Colorado solar panel systems - cost of system & installation
I've read a number of threads on this site along with many solar panel system websites to determine if investing in a solar panel system for our home is a good idea and if we can afford buying and paying for installing a system.
First, about me:
* I live in Denver, CO which sees a massive amount of sunlight each year.
* My house roof is south facing seeing daylight almost the entire day.
* I'm looking to ditch our energy provider (xcel) as much as possible to be more environmentally-friendly.
* Ideas regarding "your money would work better as an investment in ..." aren't as important to me as I see brought up here.
* I've run through our bills for the last 2 years. Our last XCEL summer bill charged $0.124 per kwh and $0.1088 per kwh in the non-summer.
I first looked into leasing from SolarCity. With no money down, they promise a reduction of $18/month on a 20 year lease. It seems like the standard SolarCity contract from what i've read here -- they insure their system for the 20 years, install the inverter and internet connection for free, provide internet monitoring, and will replace any part of their system that fails over that 20 years for free. Of course, they collect all the rebates. I have yet to ask them what happens if they damage our roof when putting the system on, and haven't yet seen an official lease/contract, only a glossy estimate of how much we could save. I also haven't yet brought in competing estimates. (SolarCity is offering $1,000 applied to our leasing costs if we sign by the end of March, but i figure $1,000 isn't much in the grand scheme, so i'm looking for more options.)
After reading through many threads on this forum, especially a 22-page thread on "is this too good to be true? solarcity vs [another provider]", i understand that it's better to buy one's own system with cash in full. However, we don't have $25,000-or-so cash to put down on a system, even if the rebates could be $10k+.
* Does anyone have experience in Colorado of buying their own solar panel system and how much cash it costs up-front before rebates are applied? I've seen up-front estimates ranging from $15,000 to $35,000+ and can't get a handle on the actual up-front cost. If it's closer to $15,000, then we can afford this.
* When do the rebates arrive? Can these be applied when paying for the system up-front, or do they come later like rebates usually do?
* The main 2 rebates i know of are the 30% federal rebate (good through 2016) and one through XCEL. I haven't seen anything for Colorado or Denver city. Does anyone from Colorado, especially Denver, have experience with this? (I know Boulder has special incentives, but that doesn't apply.)
* If we install our own system connected to "the grid", how easy is it to "sell off" energy we don't use (on a monthly basis) ?
* Is there a good website online to find recommended contractors to install systems? How about one for leasing companies?
* There's a good chance that the cost is just too much to pay for this up-front. Does anyone in Colorado have an experience leasing with SolarCity or one of their competitors? I've read a few testimonials here online and it seems SolarCity does a good job, but the installation phase, depending on issues found, could take many months. Are there any other considerations?
I've scoured many threads here on these forums and couldn't find answers to my questions, specifically Colorado-based examples -- i apologize if i'm asking something that could be found in another thread. If i can provide any more information to help you help me, then let me know.. Thank you for your help.
Unfortunately, the one thing that's missing from your post is your annual consumption of electricity and a PV Watts estimate of your potential solar production on a monthly basis. That will determine how large a system you need and hence, how costly it would be. General rule of thumb is that costs before credits and rebates of a complete installation should run somewhere in the $4-$6/watt range. So a 5kW system should run around $20-30,000. It is usually not in your interest - and is often not permitted anyway - for you to install a system much larger in projected production than what your current annual usage is. Although your utility will buy back excess production once a year, it will usually be at a low wholesale rate.
The whole process of tracking your production and usage is all automated and instantaneous using a net-metering setup. First of all, all your solar production goes first to your home, then depending on your home's usage, you will either need more from the grid or you will have excess to send to the grid. The net meter keeps detailed track of when you are taking power from the grid and when you are putting it into the grid. It also tracks the time of day when all this happens if you are on a time of use plan. Your monthly bill will detail everything and if you have an excess of production for the month, that gets carried forward as a credit to the following month. Annually, you are paid for any remaining credit at a low rate as I indicated.
You normally have to wait for rebates and tax credits until after the installation. Some installers can provide low rate short term financing at least until you get your rebates back. I suppose you could also change your federal tax withholding rate to get early benefit from the 30% credit. You might also look into a prepaid lease. While you don't own the system, the upfront cost is about the same, often less than the cost to own even after rebates/tax credits are accounted for. Plus the lessor looks after all problems/repairs for the 20 year life of the lease. You get 20 years of solar production and an opportunity to buy it at the end of the lease or have it removed at no cost. The prepaid lease will almost certainly be a better deal than monthly lease payments plus there is no monthly payment to discourage a potential future buyer of your home. The major lessors don't normally require any payment until after the system is up and running. I'm not sure the same can be said for outright purchase which may require a partial payment before the installation - just like many other contracting jobs for home improvement.
Just to clarify, the prepaid lease upfront cost should be roughly the same (often less) than the purchase cost AFTER all rebates and incentives are subtracted. The reason for the low prepaid lease cost is that the lessor gets additional tax breaks that an individual buyer is not eligible for. If you're not crazy about a monthly lease payment and don't have the wherewithal to wait months to get the rebates and tax incentives after a purchase, then you should look into the prepaid lease.
Is this the info i was missing? This was from SolarCity's estimate.
Proposed System Size
6.13 kW DC
From your post Ian, does this mean i'll be generating more energy than i need? And i assume the cost would be closer to the $30k end, correct?
OK, that's what's predicted for your production but I still don't see a number for what you've actually been using on an annual basis or did Solar City size your system to produce exactly what your historical use has been - usually they size it less? Somewhere on SC's proposal they should have what your annual kWh usage has been or you can get it from your electric bills. If they are oversizing the system, you might be better off with a slightly smaller one since upfront outlay is a major issue.
Originally Posted by paladisiac
Full outright purchase before credits/rebates for that system size is going to be around $25-30K I suspect but since each market can vary greatly in pricing you really need more quotes from other solar installers. Solar City will probably give you a purchase quote but since they're are most interested in leasing you probably can do better with outright purchase from someone else. Solar City should be able to give you a competitive prepaid lease quote however. I have a prepaid lease from Sunpower; it was really a good deal (2011) due to high incentives here in Phoenix and I got most of the incentive benefits immediately without having the hassle of waiting for them.
Doing the math, it looks like our electrical consumption for the past year was 10368 kwh.
Originally Posted by Ian S
It seems this discussion community is a lot more informative for historical reading than interactive questions. I'm sorry to have bothered everyone.
Or maybe very few people on this site live in the Denver area and have installed a PV System. I wish I could help you but I live in Sunny Florida but have yet to install a grid tie system myself. Still playing with a smaller portable off grid system.
Originally Posted by paladisiac
Sorry for not responding. So it looks like your SC system is sized to come pretty close to zeroing out your bill which is fine. Based on your electric pricing, the system will save you maybe $1100 per year. Now you have to consider incentives available to you. SC ignored those because they get the benefit of them. What you need to do is get quotes for outright purchase from non-SC entities. However, your upfront costs for a 6.1 kW system are still going to be in the $30K neighborhood before all incentives. You may be able to get some 0% interest financing for some portion until such time as your rebates/incentives come in but that will be based on the vendor and probably be builtin to the cost. Here are Colorado incentives.
Originally Posted by paladisiac
So, check out other installers, check into prepaid lease costs; that can sometimes save some money. And, alternately, consider a smaller system. You don't need to zero out your electric bill to benefit from solar e.g., my system only offsets about 65% of my kWh usage but well over half of that reduction is at peak hours in the summer when the cost/kWh is close to $.25.
Thank you for your response.
Originally Posted by Ian S
We've concluded that we can't afford $20-$35k for a new system at this time, nor do we have the money for a pre-paid lease. That leaves us with some form of lease from one of the major solar providers.
Question: do we miss out from all of the tax incentives that we would qualify for if we bought the system ourselves? Specifically, i'm wondering about the property tax incentives, as they seem to be addressing having an ongoing renewable energy source as part of our house versus the "one-time" cost incentives.
It doesn't seem like anyone in these forums from Colorado has went through this, so it's not surprising if no one knows for sure. I'm just wondering how that would work come tax time 2014.
Thanks for your help!