Help figuring out if solar makes sense for me

dcdivenut · May 13, 2012

So having recently got my Leaf, I am finally getting serious about looking at solar. Just had someone out from Solar City to take a look at things. I am hoping that some folks on here have been through this process and can help me figure this stuff out.

1. Right now I have little to no money to put upfront, so purchase is not an option.
2. I work from home, and have a 2.5 year old and another on the way, so unfortunately I don't get much in the way of system savings during the day.
3. Currently, at Pepco's rates I pay about 13.6 cents per kWh (all in - generation, transmission, fees etc)
4. As such, my average monthly bill is $200 and my average kW usage is 1475 (pre Leaf).
5. I don't have huge south facing roof space, and according to Solar City, the system they can install would be 4.84kW, which would generate about 35% of my current usage, again pre Leaf. They guarantee 6,150 kWh in annual production.

Solar City is putting up 3 PPA plans (not sure exactly why no lease), but it is a power purchase agreement where you essentially buy the power from them. They are
1. Pay as you go: NOTHING up front, 11.6 cents per kWh, 3.9% annual increase, $59 monthly payment, projected savings over 20 years is $9141
2. Custom Plan: $3755 upfront, 10.7 cents per kWh, no annual increase, $39 monthly payment, projected savings over 20 years is $16,467
3. Pre-Pay Plan: $7510 upfront, 6.4 cents per kWh, no annual increase, no monthly payment, projected savings over 20 years is $21,560

All of these are with monitoring, 20 year warranty/repair, including inverter costs, insurance coverage and performance guarantee.

So... what are your thoughts?

Cheezmo · May 13, 2012

I expect they project a 6% annual increase in your utility electric rate. I have some spreadsheets I built to evaluate some quotes and if I plug that in I get pretty close to the numbers you quote for the prepay and the Pay As You Go. So, in my opinion, their numbers add up. For some bizarre reason my SolarCity quote had 2.5% for the annual utility increase which doesn't match anything I've seen historically and actually hurts their cause. 6% seems more in line.

Your ROI on the Prepay would be about 8 years if utility rates do increase at 6%. Utility rates would have to fall at an annual rate of 7% for the ROI to fall out to 20 years.

You should save $128 the first year with the Pay as You Go. You'll continue to come out ahead after 20 years as long as utility rates increase more than 2.25% annually.

You could do a little better as their production estimate is likely conservative (they pay you back if it falls below their estimate).

I'm kind of new at evaluating this stuff so I'm sure others will chime in, but it appears to be a better deal than I've been quoted by them here in Texas. The 7kW system they proposed has an ROI out at 16 years.

Boomer23 · May 13, 2012

Does your utility have a Time of Use plan (TOU) or a TOU rate plan for EV charging that works with a solar annual net metering plan? If so, you may find that your payback is more optimistic. With a solar PV system, it's likely that you would get a credit for the power generated during Peak times during the day that would more than offset the power used to charge your LEAF at night. By offsetting gasoline powered driving with home charging, you might be able to get a more efficient payback than you are calculating.

For us, our power bill was basically zero last year for our home power use and charging our LEAF for over 10,000 miles of driving. Though we used almost 3,000 kWh MORE than we generated, our total bill for the year was almost zero.

EDIT: Of course, we also avoided paying for gasoline for that 10,300 miles of driving. If the car we replaced averaged 30 mpg at $4/per gallon of regular, we saved $1,373 on gas.

Check out my blog (link below in my signature) for details.

dcdivenut · May 14, 2012

Boomer23 said:
Does your utility have a Time of Use plan (TOU) or a TOU rate plan for EV charging that works with a solar annual net metering plan? If so, you may find that your payback is more optimistic. With a solar PV system, it's likely that you would get a credit for the power generated during Peak times during the day that would more than offset the power used to charge your LEAF at night. By offsetting gasoline powered driving with home charging, you might be able to get a more efficient payback than you are calculating.

Check out my blog (link below in my signature) for details.

So my electrical pricing situation is a little complex.
1. MD is an "energy choice state". This means I can but power from any # of different sources, but it comes to me via Pepco. As such my bill is split into Generation, Transmission and Distribution (plus assorted charges) sections and the one that can vary based on who I choose is Generation. The 13.6 cents costs above are the "all in" costs. I have looked at a couple of other options and depending on who I buy from, and how long I am willing to lock in for I can either save some money vs PEPCO or pay more (or sometimes the same) for cleaner energy (Wind RECs primarily)

2. PEPCO does have a TOU rate. For now thru end of June their generic rate is 8.531 cents per kWH. Their TOU is 9.206 cents per kWH for Peak(noon to 8PM), 8.443 for intermediate (8A - noon and 8PM to midnight) and 7.915 for off peak (midnight to 8A). I had been concerned about this because of my inability to really reduce usage during peak hours since I work from home and have 2 kids, including an infant, here.

3. If I were to go with another company I would sell to the grid at the same rate I pay. I can go as low as 7.85 cents from ConEd (4% renewable, 34% nuclear) or 8.06 from Clean Currents for 50% wind.

So unfortunately the math gets insanely complicated. I can tell you that if I don't do anything solar I will probably just switch to Clean Currents and call it a day, taking a small savings and feeling a little bit better about where the power comes from.

However, if I can maximize my savings then that would be great as well...

I am generally pretty bad with all these spreadsheets and stuff so if anyone has done this and has something to share let me know and I will gladly sent you an email address.

waitingforaleaf · May 14, 2012

Switching to Clean Currents with their 50% wind would be my decision, if I were in your shoes. The Solar City rates don't sound particularly appealing since your electricity rates from the utitilies are already fairly cheap. Plus dealing with the Solar City lease contract can be problematic if you need to sell your home at some point before the 20 years is completed.

Boomer23 · May 14, 2012

dcdivenut said:
I am generally pretty bad with all these spreadsheets and stuff so if anyone has done this and has something to share let me know and I will gladly sent you an email address.

Because the magnitude of the difference between the Peak and Off Peak TOU rates is so small, your situation is completely different from mine. Therefore, you are not in a position to significantly offset your night time LEAF charging power use with heavy day time Peak credits. You don't need any spreadsheet work to

Here's what makes my situation so different: My night time Super Off Peak rates are about 13 cents per kWh all year long. My day time Peak rates are about 28 cents most of the year and 55 cents for the summer months. Since we don't use much power during Peak times (we don't even have home air conditioning), all of the net power sent back to the utility is credited at those high rates, way more than offsetting our night time power use. So PV combined with EV makes a great combination in California for that reason. Apparently not so much in Md.

2012VoltNJ · May 17, 2012

Hello DCDiveNut,

I understand your situation about the limited capital to investigate solar. I have been in the solar industry for some years now working on residential, commercial and public sector projects.

I think you can do a lot better by staying far away from solar leasing. Solar Leasing is not going to save you all that much money. The leasing company makes all the money.Those projected savings from Solar City are all based on escalators in your utility prices. Also leasing contracts have some pretty hairy language when you look under the covers of the nice brochures and savings calculations spreadsheets they share(all of which always say in small print that savings are NOT guaranteed).

First, let me tell you that in MD there are many great solar installers and some programs that will help you own your system and not lease it. These were installing solar long before leasing companies swooped in and started painting a picture that solar energy systems were unaffordable to the masses and that you need this 20 year warranty with this wildly advanced technology.

So how do you own it with limited capital? Easily, there is a great FHA Energy Loan Program that you can take advantage of. It caps out at $25,000 dollars/20 years can be done with zero down-accomidating a system <5kW.

Here are the gotchas you need to be aware of with leasing companies.

1. Power prices don't always increase at the rate the leasing company says they are going to increase. In many parts of the country power costs have leveled off or even decreased. In Pennsylvania my kWh rate dropped over 1.5 cents in a matter of 12 months. Electricity prices tie closely to natural gas prices which are in the toilet now. In NJ, electric prices are fairly stable. So what happens when you are locked into a 20 year PPA with escalators? Trust me, nothing good.

2. When you lease your solar system you are subject to contractual termination fees should you have to move within the first 5 years. Most of the leasing companies have this in their contracts. Plus, if you go to sell your home, you need to have someone with a credit rating to assume your lease. So in theory you could have a buyer for your home that qualifies for a mortgage , but not your solar system. Worse, you have a solar leased system on your home and because of escalators you aren't saving all that much money. What is appealing to a buyer about that? Being green? In other words, all of the benefits of selling a home with solar really get watered down or disappear when you have a solar lease.

3. When you lease you are walking away from substantial lifetime savings while giving that leasing company the 30% tax credit and the energy energy credits. I believe Maryland SREC's traded at 218.00 last month. That is 21 cents a kWh that you just fork over to these guys in addition to the 13 cents per kWh you would have saved in consumption. Its a shame to walk away from that income when you have ways to finance these systems with little to no money down and reap those rewards.

4. Maintenance and Material Selection: The leasing companies are painting a picture for consumers that solar systems have to be meticulously maintained. That is rubbish. There are panels in the middle of the southwest that have been operating as designed since the 1970's. Solar panels don't really have to be cleaned and warranties are available from the inverter manufacturers that go 20 years.

By owning your system you can select the best panel for your roof from the best qualified panel maker and make more power. All solar panels are not the same. A leasing company like Solar City is around to maximize profits. They buy panels in bulk from the average solar panel makers, at the cheapest prices and push them to the masses. You don't pick what panel you want installed based on performance, 3rd party insurance coverage, etc.

They will maintain the system, but what happens if your roof leaks in year 8 underneath the array? Are they going to fix it? Are they responsible for taking down the system and letting you put a new roof on your house after the 5 year workmanship warranty has expired? Look in the contract and see if you can find that. All the contract really says is that you have 5 years on workmanship, 20 year power production guarantee. Thats it. It doesn't say anything about any costs you may incur in year 6 through 20 for gray areas like roof leaks. If you do have to do roof repairs in year 6 to 20 you will pay money to do those repairs and instantly erase the mediocre savings that a lease offers.

I would strongly advise you to seek ownership options from other local contractors offering a quality panel like SolarWorld or Kyocera for example. Make sure they are quoting you with a flashing kit for all roof penetrations and don't forget to think about the aesthetics by using black modules, rails and flashing kits. The all black systems will do more for you with regards to aesthetics and potential resale value in the future.

The only ones walking away with buckets full of money in these solar leases is the leasing companies and the banks backing them. Feel free to inbox me with any questions.

spike09 · May 17, 2012

2012VoltNJ said:
Hello DCDiveNut,

I understand your situation about the limited capital to investigate solar. I have been in the solar industry for some years now working on residential, commercial and public sector projects.

I think you can do a lot better by staying far away from solar leasing. Solar Leasing is not going to save you all that much money. The leasing company makes all the money.Those projected savings from Solar City are all based on escalators in your utility prices. Also leasing contracts have some pretty hairy language when you look under the covers of the nice brochures and savings calculations spreadsheets they share(all of which always say in small print that savings are NOT guaranteed).

First, let me tell you that in MD there are many great solar installers and some programs that will help you own your system and not lease it. These were installing solar long before leasing companies swooped in and started painting a picture that solar energy systems were unaffordable to the masses and that you need this 20 year warranty with this wildly advanced technology.

So how do you own it with limited capital? Easily, there is a great FHA Energy Loan Program that you can take advantage of. It caps out at $25,000 dollars/20 years can be done with zero down-accomidating a system <5kW.

Here are the gotchas you need to be aware of with leasing companies.

1. Power prices don't always increase at the rate the leasing company says they are going to increase. In many parts of the country power costs have leveled off or even decreased. In Pennsylvania my kWh rate dropped over 1.5 cents in a matter of 12 months. Electricity prices tie closely to natural gas prices which are in the toilet now. In NJ, electric prices are fairly stable. So what happens when you are locked into a 20 year PPA with escalators? Trust me, nothing good.

2. When you lease your solar system you are subject to contractual termination fees should you have to move within the first 5 years. Most of the leasing companies have this in their contracts. Plus, if you go to sell your home, you need to have someone with a credit rating to assume your lease. So in theory you could have a buyer for your home that qualifies for a mortgage , but not your solar system. Worse, you have a solar leased system on your home and because of escalators you aren't saving all that much money. What is appealing to a buyer about that? Being green? In other words, all of the benefits of selling a home with solar really get watered down or disappear when you have a solar lease.

3. When you lease you are walking away from substantial lifetime savings while giving that leasing company the 30% tax credit and the energy energy credits. I believe Maryland SREC's traded at 218.00 last month. That is 21 cents a kWh that you just fork over to these guys in addition to the 13 cents per kWh you would have saved in consumption. Its a shame to walk away from that income when you have ways to finance these systems with little to no money down and reap those rewards.

4. Maintenance and Material Selection: The leasing companies are painting a picture for consumers that solar systems have to be meticulously maintained. That is rubbish. There are panels in the middle of the southwest that have been operating as designed since the 1970's. Solar panels don't really have to be cleaned and warranties are available from the inverter manufacturers that go 20 years.

By owning your system you can select the best panel for your roof from the best qualified panel maker and make more power. All solar panels are not the same. A leasing company like Solar City is around to maximize profits. They buy panels in bulk from the average solar panel makers, at the cheapest prices and push them to the masses. You don't pick what panel you want installed based on performance, 3rd party insurance coverage, etc.

They will maintain the system, but what happens if your roof leaks in year 8 underneath the array? Are they going to fix it? Are they responsible for taking down the system and letting you put a new roof on your house after the 5 year workmanship warranty has expired? Look in the contract and see if you can find that. All the contract really says is that you have 5 years on workmanship, 20 year power production guarantee. Thats it. It doesn't say anything about any costs you may incur in year 6 through 20 for gray areas like roof leaks. If you do have to do roof repairs in year 6 to 20 you will pay money to do those repairs and instantly erase the mediocre savings that a lease offers.

I would strongly advise you to seek ownership options from other local contractors offering a quality panel like SolarWorld or Kyocera for example. Make sure they are quoting you with a flashing kit for all roof penetrations and don't forget to think about the aesthetics by using black modules, rails and flashing kits. The all black systems will do more for you with regards to aesthetics and potential resale value in the future.

The only ones walking away with buckets full of money in these solar leases is the leasing companies and the banks backing them. Feel free to inbox me with any questions.

+1. Don't forget the 30% Federal Tax Credit for installing solar panels. I would go with thin film laminates. They generate a bit less but do not need mounting hardware like traditional glass panels. In any case, going Solar always makes sense expecially if you have an EV!

jason98 · May 17, 2012

2012VoltNJ said:
Those projected savings from Solar City are all based on escalators in your utility prices. Also leasing contracts have some pretty hairy language when you look under the covers of the nice brochures and savings calculations spreadsheets they share(all of which always say in small print that savings are NOT guaranteed).

2012VoltNJ said:
1. Power prices don't always increase at the rate the leasing company says they are going to increase. In many parts of the country power costs have leveled off or even decreased. In Pennsylvania my kWh rate dropped over 1.5 cents in a matter of 12 months. Electricity prices tie closely to natural gas prices which are in the toilet now. In NJ, electric prices are fairly stable. So what happens when you are locked into a 20 year PPA with escalators? Trust me, nothing good.

I could not agree more. Actually I started this forum from my experience with 1bog:
http://www.mynissanleaf.com/viewtopic.php?f=45&t=5967" onclick="window.open(this.href);return false;

The whole proposal reminded me a typical Timeshare sales pitch trying to sell me air instead of a product.

JeremyW · May 17, 2012

dcdivenut said:
So... what are your thoughts?

I love solar, but I'd look at conservation first.

I lurk a lot on the northern Arizona wind and sun forums, and that's generally their advice. Conserving a watt is much cheaper then generating one! Since you're home during the day, I'd look into double paned windows and insulation. Get a kill-a-watt meter and start looking at what your appliances are drawing. Change out all incandescent bulbs to CFL or LED.

At the very least, you'll need a slightly smaller sized system when you do go solar!

Jeremy

Boomer23 · May 17, 2012

JeremyW said:
dcdivenut said:

So... what are your thoughts?

Click to expand...

I love solar, but I'd look at conservation first.

I lurk a lot on the northern Arizona wind and sun forums, and that's generally their advice. Conserving a watt is much cheaper then generating one! Since you're home during the day, I'd look into double paned windows and insulation. Get a kill-a-watt meter and start looking at what your appliances are drawing. Change out all incandescent bulbs to CFL or LED.

At the very least, you'll need a slightly smaller sized system when you do go solar!

Jeremy

+1. We even replaced our outdated 20 year old refrigerator with a new one with Energy Star II rating. My monitoring records show that we are saving about 700 kWh per year just from that decision, and we needed a new refrig anyway. That move provides the same energy advantage as installing two solar panels similar to the 215 W Sunpower panels on my roof.

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