Switching To Solar Power, One Year Later 541
ThinSkin writes "Slashdot readers may recall Loyd Case's series of articles illustrating his experiences after switching to solar power for his family home. Loyd shared his one month update, a six month update, and now finally concludes his series after one year of solar power. Despite the $38,000 initial cost for the setup, Loyd is very optimistic after a $3,000 savings in one year, meaning that in about 12 years he will break even — though he suspects ten years is a better estimate considering other factors. Other reasons such as feeling 'green,' increasing the property value of his house, and the 'spousal acceptance factor' all support Loyd's decision on why he'd do it all over again if he had to." The article is spread annoyingly over multiple pages, like everything at the site, and the print version omits the graphs.
Re:Solar panel longevity (Score:2, Interesting)
They lose efficiency over time, and will never offset his initial costs before needing to be replaced.
Oh, and don't forget maintenance (they get dusty).
Time value of money (Score:2, Interesting)
The whole solar argument still has to grapple with its high up front costs. Doing calculations on money savings with such a long time to "break even" means that you need to take into account the time value of money. Even using a small interest rate such as 4.5% as an example (which is the cost of capital of a bank's home equity loan that I saw advertised recently near my house) means that he won't break even in over 19 years. Over 50% longer than the statistic the summary uses.
Re:Solar panel longevity (Score:3, Interesting)
I believe the $38,000 cost was for the entire conversion. I doubt replacement panels would cost that much. I think you're right that it would significantly extend the ROI, though. I think 12 years is optimistic.
No, he's NOT saving money (Score:3, Interesting)
Re:Bad Math (Score:5, Interesting)
Not it isn't.
The risks are different, but this is not without risks.
Panels could prematurely fail, and the provider go out of business leaving him with no warranty.
Price of electricity could fall, greatly extending his ROI.
Interest rates could climb, increasing the opportunity cost of his investment.
Far superior panels could be released next year.
Poor installation could lead to water damage to his house.
The possible risks are numerous, far from a guaranteed ROI.
Re:Time value of money (Score:5, Interesting)
At the moment, though, you have to factor in the fact that we're about to hit some mondo inflation due to the money Obama's been printing. So, it's actually a good idea right now to get into things that aren't pegged to the actual dollars. This guy is basically buying his electricity up front before his $40k is worthless.
If anyone is interested in a solar water heater... (Score:4, Interesting)
Overengineered waste of money (Score:3, Interesting)
He could've spent a fraction of that $38K to reduce his power bills to something closer to $100 per month. Better insulation, more energy efficient PSs in his computers, not leaving electronics on 24/7, change out to CF bulbs, and so on -- seriously!
He's going to hit Jevon's Paradox and end up not actually saving anything, IMO.
I'm more in support of community solar (have the HOA do it, or in a park, etc) which is more beneficial and lower cost. Mass solar.
Re:Return on investment (Score:5, Interesting)
The system wouldn't just lose $760/year in value, it would also lose 2% in efficiency per year, which means that if he saved $3,000 the first year, he could expect to save only $2,940 the second, and so on (all else - electricity usage, cost of electricity, etc - being equal). The revenue stream then looks like this (over 10 years):
Year 0: Cost of $38400.
Year 1: Benefit of $3,000.
Year 2: Benefit of $2,940.
Year 3: Benefit of $2,880.
Year 4: Benefit of $2,820.
Year 5: Benefit of $2,760.
Year 6: Benefit of $2,700.
Year 7: Benefit of $2,640.
Year 8: Benefit of $2,580.
Year 9: Benefit of $2,520.
Year 10: Benefit of $2,460.
Value of system after 10 years: $30,400.
Plugging these numbers into the IRR formula gives you a 5.7% return per year.
If we make a slightly different assumption that the decreased output is geometric (not arithmetic) and still use the idea that the depreciated value equals the original cost times the current efficiency, then you can show that D + R = 7.9%, where D = depreciation rate and R = rate of return. So if you assume D = 2%, then R = 5.9%. But if D = 4%, then R = 3.9%, which is not great.
Doesn't sound to me like an obvious win for solar power. On the other hand, it's not an obvious money sink, either, so that's good. I'm sure things will continue to improve.
Would be interesting to see a subsidy-free comparison of both methods of electricity generation, but that's pretty hard. You can easily handle the consumer tax breaks, but how much do the producer's tax incentives affect the cost? And how much of his local coal/natural gas/hydro/nuclear generation is subsidized?
Re:Return on investment (Score:3, Interesting)
You only have to consider resale if you plan on selling. If you've found the home you're going to spend the rest of your life in, then solar panel resale values are a moo point [youtube.com].
Cheaper, Greener ways to improve your house (Score:2, Interesting)
Now I don't want to criticize to harshly, but I think he could have done been much more green for less money. Now the obvious thing he could do would be to downsize his house once his kids are a ways. How big of a house do two people need.
Apart from that there are several other cheaper things you can do. I have tried to "Green" up my house a lot too, however I live in Minnesota so solar panels are even a worst investment. But here goes.. list of cheaper green things that I do.
1. When a bulb goes out I replace it with a CFL. hen can be expensive so when I see them on sale for a $1 each I grab a few. I do not recommend replacing all you light bulbs at once because that gets expensive, but when one goes out, go for it.
2. New windows - this was my most expensive energy improvement. $9,000, but it did make my house quieter and drop my heating bill by 45%... My old windows will really bad.
3. My furnace and A/C.... probably don't need that efficient of a furnace where he lives, but in Minnesota, I am rocking the 95% efficient furnace. The furnace and new windows dropped my worst heating bill (January) from $240 to $105. I save between 500 and 600 a year in heating. (Again my windows were REALLY bad)
4. Whole House Fan.. I got one from http://www.airscapefans.com/
You turn off your A/C at night, and pull in fresh air. It uses much less power than you A/C, on low the smallest model only uses 38 watts. And for a cost between $500 - $1300, they do not hurt the wallet too much.
Well anyway..
Still not practicle (Score:2, Interesting)
(((8721 kW) * 1 hours) / (365 * 24hours)) = 995.547945 watts.
That is less then 1 regular circuit (8.2962 amps on a 120 volt load). That is just about enough to power your fridge given that it cycles on and many times a day. 38,000$ is a lot of money to spend running your fridge.
The real reason this works for him is that he was taking it in the hoop from the power company and he has that "green mentality" where quality of life can be compromised in favor of "being green." He would have probably saved more in the long run if he invested the money (some where that didn't tank in the past year) and just turned off lights and switched to lower power devices. For the average geek power consumption of desktop PCs routers, battery changers and home entertainment equipment exceeds the the total amount of power generated over the year, its just not worth it for the average person.
Re:Price of certainty. (Score:3, Interesting)
I have a residential PV system.
This is incorrect. Unless you're in an area where grid power is not available, you buy a PV system that's grid-tied, and then if there's a blackout, you have no power. A non-grid-tied system is significantly more expensive and complicated, so you don't want one unless its your only option.
This is true, but the uncertainty argument isn't all in favor of getting PV. When people ask me how long my system will take to pay for itself, I always answer that I have absolutely no way of knowing, because I don't know what electricity will cost for the next 25 years, which is the design life of the system. If we get a big spike in electricity prices, I'll come out looking like a genius. But there are also other sources of uncertainty that work against PV. The price of the panels is expected to go down, and their efficiency is expected to go up. I don't know how much the price and efficiency will improve in the next 25 years, which is the design lifetime of my system. That's an uncertainty that argues against buying a PV system now.
I live in an area with expensive electricity and lots of sun. I have a south-facing roof with no shade. Given those factors, getting PV is a fairly reasonable investment, but there's no way to pin down exactly whether or not it's really going to look like a winner for me with hindsight in the year 2032 when the system's design lifetime is over.
What I do know is that (a) it's in the right ballpark to be a reasonable investment in purely financial terms, and (b) when my grandkids ask me what the **** I did to try to reduce global warming, I'll have at least one reasonable thing I can point to.
Re:Price of certainty. (Score:3, Interesting)
I imagine it would be bad to run A/C stuff inverted from a variable DC line as well. If you are trying to run normal household stuff straight off the power output of the panels, as it gets later in the day, you'd start getting your own 'brownouts' in the house wouldn't you?
I suppose you could intentionally buy stuff that fails that way. I don't.
Most switching mode supplies don't care as long as it's above a certain minimum.
For example, I have a perfectly nice "twelve volt" input ATX supply in my server from powerstream. It doesn't much care as long as the input voltage is above 9 volts and below 18. At 9 volts the lead-acid backup batteries are about 99.99% empty so theres not much lost capacity. If the battery is above 18 volts, its probably on fire or something. So pretty much, as long as there's the tiniest fraction of a KWh left in the batteries, my server runs.
http://www.powerstream.com/DC-PC-12V.htm [powerstream.com]
This is all off the shelf stuff, no big deal, nothing special.
Re:1363kWh in one month?! (Score:3, Interesting)
the article conveniently left out mention of the 'grow room'
Re:Bad Math (Score:1, Interesting)
Except that in California you cannot actually have a net negative electricity bill. I think he mentioned that in one of the other articles. But it does mean that the short term power that is bought by the utility is paid for at retail prices. In areas that do permit selling more than you use, the utility only has to pay wholesale rates. For most people the California plan is better.
Re:Time value of money (Score:5, Interesting)
Except that we're not. Seriously off-topic, but inflation isn't unpredictable. Right now, the double-digit unemployment and positive savings rate we have suggests people are hording their cash, not shopping with abandon.
As soon as any of the indicators go up (these are pretty reliable predictors of activity), the FED simply filters the money out of the banks, rates go up for daily business paper and money is more scarce.
It's been managed this way for 3 decades, and fairly stable since 1983. Check for yourself. [measuringworth.com]
SOLAR PANELS ARE CHEAP AND EASY TO REPLACE!! (Score:4, Interesting)
All I keep seeing around here is the depreciating power generation of solar panels... blah blah blahh...
It takes maybe an hour of your time, and ~$100-200/panel to replace 20 panels.
If in 15 years, he buys new panels, with better efficiency, for 4k, and an hours worth of his time, he's just reset his investment with a MUCH better payoff. The cabeling, and inverter will not fail that fast. The inspection won't change for a replacement. There'll be virtually 0 costs.
I have 600w of grid tied, net & production metered solar on my house. The coolest part? I did it for almost nothing. Bought everything on E-bay. Hardest part was complying with code, which looking back was really just a mere nuisance.
This isn't rocket science. If you pay someone to do it, they have to charge a ton because they are
1. Licensed electricions,
2. It's a business
3. they require certain bonds and insurances.
If you do it yourself (can you understand parallel & series circuits and do you know how to count, add, multiply, etc volts, amps & watts? you're qualified!) to your own house, you can get a system for MUCH less than 50K. bonus as your ROI is better, even better is that it makes more extreme lattitudes viable.
It's not ton's of $, but it does keep the house cool.
Re:Bad Math (Score:3, Interesting)
I'm sure it varies state by state (and province by province), but last time I checked, the power companies don't pay you penny-for-penny for the kwh you sell back to them. If memory serves, they pay you something like 10% of the going rates, which doesn't really amount to much. However, every bit of power you *reduce* your power company usage by, is pure gain. Counting on selling excess just doesn't factor in practically at this time.
Re:SOLAR PANELS ARE CHEAP AND EASY TO REPLACE!! (Score:4, Interesting)
waste of electricity, that's for sure (Score:3, Interesting)
I knew I couldn't have been the only person here who thought that way.
From the original article about the installation itself, they use 17,400kWh per annum - about 47.7kWh per day. This is a staggering amount, even considering that they do work from home as well and have two teenage daughters living at home. By their own figures, their $38,000 solar installation only covers half that electricity (although about three quarters of the bill). As I'm sure NuShrike wondered, what the hell are they spending that electricity on? Do they run the air conditioner all the time? If so, wouldn't they be better off buying ceiling and wall insulation and some decent curtains?
My housemate has been considering a photovoltaic installation at home. (Since the Australian federal government suddenly pulled the rug out from underneath the $8000 rebate, I don't know whether he's still considering it.) By my measurements, he'll waste at least half of the electricity they generate on standby power for the computers and such, and nearly as much again on halogen downlights for the main living area. He's just not in the mindset that having PV power means being more responsible for electricity use. In other words, I suspect he believes that it will give him more electricity to spend as he pleases (invoking Jevons' Paradox, as NuShrike suggested), whereas the sibling post by hoojus shows how easy it is to develop the mindset of having less and using it more efficiently.
Of course, if you can save that amount of electricity, but without solar panels and for a fraction of the cost, it hardly seems worth bothering. You can still have both, though, even if it means a few new habits towards cleaning up after yourself.
Oh, and NuShrike, the idea of scaling renewable energy, rainwater catchment and the like for a community is a fantastic idea and one I have been hoping would see a bit more support. Let me know if you've got any ideas.
Re:SOLAR PANELS ARE CHEAP AND EASY TO REPLACE!! (Score:3, Interesting)
Since it's so easy to mix up active and neutral I don't think it is quite so sad.
The black wire (positive) goes to the black wire, the white wire (neutral) goes to the white wire, and it's quite obvious that the ground goes to neither. If you have three wire in your house then by the process of elimination you can determine that the red wire (switched positive if it's hooked up right) goes to the black wire.
I was fully capable of wiring a light fixture around the age of 10, electrical outlets are much more tricky (since it's not obvious that the black wire goes to copper screw, and the white wire goes to the silver screw.) Switches are really easy too, the only reason I can see it being illegal to do any of this in Australia is lobbying by an electricians union.
Re:Return on investment (Score:3, Interesting)
$36k invested at 5% for 12 years returns $68,000.
$3000/year invested each year at 5% for 12 years returns $47,000
With option A, he still had to pay $36,000 in electricity payments as well. He doesn't get a lot more, he gets a lot less.
Kudos for adding a car analogy though!
It's more like spending $50,000 on a sports car to get rid of your $500/month lease.