Net metering and the break-even point

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I was reading about a solar Prius and it said that between MPG savings, net metering (I'm in CA), and a possible $2000 federal tax credit, the break-even point for their Prius solar installation is 2-3 years. That sounds amazing to me. Is it true? How quickly can a solar installation on a small house break even?

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  • BB.
    BB. Super Moderators, Administrators Posts: 33,474 admin
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    Re: Net metering and the break-even point

    Do you have a link to the article?

    For the most part, Grid Tied solar is not yet cheaper than utility power for small homes...

    I live in Northern California and installed my 3kW (3.5 kW of solar panels) Grid Tied system about 3 years ago. My average costs after a $2.50 per watt Ca rebate, $2,000 federal tax credit, no local property taxes, net metering, etc...

    Maybe around $0.14 to $0.17 per kWhr (assuming 20-25 year life). My base rate (E7 Time Of Use 1 year Net Metering) is around $0.09 per kWhr (night) and around $0.12 to $0.29 per kWhr during weekdays (winter/summer rates, noon-6pm).

    I have done quite a bit of conservation in our home (insulation, double pane windows, Energy Star Appliances, CFL's, and just turning things off when not being used--including switchable power strips on stereo, TV, etc.).

    All together, I am actually generating more power than I use (over 1 year), and have around a $250 to $350 per year power credit (I can't use it right now--I over-sized my system based on waiting/looking for some electric or plug-in hybrid in the future). The high power credit is mostly because of the $0.29 per kWhr I get back because of net metering in the summer (no A/C for my home--so lots of "generated" power during the most expensive part of the day/season).

    With out rebates/tax credits, my costs would probably be in the $0.25 per kWhr range....

    But Northern California is "special"... We have very high power costs if you use more than base line quantities (~300 kWhrs per month where I live). If I was to use more than 1,000 kWhrs per month--on my TOU plan--I would be paying $0.50 per kWhr during summer afternoons. In this case, solar Grid Tied system would be much cheaper than my electric power rates (flat rate residential is around $0.35 per kWhr--still more costly than a solar GT system).

    So--your payback times (in Northern California) are very dependent on your rate plan and energy usage (not true in much of the rest of the US).

    In any case, spending your first dollars on extensive conservation measures will almost always have a better payback than Solar PV.

    And, I would also look into solar hot water / heating -- usually has a better payback vs solar electric (more of a pain though--lots of plumbing and long term maintenance issues--pipes and tanks leak, pumps fail, air locks, antifreeze in cold regions, etc.--Solar PV GT is as close as you can get to install and forget).

    -Bill
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset
  • System2
    System2 Posts: 6,290 admin
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    Re: Net metering and the break-even point

    Thank you very much for the info. The front page here:

    http://www.solarelectricalvehicles.com

    says:

    "Provides significant tax incentives, thus reducing the net cost of both systems and creating a break-even point for the SEV system of 2 to 3 years."

    What really got me thinking were the graphs here:

    http://www.solarelectricalvehicles.com/articles/prius-white-paper.shtml

    Based on this, $8000 seems like a conservative estimate to make as far as the "Total Value of Fuel" saved over the 100,000 miles. This is without the tax credit. From what I've read, a solar kit for a car costs about this much. I guess that means you would break even at 100,000 miles if you installed the kit yourself. There is also the time-value of the $8000 over the 100,000 mile span of time.
  • niel
    niel Solar Expert Posts: 10,300 ✭✭✭✭
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    Re: Net metering and the break-even point

    although i'm in favor of some supplemental pv power to aid in such hybrid vehicles so that the regular gas engine wouldn't have to kick in sooner at times, i find that going with 250w of pv is rediculously too high and may be somewhat of an overkill thing. the system is primary on gas engines and secondary on electric motor use. the electric is used when extra umph is needed with the gas engine or when one would be on highways requiring little power to maintain one's speed meaning the electric motor is secondary in the hybrid. the battery system in such vehicles if memory serves is about 156v worth of d sized nicd batterries rated at 4a. this is 4x156=624w and they set it up to gain power through other methods such as braking and not just charging off of the alternator. being on a highway for long periods of time is the only time i feel a small pv setup will benefit the user and not needing 250w worth to do it. my guess would be at max about 800ma needed, but that 400ma would be the standard 10% charge rate and quite fine for supplementing the normal charging methods on the hybrid like the prius. i'm guessing about 200v needed at 400ma would be about 80w and of course the 800ma charge(allows for complete charge in about 5hrs of sun) to be about 160w. personnaly i don't think it'll need even the 80w to function well as this is a supplemental source to add to what's already there to charge it. there was a discussion long ago on this very subject and i don't know if it's still archived due to many bbs changes.
  • System2
    System2 Posts: 6,290 admin
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    Re: Net metering and the break-even point

    I understand some of what you guys are saying. :) What I'm really trying to do is find a financial argument in favor of solarizing a car or my house. Is there one?
  • BB.
    BB. Super Moderators, Administrators Posts: 33,474 admin
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    Re: Net metering and the break-even point

    I looked and could not find that earlier hybrid+on-board solar discussion...

    But, basically, say that is a 250 watt solar panel in San Francisco CA (happens to be near where I live). Using this link and defaults for everything:

    We get about 1,446 kWhrs per year*1kW of panels... Or for 250watts (1/4 size), we get around 361 kwatts per or 1 kWatt per day... That is if you park your car on a 37 degree, south facing incline.

    Lets see what happens if you park it / drive it on a flat road (assuming no shade during the day):

    1,257/4 kWhrs per year or 0.86 kWhrs per day.

    Assuming the average electric use is around 0.250 kWhrs per mile, that would be:

    0.86/0.250 = 3.44 miles per day (over 1 year average)...

    If you park in shade/have shadows from power lines/trees--expect much less... Maybe $0.10 per day of solar power ($36.50 per year)--but risking $2,500 (guesstimate of Prius solar panel price) on top of the car for 10-20 years

    They were doing their calculations estimate based on 60 miles per day and getting up to 29% improvement in fuel mileage... But, this is achieved not through only the use of the solar panel--but the use of a extra 3-8 kWattHour battery pack...

    Don't get me wrong, I do like the idea of a plug-in hybrid (assuming battery technology is reliable)... But, I would prefer to put the $2,500 in solar panel costs on my roof with Grid Tied / Net metering--rather than put it on the top of my car. Much less chance of damage, no issues with variable shade when parked--can charge the car any time (from utility).

    -Bill
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset
  • System2
    System2 Posts: 6,290 admin
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    Re: Net metering and the break-even point

    OK, so where is the break even or paybackpoint for a net metered system?
    I think the PV Prius aspect is in addtion to a net metered system. By this I mean what they are selling is not a net metered PV generation system. The aftermarket PV system is contained within the car and is not hooked up to the house but the car can be pugged into your home system to get additional charge. As I read it, and I very well might be wrong here, you would need to drive 100,000 miles in that 2-3 years in order to reach the payoff. Being someone who has in a past life had an ocupation and hobby that had me driving 40,000 miles a year I can tell yo that 100k in 2-3 years is one hell of a lot of driving. Do your own math but for most people that would be doing your regular daily comute 2-3 times a day.

    Calculating payback of a system if not easy. Tons of factors are involved and it can be completely different for two homes just a couple of miles apart.
  • BB.
    BB. Super Moderators, Administrators Posts: 33,474 admin
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    Re: Net metering and the break-even point

    ggking7,

    You did not say where you lived, what the weather/sun is like in your area, what your power usage is, types of loads, how much you pay for power (and if it is tiered or not)...

    Short answer is that it will be difficult to install solar PV Grid Tied (with current prices) to do much better than break even (over 20 years)... With rebates, it can be brought down to a 10-15 year point.

    Conservation and change in your energy usage patterns are going to get you 80% to where you will want to be... Solar, can in some circumstances (high California rates for large energy users), make a very competitive energy source (if you have sun, place to install, a utility that does 1 year net metering, you don't have reservation charges--like most business probably do, etc.).

    Look at your monthly usage... An off grid home (in years gone by when solar was even more expensive) would try to make sure they used less than 100 kWhrs per month.

    My home (2 adults, 2 kids, work at home), I am around 200-250 kWhrs per month... I can get down to 175 kWhrs per month if I really try hard (and probably unplug the freezer). But, I live in a temperate climate (no A/C), use natural gas for all heating (water, cooking, drying--but use a clothes line much of the year), and just try to conserve.

    In my area, the "average home" is probably in the 600 kWhrs per month--on up (we live within a few miles of some very nice homes too)...

    If you don't have one, look around for a Kill-A-Watt meter... Very handy to plug into your home outlets and see how much power your fridge, freezer, home entertainment system, etc. take.

    To be honest, I installed Grid Tied solar because I remember how badly California State government messed up our power/utilities back around 2000--And I wanted to stabilize my power costs (and get grandfathered in) with a highly subsidized solar system (about 1/3 of my costs where paid back by rate and tax payers).

    So... Conservation, Solar Hot water, Solar Grid Tied (+ electric car of some sort) would be my 2 cents worth of recommendation.

    There are some pretty easy rules of thumb that will get you within about +/- 20% of your out-of-pocket costs for conservation/solar/etc.... Make this a business discussion first. Don't just throw money at a problem without understanding. And if you do not have good solar conditions (lots of marine layer, trees, power lines, etc.)--be honest with yourself that the location may not be right for solar... However, that just leaves you a bit more cash to install more insulation, sky lights (I love mine, I installed three--both for extra light, and they can be opened for ventilation).

    You (and your significant other) will be much happier in the end.

    -Bill
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset