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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

It depends on your individual situation. My house in Reno is of recent vintage (1995) and set partially into a hill, so that much of the lower story is underground. Consequently it uses fairly little energy-- our average electric bill is < $100/month, although it can spike to $150 per month for a few months in the summer.

Solar City spec'd a $40,000, 4KW PV system for me. (I had no choice for the capacity; apparently, they're required to spec the system based on your last year's electric bills). So the payoff time (33 years) easily exceeded the guaranteed service life of the PV cells, assuming that the PV would completely offset my electrical use.

The salesman was obviously prepared when I pointed this out and cranked out a spreadsheet showing various tax credits, improved resale value of the home, and so forth. Perhaps tellingly, he refused to give me a copy...

The thing I find interesting is that I have two friends who went PV about a decade ago. In both cases their costs were in the $35K-$40K range. I'm told that in the last decade the price of PV cells has plummeted. So why does it still cost $40K to have a PV system installed?

This is an interesting evolution of this thread. I too have been wondering about the high cost of solar. That is really compounded when I hear about our European friends that are seeing $1.50-$2.00/watt costs. If we all accept that the panels are now running $1.00/watt to manufacture, why is there such a markup. I am okay with someone making money to do the work, but it needs to be fair and in-line with a reasonable margin.

This reminds me of when granite countertops were new. I just hope we don't have to wait to see it come down.

I still would like to hear the name of the San Diego installer that was closer to $4.00 per watt. I want to call them and get a quote.

I got a quote the other day and I was at $6.55 net after tax credits, which seems really high.

Thanks,

-jason

Dramsey, that price is far to high. In Southern California the going price is ~$4 per watt, so a 4 kw system should cost ~$16,000. And that is before any rebates etc. Your quoted price is $10 per watt; that is a total rip-off. Shop around, you should be able to do much better than this.

If you want to buy the system, go with a company that does not lease. I think Solar city etc make more profit by leasing and therefore have little incentive to give you the best deal on a purchase. I went with a smaller installer that did not lease and bargained down to $3.85 per watt (before rebates etc). They did an excellent job and have no concerns 1 year later.

@mdemetri:

Who did you use in SoCal? That price is where I really want to get to. You happy with your installation?

-jason

My CSI incentive was $200/kW for a total of $855.00 on a 4.55kW system with an eligible project cost of $24,039. This is a savings of 3.5% off the price of our solar system. It would be great if the CSI could be sustained, but it's not a critical deal maker for solar. If you own a Tesla and have a roof, going solar will provide substantial economic benefits - and will make you feel good too. Get the biggest system you can fit on your roof!

@ jasonsc Here is the local contractor we used. I think it's important to get three bids. They were a good fit for our needs. PV as well as some electrical needed for the Nema 14-50.

Milholland Electric Inc
9169 Chesapeake Dr
San Diego, CA 92123
858 541 1097
www.milhollandelectric.com
 Harry Berman

We had a good experience with them and their turn-around was very good. 6-8 weeks from signing contract to completion of installations.

I agree with mdemetri. Solar City does not have an incentive to give you a good deal on a purchase. We were surprised that Solar City was so high, but their goal is to lease and our goal was to buy.

Jackie.

jasonsc

I used Solar Source (details below); they are active in Orange County. Ask to speak with Jarrod. I cannot say enough about them, they were excellent and did a top notch job. I highly recommend them.

For those who are not sure about the size of the system they will need, I recommend using erring on the smaller side, use TOU and get microinverters from Enphase Energy. This way each panel has its own inverter, with the advantage being that you can easily add more panels later if you find that your system is to small for your needs. With a single inverter system, you will most likely need to get a new larger inverter if you want to to add more panels later, adding significant cost. The other advantage is that you can monitor each panel 24/7 online for power output (this service is provided free by Enphase). If a single panel/microinverter goes down you will know immediately and more importantly the rest of the system will keep on working. If a single large inverter breaks, the whole system shuts down.

Hope that helps.

Jarrod Osborne /Project Manager
562.852.5626 Office
800.852.5026 Toll Free/Fax
Email: jarrod@solarsourcepower.com
Visit Us Online! http://www.solarsourcepower.com

Please consider the environment before printing this email or attachments.

@Colasec

The $4 kw cost was pre-tax credit.

@Dramsey | JULY 14, 2013: Solar City spec'd a $40,000, 4KW PV system for me.

My Solar City system is a 32Kw system for $28,000. I wonder why your system is so expensive? For me, it will pay for itself after 5 years.

@ppape - what type/brand of panels did you get?

I've got a Sunpower quote for $5.18/kW, pre-tax credit, but I've having a hard time deciding if Sunpower is worth the ~$1/kW premium. What's your opinion?

@mdemetri, I hate to pop your bubble, but will not get "paid" as you suggest. SCE only "pays"...giving you money back at 3 or 4 cents per KWH. While technically any annual production over what you use is pure profit, it's not at the rate you suggest which is a bit misleading.

However, you do earn credits or "bank" as you suggest according to your TOU rates of producing and consumption. But when you reconcile annually, any KWH you have credits for will NOT be paid in dollars at TOU rates.

If you knew this already, sorry for repeating, but it can seem misleading to others.

As for the California solar initiative, it hardly anything anyway. The real initiative is the 30% fed tax credit.

The real benefit is cost reduction.

Phil and Jackie, I didn’t see your post until now. My wife and I would have loved to meet up with fellow Tesla owners.

We used Sungevity for a 8.1 kW AC (9.3 kW DC) system, in January:
- Cost: $ 2.48 / watt
- 20-year lease
- Guaranteed minimum energy production
- Full Service plan and monitoring
- They use a local installer (Milholland Electric) for the actual installation

Sungevity is a wonderful company and I definitely recommend them. The founder (Danny Kennedy) is a genuine environmental activist. I wanted the lease contract with a larger company.

This system produces slightly more than all of our power needs (including the Model S at 1500 miles/month).

Like @Andre-nl, we get about 1/3 full production on a rainy day, 1/2 on a cloudy day.

Based on our usage/production, we will break even in 3.5 years. After that, it’s 16.5 years of free electricity (thanks to the guaranteed minimum energy production and full service plan).

If you live in California, and think Solar is not a good investment, here’s something to consider. SDG&E is raising Tier-3 and 4 rates by 15-30% this year. All the solar estimates we got, assumed (conservatively) only 3.5% – 4% annual increase in power costs!

I did a solar installation back in 2003, when the state was paying $4000 per kW! (They paid even more than that in 2002.) One thing to consider when you think about "pure profit" from your system is that while the panels will probably work for a long time, the inverters probably won't. Today's inverters are better than the ones manufactured ten years ago, but you should treat any inverter that lasts beyond its warranty as living on borrowed time and figure the replacement cost into your total investment. If you are leasing the system, make sure you understand what is going to happen when the lease runs out and you are left with a bunch of equipment out of warranty. In most cases, when an inverter fails, it's dead. Some manufacturers will be able to take the old inverter in trade and give you a remanufactured one -- that might reduce your cost a bit. The solar company I used promised a 15-year payback. Replacing one inverter set that point back at least a year and I'm waiting for the other one to fail. The other thing I would advise is don't forget to look at your inverters regularly! I stopped looking at ours until I noticed our electric bill was much higher than it should have been. It had probably failed months earlier.

Having said all that, compare the 15-year payback I faced in 2003 to today's five-year payback. This is what we hope happens with electric cars within the next ten years. With solar, that future is basically here now, and it should be a no-brainer to put a system on your roof immediately.

bt77057, my bubble was burst when I called SCE the other day (I posted on this above). However, TOU is still a major advantage with solar and allows one to have a much smaller system to get to a net zero electrical bill.

ellcyc, excellent point. This provides another excellent reason why to get micro-inverters (see post above for other reasons). If a micro inverter fails, only one panel will stop working rather than the entire system. Moreover, with Enphase micro inverters you can monitor each inverter (and panel) separately on-line 24/7 and therefore will be able to catch a failure very quickly.


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