does not make sound fiscal sense.

The results that Computerizer posted demonstrate what I was expecting. They'll be hugely positive over the next twenty years but this is not because they installed solar it is because they drive two EVs. Obviously installing PV for them was done because they are comfortable with the payback, are able to finance the investment and are actually initially cash flow positive. Since the money was borrowed they are completely OK with the extended break even point because of all the other non-financial benefits that solar has. I have no doubt that they'll look back at both of these decisions as the correct ones.

To me it's important to see that solar PV does not save gas so that you can ensure you are comfortable with the real impact that installing a solar PV system is going to have to ensure that it is going to meet ones needs and expectations. PV is an obvious additional purchase for an EV driver because it supports many of the same reasons that a person would buy an EV but it's critical to understand that installing solar PV and driving an EV does not decrease the break even point/ROI/etc. more than doing each one individually*.


* Except in the previously outlined scenarios (TOU, tiered rates, 100% production, non grid tie).

sparky
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Re: Solar not actually a good investment?

Tue Sep 17, 2013 6:27 pm

QueenBee wrote:* Except in the previously outlined scenarios (TOU, tiered rates, 100% production, non grid tie).
This thread is getting long; what does the 100% production mean in this context?

QueenBee
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Re: Solar not actually a good investment?

Tue Sep 17, 2013 7:05 pm

sparky wrote:
QueenBee wrote:* Except in the previously outlined scenarios (TOU, tiered rates, 100% production, non grid tie).
This thread is getting long; what does the 100% production mean in this context?


If you are producing more electricity than you are using adding an EV will be beneficial because many utilities net metering either do not give you credit for the additional production over the course of a year, pay you a reduced rate, etc. So in cases like that the EV increases the ROI on the PV.

downeykp
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Re: Solar not actually a good investment?

Tue Sep 17, 2013 7:23 pm

Queenbee, yes! That is the beauty of producing more than you can use. Plug in the car and household energy and driving doesn't cost a thing. I will never be able to use all of the energy that is going back to the power company. We can actually use hot water to wash clothes. What a concept.
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