Home Solar Wrap-Up: go for it!

So, we moved out of our home with the solar panels and ended up having them for just over 2 years. The installation was mid-March 2013 and we sold the place in mid-August 2015.

We had a PPA with Solar City. In general, they were really good to work with.

Our rate was $60 / month with a 2% escalation annually and $0.11 / KWH. Our average bill prior to solar was $100 / month.

Most months we had no extra electric bill from Eversource. By the time we moved out, Eversource owed us $560.

We had the solar system for roughly 30 months. I’m estimating that over that time, we saved about $1760 ($40 / month * 30 months + $560).

If we had prepaid for the solar power, it would have been about $10k and brought our rate down to $0.05. However, since we moved before having the system for 10 years, it’s best we didn’t, as it’s unknown whether we would have recouped the cost in the sales price.

Needless to say, we’re looking into solar for our new house and depending on the economics, might purchase the system outright or do the lease & prepay for the electricity.

Here’s a brief summary of how I see the three options:

  1. PPA (Power Purchase Agreement) / lease: It’s the least risky, but you get the least savings. You don’t pay anything up front and the solar company gets the tax savings and renewable energy credits (NRECs). The company is responsible for monitoring the system, repairing it, and fixing your roof if there are any issues. You pay a preset monthly cost for the electricity generated by your panels and in some details,┬áthe cost will go up on an annual basis, however at a rate lower than projected for utility bills. The term is typically 20 years. It’s a great option if you don’t have a lot of cash on hand but want to get some savings, or if you’re not sure how long you’ll be in your place.
  2. pre-paid PPA. You get all of the benefits of the PPA (monitoring, repairs, etc), the company gets all the benefits of owning the system (credits, etc) but you’re lowering your effective cost of electricity from the panels by half or more by prepaying for the electricity. Depending on the size of your system, this could be $5k – $15k.
  3. Purchase the system outright. You own, monitor, maintain the system. The components all have warrantees but you’re responsible for getting the work done. This will be typically the most expensive option up front but give you the most savings over time. There are now solar loans out there to help people purchase systems more cheaply and easily. This could be the best option if you don’t have a lot of cash and know you’re going to stay in your place for a long time. The cost of solar systems is coming down all the time, making this a more affordable option than ever.

Investigating Home Solar Power

We recently got an electric car which is used an 85 mile round trip daily commute. We’re estimating that this adds 400 kwh (about $80) to our monthly electric bill. This is much better than the estimated $275 per month (425 miles per week / 26 miles per gallon times $4.25 per gallon times four weeks) in gas that it would have cost with our old car. So, right off the bat, we’re saving $195 / month in direct commuting costs. Additionally, the car is only $100 / month more expensive, so we’re coming out ahead $95 / month.

We’d always been sort of interested in solar power for our home, but thought that it wasn’t feasible. Luckily, there are a few things which may change that.

  1. SRECs – credits for installation of renewable energy sources. You can read about them in MA, here.
  2. PPAs – a Power Purchase Agreement where a company installs solar panels on your home and you pay for the electricity at an agreed upon rate.
  3. Federal tax credit of 30% on the cost of a solar system.
  4. The company that we are leasing our car from has announced a deal with a solar provider, RealGoods.

A solar installation for a typical home would typically cost at least $25000. This page seems to be a pretty good and accurate solar system calculator.

I’ve been talking to SunRun, SolarCity, and RealGoods about solar installation.

Some facts about our situation:

  • Including charging the car, we’ll use about 11,000 kwh a year.
  • Our home is pretty well sited for solar, with a south-facing fairly unobstructed roof.
  • The roof could fit an approximately 4,000 kw solar panel system.
  • Unlike the other two companies, RealGoods’ PPA $0.1299/kwh is flat for the 20 year duration. That rate likely depends on system size and other factors, so you may not get the same rate.

With the PPA offered by RealGoods, we’d save roughly $75 in the first year and $434 in the last year. I’m conservatively estimating that my electric utility rates will increase 2.5% per year. If they increase 5% per year, the savings in the last year would be $992 for the year. The savings increase each year due to rising electric rates. Total savings at a 2.5% nstar rate increase would be $4,808 after 20 years and at a 5.0% nstar rate increase would be $8,832.

I’ll write another post about the purchase option.