It's good to see happy case once in a while . If you don't mind me asking- could you provide few more details: size of your system in kW and your annual electricity consumption in kWh? It's hard to appreciate the deal without knowing few essential details. It sounds though you missed (this is easily fixable) the first most efficient way of savings on electricity- analyze and reduce your current consumption. Good news if EV is in the near future then you could utilize excess of power I'm sure you'll get from optimizing your current consumption.
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Goal: Net Zero - Companies Suggesting Widely Varying kW Systems
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"What I've found strange is that after supplying my power bills, and last 12 months of energy usage, the various solar companies have given me a wide range of suggested builds - anywhere from 8.3 kW to 9.7 kW."
Nethers, I would suggest a little adjustment to your deliberations before deciding which proposal to accept. The nameplate power rating of all panels comes from a test called STC, done at the factory under controlled conditions with just a flash of light, basically for binning of the panels after manufacture. Unfortunately, the STC rated power is never delivered in the real world because of a variety of factors, including:
- Light induce permanent degradation (LID) occurring in the first few days of actual operation permanently reduces output of panels from 0.5% to as much as 5%, depending on the quality of the silicon cells.
- Temperature degradation is temporary, but in Florida will almost always be in play. Panels lose anywhere from 0.25% to 0.8% of power per degree C above 25 degrees (77degF) and panels generally run 20degC above ambient air temp. You will find this in the spec sheets under "temperature coefficient Pmax".
- Annual permanent degradation occurs with all panels, anywhere from 0.26% to 1% per annum is common.
I have noticed that the solar companies - all well regarded locally - that have proposed systems to me use STC values because it is easy, I guess, and they don't seem to take the other important factors into account in calculating output. It could be that some of your proposals do in fact calculate these known losses and have proposed larger systems in order to get your desired production.
Use the PTC wattage rating (it may not be in the spec sheet, but I have found that I can google it for panels I am interested in). PTC is a quasi-real world rating under load, generating power with 1kW/sq meter of sunlight at 68degF ambient temperature at rooftop height with a light breeze. It is a quick way to see which panels lose power from heat generated in use, albeit a little understated for FL where year round average temps are probably higher than 68.
Then check out the spec sheets on the proposed panels for light induced degradation (or google LID for those panels) and deduct the percentage of LID loss from the PTC rated watts. Now multiply by the number of panels proposed. This way you can better compare the power output for each of the proposed systems and the weaker performers should be revealed.
Then look at the "warranted [power] tolerance" on the spec sheet. The best panels will be +5%/-0% or maybe even +10%/-0%, meaning that the panels will deliver at least rated power and as much as the +%more. Lesser quality panels will be rated something like +3%/-3%, meaning that you could get as much as 3% less than rated power out of your system. With 28 to 32 panels in your system, you could safely apply the average of power tolerance figures to adjust output up or down to compare the various brands on an equal footing.
Finally, apply the annual degradation rate into the mix. Multiply that rate by 10 to see power loss in 10 years, by 25 for 25 years. Many companies show cumulative loss in a performance warranty chart on the spec sheet, showing anywhere from 80% to 90% production rate after 25 years. An inexpensive system that loses efficiency rapidly may provide less overall value than a more expensive one that retains its efficiency, sometimes in as little as ten years.
Once you figure out the best panels, look for another reputable dealer for that product and compare his proposed solution and pricing.
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Saving $150 per month = $1800 per year
A $24,000 system after tax credit = $16,800
$1,800/$16,800 = 10.7% tax-free return.
If the money were to be taken from equities investments, at 25% income tax bracket, they would have to be earning 14.3% to equal.
The only downside is that solar is as illiquid an investment as the house itself.Comment
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When viewed as an alternative investment, solar for OP may be pretty good.
Saving $150 per month = $1800 per year
A $24,000 system after tax credit = $16,800
$1,800/$16,800 = 10.7% tax-free return.
If the money were to be taken from equities investments, at 25% income tax bracket, they would have to be earning 14.3% to equal.
The only downside is that solar is as illiquid an investment as the house itself.
There are some important financial concepts missing here.. compounding, return of principal vs investment return. I understand why the someone might be hesitant to move forward with this contract. How many people even live in the same house long enough to realize anything close to an acceptable return for tying up so much cash?CS6P-260P/SE3000 - http://tiny.cc/ed5ozxComment
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"What I've found strange is that after supplying my power bills, and last 12 months of energy usage, the various solar companies have given me a wide range of suggested builds - anywhere from 8.3 kW to 9.7 kW."
Nethers, I would suggest a little adjustment to your deliberations before deciding which proposal to accept. The nameplate power rating of all panels comes from a test called STC, done at the factory under controlled conditions with just a flash of light, basically for binning of the panels after manufacture. Unfortunately, the STC rated power is never delivered in the real world because of a variety of factors, including:
- Light induce permanent degradation (LID) occurring in the first few days of actual operation permanently reduces output of panels from 0.5% to as much as 5%, depending on the quality of the silicon cells.
- Temperature degradation is temporary, but in Florida will almost always be in play. Panels lose anywhere from 0.25% to 0.8% of power per degree C above 25 degrees (77degF) and panels generally run 20degC above ambient air temp. You will find this in the spec sheets under "temperature coefficient Pmax".
- Annual permanent degradation occurs with all panels, anywhere from 0.26% to 1% per annum is common.
I have noticed that the solar companies - all well regarded locally - that have proposed systems to me use STC values because it is easy, I guess, and they don't seem to take the other important factors into account in calculating output. It could be that some of your proposals do in fact calculate these known losses and have proposed larger systems in order to get your desired production.
Use the PTC wattage rating (it may not be in the spec sheet, but I have found that I can google it for panels I am interested in). PTC is a quasi-real world rating under load, generating power with 1kW/sq meter of sunlight at 68degF ambient temperature at rooftop height with a light breeze. It is a quick way to see which panels lose power from heat generated in use, albeit a little understated for FL where year round average temps are probably higher than 68.
Then check out the spec sheets on the proposed panels for light induced degradation (or google LID for those panels) and deduct the percentage of LID loss from the PTC rated watts. Now multiply by the number of panels proposed. This way you can better compare the power output for each of the proposed systems and the weaker performers should be revealed.
Then look at the "warranted [power] tolerance" on the spec sheet. The best panels will be +5%/-0% or maybe even +10%/-0%, meaning that the panels will deliver at least rated power and as much as the +%more. Lesser quality panels will be rated something like +3%/-3%, meaning that you could get as much as 3% less than rated power out of your system. With 28 to 32 panels in your system, you could safely apply the average of power tolerance figures to adjust output up or down to compare the various brands on an equal footing.
Finally, apply the annual degradation rate into the mix. Multiply that rate by 10 to see power loss in 10 years, by 25 for 25 years. Many companies show cumulative loss in a performance warranty chart on the spec sheet, showing anywhere from 80% to 90% production rate after 25 years. An inexpensive system that loses efficiency rapidly may provide less overall value than a more expensive one that retains its efficiency, sometimes in as little as ten years.
Once you figure out the best panels, look for another reputable dealer for that product and compare his proposed solution and pricing.
IMO, there are better ways to estimate annual output than what's in bruce9t's above post, which is generally not how informed folks estimate annual output.
PVWatts, and its big brother SAM, both from NREL will produce reasonable results. Sam takes some getting used to but PVWatts, once the help/info screens are read and understood, will yield estimates of long term average annual output that seem reliable to me and lots of others after about 10 min. or so.
I'd suggest using caution in taking bruce9t's statements without understanding what's being written. STC wattage for comparison is almost, if not a universal, standard for comparison. Using PTC ratings only muddies the water.
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Here is an alternate investment idea. Send me $10,000, and I'll mail you a check for $1000 each year. 10% tax free return, right?
There are some important financial concepts missing here.. compounding, return of principal vs investment return. I understand why the someone might be hesitant to move forward with this contract. How many people even live in the same house long enough to realize anything close to an acceptable return for tying up so much cash?
An example of another option for the comparison mix: Invest the assets in a decent corp. bond. The return will be a lot less %age wise, but on the plus side, there's a pretty high (but no guaranteed) likelihood you'll get all of your principal back. Just like the value of a 10 yr. old HVAC system, I doubt the value added to a residence by the presence of a, say, 10 yr. old PV system (called salvage value) will be equal to much of anything close to the original price of the system, and just as difficult to quantify with any hope of accuracy beyond opinion. But that's part of life: no guarantees.Comment
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"Here is an alternate investment idea. Send me $10,000, and I'll mail you a check for $1000 each year. 10% tax free return, right?"
Well, JPM, you could at least TRY to make your arguments sensible. At the end of 7 years of solar, OP will have his money back and still own a valuable, income producing asset.
"There are some important financial concepts missing here.. compounding, return of principal vs investment return."
Principal is returned upon sale - same as with a house. Sure, there is no compounding, but compounding doesn't come close to the value of tax free earnings. And where are you going to find a legal, risk free investment earning more than 14%?
"How many people even live in the same house long enough to realize anything close to an acceptable return for tying up so much cash?"
So, is it your argument that one should not buy a house unless he would live there the rest of his life? Studies have shown that houses with solar generally sell today for a premium roughly equal to the system's cost. If Grid electric rates keep climbing as they are predicted to do, the return on PV will increase at higher than inflation rates and the demonstrable return for the next buyer of the property will be greater, justifying a greater premium.Comment
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"Here is an alternate investment idea. Send me $10,000, and I'll mail you a check for $1000 each year. 10% tax free return, right?"
Well, JPM, you could at least TRY to make your arguments sensible. At the end of 7 years of solar, OP will have his money back and still own a valuable, income producing asset.
"There are some important financial concepts missing here.. compounding, return of principal vs investment return."
Principal is returned upon sale - same as with a house. Sure, there is no compounding, but compounding doesn't come close to the value of tax free earnings. And where are you going to find a legal, risk free investment earning more than 14%?
"How many people even live in the same house long enough to realize anything close to an acceptable return for tying up so much cash?"
So, is it your argument that one should not buy a house unless he would live there the rest of his life? Studies have shown that houses with solar generally sell today for a premium roughly equal to the system's cost. If Grid electric rates keep climbing as they are predicted to do, the return on PV will increase at higher than inflation rates and the demonstrable return for the next buyer of the property will be greater, justifying a greater premium.
Then, think about this idea: While you may have valid opinions by virtue of everyone having one, others with what is probably more background and experience in these matters (an opinion I've formed from reading your posts) also have opinions that are not only as valid as yours, but probably more informed by virtue of such greater experience and training. IMO, a lot of what you post here so far as it relates to PV and solar process economics has the look of inexperience, and has the look of somewhat simplistic, untrained and incompletely thought through reasoning behind it.
I'd respectfully suggest you post what you want, but I'd just as respectfully suggest you consider that others reading what you post may act on what you write, and that you be prepared to justify your advice or opinions with some logic or facts that are more than simply and only something you heard or read someplace.Comment
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"Here is an alternate investment idea. Send me $10,000, and I'll mail you a check for $1000 each year. 10% tax free return, right?"
Well, JPM, you could at least TRY to make your arguments sensible. At the end of 7 years of solar, OP will have his money back and still own a valuable, income producing asset.
"There are some important financial concepts missing here.. compounding, return of principal vs investment return."
Principal is returned upon sale - same as with a house. Sure, there is no compounding, but compounding doesn't come close to the value of tax free earnings. And where are you going to find a legal, risk free investment earning more than 14%?
"How many people even live in the same house long enough to realize anything close to an acceptable return for tying up so much cash?"
So, is it your argument that one should not buy a house unless he would live there the rest of his life? Studies have shown that houses with solar generally sell today for a premium roughly equal to the system's cost. If Grid electric rates keep climbing as they are predicted to do, the return on PV will increase at higher than inflation rates and the demonstrable return for the next buyer of the property will be greater, justifying a greater premium.
Another way of looking at it is that if $16800 is spent on a system that returns $1800 a year, and assuming a 4% discount rate, after 12 years the NPV of the system is $89.55. Many people carry loans at about that interest rate, which can also be considered a "tax free" return if paid down, but of course, individual circumstance may dictate a different choice. At that rate of return, even tax-free municipal bonds would be competitive.
One problem with planning for very long payback periods to justify the expense (and support the idea that the system will be worth what you paid for it in the future) is that net metering laws can and do change. Without net metering, the value of that system can decrease dramatically. The longer the time horizon used to justify the expense, the more unknowns exist with respect to performance, obsolescence, political, and utility changes.
CS6P-260P/SE3000 - http://tiny.cc/ed5ozxComment
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[B]...... Studies have shown that houses with solar generally sell today for a premium roughly equal to the system's cost. If Grid electric rates keep climbing as they are predicted to do, the return on PV will increase at higher than inflation rates and the demonstrable return for the next buyer of the property will be greater, justifying a greater premium.Comment
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It's good to see happy case once in a while . If you don't mind me asking- could you provide few more details: size of your system in kW and your annual electricity consumption in kWh? It's hard to appreciate the deal without knowing few essential details. It sounds though you missed (this is easily fixable) the first most efficient way of savings on electricity- analyze and reduce your current consumption. Good news if EV is in the near future then you could utilize excess of power I'm sure you'll get from optimizing your current consumption.Comment
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eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_6_aComment
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I hope that had nothing to do with the increased amount of net generation from solar pv systems increasing 16.7% from 2016 to 2017.Comment
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SCE bungled a multi-million dollar re-tubing project at the San Onofre nuke plant, resulting in multiple massive water leaks and rendering it useless. The cost to safely shut it down will run into multimillions of more dollars, so one might conclude that the stockholders of SCE's parent corporation, Sempra Energy, would be stuck with massive losses. But no, their buddies at the PUC bailed them out by approving a plan for the rate payers to pay for their bungling through huge rate increases.Comment
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If they are anything like SCE, you may be onto something there. State regulators are way too cozy with utility companies, so any claims of losses due to growth of PV, whether true or simply asserted, will have a sympathetic audience.
SCE bungled a multi-million dollar re-tubing project at the San Onofre nuke plant, resulting in multiple massive water leaks and rendering it useless. The cost to safely shut it down will run into multimillions of more dollars, so one might conclude that the stockholders of SCE's parent corporation, Sempra Energy, would be stuck with massive losses. But no, their buddies at the PUC bailed them out by approving a plan for the rate payers to pay for their bungling through huge rate increases.
The only good thing is that my rates are low (~$0.11/kWh) and have been for about 10 years. I can't say the same for New England and the West Coast which have gone up to crazy high costs.Comment
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