[steven2012]

I'm super excited about the promise of solar panels, because my house has unobstructed exposure to the sun, and I live in the Bay Area, so we get sunshine 300+ days per year.

However, every time I revisit the math, it never works out. Even if I purchase it myself, the payoff times are never less than around 17-20 years, depending on how aggressive I project the rise in electricity rates. Given that solar panels have a serviceable life about 20 years, it still isn't cost effective yet.

But I'm getting more and more optimistic that in the next few years, we'll reach a level where solar panels make sense.

[ChuckMcM]

Hmmm, that seems broken. I installed 5.2KW of panels on the roof of my Bay Area home in 2002, at the time panels were a lot more expensive but the subsidies were better too, I ended up paying just about $20,000 for the complete system (after rebates and with all parts, labor etc). The system is grid tied (meaning it feeds back into the grid) and we switched our billing to a watt for watt basis (not time of use as my kids were being home schooled and we were in the house 24/7). My electricity bill is now annual (the net power usage is computed from the Anniversary date, and any power I've used in excess of my generation is charged at a flat fee). My typical annual power cost is < $200 and occasionally less than $100. There is zero maintenance other than rinsing the panels off twice a year, and trimming the trees to avoid shade.

By calculating my what my electricity bill would have been vs what it was, they have saved me more than their cost (at some point I should go back again and get exact numbers).

Its entirely unclear how much "additional" value they give the resale value of my house. It is clearly some, but I don't have a good way of knowing if it is $20,000 or more.

At the time we financed the purchase as part of a refinancing of the house, so we did know the interest cost for the money, we also went through the great Recession so in traditional financial analysis (the 'do nothing' option) we would have predicted our money would have had a better return than it actually did, although that didn't really change the math all that much.

So I can't see how you don't get it paid off in < 10 years these days. At this point I'm thinking of adding another string to offset the addition of an electric car.

[steven2012]

http://www.gosolarcalifornia.org/tools/clean_power_estimator...

Using this calculator, pick a zip code in the Peninsula, I put in a 4000 watt system, estimate my bill to be $200/month, assume 2.5% increase in electricity prices per year, and assume I pay in cash. This gives me a 15 year payback period. At $100/month, it's a 24 year payback period.

[ChuckMcM]

Not that anyone would do it this way, but that calculator got me thinking. Often I have heard home affordability expressed as dollars per month vs dollars financed. So for example this worked example of a $200,000 mortgage [1] has a $1553.45 monthly payment, so for each $1 per month you got $124.24 of house. Does that make sense?

If so, now consider that your $200/month electricity bill is the equivalent of $124.24 x $200 or $24,847 worth of "house".

Our actual bills were $250 - $300/month pre-panels and effectively about $15/month post panels. In terms of money returned by 7 years we had paid less in electricity than we had paid for the panels. But that discounts what $20,000 would have been worth if we had invested it (that is the 'do nothing' alternative since you aren't really considering putting that money under a mattress :-) And of course we also made our house more efficient which we would have gotten that pay back either way.

The only downside to our system has been trying to explain to people why it doesn't provide power when the power is off.

[1] http://hfa3741.hubpages.com/hub/How-Much-Does-a-200-000-Hous...

[fancyketchup]

I don't have a PV system, but I know people who do, so take this with a grain of salt: The default assumptions in that calculator are probably a little wrong.

First I think most people are paying closer to $5 per Watt, and I know someone who just refinanced his house in Long Beach at 3.5%, fixed. For comparison, the calculator assumes $10 per watt, and 8%. If you use halve the installed cost, there is obviously a big effect on the payback period (down to 6.5 years with tax incentives).

[JRobertson]

If you're sincerely interested in solar panels you should look into doing it yourself. It's not as complicated as many of the solar retailers want to make it out to be.

Step 1) Buy panels direct with mounts Step 2) Mount the panels yourself. They aren't super heavy, just fragile. The tricky part here is measuring and drilling the holes you need to get them secured to your roof properly. Or buying a slanted frame if you have a flat roof. Step 3) Hire a licensed electrician to wire them up.

That's pretty much it. Total cost for a 9kw system will run about 13-15k after the electrician. You'll get 30% (almost 4k) back in rebates bringing your total cost out somewhere around 10k. That's a 5-7 year payback for your average american home.

There are a number of online solar panel distributors that are reliable and have been in business for quite some time.

[marvin]

Isn't there a good, cheap solar tracking system available yet? Seems like you are leaving a lot of money on the table by not keeping a ~90 degree angle with the sun at most times during the day.

[ansible]

Good, cheap, reliable? Not that I know of. Mounting costs are higher too; you something like a post in concrete to attach the panel, rather than just screw it to your roof.

People are still working on that sort of thing. An interesting system I saw a few years back was one based on the sunlight heating up a fluid. The fluid (maybe it was a gas) expands a cylinder that keeps the panel pointed at the sun. At night, the fluid cools, and the system resets to its default state, pointing east for the next day. So 100% mechanical, without any active control.

[steven2012]

This is interesting about DIY. I'll research this a bit more, thanks for the info.

[huherto]

Can you take advantage of the shade from the Solar Panels?

If you can install solar panels above the ceiling with enough space to keep the air flow, it can help you keep your house fresh and comfortable during the day. Specially in a hot and dry climate.

[ChuckMcM]

I've found that my panels keep my attic probably 3 - 5 degrees cooler than before the panels were installed. So it's definitely a benefit. I don't have air conditioning and on warm days this keeps the house from heating up.

[driverdan]

The Bay Area is not a "hot and dry climate."

[huherto]

I am not familiar with the climate on the SF Bay area and don't know how effective the shade would be. It think this would be ideal for a house in Arizona, New Mexico, West Texas, May be Southern California.

[mikeyouse]

Much of the East Bay would probably be classified as hot and dry.

[ashayh]

I look at it from another perspective.

Many people in the bay area have expensive homes and cars. People do not think twice about over bidding 50-150K when buying a house. In fact, that's the only way to get one here, and that's what we did. Its also common to spend crazy amounts on home renovation.

Then people also get an expensive Tesla or some other car that costs 50K or more.

But far fewer people would rather spend the 25K on solar and see a guaranteed return of investment of 150-200$ a month for the next 20 years. And the energy cost is guaranteed to be the same per watt throughout that period.

Regardless of whether you buy or rent, you _have_ to pay a power bill. Mine regularly crossed 150$ a month while renting. And I will continue to have a power bill till I die (40-60 years?). Why not lock in the price for the next 20 years at least?

[g8oz]

That calculator is assuming $10,000 per Kw of capacity. Decent Chinese panels are $500 per Kw on eBay. Can the balance of system (inverters etc), permitting and installation be that expensive?

[wolff]

Are you factoring in that you can stay hooked up to the grid and sell extra power back to the energy company?

[steven2012]

Yes, I used some online calculators that predicted how much electricity I generated based on the size of the array, the amount of electricity I used, and how much I could make selling the electricity back, as well as rebates, etc. I can't remember the actual link for the calculator, but it was pretty thorough. Of course, there was a lot of guessing that needed to take place, like the rise in electricity prices, etc.

And as far as I remember, the ability to sell electricity back to the utility like PG&E isn't something that is guaranteed in the future. However, I could be wrong about this point.

[ChuckMcM]

One of the things we did was spent a year prior to panel installation reading our meter every day to figure out what our daily power usage was. We then replaced some really energy expensive appliances (and old refrigerator, some incandecent lighting, and ended up with an average of about 24kwH per day)

[steven2012]

We just bought our house a few months ago, so this is something I'm doing as well. I'm buying all energy-efficient appliances, and going 100% LED lights. I won't know my total energy costs until I fully move in, though, hopefully soon.

I became aware of this because last year I was hit with an electricity bill of $300 in a month because I ran a space heater every morning. After I did more investigation I realized I was paying about $40/month in electricity keeping my dual-CPU 8-core Xeon server running 24x7. The box alone ended up pushing me into the highest tier, so I was paying the highest rates for the last 5-6 days of the month, so it forced me to reevaluate my electricity use from the ground up.

[michielvoo]

Do you factor in an increase of the price of your home when you sell it?

[steven2012]

I would guess there is likely no increase in house price, especially for current solar panels. If I live in the house for the next 10+ years, it's questionable what value a 10-15 year old solar panel array will have, especially if the next owner will need to either change them out or remove them in 5-10 years

[umsm]

I'll argue that even in 15 years, you will not need to pay for labor to install and setup the system. Swapping out the old panels with newer, more efficient, and cheaper panels may be less than half compared to installing the entire system from scratch.