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Tuesday, March 29, 2011

Solar panel quote

I received a quickie quote from the solar panel company we are working with here in Seattle that is based on satellite images of our house just to give us an idea of how much it would cost. If we want to move forward, they'll come out and update the estimate after looking at our roof and various other variables.

In the quote, they included three PV options, ranging in size from 4.6 to 5.3 kW, using three different types of modules. They are assuming 99% annual solar access on a south-facing array (providing about 1144 kWh/yr per kW). Again, these are ballpark figures, but you'll get the idea.

Option 1 has high power density, but a small incentive rate
This option has the maximum power in the smallest possible footprint, and the system production will pay back about 71% of the initial investment (after the tax credit) by the end of 2020 through a combination of state production incentive and net metering (including the value of all the electricity we won't have to buy).

Annual production for this option is estimated at 6043 kWh, earning $906 per year while offsetting roughly 47% of our reported usage.

Option 2 has a low initial cost, but a small incentive rate
The second option has lower power density which means the panels take up more space on our roof, but the lower price per watt makes this the least expensive system in terms of up-front cost. The system production will pay back about 83% of the initial investment by the end of 2020.

Annual production for this option is estimated at 5264 kWh, earning $790 per year while offsetting roughly 41% of our reported usage.

Option 3 has a very high incentive rate, but a higher initial cost
The last option has components that are all made in Washington, which makes them eligible for the top incentive rate of 54 cents per kWh. As a result, these systems usually pay for themselves more quickly than other products, despite the higher up-front cost. We would break even in year nine, earning about $5169 by the end of year ten.

Annual production for this option is estimated at 5356 kWh, earning $2892 per year while offsetting roughly 41% of our reported usage.

Here's part of the breakdown (since it's easier to see the stats back to back):

Option 1
System size: 5280 watts
Estimated Production (kWh/yr): 6043
Installed Cost: $30,030.45
Dollars per Watt: $5.69
30% Federal Tax Credit: -$9,009.14
Net Cost After Tax & Credit(s): $21,021.32
Production Incentive, $/kWh: $0.15
Annual Incentive Payment: -$906.45
Total Incentive thru June 2020: -$8,611.28
Net residual cost (including net metering offset) as of 2020: $6,067.38
% of cost paid back by 2020: 71.1%
Payback Time (years): 18

Option 2
System size: 4600 watts
Estimated Production (kWh/yr): 5264
Installed Cost: $22,408.97
Dollars per Watt: $4.87
30% Federal Tax Credit: -$6,722.69
Net Cost After Tax & Credit(s): $15,686.28
Production Incentive, $/kWh: $0.15
Annual Incentive Payment: -$789.60
Total Incentive thru June 2020: -$7,501.20
Net residual cost (including net metering offset) as of 2020: $2,660.04
% of cost paid back by 2020: 83.0%
Payback Time (years): 15

Option 3
System size: 4680 watts
Estimated Production (kWh/yr): 5356
Installed Cost: $39,899.05
Dollars per Watt: $8.53
30% Federal Tax Credit: -$11,969.72
Net Cost After Tax & Credit(s): $27,929.34
Production Incentive, $/kWh: $0.54
Annual Incentive Payment: -$2,892.24
Total Incentive thru June 2020: -$27,476.28
Net residual cost (including net metering offset) as of 2020: -$5,168.54
% of cost paid back by 2020: 118.5%
Payback Time (years): 9

I'm more partial to Option 3 because of the quick payoff and the incentives. After 9 years, all energy generated will be "free". Option 1 has its perks in that it can squeeze more panels into a smaller space, but it takes forever to pay off. Another objective for us would be to reduce the amount of energy we use to meet the amount generated. I'm sure we can close the gap with some effort.

In any case, we have some figgerin' to do. I'll let you know if we move forward and you'll get the play-by-play if we do!

28 comments:

a Thrifty Mama said...

Okay, I understood the last couple paragraphs and that was pretty cool, but was the rest even in English? I guess I have some studying to do before I even look at considering solar for us! *sigh*

Crunchy Chicken said...

Yeah, it can be very intimidating. Really the thing to look at is initial net cost, how long it takes to pay off and how much of your energy it's producing. The quote had a lot more breakdown on annual net metering payoffs, but including that would have really made your eyes cross!

owlfan said...

One consideration I would have on the 3rd option is, what is the likelihood of the state deciding to cut the incentive because of budget troubles? If it (or any of the incentives) was cut back a few years down the road, how would that affect finances?

Lee Borden said...

I've always enjoyed crossed eyes. Seriously, for the benefit of those of us trying to understand the ramifications of net metering and the cost of installed PV, would you consider making available the unedited quotes? Thanks!

Dr. Monkey Von Monkerstein said...

I'm betting that costs will come down even more in the next few years.

Robyn M. said...

I get stuck right at the beginning. 99% solar access? What does this even mean? I lived in Seattle for two years, and if 99% solar access means anything like what it really ought to mean, then there is *no* *way* that will happen in Seattle. Most systems punk out pretty badly in the face of cloud cover. We've got some folks coming for our Earth Day celebration this year who want to do a demo with incandescent and flourescent bulbs. They plan to use a solar panel to power them, but they need backup electric in case it's cloudy--*just to run a lightbulb*.

Also, because I'm inherently distrustful of these things, what kind of hours-per-day access are they assuming? 12 hours? 8? What? Does it vary by season? In the winter, the sun is barely up at all in Seattle--you can watch it make a cute little loop in the sky between 10a-3p. Is this included in the estimates?

Crunchy Chicken said...

Robyn - 99% solar access means that we have nothing blocking our roof - no tall building, trees, etc. It just means that, when the sun is in the sky, there's nothing preventing it from falling on our roof besides the angle and thick cloud cover.

They take into consideration the less hours of daylight during the winter, but it's balanced out by the enormous gain during the summer - so it's an annual estimation.

Also, because many solar panels work better under cooler temperatures, solar in Seattle is more proficient at generating electricity versus places where it's blazing hot out (something like 78 degrees - roof temp - is ideal, but I don't remember exactly the figures).

Also solar panels work well under cloud cover situations as well. Do not assume that because it's cloudy they aren't producing.

CJ said...

I'm a new reader, have little PV experience, and I'm from the East Coast - so forgive me if I misspeak.

But here is what common sense tells me.

A) Since the output of a solar panel is based mostly on the amount of surface area exposed to the sun, it would seem to me that buying a smaller system (less panels) and adding lower cost reflective mirrors would increase your system's output with a smaller investment. Plus in 10 years when the systems are twice as efficient as what one can purchase now, the financial pain to upgrade would be less and the mirrors will still work on the newer system.

B) Using less energy is always more cost effective than any green alternative. Insulation and habit changing are the most economical green things one can do.

C) PV produces electricity, so if your energy needs are for heat, PV would be a poor choice due to energy conversion losses. A solar hot water system would be much more cost effective - and cheaper to begin with.

D) Some PV panels are constructed with some absolutely nasty chemicals. In some cities/towns, a broken PV panel is considered a hazardous waste site. Even if they don't break, I would want to know how one goes about getting rid of them at their end of life before I owned them.

Good luck.

adventuresindinner said...

Thanks so much for the breakdown. We're considering going solar in the next two years. With the price (both environmentally and fiscally) of electricity and not having a lot of confidence that present availability will be possible in the future it just seems to make the most sense.

Leta said...

As someone who has been investigating solar panels seriously, THANK YOU SO MUCH for this post. Awesome, understandable. Good job!

Also, this is not a value judgment at all, but a sincere question, why are you guys using so much electricity? Do you have an electric heat pump or something? (I can't see you using tons of AC in Seattle.)

We are a family of 5 and we use 300 to 500 kWh per month. We have chest fridge/freezers and we don't use AC (we live in the U.P.) but other than that we are normal- lights, fans, electronics, major appliances, etc. However, our secondary heat boiler (primary heat is wood), hot water heater, dryer, and range are gas, so that might be why our electric is low...

Crunchy Chicken said...

Leta - Good question. I honestly don't know and that's something we are looking at. All of our appliances are electric so that plays a huge part of it. We don't have A/C. It's not really been something we think about too much because electricity is dirt cheap in our area.

But our water heater, oil heater, washer/dryer (when we use it), fridge, chest freezer and oven/stove are all electric.

Jenette said...

I would also find out the functional life of the solar panels. Its been a while since I looked into it but some solar panels have a 10-15 year life span.

Robj98168 said...

whom did you use for your quotes?

Crunchy Chicken said...

Puget Sound Solar

eatclosetohome said...

Hey, Crunch-

I was going to ask the same question as Leta - 11,000kwh/year is a lot of electricity. (Average, for a US household, but still a lot.) I've seen a lot of recommendations that you should first try to reduce your electricity usage to 3kwh/day before installing solar panels. We've not managed to do quite that well (all our appliances are electric, no option for gas) but we still got down to about 4000kwh/yr using all the usual methods (bulbs, unplug, line dry, etc.). And payoff time for those measures is usually under a year!

homesteader said...

This is why solar is not viable. In the economy of the future i.e. no money, etc. very few folks are going to be able to afford this, not mention do we want to be encouraging taking on more debt and I doubt there are many folks with 15K+ spare cash lying around.

Leta said...

Homesteader, with respect, you are incorrect. Where I live, electricity costs 20 cents per kWh. So if I spend $18K on a solar roof (my most recent quote), after incentives I will basically get a free standing seam metal roof, and the solar portion will pay for itself in less than ten years, and that's BEFORE net metering has the electric company pay me, so, really, it's closer to 5 years, after which I'm making money. And this is north of the 45th parallel. Also, I don't have to have $18K sitting around- like everything else, I just need to be able to finance this.

homesteader said...

Leta,
What was I incorrect on, that we do not want to encourage more debt or that most people will not be able to afford this? I think solar is a great idea and technology, but it is too expensive w/o financing and I guess I feel it is not a wise move, but YMMV of course.

Mrs Mallard said...

We dropped about $11,000 (after incentives) on our 2.3kW system and we've collected over 3,100kWh in the last 15 months here in Oregon. In fact, it's pouring rain today and we've still managed to gather almost 3kWh.

The one harsh lesson we learned was that the credits are non-refundable. Wouldn't it be nice if that were in bold print somewhere and the sales folks made a point to share that info? Because our tax liability is low, we will never see the full return on the tax credits and that took our bottom line from about $3,000 (manageable) to $11,000 (total freakout).

Might be bitterly disappointed in the company we worked with, but we're beyond thrilled with the panels. From the beginning, we looked more at the conservation/sustainability side of things than the time it would take to recoup on our investment. We've paid it off and we're diggin' the drop in our monthly bills.

Greenpa said...

just very briefly - gotta go do stuff before our still frozen ground gets slick on top from sun-

As a person who has lived off grid; photovoltaic; for 30 some years; I was pretty astonished at the depth of misunderstanding and plain ignorance here in these comments.

Sorry; but some of them are just jawdropping.

Boy, do you guys need to do your homework; a ton more.

And perhaps an incentive- most of the ignorance is in the direction of deeply underestimating the utility of photovoltaics.

Reflectors???? "it seems to me" - that if they were cost effective- you might see some, now and then. But you know? You don't. Now why is that, do you suppose?

(hint. the sun is not in the same place in the sky, all the time...)

CJ said...
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CJ said...
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CJ said...

Greenpa, no disrespect but I think you need to double check your logic. Your "hint" makes no sense at all. If the path of the sun were an issue for mirrors, wouldn't it also be for a fixed solar panel? The angle of reflection from parabolic mirrors would account for the "wobble" of the earth's orbit and angle of tilt.

Solar energy is diffuse, anything that can concentrate it for less than the cost of another solar panel is money in the bank.

Greenpa said...

CJ -"Solar energy is diffuse, anything that can concentrate it for less than the cost of another solar panel is money in the bank."

yup, which is why ALL those solar panels out there are equipped with reflectors! Absolutely!

CJ said...

"Concentrated photovoltaics (CPV) is one of the newest forms of solar energy technology on the market today."


http://en.wikipedia.org/wiki/Concentrated_photovoltaics

Maybe once we get the old-timers who think they know everything out of the way.

Anonymous said...

Um, dumb question here, but what's the cost if you install yourself?

Ivanturpin said...

Hi there, I want to get rid of the electricity bills and also I think that we should have some alternative step for the consumption of electricity. So i am thinking to install solar panels at my home and office. I want some solar panels Florida services. Please suggest me something.

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Timmy.Norris said...

I had some solar panel installed in our home last year and It definitely reduced our electric consumption. Thanks.
solar panels norfolk

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