Lowest $/W for SunPower system

[J.P.M.]

So if I can get it for under $4.35 then it's a good deal?
Trying to see who's gotten the best bid from a reputable company for SP, but have yet to see anyone beat that.

Since you ask, and in an absolute sense, and IMO only, no.

See prior semi-epistle. Do as you wish and think best. NOMB, but, if cost effectiveness is a consideration, I can't agree or accept the idea that PV in general is a good first step to reduce a bill, before a lot of conservation, or that S.P. is more that overpriced and overkill.

I'd at least reduce the array (electrical) size and go with equally fit for purpose product for about a buck/Watt less before ITC. But, opinions vary.

If cost effectiveness is the major selection criterion, IMO, Sunpower is the least cost effective PV product, with PV being about the least cost effective way to reduce an electric bill compared to all the others. So, in a way, the worst of the worst if cost effectiveness means anything.

Take what you want of the above. Scrap the rest.

[woodtiger]

best price i got so far is in the 4.35/Kw for 18 panel SP 345s with SMA.

I'd be up for that! Since I am new, I am not sure if I can receive PM's. Assuming that I can, would you mind sending me the info?

[woodtiger]

I'm aware of Sunpower's power density advantage. You should do what you feel is best. I'm of the opinion that, while some folks buy S.P. for the reason you cite, most people buy S.P stuff for the wrong reasons, based in incomplete and or erroneous information, a lot of it hype from S.P. That hype, and people's solar ignorance coupled with their gullibility were also some of the reasons why Sunpower was a very good stock to own for a few years.

In spite of all the save the planet talk, IMO, the real moving force behind residential solar PV is to save money by reducing an electric bill. Solar companies go to great lengths to sell equipment by touting savings, with some nod to the environment. If it were sold on environmental attributes alone, solar would be dead by now, just like solar thermal in the past when those tax credits ended.

What is not mentioned (understandably so) by the solar companies, is that in most applications where reducing an electric bill is the goal, throwing PV at a roof is about the least cost effective method among all the possible measures for cost effective bill reduction. As such, it often takes some real imaginative economic analysis before solar can make economic sense, and when it does (make economic sense), because it's usually the least cost effective, it's usually about the last thing done - not the first.

So, options: Within your lifestyle constraints, reduce your load doing the most cost effective stuff first, i.e, turn stuff off, as in turn off lights before changing out to LED's - not everyone's cup of tea, but the most cost effective. Change thermostat settings. The cost is zero. Insulate and seal the dwelling. Lower the DHW thermostat and add insulation to the tank and hot water lines. The list goes on.

One other option: It's entirely within the realm of possibility to not replace as much of your electrical load with solar. An example (with a LOT of simplification): Say you're electric usage is 12,500 kWh/yr., for which you currently pay, say, $3,600/yr. and you estimate it will take about an 8.28 kW system (24*345) to replace your entire usage (not a recommendation, but it makes the example easier for me to work). Now, say your roof is such that you need Sunpower due to space constraints. At $4.50/watt and 30% ITC, that system will cost you $26,100 out of pocket. Now, IF you replace those 24 S.P. 345's w/ say, 24 LG 300's, you can only fit an LG system of about 7.2 kW (300*24) in the same space, but it will only cost you $3.50/Watt, less 30%, for an out of pocket of $17,640, or $8,442 less than the S.P. system after ITC. But, you will have a higher electric bill as a consequence of the smaller (electrical) size array of the LG system (but about the same annual output/kW of, say, 1,600 kWh/yr. per installed kW). How much higher will the bill be ? A VERY oversimplified SWAG might be something like : (8.28-7.2) kW * (1,600 kWh/yr./kW) * ($3,600/12,500 kWh/yr.) = ~~ $500/yr.

So, given that the #'s are all back of envelope type, saving, or having the use of $8,460 at the expense of $500/yr. for as long as you are intending to own the system, may or may not be something that you see as an option, but it is one way of looking at it. So instead of $3,600/yr. your electric bill is $500/yr. and you've got about $8,400 to spend/invest in other things.

There's usually lots of options between all and nothing. Just sayin'.

As usual, take what you want of the above. Scrap the rest.

I appreciate the detailed discussion of all the points! However, what about the long term/total (20-25 year) ROI comparison between SP and LG? It sounds like a strong point to save $8K now, but taking the long term performance into consideration, $8K more now may be worth the while?

[supac]

So if I can get it for under $4.35 then it's a good deal?

Negative. IMO anything very close to (or under) $4 is a good deal, particularly for your area. It's really like buying a car - the more you learn, the more you shop, and the more you negotiate = the lower the price you pay.

[genesmasher]

Since I can't PM yet, can you provide me name of company for the first option?

Thanks!

PM sent.

[J.P.M.]

I appreciate the detailed discussion of all the points! However, what about the long term/total (20-25 year) ROI comparison between SP and LG? It sounds like a strong point to save $8K now, but taking the long term performance into consideration, $8K more now may be worth the while?

As I wrote, a LOT of simplification went into that. It as not meant as dogma as much as food for thought.

I can and have spent a lot of time studying process economics, life cycle costing and time value of money calcs, initially in trying to understand the economics of (mostly) residential solar energy applications, and later as a mechanical engineer and then as a project mgr. for industrial power systems, and energy systems for refineries and chemical plants as well as other engineering work.

Today, when I get somewhat involved discussing some of the simpler points of process economics, etc., I've found many folks often glaze over and pronounce they know more about the subject than me because they can divide initial cost by annual savings for something they call payback. That's frustrating for all parties and so I usually don't waste their time or my patience.

However, to your 1st question, using LOCE type number crunching, which has some of the attributes of life cycle costing, and as another example only, for my situation and POCO, and a 12 yr. term., a $3.50/watt price gives me a LOCE of about $0.18 - $0.20/kWh price. Every situation is different.

Quite frankly, how such an analysis is done will vary, starting with how involved the party paying the bills wants to get. Convoluted with that, most folks (IMO) are clueless about what may need to be done, what's possible, or that there are almost as many ways and variables of merit to pick from when trying to find optimum (lowest life cycle cost) as there are opinions about how to determine what's cost effective.

NREL, has a pretty fair download about solar and process economics. It's about 200 pages or so. Check it out, or any decent text on process economics.

Also to you question about time and S.P. vs. LG: First off: Both seem good, fit for purpose products and will probably last a long time. However, simply because a product can last 20+ years, does not make that time frame valid (suppose I die, move, solar becomes obsolete, etc.)

One way to run the analysis: Guestimate how long you'll own the system and find the cost/Watt that matches the NPV of the (estimated) electrical bill savings over that time. If the NPV of the savings is less than the initial cost, then it's not cost effective at that initial price. The longer the time frame is stretched, usually the higher the initial price can be and still be cost effective using the same assumptions about the future. Again, using 12 years, my situation, and for the moment believing either mfg. claims about performance, including pretty much unmeasurable/unverifiable annual performance degradation, I've estimated that, for me, and maybe others in similar situations, Sunpower may be worth about a 5 % or so premium, or about $0.15 - $0.20/Watt more than some other product selling for $3.50/Watt. Thus, for me, and maybe some others, paying more that about $3.65 - $3.70/Watt for S.P., is about the limit for cost effectiveness at this time.

But, opinions vary.

Take what you want of the above. Scrap the rest.

[woodtiger]

As I wrote, a LOT of simplification went into that. It as not meant as dogma as much as food for thought.

I can and have spent a lot of time studying process economics, life cycle costing and time value of money calcs, initially in trying to understand the economics of (mostly) residential solar energy applications, and later as a mechanical engineer and then as a project mgr. for industrial power systems, and energy systems for refineries and chemical plants as well as other engineering work.

Today, when I get somewhat involved discussing some of the simpler points of process economics, etc., I've found many folks often glaze over and pronounce they know more about the subject than me because they can divide initial cost by annual savings for something they call payback. That's frustrating for all parties and so I usually don't waste their time or my patience.

However, to your 1st question, using LOCE type number crunching, which has some of the attributes of life cycle costing, and as another example only, for my situation and POCO, and a 12 yr. term., a $3.50/watt price gives me a LOCE of about $0.18 - $0.20/kWh price. Every situation is different.

Quite frankly, how such an analysis is done will vary, starting with how involved the party paying the bills wants to get. Convoluted with that, most folks (IMO) are clueless about what may need to be done, what's possible, or that there are almost as many ways and variables of merit to pick from when trying to find optimum (lowest life cycle cost) as there are opinions about how to determine what's cost effective.

NREL, has a pretty fair download about solar and process economics. It's about 200 pages or so. Check it out, or any decent text on process economics.

Also to you question about time and S.P. vs. LG: First off: Both seem good, fit for purpose products and will probably last a long time. However, simply because a product can last 20+ years, does not make that time frame valid (suppose I die, move, solar becomes obsolete, etc.)

One way to run the analysis: Guestimate how long you'll own the system and find the cost/Watt that matches the NPV of the (estimated) electrical bill savings over that time. If the NPV of the savings is less than the initial cost, then it's not cost effective at that initial price. The longer the time frame is stretched, usually the higher the initial price can be and still be cost effective using the same assumptions about the future. Again, using 12 years, my situation, and for the moment believing either mfg. claims about performance, including pretty much unmeasurable/unverifiable annual performance degradation, I've estimated that, for me, and maybe others in similar situations, Sunpower may be worth about a 5 % or so premium, or about $0.15 - $0.20/Watt more than some other product selling for $3.50/Watt. Thus, for me, and maybe some others, paying more that about $3.65 - $3.70/Watt for S.P., is about the limit for cost effectiveness at this time.

But, opinions vary.

Take what you want of the above. Scrap the rest.

I really enjoy the way you are explaining everything... but it leads to more questions:

1. If you don't mind me asking, what/how did you use to come up with a 12 year time frame? (are you moving 12 years from now, or?)
2. If you increased that to 25 years (we might be at our house for 20-25 years), what is the premium that you'd pay above the $3.50 for SP?

[J.P.M.]

I really enjoy the way you are explaining everything... but it leads to more questions:

1. If you don't mind me asking, what/how did you use to come up with a 12 year time frame? (are you moving 12 years from now, or?)
2. If you increased that to 25 years (we might be at our house for 20-25 years), what is the premium that you'd pay above the $3.50 for SP?

1.) Not at all. On the 12 years:

- The average time folks stay in a home is about 6-7 years. I expect that varies some by region, generation and the economy as well as other reasons. 12 years seems, to my mind anyway, to cover a good portion of those who currently have PV, basically semi middle class or above suburbanites or exurbanites. I bet most of those who buy residential PV this year won't be living in the same place 10-12 years from now.

- Over time, technology changes. Over the next 10-12 years, I'd expect R.E. technology to evolve such that today's technology, while pretty good, will probably look something like the technology that we all thought was whiz-bang 10-12 years ago. Given the American public's penchant for confusing wants and needs, I'm guessing folks will look at the 10 year old system on their home and say or think it to be deficient, just like a 2 year old I-phone that's doing exactly what it did 2 years ago is now somehow defective or at least less desirable because it's 2 years old. Same with vehicles. Same ( I bet) with solar. New good. Old Bad. Not my way of looking at it, but I know reality when I smell it.

- For those who move, including current PV owners, I bet there will be a strong likelihood they will at least consider PV for their new dwelling, and will want the latest stuff, not some 10-12 year old "dinosaur" already there. Whether that term is justifiable or not, perception is everything and can be manipulated by marketing - I cite Sunpower's constant mantra and B.S. claim of "most efficient" as an example of that type of manipulation. Solar companies, like auto companies have a stake in creating or sustaining a market by creating the perception of new is better and old is bad. It makes little or no difference that a 10-12 yr. old system will probably be functioning at ~ 90% original output. That'll probably be a fact, but it matters not a whit. Perception is everything, is easily manipulated, and usually is.

- Net metering will disappear. The economics of solar will change. Newer, better, cheaper will replace what's currently available hastening the change.

I have no immediate plans to move. When I do, I'm quite sure that technology will have surpassed what's on my roof, making it undesirable by preference or market manipulation.

Since my crystal ball is still in the shop, I do not know the future. All of the above may not happen, but I'm reasonably certain at least some of it will or some combination of the above. Whether or not my 12 year time frame is on the mark, I'm quite certain it's a lot closer to a more likely scenario for the future than the 20-25 year time frame that the solar peddlers must use to get a Net Present Value (NPV) of the annual solar savings to justify prices or at least make them appear reasonable. If I stretch a time frame long enough into the future, I (or anyone else) can make any solar price cost effective. If I used 100 years, I could, for all I know (and I don't), make $75.00/Watt appear cost effective in terms of the NPV of the savings. The point is: What's a reasonable and realistic time frame ? Or, turned around: How long a time frame must I use to justify the price of this system I'm considering ?

If I'm absolutely sure I'll be around in the same dwelling in 25 years, and technology will not advance during that time enough to warrant a changeout, and POCO rate structures and how POCO's they handle solar will not impact my decision, then 25 years MAY be an appropriate time frame. One way I look at life is as a set of probabilities. IMO, the reality deck is stacked against a 25 year time frame, thus giving it a rather low probability. I think 12 years has a better chance of a higher probability as an outcome.

2.) On the 25 year "price":

- As I wrote above, the longer I push the time frame into the future , the easier it is to justify a higher price. For the reasons cited in #1 above, I have not done a 25 year life cycle cost for my situation. For the reasons I stated in # 1 above, I believe it's a waste of time and wishful thinking for my, and most every other situation. But, opinions vary.

- I think it's reasonable to assume that for 25 years, a justifiable price from a NPV, or life cycle cost standpoint would be a fair amount higher than $3.50/Watt, perhaps substantially so.

- I can generate reasonable scenarios of a financial break even at 6-8 years or so - depending on assumptions about discount rates, resale values, and other things - someone else's #'s are as good a mine as long as they are realistic for the situation under consideration. For example, is a 10% discount rate reasonable for the next 6 years, or is 3% for the next 12 years "more" reasonable ? If $3.50/Watt is less than the NPV of the savings - that's good, which will then open discussions about rates of return (ROI.

- Since each situation is different, your NPV of the annual saving (per installed Watt perhaps), or ROI, will be different than mine. I'm afraid, that's a number you'll need to find on your own. I can suggest you look for, without being callous or blow off, a text or primer on process economics, something like "Process Economics for Dummies". It's too big a subject to be handled in a forum format such as this, but, IMO, only big because it's mostly a big bunch of rather simple concepts. Eat the elephant one bite at a time. I've also found it can be made simpler still by using spreadsheets. If you can do arithmetic, and know the rudiments of spreadsheets, you can do some pretty sophisticated process economics.

[sensij]

I really enjoy the way you are explaining everything... but it leads to more questions:

1. If you don't mind me asking, what/how did you use to come up with a 12 year time frame? (are you moving 12 years from now, or?)
2. If you increased that to 25 years (we might be at our house for 20-25 years), what is the premium that you'd pay above the $3.50 for SP?

A few more thoughts on this... 12 years is a common term for financed systems. Looking at the NPV of the system over the period it which it is being paid for is a meaningful milestone.

In CA, 20 years has to be the absolute upper limit because the NEM 1.0 grandfathering is only protected that long, and it is impossible to know what the conditions of the interconnect agreement in force at that time will be. Even within the NEM 1.0 protection, I would be uncomfortable modeling out 20 years, because there are many ways the existing tariffs can be change over time without violating the NEM protection, leading to less confidence in the cost avoided projection each successive year you look ahead.

In general, the case for Sunpower typically hinges on one of two justifications:
1) Limited roof space prevents a system capable of the desired bill offset from being installed. Since Sunpower's area efficiency is market leading, they can provide the most bill offset.

2) Sunpower's warranty allows less annual degradation than what is allowed by the warranties of others. Assuming that their panels do in fact degrade less, Sunpower's price is justified by the extra energy produced over the life of the system.

I suspect that the premium I would be willing to pay for Sunpower would depend on whether my situation was closer to #1 or #2, because I don't think the premium should be the same for both of them.

[Guest]

$4/watt for 12 - 327w panels for 3.9kW system; Sunpower 3800 inverter. 30yr old rounded clay tile roof; installed onto single pitch.

[igerstein]

you don't buy a mercedes because it's affordable. if you want the highest end panels/installation, you'll pay a premium. if you want to drive a ford pinto, you'll save some money and it'll still get you from place to place. all these over the top financial analyses are ridiculous- get what's going to make you happy, especially if the difference is only a couple thousand bucks over decades.

[J.P.M.]

you don't buy a mercedes because it's affordable. if you want the highest end panels/installation, you'll pay a premium. if you want to drive a ford pinto, you'll save some money and it'll still get you from place to place. all these over the top financial analyses are ridiculous- get what's going to make you happy, especially if the difference is only a couple thousand bucks over decades.

Opinions vary and yours is as valid as any. I'd only offer a slightly different take: If people responsible for financial decisions in businesses operated the way most homeowners operate when making economic decisions about the best way to reduce an expense, the business folks would be quickly tossed. Sad part is, things could be so much better for so little effort.

[woodtiger]

you don't buy a mercedes because it's affordable. if you want the highest end panels/installation, you'll pay a premium. if you want to drive a ford pinto, you'll save some money and it'll still get you from place to place. all these over the top financial analyses are ridiculous- get what's going to make you happy, especially if the difference is only a couple thousand bucks over decades.

I think I'd agree that you should get what makes you happy, period.

[oilerlord]

Opinions vary anf yours is as valid as any. I'd only offer a slightly different take: If people responsible for financial decisions in businesses operated the way most homeowners operate when making economic decisions about the best way to reduce an expense, the business folks would be quickly tossed. Sad part is, things could be so much better for so little effort.

I'd also add that it's common to become paralyzed with indecision. I've read posts from people that are years into making a decision about PV product/pricing/installation/etc. While it's important to take the time to make the "right" decision, the kWh's on the meter keep clicking away and dollars keep flying out the window every month.

[woodtiger]

I'd also add that it's common to become paralyzed with indecision. I've read posts from people that are years into making a decision about PV product/pricing/installation/etc. While it's important to take the time to make the "right" decision, the kWh's on the meter keep clicking away and dollars keep flying out the window every month.

It's the analysis paralysis effect of a maximizer. Been there, done that, and wasted a lot of time.