Wanting to do the right thing. Solar.

System · February 2008

I recently paid a company to do a site survey for a solar array. I figured the $150 cost was well worth the expense because I'm a complete novice when it comes to these things. My goal is to pare as much off my monthly gas and electric bill as I can. I'm replaced every light bulb in the house with the more efficient bulbs just in time to discover that the LED's are better in some applications. I've more than cut my electric and gas bill in half be being more energy aware and switching from a gas fireplace that was rarely used to a wood burning one. Stop screaming. I know about carbon footprint and all of that. I'm clearing land for a wetlands area and had the wood for free.

The proposal that I got back was for a 5 KW system of solar arrays. Ther3e was no battery packs included in this estimate. The price quoted was $45,000 and that would possibly be reduced with state and federal rebates and incentives and tax deductions. They verbally said that the actual cost would probably be closer to $25,000 after incentives. My degree is in economics and that side of me got me to wondering what the alternative was. If I invested $45,000 in CD at 5% I could make $2,250 a year. My gas and electric bill isn't that much. Like I said, I want to do the right thing when it comes to environment and carbon footprint, but the economics just isn't there for me. Was I quoted an incredibly high cost of installation for a 5KW system or is that about right?

I own a farm and have no obstructing building or plants that would be a problem. It's very flat here and I have a clear path to the southern sky. What's your collective expert opinion what a 5KW system should cost? I considered wind, but reading several posting on this site I really have my doubts that it is viable for me.

I'm at your mercy. Tell me what to do. I'm 60 and need as much money saved to hire the cutest nurse possible when I do retire.

Solar Guppy · February 2008

Re: Wanting to do the right thing. Solar.

Some thoughts:

"My degree is in economics"

OK, run some more numbers with different inputs:

What happens if the 5% CD returns a negative real return ( our money is becomming the peso of the 80's)

What happens if the energy costs go up 4X-10X over 30 years from todays value.

You won't get rebates on the 45K placed in a CD ( so run your numbers one the real final cost )

Currently, 5% is not a typical return and whatever you do get its taxable ( 2 Year Tbill is about 1.8% today )

Is your cost of energy include taxes and fees continue that creep up. There is talk of rebuilding the national electric grid, what about your local county, or state looking for there cut

Some ways to make it pay back faster:

Build it yourself, panels can be had for 3.25 watt, so for under 20K you can have panels, a 5kw inverter, wire and home-made mounts for a roof. I know, I did a 5K system in Florida and the State paid for most of it last year.

A ecomomic model can easily be built to show PV has a 100+ year payback, but thats using assumption in the value of money and energy costs staying the same. It comes down to your own thoughts to what will happen in the years to come. Some thoughts, population doubles in 30 years, resources run out or run low how does that get factored in.

Also, you can shelter income thru deprecation of the solar for your farm business and the Federal 30% tax credit is not limited to 6K like it is for personal.

Hope this gives you some angles to think about and don't take the 45K as the only price. For example, you could help the installer by suggesting lower cost panels, check out www.sunelec.com for there factory seconds. If you buy the panels yourself and have the installer do the rest, that probably would help him ( he doesn't have to front the $$ ) and lower your costs

Well just some thoughts!

BB. · February 2008

Re: Wanting to do the right thing. Solar.

I guess you are near Toledo Ohio... From this link, 5kW of panels would give you ~5,879 kWhrs per year, or at $0.085/kWhr about $499 per year (default values for fixed array optimum position).

Assuming 20 year life, zero cost of money... Price per kWhr:

$45,000 / (20 years * 5,879 kWhr/yr) = $0.38 / kWhr
$25,000 / (20 years * 5,879 kWhr/yr) = $0.22 / kWhr

If any of those numbers are wrong, you can change them and run your own analysis...

The price they are quoting sounds like it is a Grid Tied array--which is the optimum for the best bang for the buck (most power, least cost to do it).

However, you mention batteries--so do yo want off-grid and/or emergency power from your solar array? If so, your costs will go up dramatically for your power (probably north of $1.00 per kWhr).

You can check your rebate/tax credits for Ohio here. I don't see any for Solar. There are various credits for energy conservation. And there is still (I think) a Federal tax credit (more if you are a business). I would double check the rebate/tax break calculations that knock $25k of the installation price--it is possible but not obvious that you can get that break in Ohio (I don't know).

You have 1 year Net Metering for Solar with Grid Tied Inverter (depending on who your utility provider is)--which is usually not a bad deal.

You are currently "condemned" with low cost electricity and not great sunshine for your location.

You would have to look at your total energy bill (electricity and heating) and decide how much you can save with conservation, and where you should put your money (solar PV, solar thermal, or something else like farm waste to gas or something)...

At this point, you have not gotten to be a 60 year old farmer by throwing money at problems that do not have a good return. Look at the whole solar solution as nothing more than another investment for your business (and how much longer you will be in business).

The better return for your money probably starts with Conservation, then Solar Thermal (water/space heating), and then Solar PV-grid tied power...

A problem with Solar Thermal is it can require quite a bit of maintenance over the life of the system (pump failures, tank replacement, anti-freeze replacement, figuring out air locks and controller problems, etc.). Whereas solar PV Grid Tied systems are pretty maintenance free and if there are problems, not difficult to debug (ether the panel, wiring, or inverter is bad)...

-Bill

nigtomdaw · February 2008

Re: Wanting to do the right thing. Solar.

Sorry will probably get banned for life.......... spend the money on several cutest nurses............................................................................................ uniform required...take the valilum and feel the...pain hopefuly then report on backroads desulphator program.......sorry just larking

SolarJohn · February 2008

Re: Wanting to do the right thing. Solar.

I married a cute nurse. She's 9 years younger than me. She thinks my PV equipment is sexy. I must be the luckiest guy on earth!

Brock · February 2008

Re: Wanting to do the right thing. Solar.

Hey I am married to a nurse as well, must be a solar thing

System2 · February 2008

Re: Wanting to do the right thing. Solar.

Got pictures? ha ha ha

SolarJohn · March 2008

Re: Wanting to do the right thing. Solar.

FarmAnimal wrote: »

Got pictures? ha ha ha

Pictures are on my blog: http://solarjohn.blogspot.com

The first one you'll see is of my daughter. She's a part-time model, and a full time college student. I put a picture of the wife and I farther down, cause we're not as pretty as we used to be.

John

Roderick · March 2008

Re: Wanting to do the right thing. Solar.

It sounds like your situation is iffy right now as far as payback.

You might want to wait a couple years, to see if we get a Democratic president, and pass a better solar incentive. Also, as new polysilicon reactors come on line, that will hopefully relieve the shortage of raw materials that's keeping panel prices from dropping right now.

Windsun · March 2008

Re: Wanting to do the right thing. Solar.

Roderick wrote: »

It sounds like your situation is iffy right now as far as payback.

You might want to wait a couple years, to see if we get a Democratic president, and pass a better solar incentive.

If you believe that, I have some $1 a watt solar panels to sell you.

In a twist of fate that we predicted over 3 years ago, it is because of mass amounts of solar incentives that have gotten passed that the price of solar has gone up. The law of supply and demand exceeds misguided good intentions.

But actually the biggest single problem now is not the cost of the solar, it is that the regulations and permits have gotten to be such a nightmare that few and fewer people are installing systems, except large commercial ones (like us). 5 years ago it cost $450 for all the paperwork, now our cost alone is over $4500, so we just quit doing it.

n3qik · March 2008

Re: Wanting to do the right thing. Solar.

Also would like to add the the computer/IC industries are using more of the silicon than before, forcing higher prices.

Wanting to do the right thing. Solar.

Comments

Categories