Comment by mark_l_watson | Hacker News Reader

Comment by mark_l_watson | Hacker News Reader

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Our local utility company just hooked up our new solar setup to their grid yesterday afternoon. In exchange for a hefty rebate on the installation, we had to agree to be hooked up to their grid for 10 years.

What this means is: power we generate goes to a very nearby facility and we buy back power. Our setup allows me in real time see how much power we are generating, how much we are selling back to the utility vs. how much we are using. For most of today, it looked like we were generating about 800 watts more than our house was using. The installer looked at our historic electricity bills and installed enough panels so that we would get paid back some money every year, but not a lot. So, I expect maybe a "negative" electricity bill of about $400 a year, instead of a yearly "positive" bill of about $1000.

With the rebate and state and federal tax savings, our break even point is supposed to be in 5 or 6 years. I think it may be sooner than that because the contractor did not account for rising electricity costs.

Anyway, this is fun - part of the value.

Same here, got my install finished just a month ago. The inverters we used aggregates the data (to warn us of problem) which I have made public http://enlighten.enphaseenergy.com/public/systems/TTAL25069 We also expect a payback of around five years (in MA). After running the numbers it was pretty clear in MA that solar is a very decent (300% return in ~10 years)* and safe investment. Just too bad that you can only really invest ~15K before you produce more than you need.

Edit:

  *
  100% return in SREC + no electric bill in 3-5 years
  Several more years of SRECS,
    easily 50% of the original investment
  The longer you stick in the house, the no electric
    bill once again pays back (With no tax!) the initial
    investment 100% after ~15-20 years
  100+% back when you sell the house (as they are
    depreciated on the initial 30K+ install cost, not
    your post tax incentive cost and probably still
    worth in the 20's) and solar seems to be causing
    houses to sell quicker to boot.

If I was going to retire soon and needed to start moving investments to a more predictive safe place to put some cash getting panels seems a win all around and removes one more unknown bill from my life. But again it is only ~10-20K of a retirement fund, but hey every bit helps.

300% ROI for 10 years is about a 11.6% annual ROI... pretty much guaranteed. I have a feeling that companies will be springing up that match up investors who want that kind of a low-risk ROI (almost everybody) with people who want solar power on their roofs for free, with similar electric bills as they're paying now (also almost everybody in much of the continental US).

This is why solar power will quickly dominate soon, IMO.

I agree with your math but disagree with your conclusion :)

this is why Google is funding it -- getting an 11% return is great if you have giant piles of cash sitting around doing nothing. Those margins become substantially thinner if your cost of capital is 7%, 8%, 12%, etc.

edit to add: BTW, there's some great research that suggests when people "do the math" and figure out how much energy-efficiency/renewable energy technology will save, that they usually require ROI's of 50-100% -- i.e., "if your fluorescent bulbs/solar panels/low-flow shower head won't pay for itself within a year, i won't bother". It's sad, but it's a real obstacle.

"if your fluorescent bulbs/solar panels/low-flow shower head won't pay for itself within a year, i won't bother"

I'd guess this is largely caused by our psychological tendency to overly discount future gains combined with loss aversion (people are used to things failing after a year, so if it hasn't paid for itself by then, it never will (example: I just had a 4-year fluorescent bulb I installed one year ago fail, about a month after I threw away the packaging with the warranty info on it)).

https://secure.wikimedia.org/wikipedia/en/wiki/Hyperbolic_di...

My CFLs haven't lasted very long since production of most of them shifted to China. They last a year or two, which is a bit longer than the bulbs they replace, but not much. There's no place to dispose of them safely though so they are just stacking up in boxes for now. I found with the warranties that you have to ship the bulbs back at your own expense to an address, which because of the weight of the ceramic base costs more than the bulb did originally. This means in practice they don't really have a warranty, so you did the right thing throwing the warranty packaging out.

With the stock market down, there should be a lot of cash sitting around, waiting to be invested in something else than treasuries and gold.

Thanks for providing that link, it's been really difficult in the past to find hard data with actual numbers from real installations.

To clarify, as your total cost including everything $15k or $30k, I see both numbers in your post, and was that the actual prices, or were there subsidies as well?

The invoice for the install was 34K. You get back 33% from the fed. ~25% from the MA rebate, and another $1K back from MA taxes. I only had to write a check for the 34K minus the MA rebate (which MA writes a check to the installer before the work starts) so ~25K, but with the other tax rebates (already modified my W4 so "getting back" the fed 33% right now and not waiting until next April) the total I have to invest will be ~15K.

More notes on the whole install

http://benjamin-meyer-home.blogspot.com/2011/08/solar-panels...

http://benjamin-meyer-home.blogspot.com/2011/08/solar-panel-...

Thanks a bunch for the followup, that's extremely interesting.

Is the technology too new or are they able to provide you with estimates for (i) the useful life of the equipment and (ii) recurring maintenance costs?

Barring vast economic collapse, a bet on rising energy prices strikes me as relatively safe compared to many other investment alternatives. It's definitely very interesting and really appreciate you sharing your experience!

There is a manufacturer's guarantee that the system will still put out 80% power in 20 years, and is guaranteed for 25 years. If, the manufacturer stays in business...

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