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Fact or Fiction: State of CA May Stop Solar Incentives?

There was an item on the news yesterday evening that the California State fund incentivizing people to install residential solar panels may be close to running out. I'm trying to determine whether this is a fact or speculation. Anybody know?

I'm on the fence about solar because it won't be factoring the increase in home resale value into my break-even calculations. It's speculative and I'm not planning to sell. So for me, the real questions become:

  • Is solar going to improve my overall energy situation when the cost of the panels, permits and installation are factored in (should I purchase)?
  • Will having solar stabilize my electric bill or will I still be subject to the whims of SDG&E (I think I already know the answer to this one)
  • Is a substantial incentive about to be taken off the table (subject of this post)?
  • Will solar help me out more than ToU or are these orthogonal>

Additionally, I'm looking for feedback on leasing versus purchasing and what capacity array to get. I have a P85 that I drive relatively lightly (home office) and a HPWC. I'm guessing an evening's charge would normally be 20kWh or probably less. (Yeah, I know, I coulda gotten by with a 40 but ... needed the fancy toy.)

All of you seem to have done such in depth digging on these subjects, I'm really looking forward to your feedback!

Thanks

Sounds like you may have missed the May San Diego Tesla group meeting? My husband was there and they had an SDG&E guy speak. Great information. I believe he is also an MS owner. David G. organizes the group and can likely put you in touch with him.

Email your contact and I will forward.

Jackie.

Solar in CA is a no brainer, especially with MS. Combining TOU with solar turns your house into a profit center: you sell your solar electricity at the highest rate during the peak (daytime) and charge your car at the lowest rates at night. The difference in price per KWH is pure profit (for SCE this is 0.47 per KWH peak daytime and 0.09 per KWH super off-peak nighttime). My bill last month was -$190 and this month and is projected to be -$310. This means I am making ~$200-300 per month even after covering all my home and car electricity, which would have been easily another ~$300 per month without solar (note that profit will be less in winter due to lower rates and less sunshine). I drive my P85 ~20-30 miles per day. Thus, my system will be paid off in ~4 years and since it will easily last over 20 years, I will have 15 years or more of pure profit.

The CA incentive was based on a certain amount of MWH of solar and is a fixed amount. I was a tiered system: the more solar added to the state, the less the incentive became. I am not sure what it is now but i would not be surprised if it is almost done and/or at a fairly low incentive.

Even without the incentive, I would not hesitate in putting on Solar.

Hope this helps.

Steve, we also live in SD, own a MS and have installed a solar system sized for the house plus MS. I am a design professional and have already completed an exhaustive study on the issues you're asking. I'll reply by email with a more detailed response.

Phil

Phil - it would be great if you can post more detailed information on this thread as well :)

This is old news but check out: http://energycenter.org/index.php/incentive-programs/california-solar-in... It appears there are program goals in each of the areas served by the various utility companies in CA, and according to the website, San Diego is close to meeting the goal that was incentivized by the rebate program.

Yes, Phil, please post your detailed response here so more people can benefit from it...

In the past three weeks I've had consults with nine different companies on a solar system for my home. Our projected monthly usage with the MS is 890 kWh so I'm looking at ~5.5 kW systems. Right now I've got it narrowed down to the SolarCity purchase option and two Sunpower options from different installers. Sunpower is much more expensive but I'm hesitant to place such a long-term bet on a newcomer like SolarCity. The SolarCity panels (Chinese: Yingli 245) are also much lower quality than the Sunpower panels (Sunpower X21 345), with lower efficiency and a worse warranty.

I'd be happy to chat with anyone who has either questions of me or advice for me. Please email me at colasec.tesla -at- gmail.

I went with a lease through Solar City for a couple of reasons:
1) It flattens our electric bill out as it system is sized to cover Tier 2 and above usage and gives me protection against the vagaries of SMUD rate increases
2) As SMUD moves to TOU for everyone, the cost benefits get stronger as I will be putting electrons back on the grid during peak hours
3) With the lease, if something dies, its SolarCity's headache, not mine

Omar

We went with a Sungevity lease. In addition to them maintaining everything, you start saving from day 1 without having to put any money down, they guarantee a certain amount of generation or else they pay you for the shortfall. I'm very happy with our system and our reduced electricity bills. I have a referral code that will give you $ back if you sign a lease or purchase from them. Email me at teslastuff(at)jeff.pensive.org before requesting their quote if you want it.

Ok for all of you SDG&E customers here are my notes on solar systems in San Diego.

Let's start with a quick response to each of sxross posted questions.

Is solar going to improve my overall energy situation when the cost of the panels, permits and installation are factored in (should I purchase)?

Yes, overtime I believe it can greatly reduce your overall energy costs.

Will having solar stabilize my electric bill or will I still be subject to the whims of SDG&E (I think I already know the answer to this one)

If the solar system is properly sized, your SD&E bill will be limited to only the least expensive kWh charges. Off peak TOU and Tier 1 pricing will not see the same increases the Tier 4 and Peak TOU charges will.

Is a substantial incentive about to be taken off the table (subject of this post)?

CA cash rebates have already run out of money for the year. The state program still exists, but is underfunded. I filled out a state application with my Electrical contractor's assistance just in case more funds are made available but I'm not holding my breath (our system was installed April 11, 2013). The good news is, Federal tax rebates are still able! We expect to get a 30% rebate off the solar system's cost with our federal tax return.

Will solar help me out more than ToU or are these orthogonal?

I believe TOU and a solar system work best in combination. According to the SDG&E representative speaking at the SD Tesla users group meeting, if you have a solar system and are generating energy in surplus of your household needs, the TOU plan credits your account at the rate the extra energy is received. In other words, solar systems produce most energy during the peak TOU rate charges. Every surplus kWh during peak demand credits $.26 to your account. Schedule your EV charges at the Off peak times at a rate of $.14 per kWh and you save $.12 per kWh.

I have put together a little outline about buying solar systems and the different purchase options. Hope it helps.

Solar systems are a great alternative to paying full rates from SDG&E and being subjected to their periodic price increases. To start your research, I recommend you review your utility bill, find the average amount of kWh used per month. The size of your Photovoltaic system will be determined by your current consumption levels. It is best to target a system that will reduce your energy usage to the Tier 1 category (which is the cheapest cost per kWh). This is typically about 75 to 95% of your energy consumption. For example if you use 1,000 kWh per month and tier 1 energy costs are between 0 and 347 kWh, your home system should be able to produce on average not less than 700 kWh per month. It is not a problem to size the system to produce 100% of your home’s energy consumption but the overall system costs are harder to recover over time because tier 1 energy is so cheap. The Solar contractors will help you with this calculation.

There are several ways to pay for a solar system.
1. Rent/lease from the installer –By renting the energy from the installer you will not have to pay for the upfront installation costs and you will lock in your energy costs over the term of the contract. The supplier will become your energy company and will maintain your system for the term agreed upon (this is the most expensive option).
2. Finance your system – Procure a loan for the system. Make payments to the bank instead of the energy company and when paid off you will finally realize the monthly savings from the reduced energy costs.
3. Pay Cash – This is the cheapest overall way to go and is what I was able to do. No interest, just monthly savings on the energy bill. It’s a little like buying the next 5 years of energy in one lump sum. Using this method, I was able to calculate a payback in just under 5 years for the complete system. They system is warranted for 20 years and should work well beyond that.

Make sure you get at least 3 quotes. We interviewed three ourselves. One large well known company (Solar City) and two local contractors. The quotes ranged from $13.9 / watt to less than $4 / watt. Solar City was the high and a local contractor was the low. We selected the local contractor to perform our work. They installed a 7,500 watt solar panel system using 30 - 250 watt Canadian solar panels. We also preferred the micro inverter system by Enphase. It is installed with one inverter per panel and has the benefit of making each panel work independently, so if one panel is in shade it will not adversely affect the other panels. They also have a fantastic web based user interface to track your system’s performance.

Hi San Diego Tesla Owners

How about an impromtu casual gathering.

Saturday 7/13/13. UTC Mall at Corner Bakery. 8:30 am.
Mall doesn't open till 10am, so plenty of parking and no crowds.

We can chat solar or any other topics of interest.
(My husband will bring his research folder from all the solar quotes he obtained)

Hope to see some of you there.

Jackie & Phil

@ppape... I am in SDG&E as well and actively pricing out solar. I didn't see your contact info, but would like to hear who your local contractor was.

-jason

I live in LA, and am not convinced that solar pays, given the large initial investment, the inevitable decline in performance over time, and the not always optimal weather conditions. It RAINED yesterday, in JULY!!!

The monthly savings calculations are meaningless, unless one factors in purchase price, which is substantial. with mdemtri's ideal example of a $500/month differential, how many months does the system have to run at that to break even? Standard installs are easily 20-30K so we are looking at 40-60 months or 4-5 years till breaking even. Additionally, this is money that is not available for saving for retirement etc. so true breaking even point is possibly 1-2 years later. Furthermore, solar panels need to be kept clean to work properly. Either you pay someone to clean them (...), or you have to go up on the roof yourself.

Re real estate investment, leasing is a poor choice, because a future buyer is forced into an old contract. I'd think twice about doing that if I'd be looking for a home. In that case buying is your only sensible option (see above).

Last but not least, I am not sure solar is environmentally sound. Making pure silicates and aluminum (from bauxite) use huge amounts of energy, which are purchased industrially at a cheap rate. I have not seen the calculation, that solar panels generate more energy than are used to produce/ship them. It sounds to me like the biofuel folly that was going on in the last few years.

I'll wait for technology to get better, or prices to come down significantly. Solar is not good enough yet.

ppape, thanks for the great summary. What your <$4 watt pre- or post- tax credit?

Right now, I'm looking at (post-30% tax credit):

SolarCity Cash Purchase
-----------------------
(22) Yingli 245 Poly Panels
PowerOne PVI Central Inverter
5.39 kW DC
9.039 first-year production
$3.31 net/kW
Estimated $0.102 net/kWh/20 years (guaranteed at $0.0695/kWh*)

* that means they'll give a refund of that much

Local installer Sunpower Cash Purchase
-----------------------
(16) Sunpower X21 345 Mono Panels
Sunpower 5000 (branded PowerOne) Central Inverter
5.52 kW DC
8,891 first-year production
$3.97 net/kW
Estimated $0.123 net/kWh/20 years (warrantied not to exceed $0.145/actual received kWh)

Colasec - you mentioned that your projected monthly usage with the MS is 890 kWh. How did you work that out? I'm a potential solar and MS customer so I'm trying to run the numbers. I expect to do about 10000 miles per year - presumably I can convert that into projected kWh.

inverts, I have to respectfully disagree. Yes, it takes about 4-5 years to pay off if you purchase the system outright. But then it is free energy for at a minimum of 15 years, likely many more. This is a huge financial benefit, especially when you factor in inflation that will surely occur with energy prices over 20 or more years. If you then factor in the EV revolution that will undoubtedly occur, electricity prices have no where to go but up, up, up. Instead of paying ever increasing prices, your energy will be free. Not sure how anyone can see this any other way than a huge financial benefit.

And the idea that the energy required to produce a solar panel is more than it will produce over a lifetime is absurd. Over the last year, a single panel on my system in OC averaged ~400kwh; over 20 years this is 8000kwh for a single panel. Even with a decline in efficiency, this is orders of magnitude differences in energy. One US gallon of gas = 36.6 kWh. Thus a single solar panel will produce the equivalent of at least ~220 US gallons of gas over its lifetime. At the absolute most, I cannot see more than 10 gallons of gas being required to produce a single panel; it is likely much closer to ~1 gallon. Of course, if you use solar energy to extract the raw material to make new solar panels than this argument completely falls apart.

I'm not an owner yet but I'm also from San Diego. I'm ready to pull the trigger on a Model S but I'm waiting for the parking sensors which I hear is coming soon. Can I please get added to the San Diego email list?

Thanks in advance.

earlyretirement1 at gmail

Mdemetri, I live in OC and just had my solar panels turned on this month. I have SCE also and am projected to have a small credit for the next billing month (~$55). However, from what I've read, SCE will not actually pay you that credit . The credit will only go towards any excess energy costs you incur over the next year (such as in the winter). They will only pay you back a credit (at wholesale price of about 4 cents per kwh) if there is actually excess energy that your system has generated over the past year. I hope I am wrong but I don't think they will actually pay you upwards of $300 a month. To maximize your investment it is best to get a system that allows you to come closest to balancing out all your utility costs to zero dollars for the year. Again, I might be totally wrong about this ...has anyone out there had solar over a year and gotten paid all the credits that has accrued due to using TOU?

qphan79, what you say is true for the regular SCE residential plan. And yes, the profit is averaged over the year, and the excess energy produced in summer helps cover winter costs when the days are shorter and there is less sunlight. However, SCE is legally mandated to pay you for the excess energy you produce. This law was passed in 2011. The key is the price they you pay for your excess electricity. With the residential plan, this remains in in the lower tiers and does not make much profit. This is where the TOU plan for electric vehicles comes into play. With a TOU plan, SCE buys your solar energy during the day at the highest price and then you charge your car (and other household activities) at the lower prices (off peak and super off-peak). Thus even if your system is sized only to cover your total electricity use, you will still make a significant profit. You are selling high and buying low!!!!! You become a commodity supplier and are providing energy when it is most needed during the day. You then buy it back at the cheaper price. The TOU plan turns a good investment into a great great investment. One point of caution is that I am just at the end of my first year of solar and waiting on my refund check from SCE; so it is not completely real until I get the check.

@sjm992

There's a calculator here on the Tesla website that will tell you kWh per day. Go to Model S > Charging, then click the "Calculators" tab. Plug in your expected daily average mileage and you'll see the "Energy" field report your expected kWh.

I took that number, multiplied it by 30, and added it to my average current usage, which I pulled from the SCE website.

10,000 miles/yr = 27.4 miles/day
30 miles/day = 8.5 kWh/day * 30 = +255 kWh/month

Of course, you might want to add some fudge factor for how much more you'll be driving since you love your car so much. :)

What is a "no brainer" for the consumer may turn out to be brainless for the supplier/subsidizer. Euro gov'ts are scaling back FIT systems because they are so lucrative for customers that they are open arteries in the budget. There is a structural issue, too, since distributed power generation by definition pays nothing in to the capex for the central system that absorbs and redistributes their output. In effect, non-solar customers fund the solar ones, and this cost steadily rises without limit.

@Colasec - excellent, thanks!

@qphan79 - You are correct about getting only the wholesale rate of reimbursement at "true up" if you have excess generation. What you see on your monthly bill as you progress through your 12 month period is deceiving in that they are charges and credits at the retail rate. I live in San Diego. I'm in my third year as a PV customer of SDG&E. At the end of 2011, I had 2993 kWhs of excess generation. They paid me .03699/kWh and credited my bill $110.71. In 2012 I had 1095 kWhs of excess generation. They paid me .03639/kWh and credited my bill $39.85 which didn't even cover the .17/day they charge just to be hooked up to the grid. Your rate plan is not a factor in the reimbursement equation, but is if you use more than you generate. Rates of reimbursement are set by the CPUC so it doesn't matter who your power company is. The advice about getting just enough solar to offset your total yearly residential usage, or at least keep you in Tier 1 is good advice. Don't expect to make money off the power company. I now have two EVs, a ModS and a Leaf. No more excess generation :)

:-( This thread is depressing to this MS owner, who lives in a townhouse with strict CC&R's from two HOA's and can't put solar panels on his roof. I guess it is time that I ran for the board so I can change that - buying a single family home in Nor Cal isn't in the budget after all the saving up for the MS.

Still grinning (but it isn't as wide as normal without cheap electrons). :-)

Stevenmaifert, thanks for your post. You are indeed correct. I just called SCE and at year end they will only pay ~0.04 per kwh for excess generation, despite what the monthly charges show. This means it will take longer to pay off my system, at least until I get my MX.

However, the TOU monthly charges will allow anyone to put in a much smaller system and still be net 0 dollars at year end when compared with a regular residential plan. You would be significantly net positive in kwh but because of selling high and buying low, net cost will be zero using a much smaller system.

Inverts,

"Furthermore, solar panels need to be kept clean to work properly. Either you pay someone to clean them (...), or you have to go up on the roof yourself. "

Hi Inverts. I have solar panels for 4 years now and I even had some serious bird droppings on my panels, but couldn't notice the difference in yield. I monitor my systems constantly on a 10 minute basis. Only if they are on a very shallow angle or you live in a vey dry place you might need to hose them off once in a while. But we live in different places, so inform yourself for your particular situation.

"It RAINED yesterday, in JULY!!!"

Very good, some rain now and again is perfect for cleaning ;) And you can easily get 30-50% of maximum yield on cloudy days too, so suboptimal conditions are not that dramatic.

"the inevitable decline in performance over time,"

Some real life data is beginning to emerge now and it seems PV panels hold up very well. Remember that you get GUARANTEES of eg '80% after 20 years'. That doesn't mean your panels lose 1% per year. It is a guarantee, so if the manufacturer didn't feel 100% sure his panels would do much better in practice, would he give such a guarantee? In short: forget about degradation, it is negligible.

"I have not seen the calculation, that solar panels generate more energy than are used to produce/ship them. It sounds to me like the biofuel folly that was going on in the last few years."

If you really wanted to know, why didn't you run a simple Google search? Just type in: "pv energy payback". The very first hit is an NREL report spelling it out for you. The energy payback time for modern silicon panels is around 2 years. With a lifetime of at least 20 years, that is an EROI of better than 10, easily beating tar sands.

Be careful about what you read on the internet. There are many anti-pv and anti-renewables ideologues that try to sell all kinds of nonsense. If you believe them, you're missing a great opportunity to save money and having the satisfaction of running your own powerplant.

"I'll wait for technology to get better, or prices to come down significantly. Solar is not good enough yet."

And what better technology would help you? What are you wating for? Where does today's technology fall short? Today's PV systems are mature. If it works out financially, then buy it and save money. And don't worry about the technology. There will be always something better around the corner.

Installing solar in the US is very expensive compared to Europe. I see some of my collegues getting a solar installations for as little as € 1.40 per W (complete with installation and INCLUDING the hefty Dutch 21% VAT!). Four years ago I payed double that for a DIY system. You can do the math: € 1.40 per W in my not-so-sunny country is a kWh price of ~ € 0.10 per kWh, less than half of retail price. No wonder solar PV is getting so popular. Those lower prices will be seeping through to the US too, so keep an eye on them or you may be missing out on a huge opportunity to save money.

Incentives are definitely dwindling. In my area they were $1.34/watt when my main system was installed about a year and a half ago. A few months ago when I was contemplating adding more panels it was $0.80/watt. By the time the extra panels were installed it had dropped to $0.48/watt.

This is a hard thread to keep up with! I've taken the liberty of summarizing some of what I've learned here. I may have taken too many liberties so if you see places where I got it wrong, please let me know and I'll correct.

This has been a very interesting thread so I thought I would comb through it and provide a summary. Thanks to all who responded.

Topic: California Incentive

The CA incentive was based on a certain amount of MWH of solar and is a fixed amount

ToU (Time of Use)

Combined with solar this allows you to sell power you are not using (if any) from your solar array to the utility at peak, then you can buy it back at off-peak or super off-peak hours at a lesser rate. If you charge your car after midnight, you will be paying the lowest possible rate. In San Diego, these are $.16 for the lowest (super off-peak) rate after midnight and $.27 for peak. As of the time of this writing.

Caveat: Even though the price you would pay for the power at peak is $.27 (according to SDG&E site today), it is not clear the utility pays you what they would charge you. They say it's dollar for dollar, some people say their utilities are reducing the amount they pay.

ROI

This is better stated as "break-even" because everyone is trying to figure out when their $25,000 or so will be offset by lower utility bills. Whatever you call it, there are several items everyone seems to factor in:

  • Reduction in bill payments averaged across a year to account for sunny summers versus cloudier winters. These fluctuate among all of you, but some have reported optimistic numbers of $-130 (how much the utility owes), while others feel overall there will still be a utility bill. The key is using the delta between what you used to pay and what you pay with solar as your metric in break even calculations.
  • Government incentives. Evidently, the State of California had a decaying curve plan for motivating homeowners to install solar. Right now it seems the incentive is getting to the point of being negligable. However, there seem to be other offsetting incentives at the Federal level including any sales tax writeoff and straight-out incentives.
  • Increased resale value. People are reporting increased home resale values in the range of $25-85K. If you aren't planning to sell soon, this may not factor into your break-even calculation.

The time people are reporting to pay the systems off based on these calculations is about 5 years.

Companies Who Do Solar

SolarCity. Panels are Chinese: Yingli 245 and are reported to be of lower quality
Sunpower. Sunpower X21 345 are reported to be of higher quality than the Yingli

Lease Versus Loan Versus Purchase

Lease

Pros

  • Flattens electric bill (i.e., locks in rate for term of contract)
  • Little or no up-front installation cost
  • Protects against utility rate increases
  • Provides maintenance

Cons

  • You still have a monkey on your back. It just becomes SolarCity or whoever you choose to install the system instead of your friendly utility.
  • You can't project what will happen after the contract expires.

Finance

Well, this is self-explanatory. If you want to pay the lender and invest your money some other place, knock yourself out.

Purchase

Pros

  • Less expensive (it seems ... don't have hard data yet)
  • Once you've passed the break-even date, be it 5 or 7 years, the energy the solar array generates is essentially free. Given that these systems typically come with up to a 20-year warranty and likely will work for longer, you have a pretty long run of (essentially) prepaid energy.

Make sure you get at least 3 quotes. We interviewed three ourselves. One large well known company (Solar City) and two local contractors. The quotes ranged from $13.9 / watt to less than $4 / watt. Solar City was the high and a local contractor was the low. We selected the local contractor to perform our work. They installed a 7,500 watt solar panel system using 30 - 250 watt Canadian solar panels. We also preferred the micro inverter system by Enphase. It is installed with one inverter per panel and has the benefit of making each panel work independently, so if one panel is in shade it will not adversely affect the other panels. They also have a fantastic web based user interface to track your system’s performance.
Providers considered: SolarCity, Sungevity.

Useful Guidelines

  • Look at your energy bill across the entire year to see how much you usually use (kWh).
  • Size your system to cover the bulk of the energy bill. The closer you get to covering 100% of your bill, the harder it will be to pay off because you will be generating power into tier 1 where energy is inexpensive. 75-95% is what is suggested. Question: If you got to a ToU plan, does this still apply? Does it morph into "size the system to cover the peak usage"?
  • Shop around. At least talk to 3 companies.
  • Not all systems are the same. Some are more flexible than others in varying light conditions. The Canadian panels have received better reviews than the Chinese ones. The inverter (thingie that converts the DC generated into AC your home system can grok) may provide features such as isolating panels from one another to allow them to work even when one is shaded or providing a Web interface for performance monitoring.

Experiences Shared

SolarCity Cash Purchase
-----------------------
(22) Yingli 245 Poly Panels
PowerOne PVI Central Inverter
5.39 kW DC
9.039 first-year production
$3.31 net/kW
Estimated $0.102 net/kWh/20 years (guaranteed at $0.0695/kWh*)

* that means they'll give a refund of that much

Local installer Sunpower Cash Purchase
-----------------------
(16) Sunpower X21 345 Mono Panels
Sunpower 5000 (branded PowerOne) Central Inverter
5.52 kW DC
8,891 first-year production
$3.97 net/kW
Estimated $0.123 net/kWh/20 years (warrantied not to exceed $0.145/actual received kWh)

Useful Links

http://energycenter.org/index.php/incentive-programs/california-solar-in...
https://www.sdge.com/environment/ev-rates

We leased our 21 panel solar electric system from Sun Run & paid the lease in one $18K shot. Didn't make much sense to trade a $200/mo electric bill for a $200/mo lease payment.
Very happy with the results prior to installing our 250V plug to charge our Model S.
Went with Sun Run because they were featured @ Costco, a very particular company from whom to get vetted.

I'm in the process of installing a 5.17kW system here in Norway. Since electricity is quite cheap here and the system will only generate 4200-4500kWh per year due to latitude I have to do it as inexpensive as possible. So far it looks like the cost will be about $1.34 per watt (a bit under $7000 for the whole system). This is including 25% VAT.

To get the cost this far down I am doing nearly everything myself (except hooking the inverter up to the grid) and also importing panels and mounting equipment myself (the inverter is sourced locally). I went with ToPoint 235W panels from ACOsolar.com, the price was $0.52 per watt for a pallet.


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