Solar payoff....worth it?

engnrng

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Incase anyone cares our meter is located on a pole on the road just before our driveway........guessing 800 feet or so from the electrical panel on the house.
Our run from solar to panel was about 150 ft, had to use larger wire is all. I went to one size over what NEC called for. Small part of the total cost. In your case, the electrician will need to size the wires properly.
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Finally got to turn on my system. Full day, 13.86 system size generated ~65kwh of energy. I'm quite pleased. Peak power was ~9600w. Little lower than capacity due to location and time of year but that accounts for about 70% my usage at the absolute peak time of year for power consumption. At this rate ROI is looking to be 4 years.
 

bruceski88

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Finally got to turn on my system. Full day, 13.86 system size generated ~65kwh of energy. I'm quite pleased. Peak power was ~9600w. Little lower than capacity due to location and time of year but that accounts for about 70% my usage at the absolute peak time of year for power consumption. At this rate ROI is looking to be 4 years.
Without Net Metering it is really hard to make solar cost effective. Doesn’t TVA generate most electricity from Hydro. It is hard to beat Hydro prices. Here in CA where electricity is $0.24/kWhr it is a no brainer. When I put in my system I covered the cost in 5 yrs at the then $.18/kWhr.
 

EELinneman

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Solar is a financial win as well as environmental, AND improves Grid Resiliancy in case of outages. Much better than running your electric car on coal, nuke, Natural gas which is still the bulk of Utility power....
My understanding is that without the battery backup, when the grid goes down, so does your solar. If they shut things down to work on the system, they cannot have people with PV panels on their roof energizing the system. It's a safety factor. Batteries come into play when the grid goes down.
 

Mach1E

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Actually, my solar was absolutely an investment for me. All depends on how you want to view it. Is it a depreciating "asset" or does it generate cash flow to your bank account? Since it generates a significant cash flow savings, it was certainly not an "expense". I would have had to find a tax-free investment instrument yielding 7% to have the same affect on my personal cash flow.

Interesting what you can do with numbers. Don't know what you are basing either 10 years or 20 years or 40 years on: could you explain those out of thin air numbers? While they may be mathematically correct, what do they have to do with saving $7000 on utility bills given your example of a solar system costing $100,000 that still produces savings beyond year 25? If you have gotten a "return of" your $100,000 at less than 15 years, what is your rate of return "on" between year 15 and year 25? Infinite perhaps? What is $7,000 as a "return on" 0$ for year 15? The savings don't disappear when you have completed your "return of" original cost. They keep going like the Energizer bunny!

OK, let's take another look. $7000 that I save that first year can either be considered a "return of" and can be reinvested in other financial instruments pending the arrival of that "payback date", or can be considered a "return on" and can be reinvested in other instruments as long as the savings continue. Either way, the savings each year is tax-free since it is a savings of cash flow that I would have needed to pay with after-tax dollars if I did not have the solar. Let's use your original "cost" of $100,000 to make it easy. Since this is a cash flow exercise, I don't consider depreciation. So, assuming an increase in utility bills of about 5% per year and a drop in solar efficiency of 1% per year for an increase in utility savings each year of 4%, and assuming a paltry 2% after-tax return on my savings invested each year (from year 1 on to year 25), at the "end" of 11 years, I have my $100,000 back. However, at year 25, I am still saving $18,700 during that 25th year and I have a balance of over $360,000 by year 25. Certainly a "return of" my original $100,000 more than 3 times. Regardless of whether you call it "return of" or "return on", you still come out in pretty good shape! If the panels are generating a savings almost $19k in year 25, what is the value of that income stream at that time to either yourself or to a home buyer? I leave that to the student. Of course, there may be some states where electricity costs are not doubling every 8 to 10 years or so, but they have been in California where I live.
I tried to explain the math multiple ways.

We can use whatever numbers you like, but none of the numbers equate to a 10%, 7% nor anything close.

I used the exact numbers given in this thread.

If you’re curious how to calculate “rate of return,” just Google it.

The inputs are this:

PV (present value) = initial investment (a negative number)

FV (future value) = whatever the investment is worth at the end. I was using zero assuming the panels eventually need to be replaced. But you can plug in whatever number you like.

N = periods (number of years)

PMT (payment) = how much the investment pays per period. In this case it’s the energy savings.

I (interest). Solve for I.

I’ll just leave it saying this. I calculate this stuff as part of my job.

Here is the answer to your $7k per yr on $100,000. This is for 20 yrs in this example.

Ford Mustang Mach-E Solar payoff....worth it? 3D8A5E39-9ED1-4AFC-BA40-2965F4E54644
 
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Mach1E

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How can they become worthless if they continue to generate savings in utility bills? How long to reach 75% of original efficiency? 25 years? I would probably replace them or add more if output dropped to 75% or so... Worthless? Why? Only if they stop producing completely...
What is a 25 to 40 year old solar system worth? I’m assuming zero.

If you want to plug in a value at the end, I can run the numbers that way if you’re curious.

It’s just a math formula.
 

Mach1E

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Don't savings continue after the 10 years? They don't magically stop just because you have "recovered" your cost. Now I see what you are leaving out!
I’m definitely not leaving it out. Just showing you points in time to help explain the math more simply.

In that example
10 years? you break even
20- you double your money (this equals 3% return over 20 yrs)
30- you would get back 3x, etc….. still equals a 3% return.

And 3%? Basically equals inflation. Your after inflation return is zero.

Bottom line? If you don’t move and live there long enough, it CAN pay for itself.

But is absolutely is NOT a high rate of return investment as you have pitched it.
 

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What is a 25 to 40 year old solar system worth? I’m assuming zero.

If you want to plug in a value at the end, I can run the numbers that way if you’re curious.

It’s just a math formula.
Actually below zero, it costs money to remove it, fix the holes, repair broken tiles, etc.
 
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Without Net Metering it is really hard to make solar cost effective. Doesn’t TVA generate most electricity from Hydro. It is hard to beat Hydro prices. Here in CA where electricity is $0.24/kWhr it is a no brainer. When I put in my system I covered the cost in 5 yrs at the then $.18/kWhr.
Our cost is $0.09-$0.10/kWhr. I believe most is hydro but there are nuke plants as well
 

Scooby24

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I’m definitely not leaving it out. Just showing you points in time to help explain the math more simply.

In that example
10 years? you break even
20- you double your money (this equals 3% return over 20 yrs)
30- you would get back 3x, etc….. still equals a 3% return.

And 3%? Basically equals inflation. Your after inflation return is zero.

Bottom line? If you don’t move and live there long enough, it CAN pay for itself.

But is absolutely is NOT a high rate of return investment as you have pitched it.
Are these absolutes? Because if my system is paying itself off in 4 years ROI, that means within 25 years, I've returned my investment 5 times over...

but do go on.

Now, your math is fine and good, but where are you accounting for the money that you continue to spend on power since your diversion of that investment means savings are not realized and money is spent?
 
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My understanding is that without the battery backup, when the grid goes down, so does your solar. If they shut things down to work on the system, they cannot have people with PV panels on their roof energizing the system. It's a safety factor. Batteries come into play when the grid goes down.
With a battery, 9kwh, if the grid goes down we have power during the day and 9kwh to use after sunset and solar is not producing. Maybe 4hrs+/- depending on our usage. Without a battery, grid goes down we have solar during the day and then nothing after sunset.

There's still a transfer switch that shuts down our ability to push to the grid in either case. Any excess energy we produce during the day is lost without a battery. With a battery, the excess recharges the battery and powers us during the day
 

Scooby24

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With a battery, 9kwh, if the grid goes down we have power during the day and 9kwh to use after sunset and solar is not producing. Maybe 4hrs+/- depending on our usage. Without a battery, grid goes down we have solar during the day and then nothing after sunset.

There's still a transfer switch that shuts down our ability to push to the grid in either case. Any excess energy we produce during the day is lost without a battery. With a battery, the excess recharges the battery and powers us during the day
If not net metering it's not just lost....you're charged for it. Excess goes back to the grid but the meter just sees current. Granted it's still overall lower than your usage is without it...but it would suck to get charged for your excess as though you used that.
 

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My understanding is that without the battery backup, when the grid goes down, so does your solar. If they shut things down to work on the system, they cannot have people with PV panels on their roof energizing the system. It's a safety factor. Batteries come into play when the grid goes down.
correct

my point is that you typically do not NEED $15k worth of BBU to cover a couple hours outage once a year. It is less expensive to get a propane Generator for $3k-$4k

...or disconnect fro the grid, get an 'off-grid' pure-sine inverter, and run critical loads directly from your MME battery until the grid comes back up.
 

dtbaker61

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Nooooooooooo………

It is not like “doubling your money in 10 years.”

It’s “getting your money back in 10 years.”

If you give me $10,000, and at the end of 10 years I give you $10,000 back, you made zero dollars. And in fact because of inflation you LOST money. ($10,000 today is worth more than $10,000 will be in 10 years).

It would take 20 years to double your money. That’s a little over 3% return.

And at a 3% return, “take your pick” and there are much better investments out there.

Even if it doubled your money in 10 years (which it doesn’t), it would be a 7% return, not 10%. (Law of 72).
nnnooooo..... it actually IS doubling your money because you 'saved' enough to cover your original net cost by not paying a utility bill (like a dividend), and the you still have the asset (like principle). The 'good equipment' has a 25 year warranty, so you will more than double your original net investment with cash you are not paying the Utility co, especially if their rates increase at annual average rate of 4-5%.
 

Mach1E

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Are these absolutes? Because if my system is paying itself off in 4 years ROI, that means within 25 years, I've returned my investment 5 times over...

but do go on.

Now, your math is fine and good, but where are you accounting for the money that you continue to spend on power since your diversion of that investment means savings are not realized and money is spent?
Not absolutes at all.

I was just correcting the math.

If your system pays for itself in 4 years (instead of 11-15 like the other people), clearly your return is significantly higher!

Individual results may vary.

My post is not for nor against solar. It was just clearing up how to calculate the return so people can make their own “is it worth it” decision.

For me, here in Florida? The return is terrible. Systems are expensive, they require a new roof, and every 10 yrs your insurance company makes you get a new roof, which means taking the panels off and reinstalling.

The break even point is easier measured in decades than years for me.
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