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Comment by haliskerbas | Hacker News Reader

I’ve been trying to do the math for my own home, are solar panels actually cash flow positive, once you account for efficiency decrease overtime etc.? It always seemed like one barely breaks even in 2 decades

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It depends on a whole lot of factors. In a sunny place like CA with good solar incentive programs, assuming good southern to southwestern exposure, they are cash positive after about 6 years [1]. In Wisconsin, 11 years [2]. In Washington State, 15 years [3]

1. https://www.energysage.com/solar-panels/ca/#:~:text=For%20Ca....

2. https://www.energysage.com/solar-panels/wi/#:~:text=In%20Wis....

3. https://www.energysage.com/solar-panels/wa/#:~:text=In%20Was....

Yeah, so far, with the rooftop system we put in about 1.5 years ago (Los Angeles), we are tracking to ~5.5 year payback period, so this feels right.

Guaranteed 15%+ ROI. Really makes you wonder why more people aren't investing in solar

At what state? It’s more like 15-20 year break even by me; and I can’t sell power back to the grid.

Wow is electricity really that expensive in CA? Our total expenditure on electricity over 20 years is around 20k.

But in CA that site says that their net 20 year savings using solar is 44k-60k. That's insane. Their savings alone is 3 times the cost of our entire electric bill...

> Wow is electricity really that expensive in CA? Our total expenditure on electricity over 20 years is around 20k.

Electricity in CA currently averages around 28c/kWh. Your total expenditure depends on a lot of things, including the size of your home and your loads. The average CA home probably spends around $2000/year on electricity, but that varies a lot based on location and lifestyle.

> But in CA that site says that their net 20 year savings using solar is 44k-60k. That's insane. Their savings alone is 3 times the cost of our entire electric bill...

That figure probably assumes increasing electricity prices over the 20 years, which by and large has held true due to both inflation and increasing wildfire liability.

That explains it then, looking at our past few bills it comes out to ~$0.13/kWh. So yeah, we are less than half the average price in CA. Crazy. That would really change the dynamics of how profitable solar is. I've been wanting to get solar myself.

In reality our rate is Basic - $23.15 + All kWh @ $.089. So it would be even cheaper if we used more on a per kWh basis.

I got a quote last fall in the SF Bay Area for a system:

- 6.4 kW (16x400W panels), microinverter-based (little to no maintenance expected in 25 years)

- estimated to produce 8,500 kWh in year 1

- the panels are warrantied to produce 86% in year 25. Let's use 80% as a more conservative estimate.

- up front cost: $16,500 after the federal tax incentive

- alternative: paying PG&E $.25/kWh on average (conservative estimate)

To a first approximation, the system would save $2,125 in the first year, or almost 13% of the initial investment. In year 25, we'd expect 6,800 kWh. At the same energy price, it'd be saving 10% of the initial investment. (This doesn't take into account inflation, changes in energy prices, and I'm sure other things. This is all very different if your local utility doesn't offer net metering, too.)

The system breaks even in year 8, similar to what others in this thread have reported. But you can also look at it as a pretty low-risk investment returning 10-13% per year for 25 years. That sounds pretty good to me.

The fact that the return is not compounding makes a very large difference here.

$16,500 returning 10% of the original principle per year isn’t a great investment. 25 years you have $41,000 + 25 yr old solar panels.

$16,500 returning 10% compounding over 25 years gets you $162,000 + the $16,500 principle.

Considering opportunity cost spread evenly over 25 years, those panels cost over $5000 per year.

There are plenty of reasons to go solar, but return on investment is not one of them.

You are ignoring investing the savings which if the stock market returns 8% vs the panels at 13%, you would get a 50% higher return with the panels + investing the savings in the stock market vs just the stock market after 30 years. Albeit, it does take 13 years to come out ahead.

  >>> x = 0
  >>> for y in range(0,30):
  ...   x *= 1.08
  ...   x += 2125
  ...   print(y, x)
  ...
  0 2125.0
  1 4420.0
  2 6898.6
  3 9575.488000000001
  4 12466.527040000003
  5 15588.849203200003
  6 18960.957139456004
  7 22602.833710612485
  8 26536.060407461486
  9 30783.945240058405
  10 35371.66085926308
  11 40326.39372800413
  12 45677.50522624446
  13 51456.705644344016
  14 57698.24209589154
  15 64439.10146356287
  16 71719.2295806479
  17 79581.76794709972
  18 88073.30938286771
  19 97244.17413349713
  20 107148.70806417691
  21 117845.60470931107
  22 129398.25308605596
  23 141875.11333294044
  24 155350.1223995757
  25 169903.13219154175
  26 185620.3827668651
  27 202595.01338821434
  28 220927.6144592715
  29 240726.82361601325
  >>> x = 16500
  >>> for y in range(0,30):
  ...   x *= 1.08
  ...   print(y, x)
  ...
  0 17820.0
  1 19245.600000000002
  2 20785.248000000003
  3 22448.067840000003
  4 24243.913267200005
  5 26183.426328576006
  6 28278.100434862088
  7 30540.348469651057
  8 32983.57634722314
  9 35622.26245500099
  10 38472.04345140108
  11 41549.806927513164
  12 44873.79148171422
  13 48463.69480025137
  14 52340.79038427148
  15 56528.0536150132
  16 61050.29790421426
  17 65934.32173655141
  18 71209.06747547553
  19 76905.79287351358
  20 83058.25630339466
  21 89702.91680766625
  22 96879.15015227956
  23 104629.48216446194
  24 112999.8407376189
  25 122039.82799662842
  26 131803.0142363587
  27 142347.25537526738
  28 153735.0358052888
  29 166033.8386697119

You're not adjusting for inflation (cash + increases in electricity costs), ambitiously assuming an equivalent 10% return on other investments, or re-investing the amount saved per year in your calculations (that $1650 you save in the first year also compounds to ~$16.25k).

Make those fixes and the numbers are much closer.

Just take the money you save on electricity and put it into the market...?

This is a good point!

No it is not. It assumes you store money gained under the bed and do not reinvest it in any way.

Solar in California is often breakeven after 4 to 7 years. Enphase enables microgrid systems, and the IQ8 can keep your house powered even when the grid is down, and even without batteries –– something never before possible.

https://enphase.com/sites/default/files/2021-10/IQ8SP-DS-000...

Worth nothing that PG&E is working with CA Democrats to try to kill rooftop solar. They want renewables, but only if distributed using their (badly operated and overpriced) grid. [1]

[1] https://pv-magazine-usa.com/2022/02/11/coalition-received-1-...

While I can't say anything useful about PG&E, net metering is problematic though. As used right now in many regions of the world, it is a large and inefficient subsidy to relatively affluent solar roof owners like you and me.

Where I live, a different regime is being introduced: - a capacity tariff: a base grid charge, calculated based upon quarterly average peak consumption - a feed-in rate: a wholesale rate compensation for injecting self-produced green electricity into the grid (my current rate: 0.064€/kWh) - a retail rate by one's electricity provider (my current rate: .02869€/kWh) - subsidies for installation of solar (up to 300€/kW peak) and storage (up to 30%)

This at least conceptually incentivises both of solar installation and peak shaving. Solar is less ridiculously profitable for me, but still a no-brainer in terms of profitability.

I'm happy with our enphase system. We have batteties from them too.

The Democrats (and Arnold) pushed back hard against the proposed NEM 3 rates that would have killed rooftop solar.

I have nothing nice to say about PG&E.

It can be cash flow positive if you do a bunch of the work yourself and plan accordingly.

https://www.sevarg.net/tag/solar/

From my point of view the nice thing about it is reducing or eliminating recurring expenses.

Once your recurring expenses drop below passive income you are pretty well set.

Depends on how much power you need and your access to sun. I'm in the Bay Area, installed solar panels about 18 months ago. Break even for the panels is estimated to be about 6 years at current market rates. Now I also had to do a new roof, which roughly doubles the break even time, ignoring the fact that I'd have needed a new roof anyways.

Currently I'm not taking into consideration decreased efficiency because the panels are warrantied for 90.08%+ at 25 years. Also something not taken into account on breakeven/cash positive is the fact that PG&E rates are always on the rise. As of March of this year rates went up 9%. The more rates go up, the faster I break even.

You can take increasing rates , but then you also need to take opportunity cost.

You paid say 50k cash for solar? Put that in SP500 for 6 years. It’s not 50k anymore.

I got solar in northern California with new roof that needed to be replaced. I got 30 percent tax credit on the roof as well. Paid for the roof in cash but took 10 year loan out for the solar panels at 3.0 percent. Break even at this rate is about 4 years already a few year in. With inflation right now I feel like I got good deal borrowing the money. Right now my loan payment plus then 10.00 monthly connection fee is less than my average monthly bill before 2019. Not sure I would do it with needing a new roof though. But everybody experience will be different.

You do, but it seems pretty good even taking into account opportunity cost? My calculations: https://news.ycombinator.com/item?id=31105389

Someone else said it better in a different subthread: https://news.ycombinator.com/item?id=31105120

Yah I’m not doubting it is good in Cali, I’m just saying you need to include the opportunity cost if going that route.

I wish the break even was better further north for me.

Sounds about right for the power only, but you also probably get a battery with it to deal with power outages… I don’t know how to price the utility of that, but it’s why I bought solar.

35k for a 8kwh, 24kwh battery storage system. ~15k in credits?

Solar loan ends up at 175 a month. I got in before the recent ridiculousness around fuel prices. I'm sure I'm net positive at this point but haven't done the precise math.

One addition I'm considering, is some bitcoin/ crypto rigs to take care of excess power during the peaks. Even with my batteries, I produce a lot of extra power and don't get paid spit from the power company, and what I do get I can only use as credit.

https://www.nicehash.com/profitability-calculator/-bitmain-a...

Thing costs ~1.25k, but at ~$10/ day it will pay its self off in a quarter.

How long have you been able to stretch that battery out when your power is out? Don’t have a point to make or anything, I’m just curious. I hadn’t really considered that.

I only have 10kw but most days that is enough to get through the night. Air conditioning will go through it, but I don’t typically need it, especially after the sun sets.

24kW can lost a long time if you don’t need AC. Should be days

Even if only just break even after 20years, it is an acceptable cost for freedom of mind and autonomy.

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