Your input on my situation is much appreciated!

[Willaby]

I don't pay much in Federal or State tax. So for me to purchase I can't use the Credits. My system is being leased $207 per month fixed for 20 years. I get some benefit first 4 years on property taxes and state credit. My Con Edison bill is anywhere from $250-$350 monthly and that is only going to increase in the future.

Perfect example of leasing that makes sense, since the company is allowed to take the tax credit and pass on the savings. Works the same when leasing an EV. Hopefully the $207/month pays all your electricity use too.

[bronxnua]

Perfect example of leasing that makes sense, since the company is allowed to take the tax credit and pass on the savings. Works the same when leasing an EV. Hopefully the $207/month pays all your electricity use too.

I last month use 789 KWH, my bill was over $434 They thought I used more. then Gave me a credit.


I will produce over 12K KWH yearly that should make me pay nothing if I don't use more than 1K monthly.

I get charged about $30 for gas.. I use $4 and they charge the rest in fees. So my net metering will produce more then I use , that should offset any fees.

[Willaby]

Do you work for Solar City or something?

Net metering rates for SCE customers will not "get worse" until July 1, 2017. The current agreement will be available until then, unless there is a massive increase in the rate of installations, almost an order of magnitude.

Your definition of "return" could use some work.

Take that 13000 and see what it does with a 10% compounded return each year:
y0 = 13000
y10 = 33719

Now, look at the cumulative savings on the electric bill, assuming a 5% increase in rates each year (higher than average), and also assuming that the savings on the bill is invested at the same hypothetical 10% rate each year

y1 = 1320
y10 = 25472

It would take 15 years for the two investments to have been worth the same... 15 years of discipline to avoid the temptation to spend that savings each year instead of invest it. The fact that the 401(k) loan will be getting repaid will help, but another negative consequence of that loan is that no new money can be contributed until the loan is paid off.

I'm not against investing in solar if you think it will save money. I would be very cautious about borrowing money from a retirement account to do it. 10% is clearly a round number and is unlikely to reflect the actual market return over that time, but the point is to do this analysis with whatever numbers best reflect your outlook and not accept the BS that most solar sales people will shovel in your direction.

Haha, not in the solar industry, just a semi-retired CPA/CFO type.

I'm SDGE which is expected to reach net-metering capacity within 12 months. You're correct, seems the other Utils are not as close.

My return calculation is real. If a $13k solar investment eliminates a $1300/year expense, you would need either earned or taxed investment income that is likely 30+% greater to cover that $1300. I would even argue that the solar savings is a near bond equivalent because you will always need electricity and taxes. I would also argue that this aspect is probably equal in benefit to the initial 30% tax credit. I'd agree that the end true depreciated value of the solar should be considered at, say 50% (kills my bond comparison), but at least the solar savings should continue for longer than 20 years.

Also, the discipline you mention is not a factor with the solar savings but I doubt discipline will earn you 10% ann in the market. Your 10% is a little rich, close to historic returns that 90% of investors do not achieve, plus it is taxable as dividends and gains (when taken). I would suggest you use 6% and run the numbers again.

I'd agree to refrain from taking a loan against a 401k. If it was the only way and to beat the clock on net metering, maybe. I would at least look at a monthly lease if the cap rate was reaonable AND it has an early payoff provision with no penalty (it could displace the 401k borrow).

[Willaby]

I last month use 789 KWH, my bill was over $434 They thought I used more. then Gave me a credit.

Congrats on that! I've got an EV (Volt). On the TOU2 plan here in San Diego, I only need to produce 2/3 of my KW usage to zero my bill in the summer. We have 49c/kw peak here! I'm getting my site inspection tomorrow. I only use 600kw/mo so I'm looking at a 4.5kw system.

[paris401]

I last month use 789 KWH, my bill was over $434 .

what am I missing??.. that's 55c... that's impossible... I think lipa here on long island is the most $$$ in the usa at 21c

[bronxnua]

what am I missing??.. that's 55c... that's impossible... I think lipa here on long island is the most $$$ in the usa at 21c

That is crazy.. I pay fixed 8.9 per KWH from my ESCO, Con Edison charges me delivery and all other taxes and fees that are about .35 per kwh.

[bronxnua]

Works out like if I use $100 of Electricity my bill is $350.

[J.P.M.]

Congrats on that! I've got an EV (Volt). On the TOU2 plan here in San Diego, I only need to produce 2/3 of my KW usage to zero my bill in the summer. We have 49c/kw peak here! I'm getting my site inspection tomorrow. I only use 600kw/mo so I'm looking at a 4.5kw system.

Depending on when you use that 600 kWh/mo., on T.O.U. 2 a 4.5 kW system may be a bit or more oversized. With low shading & decent orientation, a 4.5 kW system ought to yield about that much output - SWAG ~ 7,500 - 8,000 kWh/yr., but, as you suggest, w/min. on peak use, the revenue from the system will be a fair amount more than what you're billed for.

FWIW, on a "site inspection": Usually and commonly solar vendors will probably underestimate annual output by 10+ % to oversell you. Your choice - just know when/if you're getting B.S.'d. Run PVWatts / a 8-10% system loss and check back here before you pull the trigger.

W/net metering, the summer zeroing out will not be a consideration. true up is 1X/yr.

How much of that 600 kWh/mo. does the EV take ?

W/~ $0.49/kWh on peak summer rate (but note that the winter on peak rate is < half that) T.O.U. can be your friend, mostly because it allows a smaller system size to produce more revenue than the lower expense that will be incurred by heads' up time shifting of loads.

[J.P.M.]

Perfect example of leasing that makes sense, since the company is allowed to take the tax credit and pass on the savings. Works the same when leasing an EV. Hopefully the $207/month pays all your electricity use too.

I have no proof, but I seriously doubt that any leasing co. passes that 30% on to the mark. Part of it maybe, but only as much as the market/competition requires and not one red cent more. My cynicism is such that I bet they don't pass any of it along, any more than they talk about the sweetheart accelerated depreciation they get but Joe 6 pack is unable to take advantage of, and is for the most part, utterly clueless about.

[Willaby]

I have no proof, but I seriously doubt that any leasing co. passes that 30% on to the mark. Part of it maybe, but only as much as the market/competition requires and not one red cent more. My cynicism is such that I bet they don't pass any of it along, any more than they talk about the sweetheart accelerated depreciation they get but Joe 6 pack is unable to take advantage of, and is for the most part, utterly clueless about.

I'd agree if it was a car lease type, but these Solar leases are not truly a lease, except by name. They simply facilitate the pass through of the tax credit. The tax credit is only available to the purchaser (Sun Run) and in the OP's example he gave us the purchase price and the lease cost, so they are passing it on (at least most of it). If not for this "lease" it wouldn't ROI for those in low tax brackets to go solar. To truly be a lease, the residual buyout would need to be close to FMV (car lease), but it is probably a trivial amount.

In business, in most cases, these leases would be required to be booked as a purchase per Gov and GAAP rules. It might be called a lease, but it represents a purchase.

[Willaby]

Depending on when you use that 600 kWh/mo., on T.O.U. 2 a 4.5 kW system may be a bit or more oversized. With low shading & decent orientation, a 4.5 kW system ought to yield about that much output - SWAG ~ 7,500 - 8,000 kWh/yr., but, as you suggest, w/min. on peak use, the revenue from the system will be a fair amount more than what you're billed for.

FWIW, on a "site inspection": Usually and commonly solar vendors will probably underestimate annual output by 10+ % to oversell you. Your choice - just know when/if you're getting B.S.'d. Run PVWatts / a 8-10% system loss and check back here before you pull the trigger.

W/net metering, the summer zeroing out will not be a consideration. true up is 1X/yr.

How much of that 600 kWh/mo. does the EV take ?

W/~ $0.49/kWh on peak summer rate (but note that the winter on peak rate is < half that) T.O.U. can be your friend, mostly because it allows a smaller system size to produce more revenue than the lower expense that will be incurred by heads' up time shifting of loads.

Thanks, I think I'm roughly in line with your calcs. I've got a perfect 180 roof with <10% shading, but that shade is in the morning. The 12-6pm peak has no shade and this is a big plus. My quotes are for 12-14 panels, but I'm thinking 14-16 would be good to lock in now and only ~$1k more (I'm overselling myself ). You never know, the lease on a Spark is only $129 w/zero down.

My Volt only takes ~200kw/month and we don't use AC or heat much at all. I do charge at work, maybe 50kw/month. Our roof has been an issue. I've got true clay tile which makes for a costly install. That is what they are looking at tomorrow. I will likely go with tile hooks for the racks and I will cover a reasonable amount of broken tiles.

[inetdog]

what am I missing??.. that's 55c... that's impossible... I think lipa here on long island is the most $$$ in the usa at 21c

$.55 per kWh is not unreasonable for Hawaii, and may be an incremental rate for some areas with combined TOU and tier pricing.
And don't forget access charges, taxes, etc that come in addition to the per kWh rate.

[paris401]

$.55 per kWh is not unreasonable for Hawaii, and may be an incremental rate for some areas with combined TOU and tier pricing.
And don't forget access charges, taxes, etc that come in addition to the per kWh rate.

ok maybe in Hawaii... but I'd pay 55c to live there.. but in ny?? I'm on long island, and I thought we were home to the highest rates in the continental US... I pay 21c... all in...taxes/delivery/dinners/girls for the ceo...

con ed is a tad cheaper... so still not sure how u get your numbers...

[donald]

Perfect example of leasing that makes sense, since the company is allowed to take the tax credit and pass on the savings. Works the same when leasing an EV. Hopefully the $207/month pays all your electricity use too.

No solar leasing company passes on the saving. The point of solar leasing and PPA is to extract the potential benefits, including subsidies, from the homeowner.

By the beginning of the next decade home solar will provide $.03/kWh electricity to homes with sunny roofs. A proper purchase/lease decision has to include falling self generation costs.

Someone should build a spreadsheet with likely future cost scenarios.

[J.P.M.]

No solar leasing company passes on the saving. The point of solar leasing and PPA is to extract the potential benefits, including subsidies, from the homeowner.

By the beginning of the next decade home solar will provide $.03/kWh electricity to homes with sunny roofs. A proper purchase/lease decision has to include falling self generation costs.

Someone should build a spreadsheet with likely future cost scenarios.

I'm of an opinion that "passing on the savings" is a marketing tool used to rope in the solar ignorant. If anything is passed on in terms of savings it is due to competitive market forces applied by other solar purveyors who have no interest in selling any lower than they need. I'm also of the opinion that many who believe savings are passed on in any measureable way will also be good candidates to buy a bridge.

As for future prices or the future of solar generated electricity, I, like most everyone else, because the future is unknown, have no clue.

Seems to me the best way to prepare is to use less, and in so doing, lessen the impact of whatever happens.

A lot of people "build spreadsheets". I have, as I'm pretty sure many others have done. Since most every situation is different, and probably because most of us solar geeks are not financially savvy, such efforts are often of limited or dubious value - especially when the limited interpretive abilities of most potential users of the output of such efforts is considered.

I know enough about such things to be dangerous, and, no insult/offense intended, but I'm pretty sure it involves a little more than "someone should build a spreadsheet" would seem to imply.

Part of what we're discussing here is known by, and deals with an area, that goes by various names: Financial analysis, process economics, life cycle costing, the time value of money, comparison of alternatives, L.C.O.E. analysis, etc., to name a few.

Most folks' idea of solar financial analysis is limited to initial cost divided by initial potential annual savings. That may be one figure of merit, but to use that as the only measure may not result in the best outcome, financially, or practically.