figuring payback

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xiphias
xiphias Solar Expert Posts: 52 ✭✭✭✭
Howdy all. Neat site.

Currently investigating PV and solar thermal (heating and DHW). On the PV front, I'm interested in figuring the possible payback period. Haven't been able to find a good calculator that models past, present and future potential energy prices. Looking at DOE data for the past decade or so, it appears residential electricity prices are on the upswing and if current trends continue, the national average would ~double to about 20cents/kwh in 8-11 years.

PVWatts and Solar Pathfinder assays tell me a 5kw installation will generate about 5.8-6k kwh annually at my location/orientation.

I have net-metering available (which here in MA is currently monthly but is converting to annual), and would go with a grid-tie system.

Monthly use is 500 kwh. Efficiency gains are generally being offset by increasing use (e.g., bigger kids = more laundry!).

Any insight would be most appreciated. Thanks.

Comments

  • niel
    niel Solar Expert Posts: 10,300 ✭✭✭✭
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    Re: figuring payback

    though i am not into payback periods i will ask you to relook at your statement here, "PVWatts and Solar Pathfinder assays tell me a 5kw installation will generate about 5.8-6 kwh annually at my location/orientation." it seems to me that it should work for more than just over an hour for the whole year. 5kwx1.2hrs=6.0kwh.
  • nigtomdaw
    nigtomdaw Solar Expert Posts: 705 ✭✭
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    Re: figuring payback

    If the your looking at pAY BACK your on the wrong road,,, grid is grid and will be the cheapest form of power for some time as long as we rape mother earth . Ive beeen called an idiot by my fellow English neighbors in Spain because I live within 100m of a grid supply,unlike them !!!!!!!!, to connect would cost about 50% of my solar supply I put the applicable 50% in to the equation and dont have a 3 mthly power bill.

    Personal choice but when the sun shines every 300 days out of 365 I still get a sense of yeah right decision ! :D
  • xiphias
    xiphias Solar Expert Posts: 52 ✭✭✭✭
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    Re: figuring payback

    Oops. Missed the k after the 5.8-6. 5.8-6k kwh annually.

    I'm not wedded to payback as the sole determinant. Just one piece of information to look at.
  • nigtomdaw
    nigtomdaw Solar Expert Posts: 705 ✭✭
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    Re: figuring payback

    PS I know BB hammers on about grid tied vs battery with its less efficiency he lives with grid I had a choice and I suppose he didnt...... I chose off grid Im happy and when the lights finally go out BB he will light up his torch and Ill be cranking along like yesterday,,,, Im not kicking BB in between the legs.....but my lights are still on and BB is looking for his grid link :cry: Hey but BB doesnt have 2 fork out for a new set of batteries every 10 years.:D BB just an observtion nothing personal please fell free 2 kick me up the arse...mate !
  • xiphias
    xiphias Solar Expert Posts: 52 ✭✭✭✭
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    Re: figuring payback

    Found something from NREL. Solar Advisor Module. Will take some learning.

    https://www.nrel.gov/analysis/sam/
  • BB.
    BB. Super Moderators, Administrators Posts: 33,479 admin
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    Re: figuring payback

    Nigtomdaw,

    Not a problem... Since we still have the second amendment here (even in Kalifornia)--I can still protect myself. :p

    Normally the reason I answer Grid Tie vs Off-Grid is because the first thing 99% of the folks ask is how much will I spend/cost/return on investment/tight money/save/etc... If you are asking in terms of money--sorry, Grid Power is cheaper than solar if you already have it wired up to the edge of your home.

    The other reason is that 90% of the people out there are looking to reduce their 2,000 kWhr per month ($200-$500 per month) power bill with solar... If they are willing to put up ~$150,000 for a grid tie system or ~$500,000 for an off-grid system--then no problem offsetting their monthly power bill.

    If you want to do it to save the environment--those few tonnes of batteries and sulfuric acid every 10 years is hard on the environment too...

    And regarding power, the last time there was an outage that lasted more than a couple of hours--was 50+ years ago (lasted around one week because the trees in the neighborhood took out the power distribution system after a storm).

    With conservation, 20 gallons of gasoline (plus more in the car+truck), I can easily last 2 weeks with my Honda eu2000i generator--or have extra fuel to bugout.

    I did look into an off grid system--and if the XW system was available then--I probably would have done it...

    Regarding Grid Tie--that makes sense here because I pay less than $6.00 per month for a storage battery that can shift my winter deficit into my summer surplus. Can't do that with any battery system.

    But, again, I can do 1 year net metering because my Utility was dragged kicking and screaming into doing this--and the original promise was that only 0.5% of their customer base would be allowed to sign up for this plan (now changed to 1.0% under new law).
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset
  • niel
    niel Solar Expert Posts: 10,300 ✭✭✭✭
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    Re: figuring payback

    bb,
    side question for you.
    when california had those power shortages a few years back and there were rolling blackouts and brownouts, were you not affected? or is it a case of my missinderstanding of the severity of the situation at that time?
  • autoxsteve
    autoxsteve Solar Expert Posts: 114 ✭✭✭✭
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    Re: figuring payback

    FWIW, I was here in Socal during that time (been here since birth) and was not affected at all during those rolling blackouts.

    Regarding my situation, backouts for me are more due to someone hitting a local transformer (or it going out) than large electrical shortages....
  • Mangas
    Mangas Solar Expert Posts: 547 ✭✭✭✭
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    Re: figuring payback

    Lot's of ways to look at it.

    Given its habitat sensitive location, I put the ranch into permanent conservation to avoid development and landscape fragmentation. For this reason, I did not want the grid on or, anywhere near the ranch.

    These factors alone decided an off grid system which cost about 50% more that bringing the grid to the ranch.

    My off grid "economics" were driven primarily by land conservation and not grid versus off grid discounted rates of return. But, I do plan to recover the off grid hardware investment in say, 14 years (replacing the batteries once).

    Apples to apples, rural grid power is presently cheaper. IMO, rural utility rates are headed significantly higher over the next decade which should be factored in when comparing 2008 solar hardware cost values and "payback". Finally, consider the present the rural grid is often not consistantly reliable and interruptions in service common.
    Ranch Off Grid System & Custom Home: 2 x pair stacked Schneider XW 5548+ Plus inverters (4), 2 x Schneider MPPT 80-600 Charge Controllers, 2 Xanbus AGS Generator Start and Air Extraction System Controllers, 64 Trojan L16 REB 6v 375 AH Flooded Cel Batteries w/Water Miser Caps, 44 x 185 Sharp Solar Panels, Cummins Onan RS20 KW Propane Water Cooled Genset, ICF Custom House Construction, all appliances, Central A/C, 2 x High Efficiency Variable Speed three ton Central A/C 220v compressors, 2 x Propane furnaces, 2 x Variable Speed Air Handlers, 2 x HD WiFi HVAC Zoned System Controllers
  • BB.
    BB. Super Moderators, Administrators Posts: 33,479 admin
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    Re: figuring payback

    Niel,

    At work (San Jose, CA), we had one rolling black out that lasted about one hour. At home, no blackout.

    At the time, California had entered into deregulation required our major utilities to sell off all of their generators and buy electricity with a 24 hour ahead contract (spot market)--and that worked well when there was an excess of generating capacity.

    But since California had not allowed any new power plants to be built and since generator owners could not write contracts for power 5-20 years in the future (like anyone else, who would finance 100% of a power plant with a 20+ year life and no idea who will buy the power and at what price), nobody would build any new plants in California.

    When the companies that owned the generators figured out how to game the system, and the state told the power companies that they had to pay virtually any price for electricity on the spot market (many times the retail price they sold the power for) and the utilities where not allowed to charge customers for the higher costs, and they where not allowed to write long term contracts--the state PUC drove both utilities to virtual bankrupsy and forced on the state taxpayers a $25,000,000,000 (yes billion) 40 year bonds to just to pay for all of this summer power fiasco over a year or two (remember, Enron was a major player in this market--but so was Los Angeles Power and Light--the city power company made huge amounts of money during this time too).

    Since then, the have change the regulations on how the companies contract for power, there have been multiple "peaker" natural gas fired power plants built in the SF Bay area, and there has been quite a bit of expansion to the regional power grid. And it was one of the major reasons that we recalled our freshly re-elected governor and replaced him with the "Governator" Arnold Schwarzenegger.

    So--short answer, other than one, hour long, blackout at work--nope, did not affect me at all.

    -Bill
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset
  • niel
    niel Solar Expert Posts: 10,300 ✭✭✭✭
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    Re: figuring payback

    media overblown again.:roll: wish i could say only 1 incident of loss over the years. in fact my pc backups kicked on a few days ago for a 5 min interuption and i have found this happens more during the night here explaining why my alarm failed so much in the past so i now use battery only.:p i just gotta remember to check the batteries every now and then.:roll:
  • newenergy
    newenergy Solar Expert Posts: 291 ✭✭✭✭✭✭
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    Re: figuring payback

    What does your power from the grid cost? Top tier here in Southern California Edison is about 44 cents /kWH. In some places it's like 7c tops.
  • niel
    niel Solar Expert Posts: 10,300 ✭✭✭✭
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    Re: figuring payback

    assuming you are asking me, it has been some time since i looked at the cost here. it is difficult to say as they put upfront fees and such to it that can vary the overall cost/kwh depending on your total kwh draw at the months end, but all costs factored i believe i was around 14 cents/kwh several years ago. at 44 cents/kwh i'd be extreme on conserving and looking to get other power sources to avoid using power from them.
  • Brock
    Brock Solar Expert Posts: 639 ✭✭✭✭
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    Re: figuring payback

    For reference in Wisconsin we pay $.12 / kw flat or I choose $.06 off peak (7p to 9a) and $.24 on peak (9a to 7p), weekends and holidays are also off peak. So in my case solar is offsetting my $.24 rate :)
    3kw solar PV, 4 LiFePO4 100a, xw 6048, Honda eu2000i, iota DLS-54-13, Tesla 3, Leaf, Volt, 4 ton horizontal geothermal, grid tied - Green Bay, WI
  • xiphias
    xiphias Solar Expert Posts: 52 ✭✭✭✭
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    Re: figuring payback

    My "all-in" rate is 19.9 cents/kWh. The supplier portion is 11.1 cents/kWh; the other 8.8 is various usage-rated transmission, transition, etc. charges.

    A local professional figured payback for a 3.6 kW array at around 14 years. I got similar results from the NREL Solar Advisor Module, linked above.

    Projecting future electricity prices is obviously the weak link here. 4-5%/yr increase is the long-term (15-40 yr) historical trend, but who knows whether that will continue. Recent (last 5-7 yr) rate increases are more than that.
  • Brock
    Brock Solar Expert Posts: 639 ✭✭✭✭
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    Re: figuring payback

    I should have added that with ours, we pay about $10 to be connected and $12 for transmission a month as well. Those are flat rates, doesn't matter how much you use, even if it's none.
    3kw solar PV, 4 LiFePO4 100a, xw 6048, Honda eu2000i, iota DLS-54-13, Tesla 3, Leaf, Volt, 4 ton horizontal geothermal, grid tied - Green Bay, WI
  • westbranch
    westbranch Solar Expert Posts: 5,183 ✭✭✭✭
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    Re: figuring payback

    for everyones FYI.... In British Columbia: we are charged

    a basic charge of $.12130 per day
    a usage charge of $ .06150 / KWh
    a rate rider ??? @ 2 % and now
    an Innovative Clean Energy Fund levy @ .4 %
    plus GST @ 5 %

    Based on my last bill it comes to $.07065085....... per kWh

    still cheap compared to others... the benefits of Hydro generation ... vs fossil fuels or ?

    Eric
     
    KID #51B  4s 140W to 24V 900Ah C&D AGM
    CL#29032 FW 2126/ 2073/ 2133 175A E-Panel WBjr, 3 x 4s 140W to 24V 900Ah C&D AGM 
    Cotek ST1500W 24V Inverter,OmniCharge 3024,
    2 x Cisco WRT54GL i/c DD-WRT Rtr & Bridge,
    Eu3/2/1000i Gens, 1680W & E-Panel/WBjr to come, CL #647 asleep
    West Chilcotin, BC, Canada
  • Brock
    Brock Solar Expert Posts: 639 ✭✭✭✭
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    Re: figuring payback

    Going back to the OP (original poster), our payback was the first time we had a storm and the power was out for about 12 hours. I wasn’t home but the rest of my family was in the house with the furnace, fridge, freezer and lights on.

    My intent when I started was to have a whole house UPS sort of system, the solar power offsets that cost. I looked long and hard between a large standby genset and solar/inverter/batteries. I am glad I went the way I did. While they both would perform the same function, the solar system also performs when we don't have problems. When I get asked when my system pays for itself, I ask when does a genset pay for itself?
    3kw solar PV, 4 LiFePO4 100a, xw 6048, Honda eu2000i, iota DLS-54-13, Tesla 3, Leaf, Volt, 4 ton horizontal geothermal, grid tied - Green Bay, WI
  • mikeo
    mikeo Solar Expert Posts: 386 ✭✭✭
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    Re: figuring payback

    Here where I live in the Ozarks, I pay around 11 cents a kwh after all charges are figured in on around 600 KWhs/month at my rural connection. As far as power outages, it was out 6 days after the tornadoes and 4 days after a foot of snow fell and brought down a lot of trees on the power grid. This is just since Feb 5th. With no incentives available, I figure payback at around 20 years on my system. Where I live I chose a battery backed grid tie system for the outage reasons mentioned above and the expectation that power rates will rise an undermined amount and shorten the payback estimate.
    Mike
  • BB.
    BB. Super Moderators, Administrators Posts: 33,479 admin
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    Re: figuring payback
    Brock wrote: »
    When I get asked when my system pays for itself, I ask when does a genset pay for itself?

    In my case, the first time my $900 generator paid itself off--I did not have to buy $x,xxx worth of batteries for grid tied solar. In other cases, it may be when the person does not need to purchase their replacement batteries ~7-10 years down the road.

    I just change the stored gasoline once per year (dump in car--so all I lose was the interest on $xx worth of gasoline--although, the last time it turned out to be an "investment" as the price has shot way up this year).

    But--that is for my location. If I was in an area that got ice storms and/or hurricane power outages that lasted days or even weeks--An off grid capable system would make lots of sense to me. And if California ever gets back into real daily power outages--it would probably be worth converting to off-grid capable solar.

    And, lastly, my "big one" will be an earth quake--I don't know that my 2nd story roof mounted solar array will still be functional after an earthquake. A small generator + 20 gallons of gas are probably worth more to me than 20 solar panels and x tons of batteries if I have to bug-out.

    -Bill
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset
  • niel
    niel Solar Expert Posts: 10,300 ✭✭✭✭
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    Re: figuring payback

    i believe brock's point was one that i brought up years ago that when people buy a generator that they don't sit there asking the question of how long before it pays for itself like they do with solar. they think it's purely there to make money with after the initial investment is accounted for. although this is possible, they can make money in many better ways than this imho. there obviously are exceptions or grid-tie only wouldn't have appealed to very many people and incentives do help in this area too.
    the most common reason for solar or even generators is one of backup power, but also as primary power sources too with solar being quieter. no matter the backup source you employ, it can save much in food costs from spoilage or the possibility of being able to run either a furnace or an air conditioner for some period of time that usually go out at the worst possible times with bad weather conditions prevailing such as life threatening heat or cold. other safety conciderations exist too that vary from place to place or individual's needs. when one buys a car they usually don't ask how long before it pays for itself even though it too can make money. the needs go beyond money in most cases, but it does do this too in roundabout ways at times. that light being on during an outage may have prevented you or somebody you love from tripping and hurting themselves badly so the costs of the hospital and followups in addition to lost work if they work was saved. i see a bigger savings beyond the money like keeping one's health or safety more intact and that would depend on one's value system and how one see things, but to be sure i'm not against saving some $ secondly.
    enough of my philosophizing as the questioning of payback times to me is stupid, but that's just my way of thinking i guess.
  • Brock
    Brock Solar Expert Posts: 639 ✭✭✭✭
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    Re: figuring payback

    I am certainly not knocking grid tied, I think that is the most efficient way to go with solar if available and offsets loads when the largest loads are on the grid.

    My intent was to have an automatic system that would work even if I weren’t there and my wife wouldn't have to do anything or heck even keep the fridge and freezer cold when we were gone and the power went out (happened once while we were on vacation). I am pretty sure I could have done that for less $ with an auto start genset, and transfer panel, but I went the wrong way ;) which lead me here. Sometimes mistakes can lead to good things.

    I would agree though that a Honda Eu2000i and a couple gallons of gas that is rotated is a great way to go, and very portable.
    3kw solar PV, 4 LiFePO4 100a, xw 6048, Honda eu2000i, iota DLS-54-13, Tesla 3, Leaf, Volt, 4 ton horizontal geothermal, grid tied - Green Bay, WI
  • SolarJohn
    SolarJohn Solar Expert Posts: 202 ✭✭
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    Re: figuring payback

    Quote: My intent was to have an automatic system that would work even if I weren’t there and my wife wouldn't have to do anything .........

    I know what you mean. I have an automatic transfer switch for just my refrigerator and freezer. My off-grid PV system is too small to power everything, but at least I can keep food from spoiling. I've also used it to power my bio-fueled stove during an extended power failure. So, like others here, I'm not concerned about the payback. I'm going to upgrade my battery bank soon, making my system even more useful.

    http://solarjohn.blogspot.com

    John
  • Mangas
    Mangas Solar Expert Posts: 547 ✭✭✭✭
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    Re: figuring payback

    I agree with Niel's comment about the generator.

    I've got an 1800 rpm, 16KW propane, H Panel generator which backs up my off grid system. Apart from monthly 10 minute exercises it only runs at most about 20 - 30 hours a year. I see it as an insurance policy. With the sound accenutated cover you can barely hear it 100 feet away.

    I didn't include the cost either in my "payback" as I would have bought one anyway, grid or off grid.
    Ranch Off Grid System & Custom Home: 2 x pair stacked Schneider XW 5548+ Plus inverters (4), 2 x Schneider MPPT 80-600 Charge Controllers, 2 Xanbus AGS Generator Start and Air Extraction System Controllers, 64 Trojan L16 REB 6v 375 AH Flooded Cel Batteries w/Water Miser Caps, 44 x 185 Sharp Solar Panels, Cummins Onan RS20 KW Propane Water Cooled Genset, ICF Custom House Construction, all appliances, Central A/C, 2 x High Efficiency Variable Speed three ton Central A/C 220v compressors, 2 x Propane furnaces, 2 x Variable Speed Air Handlers, 2 x HD WiFi HVAC Zoned System Controllers