One last look before we sign for Sunpower system

[Ian S]

Does your 6-7 Year ROI calculation already incorporate the $6,204 your 12,662 could earn in those 7 years?

That's not really an appropriate calculation for looking at solar as an investment. A far more meaningful approach is to consider that the net cost after tax credits/incentives of your solar system is like a long term "loan" you are providing to someone whose payments are guaranteed to be made for the life of the loan. Because a solar system will last for 25 years, make that the term of the "loan." Your monthly savings on your electric bill become the monthly "payments" back to you on the loan and will include both principal and interest. Now you can plug the numbers into a loan calculation program and back out the effective interest rate on the loan. BTW that interest will be tax free to you. Ultimately, the "loan" may be more complicated and you may need to account for maintenance costs and decline in production over the years but in California and many other places, these are almost certain to be offset by increased savings due to rate hikes so consider the initial calculation to be a conservative estimate of your investment's return.

[frizzlefry]

Sorry, I was referring to both of you. I just took your "Net Cost" out of your System Prices, to determine the amount of money you could have invested in other vehicle, i.e.:

37100 - 24,438 = 12662

42500 - 28,517 = 13983

So a rough average of those was $13K. Listening to the admonitions of Sunking and others here, your calculated ROI would have to include the interest you could have earned on that $13K over time if it weren't tied up in your system (with 5-10% as reasonable estimates, often using 7%).

Does your 6-7 Year ROI calculation already incorporate the $6,204 your 12,662 could earn in those 7 years?

No it does not. Just a rough guess, but 1-2yrs if you want to include the interest/gain over that time frame. I get it that you can throw assumptions left and right, however you wish you want to do it to make it look "right." We can take it a step further and take the extra $300+/mo saved and invest that a the same 7% assumptions. This can go on forever. But there is the downside risk of that $13k investment that most I see do not take into consideration.

In the end, each person has their own reasons of why they want to go solar and which option they go with. Sunpower PPAs don't make sense anymore. And without being able to take the tax credit, the differential between lease and purchase isn't all that much (depends on which company). From the numbers I've been given, the conservative and liberal projections I've analyzed, the purchase makes sense for us.

[cyph]

Fair enough, although I'm pretty sure you're wrong about one thing -- that $13K is their net outlay AFTER all incentives including "federal" come back.

Thanks for the info and viewpoint (seriously).

I never said 13k is their net outlay. I said it wasn't factored into their pay back period. The payback was cost - federal rebate = net cost. 35 - 13 = 25 or so net cost which is then factored into payback over 6-7 years.

[Noob]

Break even is 6-7 years to recoup the cost minus the tax rebate. The 13k was not part of the calculation because it will be returned by the fed. Keep in mind that you can plug in numbers to make anything look right. If you want to play with your calculations by using opportunity cost, then you should also consider a 5-6 percent in annual rates increase factored in to calculate savings.

In the end, I am going for Solar so that I don't have to follow my kids telling them to turn off their lights as well as blasting my AC to 75 in the summer months. What is the opportunity cost for that? You have to consider the intangibles as well. Not everything in life has a ROI. This one does.

Fair enough, although I'm pretty sure you're wrong about one thing -- that $13K is their net outlay AFTER all incentives including "federal" come back.

Thanks for the info and viewpoint (seriously).

[cyph]

Break even is 6-7 years to recoup the cost minus the tax rebate. The 13k was not part of the calculation because it will be returned by the fed. Keep in mind that you can plug in numbers to make anything look right. If you want to play with your calculations by using opportunity cost, then you should also consider a 5-6 percent in annual rates increase factored in to calculate savings.

In the end, I am going for Solar so that I don't have to follow my kids telling them to turn off their lights as well as blasting my AC to 75 in the summer months. What is the opportunity cost for that? You have to consider the intangibles as well. Not everything in life has a ROI. This one does.

[Noob]

Why 7 years? They get that 13k back after one year.

I have no idea -- frizzlefry wrote above me that his ROI was 7 years, or possibly 6.

[cyph]

Why 7 years? They get that 13k back after one year.

[Noob]

Sorry, I was referring to both of you. I just took your "Net Cost" out of your System Prices, to determine the amount of money you could have invested in other vehicle, i.e.:

37100 - 24,438 = 12662

42500 - 28,517 = 13983

So a rough average of those was $13K. Listening to the admonitions of Sunking and others here, your calculated ROI would have to include the interest you could have earned on that $13K over time if it weren't tied up in your system (with 5-10% as reasonable estimates, often using 7%).

Does your 6-7 Year ROI calculation already incorporate the $6,204 your 12,662 could earn in those 7 years?

[frizzlefry]

Wow you still both ended up over $5/watt. Will you break even on this versus the interest that could have been earned on $13K, or was overall savings not the driving factor for you?

I don't know if you're referring to me, but my ROI is 7yrs based on 3% increase in SCE bill. Unfortunately, that's not the case since from last year, the tiers have adjusted down and we hit tier 3 and 4 earlier. I calculated a 7.5% increase in our rates if we used the same amount of power as last year. Given that change, ROI becomes 6yrs. We're due for another 5% increase next year in rates as well.

There are some other considerations for purchase. I get the tax credit which can offset additional tax liabilities. We're researching whether or not depreciation of the system can be taken into account. I work from home but there's an exemption in CA where there is a property tax exclusion for solar systems. Strange how some of the sellers out there (SunRun and several others) were anti-purchase because it would increase property taxes. FYI, that exclusion ends in 2016.

Once the sytem is in, we no longer have to worry about our AC usage during the hotter months. We have 6 zones with each thermostat programmed accordingly. Even with that, hit $475 in Aug last year.

[craeay]

Confused about your question

Wow you still both ended up over $5/watt. Will you break even on this versus the interest that could have been earned on $13K, or was overall savings not the driving factor for you?

I don't understand your question. What $13k are you referring to?

[Noob]

Wow you still both ended up over $5/watt. Will you break even on this versus the interest that could have been earned on $13K, or was overall savings not the driving factor for you?

[craeay]

Four Way Comparison

Panel: SunPower w/ MicroInv
Model: 240E-ACPV
KW: 8.64 kW
# panels: 36
Output: 12,623
Total Price: $50,700
Net Price: $34,206

Panel: Sunpower w/SMA8000
Model: X21-335
KW: 8.04kW
# panels: 24
Output: 12,029
Total Price: $42,500
Net Price: $28,517

Panel: Canadian Solar w/MicroInv
Model: CS6P-250M
KW: 9kW
# panels: 36
Output: 13,413
Total Price: $38,600
Net Price: $25,663

Panel: Canadian Solar w/SMA 8000
Model: CS6P-250M
KW: 9kW
# panels: 36
Output: 13,413
Total Price: $35,150
Net Price: $23,248

Do you mind telling me what you had installed and if my numbers are similar to your numbers? Thanks!

[Naptown]

I had 5 companies bid the project. I specified the new X21 series panel. Negligible price increase compared to E20. Suprising tidbit about the E20, no more black backing for future production.

Location Southern CA (Orange County)
Utility = SCE

(24) Sunpower X21-345 Panels - 3 strings of 8 panels
(1) SMA 8000US inverter
System Cost = $37,100
CSI Rebate = $1474
Out of Pocket = $35,626
Tax Credit = $10,687.80
Incentive = $500 rebate after install complete
Net Cost = $24,438.20


Rating = 7376 kWh
First yr production = 12,785 kWh
Current annual usage = 14,200 kWh

Gross Cost/kWh = $4.48
Net Cost/kWh = $2.95

This is an all cash purchase. No financing. Just curious if any one has any comments or if I'm missing something here. 10% less than the next closest bid.

You did well with that one.

[cyph]

What was the quote difference between Canadian Solar panels vs Sunpower and SMA vs micro may I ask?

I have noticed that going with a smaller installer has been a much better experience than the bigger one so far because they try that much harder. Clean Solar wanted to charge me extra for renting a porta-potty, permits, and extra for putting the conduit through my attic totaling almost 1k on top of the quoted cost. All of this was included for me with my chosen installer. The install will be finished today and I'm pretty happy with it. No conduits running to the side of the house and no panels can be seen from the front. All hidden.

[craeay]

I'm not sure what the rules are either...

I received bids from Solar City, Xero Solar and Real Goods Solar.

The quote I provided earlier is from Xero Solar. They gave me four quotes, two for SunPower, one with micro inverters and one with the SMA 8000. The other two quotes were for Canadian Solar panels; one with micro inverters and one with the SMA 8000.

Nice guy. But I think he's relatively new to the business.

Real Goods Solar's SunPowers were a joke... They wanted a 20 year PPA for over $47,000. (diff stats... but crummy deal, nonetheless)