good investment?

Plain and simple: Is a grid tie system a good investment over the life of the sytem?

I know, an explosive question and one I'm sure with many differing opinions (maybe?). But, I'm at the stage of buy or get out.

The system in in Las Cruces, NM. 4.6kw for 5.83 a watt ($26.8k). with 40% government credits, it = out to ~16k investment. power is either $0.11 off peak or $0.13 on peak (12-8pm). REC program pays $0.12 kw produced plus I get money back when the meter turns backwards. I think it is $0.03 kw. Pretty measely.

So, any thoughts? What about your own system? Do you find it a good investment? Thanks for the reponses.

Comments

  • Solar GuppySolar Guppy Solar Expert Posts: 1,971 ✭✭✭
    Re: good investment?
    bobdog wrote: »
    Plain and simple: Is a grid tie system a good investment over the life of the sytem?

    I know, an explosive question and one I'm sure with many differing opinions (maybe?). But, I'm at the stage of buy or get out.

    The system in in Las Cruces, NM. 4.6kw for 5.83 a watt ($26.8k). with 40% government credits, it = out to ~16k investment. power is either $0.11 off peak or $0.13 on peak (12-8pm). REC program pays $0.12 kw produced plus I get money back when the meter turns backwards. I think it is $0.03 kw. Pretty measely.

    So, any thoughts? What about your own system? Do you find it a good investment? Thanks for the reponses.


    No ... with panels @ 1.50 watt the purchase price seems high to me.

    At 3 cents for sell, you will never break even

    Not sure how the REC program plays out as the value is always changing, it can/will disappear at any time, and they usally have steep administrative charges, so the devil is in the details
  • System2System2 Posts: 6,290 admin
    Re: good investment?

    i think your initial price is high pre rebates and tax incentives. did my system back in june this year, contract was done back in dec and the price was $4.25 / watt on a 10k system, then got 1.75 back from the utility company. here we pay just shy of .22 kwh so worst case scenario without tax incentives my payback is about 8 years, after 25 years i potentially 'make' a considerable sum depending on their inflation rates.
  • bobdogbobdog Solar Expert Posts: 192 ✭✭
    Re: good investment?
    No ... with panels @ 1.50 watt the purchase price seems high to me.

    At 3 cents for sell, you will never break even

    Not sure how the REC program plays out as the value is always changing, it can/will disappear at any time, and they usally have steep administrative charges, so the devil is in the details



    I should've said the REC program is locked in at $0.12 kw for 12 years. Does that help?
  • ggunnggunn Solar Expert Posts: 1,973 ✭✭✭
    Re: good investment?
    bobdog wrote: »
    Plain and simple: Is a grid tie system a good investment over the life of the sytem?

    I know, an explosive question and one I'm sure with many differing opinions (maybe?). But, I'm at the stage of buy or get out.

    The system in in Las Cruces, NM. 4.6kw for 5.83 a watt ($26.8k). with 40% government credits, it = out to ~16k investment. power is either $0.11 off peak or $0.13 on peak (12-8pm). REC program pays $0.12 kw produced plus I get money back when the meter turns backwards. I think it is $0.03 kw. Pretty measely.
    Is that any time the meter spins backwards, for any length of time, or do they look at the net at the end of the month? Actually, if it is a mechanical meter, I'm pretty sure the utility can't tell if or when the meter has spun backwards as long as the reading at the end of the month shows usage from the month before. In that case, you get full retail value for every kWh you produce as long as you have a net usage at the end of the month, even if the meter spins backwards from time to time. In some jurisdictions they don't worry about a negative meter reading for a given month; they zero things out yearly.

    Tired charging often helps PV systems because the time of the highest rates usually coincides pretty well with the peak output of the system, particularly if the azimuth is skewed toward the west. It does, however, make it harder to calculate what your ROI is.
  • bobdogbobdog Solar Expert Posts: 192 ✭✭
    Re: good investment?

    Actually, the "net" metering as they call it, has a few programs. One doesn't pay anything (go figure?), two they put a certain style of meter on and it pays the avg $0.3-0.4 per kw produced (meter spinning backwards) and three, same thing just a different type of meter. Plus the REC program that has a seperate meter altogether that pays for everything you produce as well as the "net" metering. That's at 12 cents a KW for 12 years. So I'm getting "paid" twice for the same power basically.

    The reason I'm asking your opinion is that I've run some investment numbers and it doesn't seem to work as an investment strategy or at minimum pays very little over the lifetime of the sytem. I was just curious if those of you that have systems or are looking into getting one, feel or know that my numbers may be off or that it is a good investment. There of course are other conciderations as to why I will likely get a system, but just wanted to hear your thoughts on the matter. Thanks.
  • BB.BB. Super Moderators, Administrators Posts: 31,690 admin
    Re: good investment?

    A "good" investment, from my point of view--Conservation.

    Almost always a better return on your money (and capital appreciation/conservation) than something like Solar GT systems.

    Solar GT--pretty much do it after you have done everything else--and look at is as pre-paying your electrical bill/inflation protection. Not as an investment grade vehicle for your savings.

    -Bill
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset
  • solar_davesolar_dave Solar Expert Posts: 2,381 ✭✭✭✭
    Re: good investment?

    Well it is hard to say really unless you know all the variables. Like:
    Installed cost net after rebates, tax credits ...
    kWh avoided, how much you generate and how much you would have paid the utility.
    kWh over usage, your net payback.
    How the utility accounts for your system. Some buy it all back and then just sell as normal to you, some use the spin the meter backwards measurement.
    Cost to operate over time, replacement parts and electronics.
    What interest or investment you could have earned elsewhere with the monies.

    Some times peak load avoidance is enough of an incentive, like those California guys @ something like $0.54 a kWh under certain conditions. There, a few kWh are enough to justify the cost, but it slides down the justification ladder as you increase the amount of generation.

    I know for my system the ROI is well under 5 years with no increase in utility rates (fat chance of that). :D

    But most of all the best investment is to conserve, way cheaper and a better payback than solar for sure. Cheaper to save a watt than generate a watt in almost all cases.
  • Solar GuppySolar Guppy Solar Expert Posts: 1,971 ✭✭✭
    Re: good investment?

    What is the cost of being in the REC program, when I looked it was like 400-500 year, which nixs almost all the value of the energy

    Your only going to get 3 cents from the utility as you indicate they will install dual meters ( can be two physically or one single that has multi registers ), you will never get retail on exported energy from the utility
  • bobdogbobdog Solar Expert Posts: 192 ✭✭
    Re: good investment?
    What is the cost of being in the REC program, when I looked it was like 400-500 year, which nixs almost all the value of the energy

    Your only going to get 3 cents from the utility as you indicate they will install dual meters ( can be two physically or one single that has multi registers ), you will never get retail on exported energy from the utility

    You loooked at NM and it was 4-500 bucks? What? Never saw that anywhere. OMG. Are you sure it was NM?
  • rollandelliottrollandelliott Solar Expert Posts: 834 ✭✭
    Re: good investment?
    5.83 a watt

    no it is not a good investment at that price.

    Even if you do all the work yourself and get the price down to $3.00 a watt installed. it will take over 7 years to break even in most average homes.

    I'd recommend doing it yourself and then hiring an electrician to wire it all up.

    Regards, Rolland
  • Solar GuppySolar Guppy Solar Expert Posts: 1,971 ✭✭✭
    Re: good investment?
    bobdog wrote: »
    You looked at NM and it was 4-500 bucks? What? Never saw that anywhere. OMG. Are you sure it was NM?

    Programs I looked at for my system in Florida were only served by REC brokers, there is no direct REC here, closest is NC I believe.

    Using DIRE I looked and the program your referring to pays on a per kwh basis if your a customer of Xcel Energy.

    http://www.xcelenergy.com/Save_Money_&_Energy/For_Your_Home/Renewable_Energy_Programs/Solar*Rewards__-_NM

    only 100kw is available at 13 cents and steps down when reached, the 10K tier is sold out down to 8 cents as and example.

    So it would seem a risk that you won't know till your rate until you submit the application according to the website linked

    NM is like Florida, they only pay avoided cost ( less than wholesale ) on export and will likely install a dual register meter so if the energy would "spin" an old mechanical meter backwards on the new meter it would be counted as export energy and have no effect on the metering of what the home consumes.

    At your energy prices, I'm with BB, invest in energy efficiency, super insulation, windows high efficiency heat pump or Geothermal system all would have better paybacks that solar in your situation
  • bobdogbobdog Solar Expert Posts: 192 ✭✭
    Re: good investment?

    Not to high jack my own thread but the other system I was quoted for was for 24 Solarworld panels (verses 20 Sunpower in the first quote) which would make it a 5.28 KW system. The price and all else would be the same. Does that seem any better? Or am I trying to justify something I just shouldn't do?

    To answer to Bill's point about conservation, we have done many of those things. It's a relatively new home with heavily insulated walls and ceiling; all cfls where possible; A/C on an electronic thermostat: etc. So I feel we've done most things that can be done to conserve our energy. This seems like the next step.
  • solar_davesolar_dave Solar Expert Posts: 2,381 ✭✭✭✭
    Re: good investment?

    I had recent quotes as low as $4.25 a watt installed from a reputable dealer, keep looking.
  • Solar GuppySolar Guppy Solar Expert Posts: 1,971 ✭✭✭
    Re: good investment?
    bobdog wrote: »
    A/C on an electronic thermostat: etc. So I feel we've done most things that can be done to conserve our energy. This seems like the next step.

    Thermostat doesn't save a dime in most places ... I bet your AC is SEER 13 or less and is half your electric bill. Installing a Seer 22 unit or higher if Geo Thermal will come close to cutting your AC bill in half and for a price one third the Solar.

    What is the R in the ceiling? in NM, I would want R40 minimum , maybe even R50 ( R40 is 14" of blow-in ). I have found what people think they have and what is really in place vastly different. I helped family improve homes after complaining about 500 dollar electric bills, turns out they had about 3 inches in the attic, that and a new SEER 16 heat pump cut the bill 75%.

    Being new does not mean its efficient, actually unless it was a custom home your looking best case at SEER13, maybe a SEER10 depending on when the home was built
  • rollandelliottrollandelliott Solar Expert Posts: 834 ✭✭
    Re: good investment?

    read this thead about solar panels vs paying down a mortgage.

    http://forum.solar-electric.com/showthread.php?t=11216&highlight=morgage

    Seems like the net return is around 5.7% IF YOU DO THE INSTALL YOURSELF.

    Nothing spectacular, you are probably better investing in an IRA or 401k plan for 25 years, but I love solar and invest in both.
  • bobdogbobdog Solar Expert Posts: 192 ✭✭
    Re: good investment?
    Thermostat doesn't save a dime in most places ... I bet your AC is SEER 13 or less and is half your electric bill. Installing a Seer 22 unit or higher if Geo Thermal will come close to cutting your AC bill in half and for a price one third the Solar.

    What is the R in the ceiling? in NM, I would want R40 minimum , maybe even R50 ( R40 is 14" of blow-in ). I have found what people think they have and what is really in place vastly different. I helped family improve homes after complaining about 500 dollar electric bills, turns out they had about 3 inches in the attic, that and a new SEER 16 heat pump cut the bill 75%.

    Being new does not mean its efficient, actually unless it was a custom home your looking best case at SEER13, maybe a SEER10 depending on when the home was built

    The A/C is half our bill in the summer (June through August). Seer 12 which was just below the highest we could get at the time. I'll look into a higher seer rated unit if it really makes as much of a difference as you say. This summer our bills were 3 months of $200 to $244, which isn't too bad considering a lot of homes around here are running as high as you were saying. Our bills the rest of the year avg. $100 or less without the A/C.

    R-40 in the ceiling. Hard to blow anymore in though because there is no access to the "attic" except by cutting a hole in it. Could blow more in through the turbine vents I had put in though. May look into that as well.

    Thanks for the advice.
  • Solar GuppySolar Guppy Solar Expert Posts: 1,971 ✭✭✭
    Re: good investment?

    Sounds like a top end Geo unit can cut that in half, plus it does hot water as well

    Or a Top end HeatPump and one of the new heat pump hot water tanks would provided the best ROI

    FYI, SEER 12 is below the current code minimum, absolutely bottom of the barrel efficiency wise for being new

    Current best in class I believe is

    http://www.frigidaire.net/Frigidaire-iQ-Drive-reg-Heat-Pump-p/ft4bi.htm
  • bobdogbobdog Solar Expert Posts: 192 ✭✭
    Re: good investment?
    read this thead about solar panels vs paying down a mortgage.

    http://forum.solar-electric.com/showthread.php?t=11216&highlight=morgage

    Seems like the net return is around 5.7% IF YOU DO THE INSTALL YOURSELF.

    Nothing spectacular, you are probably better investing in an IRA or 401k plan for 25 years, but I love solar and invest in both.

    Thanks for the article. Due to that and my gut feeling, I've decided to pay off the mortgage and other debt first, plus look into putting in a higher SEER rated heat pump. I think that this is a better way to go right now than spend money on a grid-tie system. I hope solar does get cheaper and that my electricity doesn't rise to much though. The tax credits were enticing as well. But, paying off the house in eight years is more enticing. Thanks to all of you for all the help in this matter. Again this forum is very helpful and I appreciate it greatly.

    Tim
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