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Solar panel advice

Have also posted in Southern Cal section but am looking for some guidance as regards solar panels. Looks like there are many traps and pitfalls in this industry.

Trying to get some quotes in Southern California. Need a largish system base on driving my MS 100 miles a day. Bill now $400 per month with $150 from the MS. Suspect I need a 13 + kw system. Solar city tends to push leases but to me it sees that I will need to let them drill my roof to just save $50 per month. At the end of 20 years you do not own your panels. Leases probably don't increase the value of you property and you may have issues transferring the lease. A purchase seems to increase the value of the property and may last up to 40 years. The quotes I am getting from Solar City are $62,000 down to $32,000 after rebates. Sunpower claim higher quality panels and their quote is similar for an 11.7 kw system. Too me theses quotes seem on the high side but would appreciate any input and pros and cons of various systems.

$62k for how many kW system? If for 13kW, it is in the right ballpark, maybe a bit high. Bear in mind that while the panels may last 40 years, their output does degrade, and at some point, it makes more economic sense to replace them. But in general, solar makes a lot of economic sense for SoCal.

I am paying $28k before incentives for a 5.2 kW system in NoCal using SunPower panels. There was not much comparison, because most companies do not install on a steel tile roof, this company had done several in my neighbourhood using the correct hooks from Germany. I checked the basic component prices and ended at about $20k - so $8k for the electrical work sounded more then fair to me ( panel upgrade, solar wiring plus extra 14-50 connector with 100 ft of #3 wire ).
I have a small roof and so I figured high efficency panels makes most sense here. In 20 years I expect 30% efficent panels to be available so an upgrade could make sense.

Look for smaller companies in your area with good track record to get a better price. Here in the San Francisco bay area, I and several of my friends have used http://www.mothernaturesolar.com/ and we are very happy with it. The price (before rebate) are on the website. For a 13kw installation, it would be less than 44k before rebate.

I have 3 kw system ( Sunpower) here in Australia - small roof. At best I have only ever seen 2.7 kw instantaneous, but that is really at an ideal time of day and usually much lower. I face the correct direction. My installation uses quality components. Very short cable runs. So, bear this in mind when sizing a system. I am not using a solar tracker which likely would give better results.

Thanks guys. I am assuming that none of you recommend leasing. I am committed to being green but my wife is more concerned about the financial side. As it takes somewhere from 6-8 years to regain your investment if we end up selling our home after 4-5 years would it have been a mistake to purchase or is the investment likely to be recouped in the home resale.

Leasing is not an option in my opinion. We had SunPower panels installed giving us a 10.7 kWh system. It cost us about 51g but with all the credits from the electric company, the Feds and the state our total oop is about 17,000g. It increased the value of the house by about 34g. Plus we have a 15 year grace period where the county won't re-assess the property tax due to the install of the panels.

I see it from a different angle... the solar more then covers my driving needs and that means I have pre paid for the next 20+ years of my personal transportation. We spend $5k-$6k a year on gas... in 4 years the solar is paid for. Using the electricity saving it takes longer more like 8-10 years.

If you are on a TOU and tiered rate, and install just enough panels to get yourself to the lowest tier, the return on investment will be 20-25%. That is very good. If you install panels to cover ALL of your usage then the return will be slightly lower, but still quite good.

Solar City and other larger companies tend to recommend larger system than you need in order to guarantee the generated energy. So if you haven't done the analysis yourself, it maybe worth putting some rough numbers on a spreadsheet with your usage pattern and find out whether you really need a 13kw system. In my case, I found that the smaller companies were closer to my own analysis than the two large companies I got proposals from.

Surprisingly, there was one other benefit to working with a small company. They tried to find the best place for every single panel to get the best output throughout the year. Larger companies tend to slap them all in a row. You can see this for yourself if you look at the publicly viewable systems on, say, http://enphaseenergy.com You will notice that smaller installers have all kinds of crazy layouts compared to the ones installed by bigger companies.

I have a 2 tiered system. Tier 1 is 11c and is about 530 kWh over 2 months.. Tier 2 is 16c. Solar city' estimated 13 kWh to cover 99 % of my electric bill. Sun Power quoted me for an 11.75 kW system. The quotes for their system was similar to what Solar City quoted me for 13. Sun Power panels are more aesthetic and they claim "more efficiency" I suspect they are all actually underestimating my bill as we only have MS data from when I got my MS in April till my end July bimonthly electric bill. My estimate is my charging has increased the bill $300 every 2 months (150 per month). A question about going with a smaller company. Are there any issues with warranty and after sales service.

@rgbliny. What state are you in because Sunpower quoted us 62,000 for the 11.75 kw system and with rebates only took it down to 31,000

@keist. What happens if you move. The consensus seems to be that it may not increase the value of your home and you take a loss.

@SCCRENDO - everybody has a different point of view... just tought I throw my point of view in there.
There is very little chance that I will move, not too long until retirement and house is perfect size, location, etc. But it could happen - two years ago we found a great property in the neighbourhood but we were a day late, it just sold. That would have been a $700k transaction... in that case I would not worry too much about the $20k solar investment.

@SCCRENDO The equipment warranty, usually 25 years, is from the manufacturer, so that is independent of the installer. Installation usually has 10 year warranty. That duration was required by California Solar Initiative. Yes, one has to do due diligence and find an installer with a relatively good track record. Yelp and online forums helped me with that. Interestingly, larger companies sometimes outsource their after sales work to smaller companies probably because the margins are lower. I haven't heard of many after installation issues; that is comforting.

I have been thinking about this more lately. I never thought about it before getting the Model S. We will probably also get a Model X next year when it comes out (I need to test drive it first).

I also live in Southern California (San Diego). I'm curious at the explosion of the smaller mom and pop players out there. It seems like here in the UT San Diego newspaper there are tons and tons of advertisements all from different smaller players. How are all of these companies able to coexist?

I'm curious, do they do the work themselves or just subcontract it out? It doesn't seem like there would be enough demand for all of the various entities and players out there.

I guess I'll start calling some to crunch some numbers.

@SCCRENDO Is your day time usage less compared to night time? If yes, the time of use rate plan, if available, works great with solar. You can sell high during the day and buy low at night.

I am in the city of Anaheim and there is no time of day rate plan. Same price all day and night.

Inverter replacement usually in year 10-14. Factor that in.

Adding solar to your home will increase it's value. The increase, or the national average for the increase, can be calculated.

Overview: Whoever purchases your home will roll the increased cost into the mortgaged. The mortgage is paid for by the savings. On average people are willing to increase the mortgage by 80% of the savings. So yes, the increased value of your homes, due to solar, is tied to the local cost of electricity and interest rates. Eventually the age of your system will be a factor, but today the system is new.

The formula is, "Increased value" = ("Savings" * .8) / "mortgage rates". Note: if mortgage rates is 4% you use .04 in the formula.

Nobody thinks of pricing the value of a home like this (or at least not consciously). But when you analyze what you do, this is what pops out. The 20% discount can be thought of as the compensation the buyer wants for the risk of purchasing a PV system.

@earlyretirement - installing a PV system isn't particularly hard, so I'm not surprised there are a lot of small installers out there. However, like any construction project expected to last 25+ years, there are a whole host of good practices that should be followed. You can slap together a system that'll work day 1, but the next windstorm will rip it up. Or a bad connection could lead to an electrical fault in five years. So picking an installer that has been around for a while is always a good idea.

I leased. In our circumstances, it made sense and I like the idea of not having to worry about the maintenance, upkeep, etc. If anything goes south, it's Solar City's problem to deal with--I have neither the time nor the inclination.

O

@SCCRENDO With no TOU plan and the rate of $0.16/kwh, the return on solar panel investment, just for the car, would be 7-8%. That is not bad but definitely not a clear cut choice.

If it is any consolation, with $0.16/kwh rate, electricity cost would be less than half the cost for an equivalent gasoline car. I am sure you already knew that.

@ shop. Thanks for that comment. Yeah, I figured it was like that. Still, it just seems like everyone and their brother is jumping into solar right now. It will be interesting to see who survives and which players actually make money on this.

I even see some companies offering $50 gift cards or 2 Chargers tickets (if your monthly bill is over $200) just to get a free estimate/quote.

I don't use much electricity besides the summer months and I never plan on selling my house. Even when the kids are older and we are empty nesters, I just plan to rent the house out. So I don't have to worry about any potential problem o resale value on the house.

Bottom line is I just want a good ROI and to save money and helping out the environment at the same time helps but isn't my main priority. Someone else mentioned, primarily using solar to stay out of tier 3 and 4. That seems to make sense providing the costs aren't too high. I guess I'll have to do some due diligence and see what the ROI is like.

To do a back of the napkin calculation, my calcs show that solar costs about $.10 to $.11 per kWh over the lifetime of the equipment. Now, that is in today's dollars. ie. you spend $30K or whatever capital today, and your electric rates will be fixed at that kWh figure. Meanwhile, utility electric rates go up around 5% to 6% per year.

So ... for a quick and dirty calculation, add up all your electric bills over last year (only if your usage changes a lot through the year, otherwise use one month), and add up all the kWh usage. Divide one number by the other to figure out your average cost per kWh.

For me, now, under the cheaper TOU-2 rate, it is still $0.19/kWh that I pay the utility on average. And that price will go up by 5% a year. So solar is a no brainer for me, and for most people in California.

That's why solar is such a hot industry right now.

SCCRENDO: we are in NY. panels warranted for 25 yrs.. The inverter is for 10 yrs. I believe the SunPower panels are one of the highest efficiencies on the market. As rates go up solar panels become more attractive to potential buyers. Our utility kicked back 16,500. Feds will be about 10,000 and state is around 5,000. Plus we got the solar panels for the Tesla. So add another 15,000 kickback on the Teslas (we have 2). And another grand that the utility is rebating ($500/each) for an EV purchase in 2013. So the total cost of the Panels (taking into the credits on the EVs is about $4000+.

FWIW I went with SolarCity but did the Power Purchase Agreement. No $$ down, no lease, no loan. They install, maintain, repair, monitor and guarantee the system for 20 years. I just buy my power from them at a 50% discount from PG&E. They size the system properly (generate 70% of your power and 90% of your bill). They do not oversell hardware. Yes, I could do lots of homework, get competitive bids, check out financing, figure out life cycle costs and repairs (inverters), etc. I decided that SC could make some money off of me and I would enjoy the experience. YMMV.

@ shop. Once again. Thanks. Your information is super helpful. Yes, that is how I was going to do a back of the envelope type estimate. I guess my data will be more useful once I have at least a few months of charging history with the Model S.

So I'll keep detailed track of my data a few months for both my regular meter along with the 2nd dedicated EV meter I got installed. I do find it useful that I can see exactly how many kWh I use each night for the car with the dedicated meter.

@ JPPTM. Did you just go with Solar City without any other estimates at all? I was also thinking of calling them and hearing their pitch. They called me right after I bought the car but I told them I wasn't interested but will at least hear what they have to say.

JPPTM or anyone,

Would you give more details on the Power Purchase Agreement please? How is the risk apportioned? Do they contract to sell you the power at a given discount to the utility? What happens if, say, an inverter fails, the conversion efficiency falls faster than predicted, the sun shines less than predicted, or a neighbor's tree grows to obscure the tree?

I expect Solarcity will replace a failed inverter, but do you pay full price until they do? Who bears therisk in the other cases?

This is not idle speculation on my part. I'm having a house substantially remodelled and plan on installing PV panels for electricity and solar-thermal for pool and outdoor shower.

Solar City tries to push you to lease. They have three different leasing option. 2 are monthly payments. One is stable and the second fixed. My electricity rates are frankly lower than most so savings are less. What bothered me is while they maintain everything you pay them a monthly fee and it seemed like I was only saving $50 per month initially with promises of savings down the line based on a hypothetical 4 % per year inflation rate. It am not excited about them drilling my roof and claiming all the rebates for themselves for essentially minimal savings. They are now pushing me to do a prepaid 20 year lease which will work out 30 % cheaper than outright purchase even after all my rebates at face value. But remember they will own the panels not you at 20 years. My extensive research over the past 48 hours suggest that purchase is the way to go over lease for most for reasons that are well documented on the web and I can elaborate on if required. At this point I am shopping for the best price but will only do it if I get the 30% rebate from my city which is awarded in January on a lottery basis. If you want the power purchase agreement call Solar City, they have an army of salesman ready to sell it to you. They claim they bear full risk and do a good job because its not in their best interest to be sending ther trucks around doing repairs all day.

@Nu2ecar you get to use the electricity generated. If its more than you need it gets pumped back into the grid and you get credit for the months you don't generate sufficient for the panels. Some cities will actually pay you for the excess electricity however my city banks the credits and are good for a year. Their sales point is that they are your new utility but in fact they are charging a monthly fee to lease their panels.

@JPPTM what you are doing is in fact a lease because after 20 years if you don't lease again they come pick up their panels and don't necessarily return the roof to its previous condition. The big factor to me is if you move within the 20 years you need to convince the new owners to pick up the lease otherwise its your baby and may potentially negatively impact resale. Purchase is said to increase home value.

SCCRENDO- The fee Solar City charges is because their investors expect a return on their money. I think it boils down to the cost of money?

To me, leasing seems to be a better approach. Here's why:
Solar panel technology will surely improve in 20 years, so you'd probably want to replace an old system anyway.
If weather, other environmental conditions or some malfunction affect the proper operation of your PV system, the company who is leasing you the system has to repair it.

I usually like to own things, but I am closer to leasing a PV system than owning one.

Solar installers are making a killing right now because panel prices have dropped sharply in the last few years and they have *NOT* passed along most of the savings.

I installed my 8.3kW system myself for about $10K out of pocket after the federal tax credit and the CA rebate (about $1.20/W). This is 32 panels - a mix of Trina and ReneSola - with EnPhase M215 micro-inverters and ProSolar racking. The lowest quote I had from an installer was about $40K.

The labor involved - including getting the permits and dealing with PG&E - was 24 hours of my time spread over two weekends and a few friends helping on a Saturday morning to actually lift the panels into place. I'm sure an experienced installer would have done it in less time, and I'm sure they get lower prices on the components than I did.


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