Price paid per watt

[J.P.M.]

i don't follow the logic here. Let's say you use 9000 kwh annually, and you can fit 16 x 60 cell panels (the sunpower panels you've mentioned are larger, but set that aside for the moment).

If you put up 250 w panels for $3.50 / w, you have a 4000 w system that might produce 6400 kwh, leaving 2600 kwh, which should be at baseline price (let's call is 0.20 / kwh). So, that is 14,000 upfront, with 4200 back from the tax credit. $9800 total, plus a residual electric bill of $520 / yr.

If you put up 343 w panels for $4.70 / w, you have a 5520 w system that might produce 8832 kwh, leaving 168 kwh at baseline price. So, that is 25944 up front, or $18161 after the tax rebate, with a residual bill of $34 / yr.

The difference in the post tax credit cost of the two systems is ($18161 - $9800) = $8361. The residual cost difference is (520 - 34) = $486 / yr. That means it will take about 17 years for the total costs of the two systems to be equal, with no accounting for time value of money. Until then, the total electric bill (solar panel + residual electric) of the smaller system would have been less.

This is super-simplistic, but i've found that the more factors you include, the more the decision gets pushed towards buying the least expensive system that fits, unless you plan to be in the house for a very long time.

fwiw +1

[sms]

By 4., are you saying, use 72 cell panels? That is the same power output (per cell) as
the very common, almost as space efficient (and cheap) 250W 60 cell panel. Your roof
will determine which fits best. On the ground here the very generic 250s give me the
most W/$ and are a lot easier to handle (I have both sizes).

I don't see 6. at all.

Maybe your guidelines are intended just for rooftop installations? Bruce Roe

Yes, it is a roof system. It's a split level house. To get enough KW with the 250 watt panels would have looked awful. It would have taken 22 panels versus 16 of 345 watt panels.

The Sunpower quote was the most expensive and I told him to forget it. Maybe it was just the salesperson's style, but he was very low key and even said that at the Sunpower price the payback time would be too long to make it worthwhile since I have a lot of high-wattage needs during peak hours. Then he mentioned the 60¢/watt rebate (up to $3K) which dropped the price by $3K (since I did have a friend working there and I called him and he was fine with me using him for that discount). That made the price palatable. As you know, the margins in solar installations are extremely high so a $3K price cut is nothing when it's a choice between sale or no sale. When the tax credits disappear the prices will likely not increase, the installation companies will just have lower margins.

If you look at independent testing lab testing of different panels you'll see quite a difference in power output per rated watt and durability. So of course the companies with the higher-rated panels are going to make a big deal about it. And the resellers of the lower-rated panels also have a valid sale's pitch, namely that even at the lower-efficiency they are cheaper per watt so if space is not an issue the payback is faster with the lower-efficiency, lower cost panels. But in two story tract homes with limited roof space the choice is essentially made for you, at least if you want to offset 90% or more of your usage. Some people offset only 60-70% of their usage but personally I don't see the value in that considering that the PG&E base rate has been going up much faster than the higher-tier rates.

[lkstaack]

But in two story tract homes with limited roof space the choice is essentially made for you, at least if you want to offset 90% or more of your usage. Some people offset only 60-70% of their usage but personally I don't see the value in that considering that the PG&E base rate has been going up much faster than the higher-tier rates.

I can understand that argument; individual circumstances can prevent a modestly priced system. I will be paying 4.65/w because I must ground mount in order to get decent production. It'll take me longer to get my investment back. Oh well.

[J.P.M.]

Yes, it is a roof system. It's a split level house. To get enough KW with the 250 watt panels would have looked awful. It would have taken 22 panels versus 16 of 345 watt panels.

The Sunpower quote was the most expensive and I told him to forget it. Maybe it was just the salesperson's style, but he was very low key and even said that at the Sunpower price the payback time would be too long to make it worthwhile since I have a lot of high-wattage needs during peak hours. Then he mentioned the 60¢/watt rebate (up to $3K) which dropped the price by $3K (since I did have a friend working there and I called him and he was fine with me using him for that discount). That made the price palatable. As you know, the margins in solar installations are extremely high so a $3K price cut is nothing when it's a choice between sale or no sale. When the tax credits disappear the prices will likely not increase, the installation companies will just have lower margins.

If you look at independent testing lab testing of different panels you'll see quite a difference in power output per rated watt and durability. So of course the companies with the higher-rated panels are going to make a big deal about it. And the resellers of the lower-rated panels also have a valid sale's pitch, namely that even at the lower-efficiency they are cheaper per watt so if space is not an issue the payback is faster with the lower-efficiency, lower cost panels. But in two story tract homes with limited roof space the choice is essentially made for you, at least if you want to offset 90% or more of your usage. Some people offset only 60-70% of their usage but personally I don't see the value in that considering that the PG&E base rate has been going up much faster than the higher-tier rates.

And guess what: Just about all 5 kW systems in the same orientation and service will produce just about the same annual output - the only real difference is footprint - Sunpower's smaller in overall size with sort of a built in overpriced extended warranty you don't get to decline. At least that's what all kinds of stuff from sources like PVoutlet will confirm for the looking.

Take what you want of the above, if any, and scrap the rest.

[sms]

I don't follow the logic here. Let's say you use 9000 kWh annually, and you can fit 16 x 60 cell panels (the Sunpower panels you've mentioned are larger, but set that aside for the moment).

If you put up 250 W panels for $3.50 / W, you have a 4000 W system that might produce 6400 kWh, leaving 2600 kWh, which should be at baseline price (let's call it $0.20 / kWh). So, that is 14,000 upfront, with 4200 back from the tax credit. $9800 total, plus a residual electric bill of $520 / yr.

If you put up 343 W panels for $4.70 / W, you have a 5520 W system that might produce 8832 kWh, leaving 168 kWh at baseline price. So, that is 25944 up front, or $18161 after the tax rebate, with a residual bill of $34 / yr.

The difference in the post tax credit cost of the two systems is ($18161 - $9800) = $8361. The residual cost difference is (520 - 34) = $486 / yr. That means it will take about 17 years for the total costs of the two systems to be equal, with no accounting for time value of money. Until then, the total electric bill (solar panel + residual electric) of the smaller system would have been less.

This is super-simplistic, but I've found that the more factors you include, the more the decision gets pushed towards buying the least expensive system that fits, unless you plan to be in the house for a very long time.

It is simplistic.

The big issue is that the the lower wattage panels are not $3.50/watt. With the Solar World panels 275W panels it was actually much more expensive. $5.32/watt, but that's partially because they quoted with Micro-Inverters with the scam of the Enphase monitoring. That was also a smaller system. But that wasn't the final price, I just never called them back to negotiate it after reading more about Solar World.

With the REC panels from Sunrun it was around $4.30 watt.

There are expenses unrelated to the panels that have to be amortized into the total and are fixed regardless of the panels, which is why the prices are higher than normal. I.e. Every company quoted $2000 for the electrical panel replacement, as did an electrician. That adds 25-30¢ watt right off the bat. There is also extra cost because of the type of roof since the mounts cost more and it's more trouble to install, which works out to about 15¢/watt.

Here are the final numbers with the electrical panel:

Sunrun: 6240W from 24 260W REC panels: $26863 =$4.30/W
Sunpower: 5520W from 16 345W Sunpower panels: $25934 = $4.70/W
Petersen Dean: 4950W from 18 275W Solar World panels: $26324: =$5.32/W

So Sunpower is 40¢ more per watt than Sunrun. The Sunrun system is a little oversized but the cost per watt would not go up much for a smaller system. But a Sunrun system at the same power as the Sunpower System would still take 21 panels.

So far, Sunrun has come down $2000 by including the electrical panel. Sunpower came down $3500 with the 60¢/W discount plus the 2% I would get from charging the system on a cash-back credit card. I did not call Petersen-Dean back because I don't want the Solar World panels, and because of their infomercial.

The only real issue now is whether Sunpower will come down any more. The panel layout for the lower power panels would look awful because they'd have to put them on three different sections of the roof.

[sensij]

It is simplistic.

The big issue is that the the lower wattage panels are not $3.50/watt. With the Solar World panels 275W panels it was actually much more expensive. $5.32/watt, but that's partially because they quoted with Micro-Inverters with the scam of the Enphase monitoring. That was also a smaller system. But that wasn't the final price, I just never called them back to negotiate it after reading more about Solar World.

That particular installer is just pulling numbers out of the air. Did he know you were looking at Sunpower panels? If so, he probably pegged you as someone who was willing to pay more than the average customer and bumped his price up to try to score. Solarworld panels should not cost more than Sunpower, ever. Read some of the other threads... there are people in your area getting sub $4.00 / W with good equipment.

Are you sure you need a panel upgrade? Several salespeople quoted one for me too, until one actually did the research and showed it wasn't necessary. I can refer you to my installer if you want a decent price, although if you are convinced that only 100% offset is the way to go, I guess it won't matter. You don't have to put on panels that look ugly... just enough on to use the good part of the roof and you can rest easy knowing you actually have a chance of having them pay for themselves over time, even if they aren't covering your full consumption.

[foo1bar]

As to the panel cost, none of the salesmen were tax people, but one said that the electrical panel upgrade is not technically part of the solar installation and whether it was bundled in or not there was no tax credit on it. Two said that if it was bundled in then the tax credit applied. Doing it separately would be iffy since it could be claimed that it was an improvement unrelated to the solar system. From what I've read, the 30% applies to "any complete solar power package, for home or business." So claiming the tax credit on a separate electrical panel installation might be iffy. It might go through, but a year down the road it could trigger an audit.

"Expenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of the property described in subsection (d) and for piping or wiring to interconnect such property to the dwelling unit shall be taken into account for purposes of this section."

http://www.law.cornell.edu/uscode/text/26/25D

IMO if it's necessary for the solar install to also do a panel upgrade, then *at least* the labor costs can be included under this part of the law.
And IMO even the material costs of the panel (~$150) and wiring ($??) could/should be considered part of the "property which uses solar energy to generate electricity for use in a dwelling unit located in the United States and used as a residence by the taxpayer."
BUT I am not a tax lawyer. (I only claim that I know how to use a search engine to find the right section of tax law)

FWIW, I believe pretty much *ALL* tax claims go through, only to possibly trigger an audit a year or more later. But when you are doing your taxes legally, an audit isn't something to worry about. Frankly I doubt this would trigger an audit - IMO there's going to be a LOT of 5695 forms filed - and it simply wouldn't be economical to audit all of them since most of them would result in no additional taxes collected.

Also - you're looking at a $26k system. $26k * .30 = $7800. If your 2015 and 2016 taxes together aren't at least $7800, then you may not get to claim that whole credit anyhow. (Probably you are paying that much in taxes since you're considering spending $26k - but something you can estimate fairly easily since it's the time of year to fill out your 1040 for 2014 anyhow)

[sms]

And guess what: Just about all 5 kW systems in the same orientation and service will produce just about the same annual output - the only real difference is footprint - Sunpower's smaller in overall size with sort of a built in overpriced extended warranty you don't get to decline. At least that's what all kinds of stuff from sources like PVoutlet will confirm for the looking.

Take what you want of the above, if any, and scrap the rest.

What you don't understand that it's often not possible, due to space constraints, to have the same orientation when you increase the number of panels and use less efficient panels. A lot of residential installations are roof-space constricted. For a company like Solar City, who is doing leases, they're marketing slightly reduced electric bills with zero-outlay and this looks attractive to some people even when they are only getting enough panels to offset 50-60%.

[sms]

That particular installer is just pulling numbers out of the air. Did he know you were looking at Sunpower panels? If so, he probably pegged you as someone who was willing to pay more than the average customer and bumped his price up to try to score. Solarworld panels should not cost more than Sunpower, ever. Read some of the other threads... there are people in your area getting sub $4.00 / W with good equipment.

Are you sure you need a panel upgrade? Several salespeople quoted one for me too, until one actually did the research and showed it wasn't necessary. I can refer you to my installer if you want a decent price, although if you are convinced that only 100% offset is the way to go, I guess it won't matter. You don't have to put on panels that look ugly... just enough on to use the good part of the roof and you can rest easy knowing you actually have a chance of having them pay for themselves over time, even if they aren't covering your full consumption.

The panel needs an upgrade regardless of solar or not. It's a 50 year old Zinsco 100 amp panel and you can read about Zinsco panels if you wish. It's already got too much on it with a pool pump and air-conditioner, neither of which were there when the house was built.

No salesperson knew what other companies I was looking at.

I'd love a referral to your installer as long as he's installing high-efficiency panels from a panel maker likely to survive for at least ten years.

[sms]

"Expenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of the property described in subsection (d) and for piping or wiring to interconnect such property to the dwelling unit shall be taken into account for purposes of this section."

http://www.law.cornell.edu/uscode/text/26/25D

IMO if it's necessary for the solar install to also do a panel upgrade, then *at least* the labor costs can be included under this part of the law.
And IMO even the material costs of the panel (~$150) and wiring ($??) could/should be considered part of the "property which uses solar energy to generate electricity for use in a dwelling unit located in the United States and used as a residence by the taxpayer."
BUT I am not a tax lawyer. (I only claim that I know how to use a search engine to find the right section of tax law)

FWIW, I believe pretty much *ALL* tax claims go through, only to possibly trigger an audit a year or more later. But when you are doing your taxes legally, an audit isn't something to worry about. Frankly I doubt this would trigger an audit - IMO there's going to be a LOT of 5695 forms filed - and it simply wouldn't be economical to audit all of them since most of them would result in no additional taxes collected.

Also - you're looking at a $26k system. $26k * .30 = $7800. If your 2015 and 2016 taxes together aren't at least $7800, then you may not get to claim that whole credit anyhow. (Probably you are paying that much in taxes since you're considering spending $26k - but something you can estimate fairly easily since it's the time of year to fill out your 1040 for 2014 anyhow)

Actually the tax credit is higher than 30% of the net pre-tax cost because of the way they do things regarding the rebate, but the rebate amount is taxable income so it works out about the same.

[sensij]

What you don't understand that it's often not possible, due to space constraints, to have the same orientation when you increase the number of panels and use less efficient panels

What you don't seem to understand is that I'm not suggesting you put up more panels to compensate for the lower efficiency. What I'm saying is that a less efficient system will probably cost you less money than a more efficient system (even counting the residual electric bill) if both were installed in the same area, because the cost of higher efficiency is greater than the actual efficiency improvement you are getting.

I'd love a referral to your installer as long as he's installing high-efficiency panels from a panel maker likely to survive for at least ten years.

It sounds like you've got it all figured out. I'm not sure which of today's big solar panel companies, if any, are likely to survive 10 years, so I guess I've got nothing for you. I am reasonably sure that in the unlikely event a panel actually fails, the cost of replacing it with a panel that is current at that time will be inexpensive, and much less than the upfront cost of "insurance" offered by companies who make their sales pitch based on such things.

[sensij]

Actually the tax credit is higher than 30% of the net pre-tax cost because of the way they do things regarding the rebate, but the rebate amount is taxable income so it works out about the same.

Have you even looked at Form 5695? You are getting bad information from somewhere.

[russ]

What you don't understand that it's often not possible, due to space constraints, to have the same orientation when you increase the number of panels and use less efficient panels. A lot of residential installations are roof-space constricted. For a company like Solar City, who is doing leases, they're marketing slightly reduced electric bills with zero-outlay and this looks attractive to some people even when they are only getting enough panels to offset 50-60%.

sms - If you read old posts by J.P.M. you would see that is exactly what he says time after time. If you have the space the cheaper panels are a better deal. Solar City marketing is like much of marketing - more blather than reality by people that have no idea.

[russ]

Have you even looked at Form 5695? You are getting bad information from somewhere.

Maybe the barber or a bar buddy offered him information?

[sms]

sms - If you read old posts by J.P.M. you would see that is exactly what he says time after time. If you have the space the cheaper panels are a better deal. Solar City marketing is like much of marketing - more blather than reality by people that have no idea.

Solar City is for people who are bad at math. But similarly, many people don't take a systems view when selecting panels and systems, they go for the least-efficient, least-expensive, panels and either use more of them, or they buy a lower capacity system that offsets less of their electric bill. They also don't look at the long term of where electric rates are going and they don't even look at their billing history to see how some utilities are moving the rates around among tiers, lowering the top tier rates and raising the lower tier rates. It used to be that just offsetting the higher tiers made sense since the lower tiers were very cheap. But at least for PG&E, if you look at the rate changes they've pushed through the PUC (and there was likely criminal activity at the PUC that is just now being uncovered) it now makes sense to put in a system to offset most of the usage. Sure the break-even time will be a little longer, but if you're planning on keeping the property it makes sense. Seven years versus nine years to break even is of little concern especially when you look at the interest you could get on extra few thousand dollars.

Personally I'm not married to Sunpower panels, I'd use any panel that could generate 5500-6000 watts with 16 panels or less. I'm not tied to Sunpower Direct either but an independent dealer would have to be at least a few thousand less expensive to offset the risk.