One last look before we sign for Sunpower system

[bobfromnj]

Judging by what they tell me here it seems that reasonable prices run somewhere between $3/watt on the low end and $5-$6/watt on the high end. These are "all-in" prices for system, delivery, parts, labor, permits, fees, and (I think) tax. Please keep in mind that, as far as I understand, these are meant to be prices BEFORE any government incentives, tax rebates, or other discounts. The post-discount price/watt is often close to half the original price/watt

The expected $/watt depends on the equipment chosen, regulations, and the market in your area. I think in the northeast we're stuck on the higher side of things, which has given me pause.

[Please keep in mind I'm talking out my ass based only on what I've read here in the last few weeks.]

I live in the Northeast and bought my lease a year in a half ago for $21,000. for a 6.27 kW system. If I did my math right that's about $ 3.35 per watt.

[Lomag]

I live in the Northeast and bought my lease a year in a half ago for $21,000. for a 6.27 kW system. If I did my math right that's about $ 3.35 per watt.

So if you leased, you have to add back the 30% federal tax credit that the leasing company received to compare apples to apples. So your system cost $30,000 before tax credits which is about $4.78/watt. Still a good deal for NJ I think between $4-5/watt.

Personally, I paid $34,531 to own my 7.19 kw DC Sunpower system (22 x E20 327 watt panels) last June. That works out to $4.80/watt. Sunpower is what many would call top of the line. Panels from other brands should be cheaper however with leasing you are getting the benefit of a 20 year full system warranty whereas I only have a 10 year full system warranty from the installer (if they last that long) and the 25 year Sunpower warranty on the panel output. The extra warranty should add some value to a lease I would imagine.

[bobfromnj]

You are correct, but...

"So if you leased, you have to add back the 30% federal tax credit that the leasing company received to compare apples to apples"

But...I still get the SRECS for the next 15 years. Yes, I know they are only worth around $ 100.00 but I produce 8 of them a year and my total electric bill for 2012 was $ 0. Still a pretty good deal.
Bob

[frizzlefry]

"So if you leased, you have to add back the 30% federal tax credit that the leasing company received to compare apples to apples"

But...I still get the SRECS for the next 15 years. Yes, I know they are only worth around $ 100.00 but I produce 8 of them a year and my total electric bill for 2012 was $ 0. Still a pretty good deal.
Bob

I'm still waiting to see what happens with SREC/TREC in CA.

[Noob]

"So if you leased, you have to add back the 30% federal tax credit that the leasing company received to compare apples to apples"

But...I still get the SRECS for the next 15 years. Yes, I know they are only worth around $ 100.00 but I produce 8 of them a year and my total electric bill for 2012 was $ 0. Still a pretty good deal.
Bob

Wait, was that $21,000 out-of-pocket to pre-pay your lease? Yikes. I could probably never afford doing that. Not to mention the "what would that money earn in stocks" thing.

[bobfromnj]

Wait, was that $21,000 out-of-pocket to pre-pay your lease? Yikes. I could probably never afford doing that. Not to mention the "what would that money earn in stocks" thing.

The problem with your thinking is that you don’t know anything about my personal life. You sound like a younger person then me, since I am a “senior”. Look at it this way...we are about ready to retire, made an investment in a Solar System that besides the items previously mentioned, my electric bill “hopefully” will be $ 0.00 for the next twenty years. Hopefully I will live that long.

My average electric bill was $ 135.00 per month ($ 1,620. per year) before the PV system. So again do the math...will I make as much if I put that money in the market? Also, knowing in retirement that I have one less bill to pay...my electric. I collect my SRECS for 15 years, have a 20 year warranty on the system, it’s a win win as far as I am concerned.

But again we are all different.

Thanks for your input.
Good luck

[SunEagle]

The problem with your thinking is that you don’t know anything about my personal life. You sound like a younger person then me, since I am a “senior”. Look at it this way...we are about ready to retire, made an investment in a Solar System that besides the items previously mentioned, my electric bill “hopefully” will be $ 0.00 for the next twenty years. Hopefully I will live that long.

My average electric bill was $ 135.00 per month ($ 1,620. per year) before the PV system. So again do the math...will I make as much if I put that money in the market? Also, knowing in retirement that I have one less bill to pay...my electric. I collect my SRECS for 15 years, have a 20 year warranty on the system, it’s a win win as far as I am concerned.

But again we are all different.

Thanks for your input.
Good luck

It looks like you have it planned out for yourself. As you indicated each person has to understand what their priorities are.

You also have to understand that for some of us eliminating $135 / mth is not a big priority and not worth spending thousands up front to eliminate it.

I just had a discussion with my sister in law who went out and purchased a $20,000 economy car to save about $125/mth in gas. She didn't get rid of her bigger car so has to still pay for insurance and some maintenance on it as well as the new car. At the $20,000 plus insurance, even if she saved $200 per month it would take her over 10 years to break even.

This was acceptable to her but I wouldn't agree for me. I would have put that $20 grand into an interest bearing account and drawn the cash needed each month to pay my gas bill. The balance would also be there for a rainy day if I needed a lump of cash to pay for something critical.

To each their own i guess. At least on the positive side you are happy with your PV system.

[Lomag]

This was acceptable to her but I wouldn't agree for me. I would have put that $20 grand into an interest bearing account and drawn the cash needed each month to pay my gas bill. The balance would also be there for a rainy day if I needed a lump of cash to pay for something critical.

I think that for most people buying a solar panel system upfront, coming up with the cash is not a major problem. Essentially, it's a small part of a larger investment mix. Like Bob said, he spent $21,000 and is saving $1600/yr + collecting srec's (another ~$800/yr), so $2400/yr which is TAX FREE income on that $21,000 or about 11.5%. Keyword, that income being tax free. From a taxable investment, you'd have to make about $3700/yr on that $21,000 or almost 18% per year to get the same return. Good luck making 18% or even the original 11.5% now-a-days. Of course you never get your initial principle back as you own or have pre-paid the system, but still well worth it as it gives you the freedom of one less bill to pay per month.

Also, it's a great feeling being able to careless if electric rates rise or fall, and most likely rise they will, probably will double over the next 20 years, who knows. Being able to turn on the A/C without worrying about "what it will do to the bill" etc.. a small slice of a little bit more freedom and less worry. But as I mentioned, this would be part of a larger investment mix. If you're going to sink your entire life savings into a solar system or have to take out a loan, then you really have to think about it and each situation is different. But as Sunking would say, if you have the cash, might as well let the tax payer subsidize a solar system for you.

[SunEagle]

I think that for most people buying a solar panel system upfront, coming up with the cash is not a major problem. Essentially, it's a small part of a larger investment mix. Like Bob said, he spent $21,000 and is saving $1600/yr + collecting srec's (another ~$800/yr), so $2400/yr which is TAX FREE income on that $21,000 or about 11.5%. Keyword, that income being tax free. From a taxable investment, you'd have to make about $3700/yr on that $21,000 or almost 18% per year to get the same return. Good luck making 18% or even the original 11.5% now-a-days. Of course you never get your initial principle back as you own or have pre-paid the system, but still well worth it as it gives you the freedom of one less bill to pay per month.

Also, it's a great feeling being able to careless if electric rates rise or fall, and most likely rise they will, probably will double over the next 20 years, who knows. Being able to turn on the A/C without worrying about "what it will do to the bill" etc.. a small slice of a little bit more freedom and less worry. But as I mentioned, this would be part of a larger investment mix. If you're going to sink your entire life savings into a solar system or have to take out a loan, then you really have to think about it and each situation is different. But as Sunking would say, if you have the cash, might as well let the tax payer subsidize a solar system for you.

Well the $1600 is not income it is really cost avoidance but I doubt his bill will really go to zero due to meter fees and taxes. I am unfamiliar with srec's but I can understand if getting an additional $800 in your pocket it would be worth thinking about the solar investment.

As for the electric rates doubling over the next 20 years. I would say that will only happen if we shut down all of the nuclear and low cost base generating plants and go over to high cost renewable generation.

Again it is all up to how you look at it. I can't justify a home solar system (yet) but maybe some day.

[Lomag]

Cost avoidance or income? Same thing. You're saving those hard earned post-tax dollars to spend on other stuff besides your electric bill. Ideally you'd be investing those dollars you are saving but so far we've been spending them to be honest. It's like the idiots that take out loans from their 401k only to have to re-pay the loan with interest and using post-tax dollars when it was originally contributed with pre-tax dollars. You don't get a tax deduction for putting the money back in after taking out a loan. Being double taxed in a way. But that's another story.

I guess I'm from the same school of thought like Bob. I've had my system since June last year. You are right, my bills are not $0. They are $2.20 (the customer fee), but that's basically zero eh?. Then, at the end of my anniversary year which I set to March, any banked kwh credits I have (over-production from the year) are credited to me at the wholesale rate which I think is $0.05/kwh or so. If there are 1,000 kwh banked, that's a $50 cash credit to our electric bill that more than takes care of the $2.20/mo customer fee for the rest of the year and then the bill is truly zero. Then next year the process repeats itself. My system has overproduced each month by 100-150 kwh from the estimates I was given so I'm confident that there will be over-production. Although, we have young kids who soon will suck up that excess I'm sure, lol

[SunEagle]

Cost avoidance or income? Same thing. You're saving those hard earned post-tax dollars to spend on other stuff besides your electric bill. Ideally you'd be investing those dollars you are saving but so far we've been spending them to be honest. It's like the idiots that take out loans from their 401k only to have to re-pay the loan with interest and using post-tax dollars when it was originally contributed with pre-tax dollars. You don't get a tax deduction for putting the money back in after taking out a loan. Being double taxed in a way. But that's another story.

I guess I'm from the same school of thought like Bob. I've had my system since June last year. You are right, my bills are not $0. They are $2.20 (the customer fee), but that's basically zero eh?. Then, at the end of my anniversary year which I set to March, any banked kwh credits I have (over-production from the year) are credited to me at the wholesale rate which I think is $0.05/kwh or so. If there are 1,000 kwh banked, that's a $50 cash credit to our electric bill that more than takes care of the $2.20/mo customer fee for the rest of the year and then the bill is truly zero. Then next year the process repeats itself. My system has overproduced each month by 100-150 kwh from the estimates I was given so I'm confident that there will be over-production. Although, we have young kids who soon will suck up that excess I'm sure, lol

Amen on the kids. You will be running around telling them to turn off the lights and tv and and and.

I am glad your system is working for you. I am partially jealous since the cost and payback for one where I live does not equate now but maybe some day. Right now my total electric bill cost is about $.135/kWh which is up from $0.115/kWh back in 2008. My big saving is about $250 / month since 2010 when I installed a solar water heating system and reduced my connected lighting load by about 1800 watts converting to LED and CLF type lamps. So I understand about investing in solar I just can't justify a pv system right now.

[cyph]

Amen on the kids. You will be running around telling them to turn off the lights and tv and and and.

I am glad your system is working for you. I am partially jealous since the cost and payback for one where I live does not equate now but maybe some day. Right now my total electric bill cost is about $.135/kWh which is up from $0.115/kWh back in 2008. My big saving is about $250 / month since 2010 when I installed a solar water heating system and reduced my connected lighting load by about 1800 watts converting to LED and CLF type lamps. So I understand about investing in solar I just can't justify a pv system right now.

Have you looked into PPA? No cost other than lending them your roof. You save immediately. Although I'm not sure if SolarCity even services Florida.

[Noob]

I think that for most people buying a solar panel system upfront, coming up with the cash is not a major problem. Essentially, it's a small part of a larger investment mix. Like Bob said, he spent $21,000 and is saving $1600/yr + collecting srec's (another ~$800/yr), so $2400/yr which is TAX FREE income on that $21,000 or about 11.5%. Keyword, that income being tax free. From a taxable investment, you'd have to make about $3700/yr on that $21,000 or almost 18% per year to get the same return. Good luck making 18% or even the original 11.5% now-a-days. Of course you never get your initial principle back as you own or have pre-paid the system, but still well worth it as it gives you the freedom of one less bill to pay per month.

Also, it's a great feeling being able to careless if electric rates rise or fall, and most likely rise they will, probably will double over the next 20 years, who knows. Being able to turn on the A/C without worrying about "what it will do to the bill" etc.. a small slice of a little bit more freedom and less worry. But as I mentioned, this would be part of a larger investment mix. If you're going to sink your entire life savings into a solar system or have to take out a loan, then you really have to think about it and each situation is different. But as Sunking would say, if you have the cash, might as well let the tax payer subsidize a solar system for you.

It's 11% tax free... oh but you never get your principal back. That's kind of a big "but" isn't it? Not to be a jerk, it's just that the more I hear other people's calculations the more confused I get.

Leaving the money in a fund that averages 5% and taking into account a 1600 withdrawal every year, I'm getting right up to 19 years before the fund hits negative balance. So it does seem kind of a wash, and bobfrommnj is buying himself stability, as you say. Unfortunately I'm not a whole lot younger than you, Bob, so congratulations on your long term planning. Enjoy the system!

[cyph]

It's 11% tax free... oh but you never get your principal back. That's kind of a big "but" isn't it? Not to be a jerk, it's just that the more I hear other people's calculations the more confused I get.

Leaving the money in a fund that averages 5% and taking into account a 1600 withdrawal every year, I'm getting right up to 19 years before the fund hits negative balance. So it does seem kind of a wash, and bobfrommnj is buying himself stability, as you say. Unfortunately I'm not a whole lot younger than you, Bob, so congratulations on your long term planning. Enjoy the system!

You're assuming that your electricity never goes up and it will cost you $1600 each year. Furthermore, your 5% or $1050 is taxed as ordinary income at your marginal tax rate. So state plus federal will take at minimum 35% of that. What you have left is around $700 to cover your bills. You'd need another $1380 gross pay, or $900 after tax dollars to cover the rest of the utility bill each year. Finally, as you take $1600 out each year, you'd find that your 5% earnings is less and less.

However, I do agree that 13 year payback is a little extreme. He chose Sunpower that means that brand name, quality of warranty, etc. plays into his purchase decision. It's the difference between someone buying a Luxury car over a regular car. If it gives him the extra satisfaction, then you can't put a price on that. For me, my payback period is 6 years take or give a year. That is the reason I chose to purchase over going PPA (which makes sense to me as well, save now versus save later).

[SunEagle]

Have you looked into PPA? No cost other than lending them your roof. You save immediately. Although I'm not sure if SolarCity even services Florida.

Unfortunately it is against Florida law for someone to pay the cost to install a pv system on another person's home or anything concerning a leasing arrangement. Stupid law but the only option I have is to purchase it outright. I don't plan on staying at this house more than a few more years so I would never get anything close to a payback even the price of my home would not appreciate the amount of what I put into a pv system. Sucks for me.