AudioCircle
Community => Non-audio hobbies and interests => Home Improvements and Renovations => Topic started by: Don_S on 20 Apr 2017, 03:28 pm
-
I am considering purchasing a brand new home. It will have mandatory solar. The only two options are buy the system or enter an agreement for 20 years. I do not have a firm price on the system. I think it was $14,000. I will find out today.
I do not want to add the cost to the purchase price because I have maxed out my loan and any additional cost has to be part of the down payment which is already approaching 50%. :o
I also like the fact that the company will have to do maintenance.
What I don't like about the agreement is I will have to pay for all the energy produced. The rate will be 20% less than the local utility. Then I get credit from the local utility for what I use. I live in Sacramento, CA. Lots of sunny days so my bill for energy produced will be large. I expect it to be larger than my consumption but I do not have a figure on how large the system will be. Sales people are kind of stupid on anything but carpet upgrades.
I live in a total electric home today. It is 2/3 the size of the new home but not as energy efficient due to 1970's construction. I have made some upgrades. I have a huge pool and spa. I run the pumps a lot in the summer to heat them from solar water panels. My last bill was $83. Less than summer hours on the pool pump but some time on my heat pump. Spring has been mixed here. I would estimate my average total energy bill for 12 months is about $100/month. Yes, I know -- enviable. I tend to run my home warmer in the summer and cooler in the winter than most people would. Plus my new home will have gas heat and cooking so that takes away a major source of energy that was previously supplied by electricity.
My questions are about the 20/20 plan where I do not pay for the system but pay for all energy produced and then get credit back for what I use. Any surplus not used is compensated to me after 12 months by my local utility at a rate less than what I paid the solar company. Is that a typical agreement? I fear I am going to come on the short side of that. And adding that to greatly increased taxes and a special fee (Mello-Roos) of $220/month on my taxes. It's a CA thing for new developments. Plus $220 HOA fees has me reluctant to make the move.
The overriding factors in my moving are an entirely new discussion which I don't want to distract from the solar issue.
-
Where you live effects the circumstances around which you make this decision. I'm in Colorado with (presumably) a different set of laws than you face. The main thing you are asking about remains the same in all likelihood. There are several reasons why you will fare better if you buy outright. The leasing programs are a racket. Chances are the company leasing this to you gets the 30% federal tax credit instead of you. Another is the Renewable Energy Credit the utility pays me every month. I get 3 cents per KWH produced. It comes to me in the form of a check in the mail and returns about $200/yr to offset a part of my balance. Another reason I have heard of is the difficulty involved in resale. Your buyer wants the system included and pay no more for that asset. Meanwhile local appraisers may not award any value to the system, leaving you in the middle with air in your hand where a check should be.
Because of your pool heater, etc. I can't really offer any other comparison except to mention that I have 16 panels rated at 270 watts each with Envision micro-inverters. The rig cost me approx. $12K installed. I'm on track to have it pay for itself in about 4-5 more years.
Our house has NG for baseboard hot water heat, a gas range, and a Rinnai on demand NG water heater. Everything else is electric. We produce 6500 KWH per annum and consume 4500 KWH. This, of course, means we do not pay for any electricity at all. Our annualized bill for gas ($8 electric meter charge is $43/mo. Deducting the $16/mo. REC payment leaves me with a net outlay of only $25/mo. to Xcel Energy. I'd like to lower that but the potential gain is so small at this point that I bump up against pretty ridiculous ROI prospects every time I look into another energy saving scheme. My house is about 1350 sq. ft. and I would look for something a bit smaller if my wife would consider moving. South facing would be nice too. This one faces west --- a fact I cannot reconcile. I got the solar aspect blues, oh lawdy!! Can I get a witness?
-
Like any decision, it will likely be based on the overall economics (cost and savings vs. payback). I did all solar on mine (in FL - closed in April 2013 but did not move in until a bit later). Between what it cost me less tax credits, it's probably 8-9 year payback in my case. So I have about 5 more years and then I don't have to think about it.
-
50% down seems out of line, but I don't know the circumstances.
As to solar, you're probably more well-versed than me, but my red flag sensor sure lights up with the non-ownership option. There has to be a payoff (profit) for the company providing the service and I suspect it's slanted in their favor... perhaps in a big way. I'd steer clear, but my perspective is probably somewhat different than yours, as I would be involved in the installation and I like owning things, especially if they're attached to my roof.
Makes me glad I don't have to deal with such. Is the requirement for solar a California thing?
-
In Michigan I bought a 5.04 kWp system in 2015 for $16,000 under an incentive program my utility offered. Thanks to that program the system generates more income than we pay for electricity on an annual basis (the utility cuts us a check for months where the credit exceeds $50). In our first full year our electricity cost went from $1,100 to a $300 profit. And thanks to the federal tax credit the system is expected be paid off in 8 years.
Agree with Peter J, leasing in general seems like a red flag. Seems to me that in this case the leaser has every incentive to put the biggest possible array on your roof. Is that what you want? In trying to understand the lease agreement allow me to pose a monthly example: 2,000 kWh generated, local utility charges $0.15/kWh, so you'd pay $300 regardless of your usage. You use 600 kWh and receive a $75 credit. The surplus 1,400 kWh would be compensated at say $0.10/kWh, so you'd see $140 at years end. Net = your electricity cost you $85. And from your description you'd be incentivized to use more electricity so you can receive a bigger credit at the full rate (that's crazy).
In our case we paid extra to have it mounted above a deck to shade it and more importantly to keep it off the roof (possible leaks and will be in the way for roof repair/replacement). With the lease, who pays for leaks? Who pays to take it down when the roof needs to be worked on? And who gets the 30% federal tax credit? Are there any other government credits and who would get those? And if you sell before the lease is up, what then?
-
Where you live effects the circumstances... Chances are the company leasing this to you gets the 30% federal tax credit instead of you... Can I get a witness?
That is correct.
-
Wish I were better versed in this, and I have a Solar System!
We bought into a planned development, moving into a brand new house over 2 years ago. All of the houses have Solar built in. In our case it is a 20 year lease program that was rolled into construction costs. We produce more electricity then we use, so we end up with a credit each year at "True up" time. I know that the Solar Company got the tax credit, but I really don't care as it was all part of the cost of the house. I figure that it adds some value to the house if we ever decide to sell. If a purchaser doesn't view it that way, I'll get a different buyer. (Hoping the housing market doesn't tank when we make that decision)..
I just don't understand the bit about having to pay for the energy you produce at a rate 20% below what the local company charges. That is insane. Find a different company to lease from if that is the direction you choose.
The problem is that the rules are changing constantly with regard to Solar. It has to.
......but that is a different discussion.
-
A good friend always advised to "follow the money" to find the answers in this life. I'm sure the solar installers/lease holders are in cahoots with the builders. In many cases the financing makes more money than the product itself. Thankfully I simply bought our solar installation.
I've tried to not use the term "solar system" because it misleads to things astronomical. :scratch:
-
I used home equity. At the time it was 3.99% interest. You're making a monthly payment to the utility. Why not just pay it to your bank instead?
The biggest key to payback time is increases in the cost of electricity. You know it will go up every year. As it does, your repayment rate increases.
-
Thanks for the responses. To answer a few questions and respond to suggestions.
Solar is not a California requirement. It is part of the new development and my options are:
1. Lease the solar
2. Purchase the solar
3. Take a hike
9 panels 2.93KW $11, 687 to purchase. Sacramento sun should produce good results many months out of the year. I am new to solar so please answer this question. Is the 2.93KW rating per day? I used 54KW last month and some of that was to run my heat pump because the weather was mixed spring weather. But this is my current home. Not sure what my new home will be. It will be 50% larger but better built and heating and cooking will be gas.
-
The 2.39KW are what the panels put out per hr, you would get 5-6 times that per sunny day or about 10KW to15KW per day. Based on your 54KW per month you would need about 4KW of solar to meet your needs. In my experience most of the time it is more cost effective to make the house more efficient than to add solar. Right off the bat I'd bet your house only has code insulation, which in my option is a joke. Look into making the house more efficient first.
-
It's really a shame how imprecise use of units ends up confusing most people about overall energy issues. Just keep in mind the need to research and understand units, and be able to convert between units as necessary. If unit conversions and algebra were never your thing, seek out someone knowledgeable to help with the calculations.
kW = kilowatt = 1,000 watts
watt = joule per second = rate of energy
So, kW is a rate of energy, not a quantity of energy. And the KW rating of a panel or bank of panels is the rate of energy those panels will produce, when producing at full output. When the sun isn't as direct (morning or evening) or partially obscured (cloud cover), the panels will be producing less energy - not their max output.
The quantity of energy you consume, and what you're billed in a month for is not the KW - it's the kWh.
kWh = kilowatt hour = 1,000 watts continuous for one hour's time
rate of energy (energy per time) X the amount of time = quantity of energy
In scaling a system for the needs of the home, and especially if you're ever concerned about erosion of net metering benefits, you need to consider:
1) the total energy quantity (not the rate) produced by the panels in a month compared with your home's overall consumption
2) the peak production of the system relative to either the instantaneous demand of your home or the amount of storage (energy sink) that you have available
If you have good net metering rules and believe them to be supported well into the future, the amount of storage can be considered nearly infinite for all practical purposes (unless your system becomes so big that it would require transformer or other local distribution grid upgrades by the utility company). But if you're concerned about erosion of net metering rules in your state, or if you're thinking of off-grid, there's a lot more consideration of overall supply-demand timing and energy storage issues to consider.
-
genjamon,
Thanks for the clarification. So what is the theoretical range of KWh/month from my new system? I could probably calculate it myself but my head is swimming with decision making at the moment. Moving after over 30 years is stressful.
• High performance dual-pane low-E glass windows 4 • Single coat exterior stucco system 4 • Insulated R-13/R-15 exterior walls 4 • R-38 ceiling insulation, weighted average
Insulated ducts • Radiant barrier roof sheathing 4 • Rinnai® tankless water heater
-
Well, Mikeeastman already tried to respond to your needs a bit. Equivalent of 5-6 hrs/day in a full sunshine situation sounds about right to me. Of course, this depends greatly on seasons (length of day, and angle of sun). But 10-15 kWh produced per day seems somewhat reasonable estimate to me. To know more exactly, you'd need a to do a solar resource analysis that takes into consideration the path of the sun for Sacramento throughout the year, and the angle of your panels with respect to the sun.
So, maybe 10-15 kWh per day production for around half the year, and maybe more like half that for the winter months? So that would be 300-450 kWh range per month for the hotter months, and probably more like 200-300 for colder months? If that?
I don't have much experience spec'ing solar systems with commercial contractors, but participated in a solar installation cooperative for a couple years about four years ago. At that time, with free labor and group bulk purchasing of panels and other installation materials/equipment, we were achieving installed costs of about $1.50/watt. Around $12K for a 3kW system would be around $4/watt. I would expect a substantial increase in installed costs compared to a co-op due to their need to recoup labor costs, and have a decent profit margin as well. But the technology has continued to come down in cost as well. $12K may be on the pricey side, from my outsider's vantage on the situation. But that might be more standard for commercial installers, and/or for California prices. Not sure.
So, the big question is how long it takes for your savings to pay off that up front cost. In a commercial energy efficiency/investment environment, 5-7 year payback might be about as long as even a generous CFO would be willing to finance.
Let's say you produce 3500 kWh a year... What's your energy costs in Sacramento? $0.15/kWh? Less? More? Do the math. If $0.15/kWh, and 3500 kWh/year - that's $500-600 in savings per year. Which would take 20-24 years to pay back the up front costs. And that's with zero interest or depreciation considerations. Unless your energy costs are a lot higher than $0.15/kWh, the economics are look like a stretch to me - from a business perspective of the homeowner. Pretty much all of the rewards are being reaped by the installers, if I'm not way off in the above.
That said, if there's a 30% tax credit available, and if you get to benefit from it instead of the home builder, then that changes the equation quite a bit. But still not a major financial win for you.
-
Oh, and I would consider 300 kWh per month as pretty much a lower limit baseline for most modern homes. It would only go up from there. That's about 10 kWh per day. Which, if you're running a refrigerator, using LED's, watching TV for a couple hours a day, have the usual set of always-on gadgets such as internet modems/routers, etc, and maybe have a nice stereo that you play fairly often - should not be difficult to get to 10 kWh in a day. In the months when I'm not using AC or heat, that's pretty much my baseline consumption on a daily basis. When using AC/heat - it goes up by multiples. And that's just with myself and my wife in the house.
My lowest consumption ever was when I was still a college student, lived in a studio apartment with a small fridge, didn't really cook much at home, and didn't have cable TV, so didn't watch much. And studied a ton. It was around 7 kWh/day. That was with no heating/cooling costs (they were built into my rent in university housing), so we're just talking about CFL lighting, some music, my computer, and watching a movie a couple times a week, and some lightweight cooking on the electric stove.
So, I would not expect you to produce more electricity with a 3kW solar array than you use in a month.
-
Proves my point about efficiency my 2000 sq ft house with all the usual gadgets, tv on 8-9 hrs, stereo, etc and only uses .1 KW per day with it going up some in the summer with cooling. Of course my house was designed for off the grid. But if all houses were properly designed and built their power use could be cut by 40-50%.
-
Sorry, Mike - .1kWh per day is impossible. How are you defining KW?
-
removed, bad math day
-
As far as maintenance is concerned - there probably isn't any. The industry mindset is that cleaning panels isn't really worth it. Studies have shown the collection lost due to dirty panels is minimal and not worth the bother to clean. You can clean them if you want (I clean mine).
If maintenance is still something you think you want/need have them give you a schedule of what maintenance they will do and when they will do it. My guess that is just a get you to sign sales gimmick and no actual maintenance will occur.
FYI - In CA you will not get a check from the power company if you over produce.
-
Our 2016 example:
House is 2300 s.f. with 1600 s.f. finished basement located in Michigan lower peninsula (extremely cloudy winters) and when built in 2005 was certified as an EPA 5 star home. (18) 2.85 kW panels (about 17 ft x 20 ft) at 26 degree angle pointed directly south, no shade. We had 3 people living in the home, one around the clock. We have a TV on 18 hours/day, freezer, electric oven (not used much), and the normal assortment of other electrical devices. Water heater, furnace, and dryer use propane. The system cost $11,400 after federal tax credit in 2015. We pay 13 cents per kWh for electricity used but get reimbursed (under the special incentive plan I signed up for) at 24 cents per kWh (and so have two electric meters).
We used 7,400 kWh (@ $0.13/kWh = $962) for the year and generated 6,400 kWh (@$0.24/kWh = $1536). My understanding is that the panels will lose 2% efficiency per year. In 25 years (typical projection lifetime because by then something better will come along) the panels will only be producing 60% of the new performance. So they should payoff in 8 years ($11,400/1,536 with degradation) and net $17,800 profit over 25 years with zero maintenance and zero net electric bills. So buy the panels!
-
Well lets hope it was just a bad math day and not the Alzheimer starting to kick in :duh: , those pesky decimal points. It is actually 10KW per day and going up to 12KW on very hot days, that require extra cooling. As my house is passive solar design I don’t us any more power to heat it in the winter.
genjamon, 10KW for a on the grid house is pretty good. Do you use any passive solar design to heat your house, living in Tucson you would have more solar gain and warmer temps than I have and I get 70-80% of my heat from the sun.
-
I bought solar panels (11.5kW) and I find it a very difficult calculation. If we make more than we use (rare), we still have to pay $19/month. When we get billed for power, we get billed on a sliding scale, based on energy consumption, which makes no sense to me, although the less you use, the more you pay. I've paid anywhere from 17 cents/kWHr to 38 cents/kWHr. The solar company, using a fixed energy cost, 4% increase per year, and no fee if you produce more than you use, estimated a return on investment of about 8 years. I have no idea what the actual return on investment will be. It cost me $3.20/kW.
I'm also in CT, so we have periods of not much sun and snow on the cells.
-
My panels produce 6500 KWH/yr. We use 4500 KWH/yr. Therefore we do not pay for any electricity --- but install costs $8.00/mo. for the connection and the meter readings. Only true for grid-tied systems, but if you want to use your utility company as a battery bank you will likely have to pay something. Mine is more than offset by my REC payment. This month I will receive a check from Xcel Energy in the amount of $20.24. That represents 3 cents per KWH produced during the previous billing cycle. That leaves +/- $12 to put toward my NG bill of $43 which includes the $8 meter fee on my electric.
This stuff is a little difficult to discuss on a forum because conditions and regulations vary so much from state to state.
-
Well lets hope it was just a bad math day and not the Alzheimer starting to kick in :duh: , those pesky decimal points. It is actually 10KW per day and going up to 12KW on very hot days, that require extra cooling. As my house is passive solar design I don’t us any more power to heat it in the winter.
genjamon, 10KW for a on the grid house is pretty good. Do you use any passive solar design to heat your house, living in Tucson you would have more solar gain and warmer temps than I have and I get 70-80% of my heat from the sun.
Given that my profession is working to advance environmental sustainability in many forms in higher education, I do try to be as efficient as possible, within reason. 10kWh/day is my ballpark baseline consumption excluding any HVAC use. This is what we consume during the late fall, and early-mid spring months when I don't use any home AC or heating. When it heats up, yeah even with 16 SEER AC units, I'm using more like 40kWh/day. This year we had a hot spell in early March, with highs in the low-mid 90's, and I had to use AC that week. Then didn't touch it until about the middle of this week when we got a ramp-up of temps, and we hit 104F on my back porch today. So, today's been a bad day in terms of electricity consumption.
Incidentally, Amazon just delivered a couple days ago a FLIR IR camera that plugs into my iphone/ipad. So I had a fun hour this afternoon walking throughout the house with my iphone looking at all parts of my ceiling to find any gaps in insulation or thermal bridges. We bought the house last spring, and after a year of living in it, I'm now beginning to plan various upgrades, including thinking through energy efficiency desires.
In AZ, we just had our newly elected corporation commission approve new rate structures for all the major utilities in the state that eliminate true net metering, and instead only pay back to the homeowner the "avoided costs" to the utility for any new rooftop solar installations. And part of these new rate structures also include new 3-tiered rate structures that incorporate demand charges into the equation. Basically, your largest single 1-hour demand during 3-7pm time weekdays time window determines a surcharge fee added to your bill. So, when those solar panels quit working around 5-6pm, and it's still 100+ degrees outside and your AC is still working hard, and you just fire up the electric stove for cooking dinner, it'll kill you. It's around $5/kW of demand tacked on to your monthly bill. Again, since it's only your single largest day of consumption, you can do great all month, but if you have a single day when the forces are working against you and your consumption spikes, you're screwed by an extra who knows how much.
Try figuring out your payback period for rooftop solar under those conditions!
-
In most of Northern California, PG&E is the supplier of electricity and the average cost is about $0.25/Kwh. With their tiered pricing, and time of use metering, if you are a heavy user, particularly of air conditioning in summer afternoons, you could be charged as much as $0.50/Kwh!
I installed a 6KW solar system 6 years ago when the price of solar panels was very high compared to today, but am glad I did.
I expect the system to be still producing 20 years from now when the cost of electricity will be substantially more than it is today.