How good is solar electric production?

Posted: September 5, 2012 in Conservation, Solar power
Tags: , , ,

Now that I’ve had my panels installed for over a full month, do they really work as advertised?

The short answer is Yes! I’ve been very happy with the amount of electricity produced by the panels, in spite of the fact that this August has been quite rainy. Especially when compared to June and July which were sunny and hot! But that’s life in Eastern Pennsylvania. We have real weather here!

System specifications

  • Location: New Hope, Pennsylvania
  • Solar system: SunPower, 9.66kW DC capacity. Panels: SPR 230NE-BLK-D
  • Installer: Heat Shed / GeoGenix
  • Roof pitch: 4:12 (tilt = 16 degrees)
  • Azimuth: 158 degrees (180 degrees = due south)
  • Average yearly capacity: 86% (slightly shaded in early morning and later afternoon)

In English, we’ve got a pretty good installation, pointed south on a low pitched roof rancher style home. Some trees around the perimeter of the property shade the system in morning and afternoon, but overall, the production of the system is within 20% of optimal. Good but not perfect. In other words, pretty typical.

The system size: 9.66 kilowatts. That’s above average for residential system. We wanted to fill the full roof of that section of the house and get as much capacity as possible because our home’s electric load is high. The national average size is around 6 kW but is steadily increasing due to rapidly decreasing costs.

Actual performance

SunPower provides some nice tools that show your system’s performance, so whether you’re at home or away, you can see how the system is doing. This is our graph for the month of August:

Output of our 9.66kW system for the month of August, 2012

It’s a little hard to tell, but the production varied from a low of about 18 kilowatt-hours (kWh) up to a maximum of  just under 52 kWh, averaging 38.73 kWh per day. This would supply all the electricity for many homes in the U.S where the nationwide average consumption is 31.50 kWh per day (source: U.S. EIA). In my home, I’m not so lucky because we have some “luxuries” such as a pool (heated by a separate solar hot water system), hot tub and air conditioning. So our home is not “net zero.” In spite of that, the way I see it is that our solar system is doing the equivalent of removing one house from the grid.

Utility Bills

Most people are interested in how much an expensive solar system will reduce their electric bills. In my case, my bill in July was $331, and in August it was $119. In 2011, our August billing period costs $288. While this is a very imprecise comparison due to many variables, it does give you a rough idea of the change – we saved approximately $200 for the month.

It’s very important to note that this is for a single summer month where the system’s output is high. In the winter, the system will produce considerably less energy due to the reduced solar input (shorter days and lower sun angles), so this information is preliminary. The one year accounting will be most useful.

Projected Production

According to the estimates from Heat Shed, the estimated total solar production for the system for the first year is 11,986 kWh with a first year savings of $2,266. For August, they projected about 1,100 kWh which is almost exactly what our system produced, giving me confidence in their estimates. They also projected that my August electric bill would be $123, so again, they are pretty much dead-on.

Lifetime Cost/Savings

This is where things get considerably more speculative, but it is one of the first questions people ask about solar – they want to know if it really pays to get solar.

First, as I mentioned above, the production from my system is roughly equivalent to taking one house of the grid. This in itself is worth something from an environmental perspective. If every installed solar system can do that, it’s a good thing for all of us. It’s an investment in our future. Compared to other expenses people make that don’t return anything to their communities, investing in solar is truly “doing the right thing.” Unfortunately, most of us are not in the position to make such a large investment purely for philanthropic reasons. So I’m going to “show you the money!”

We financed our system using a 20-year “pre-paid lease” option. Basically, this is a lease where you pay the full amount up-front and have no interest payments. I hate interest payments, especially since the value of money in the bank and in traditional investments these days is horrible and unpredictable.

The upside of this financing mechanism is that it allowed me to get the system for about half the cost of an outright purchase. At the rate of technological advances and the rapidly diminishing prices, this seems like a prudent decision. Second, since SunPower owns the system, they are responsible for ensuring that it works. If anything breaks, they come and fix it. If I purchased the system, I’d be on the hook for any repairs.

The downside of this type of financing is that I never truly own the system. After 20-years, SunPower can come and take the system away or we have to pay the residual value of the system. Even so, that is less than what it would be to buy the system now, so there’s little true downside to financing the system this way.

But, you ask, does it “pay back?” – Again, the answer is yes.

Based upon the projected savings, which is based on the decreased electric bills, we will save an amount equal to the purchase price of the system after seven years. Even if you factor in the amount that we could have made on an equivalent investment, the system would pay back in under ten years.

Given the state of the economy, this is a far better investment than putting my money in the bank or buying CDs or even investing in the stock market. And it’s virtually guaranteed – as long as the sun shines and I keep using electricity, the system pays me back in 7-10 years. To me, the investment is a total “no-brainer.” In fact, if I could, I would invest in more of these rather than having my money languish in other investments.

Incentives and Rebates

It is important to note that these calculations are based on receiving NO national or state incentives or rebates of any sort. This is one of the reasons that the pre-paid lease is given on such favorable terms. SunPower owns the system so they receive the tax benefits. They pass some of those along to me in the form of a reduced up-front cost. However, Pennsylvania has some additional funds that could result in a rebate to me of about $7,000. This funding is uncertain, so I have not included it in these calculations.

Another financial incentive comes in the form of SRECs – solar renewable energy certificates. Unfortunately, in Pennsylvania, these are almost worthless, but elsewhere, they can be substantial. For example, if I lived in neighboring NJ, they would have been worth about $140 for the amount of energy my panels produced, reducing my effective electric bill to below zero and likewise cutting my payback period in half. In PA, they’re only worth about $20 for what I produced. In spite of that, the entire system is a great investment.

Conclusion

People ask “if you knew then what you know now, would you still have done this?” My answer is “absolutely!” The installation went relatively smoothly and the cost was right. Investing in a solar electric system for my home is something I would recommend to anyone who has the appropriate home and location. It’s an investment that not only pays financial dividends but also invests in our future.

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Comments
  1. HI Ted,
    Brother Stephen from NM here. Regarding this project, do I understand correctly that the lease with installation was in the 20K range but outright purchase would likely be around 40K? Our summer electrical usage with the 6 Fujitsu A/C mini splits averages about 35 kWh, in line with your units east coast electrical production. What was the total sq. footage of the panels you installed? Would you recommend installing the units on the roof or on adjoining property if the space allows for it? What do you think of rotating stands to maximize solar gain throughout the day? The local National Guard base has about 40 panels with tracking stands, but I often see one of more out of sync. Is this common, or just a sign of poor installation?

    I hope all is well with you,
    Stephen

    • Hi Stephen, thanks for the question!

      I can’t give you the exact number for the outright purchase but it was on the order of 2x the lease price. The really nice thing is that they let you buy out the lease after 10-14 years for essentially nothing (<$1000) so the true cost of a full purchase would be under $20k. Out in Santa Fe with all that great sun, your payback would be a lot quicker than mine. Plus, you'd be able to install it on a rack mount at the right angle for optimal yearly output, even adjusting the angle from season to season to tweak it for even better performance. It looks like you'd easily be able to achieve "net-zero" with an array the size I got given your very modest consumption.

      Our roof is ~39 feet wide, maybe 20+ feet tall so roughly 800sf. There are various advantages/disadvantages to roof vs. ground mounting. If you mount racks on a flat roof, it will help to shade your roof, which can dramatically extend the life of the roof as well as cut air conditioning costs. It also helps reduce the chance of theft or vandalism, something that is often overlooked. On the other hand, it's on the roof, so it's harder to access for periodic cleaning, adjustment etc. Plus, if there's a roof leak, the panels can be a hassle. Ground mounting of racks can be much easier/safer, especially if they don't require footings for the racks. That depends on local building codes, wind conditions etc.

      My personal preference would be fixed ground mount as long as theft isn't a big consideration.

      I looked into trackers and the general consensus is that for most people, it's not worth the hassle of introducing another mechanical system into the equation. It definitely increases the overall efficiency, but at the currently low cost of panels, it can be more cost effective to install a few more panels than pay for the trackers. Here’s a website that discusses these issues in detail.

      The final consideration is your existing and expected costs of electricity. I was told that my system resulted in electricity that costs essentially $0.10/kWh, which is about the same as the electricity costs in some areas of the country. Around here, it’s about $0.16/kWh, so it’s a good savings. However, even if I weren’t saving a lot, I would still want to go with solar because it’s not entirely a financial decision. I like that I’m helping to reduce peak loads on the grid which ultimately means less power stations required, less pollution etc. Plus, after the system is paid off, it’s all income regardless of electricity costs.

  2. Thanks, Ted.

    Theft is not a big concern out where we are(gated community with 10 acre min. lots), but I might think about putting some sort of attractive fencing/visual break for the neighbors and ourselves so they don’t detract from our mountain views. We are having our most of our roof replaced as I write, so I could have a system mounted up there without worry of having to do any repairs underneath the panels for a long time, so that may be a good location. We have almost 4500 ft. of roofing, so ample area for panels. The new roofing is white to reflect our sunlight and is supposed to reduce our summer cooling expenses which have been very modest this year (thanks to our Fujitsu mini-splits.) I like the look of solar panels, but I want to make it as attractive as possible. My main concern with ground level mounting are rodents and the damage they do around here. I don’t know if the panels/wiring are attractive to the local critters and will have to talk to some locals who have systems and what they are doing to keep the systems safe. Thanks for your thoughts, I agree with not using rotating mounts, I don’t need to add another failure factor into the system.

    P.S. We love the solatubes I installed in the kitchen (2-14″ units) they really brightened up the area nicely and were pretty straight-forward to install.

    • You would probably want to ensure metal conduit is used for any accessible wiring just to be safe. It might even be code because it’s typically close to 500 volts DC coming from the panels wired together in series which would fry anybody who had the misfortune of shorting them! Some sort of visual barrier for a ground mound makes sense.

      Glad the Solatubes are working out. It’s amazing how well they work. I’m surprised that more people haven’t discovered them!

  3. TackyTed says:

    I placed (7) Schott panels up on the roof in Dec. 2010. The amount each panel generated for a year was $66.53, a credit against my electric bill. The TVA pays$0.21 per kW. I just added 14 more panels (Suniva 240′s) and my total electric bill for the year should be $0.00 (plus/minus a buck) For me to be a true net zero in energy use, I’d have to up my 5kw system to about 13 kw system.
    http://tackyted.com/solar/

    Oh if anyone is thinking solar, go to: http://rredc.nrel.gov/solar/calculators/PVWATTS/version1/US/Tennessee/Knoxville.html that’s the nearest city to me. Their numbers are very close to what you’ll produce

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