EEVblog #724 - Home Solar Power System Analysis & Update

[Poe]

I've never had any money to invest, so maybe I'm way off base here.....
But I get the impression that it would make more financial sense to invest that $5k in the stock market.
Eight years of compounding savings versus just getting your money back (Does this equipment retain its value on the second-hand market or would people be silly to buy used?) then hoping you can turn a profit near the end or after the warranty has expired.

Dunno.  Just thinking out loud.

You are thinking well.  It's called opportunity cost, an important part of every serious investment analysis. 'the value of my house went up' doesn't necessarily mean that it was an efficient investment.

http://en.wikipedia.org/wiki/Opportunity_cost

So I did a bit of research.  Please point out any mistakes because this interests me..

As Dave mentions, due to Australia's disparity in generated/imported energy costs, his ROI could have significantly shorter if he simply installed fewer panels.  Two years is possible!  The excess panels (over what he consumes) are probably a really really poor investment. 

Although I think this highlights the fact that, to be fair, his investment was only a good one due to Australia's high cost of electricity, low installation costs, and high insolation levels. 

My payback period for a similar system would be >20 years. 

Installed cost ~$10k.  $13k if I want a ten year inverter warranty.  (Sunnyboy 3000TL factory warranty is five?).  In my area specifically, 2MWh appears to be a very generous annual generation estimate for a 3KW array.   At $0.118 per KWh (same price generated/imported), that's ~$275 worth of electric savings and a payback period of thirty years (assuming I go with the cheapest inverter).

The price drops substantially if I install the system myself (my time has no value), but the payback period would probably still be outside of the warranty period.

Due to the equal pay/charge structure, scaling up/down wouldn't affect the ROI either.

I'm better off investing that money (pre-tax) in a very low risk index and seeing >$7k in my bank around the same point Dave's system has paid for itself (net zero).  After twenty years, Dave's system would have generated <$9k while my investment would sit North of $13k.  All of that assumes no maintenance costs as well.

My scenario is not an outlier either.  Most countries have a lower cost of electricity than Australia.  Reasons for those high(er) costs are not interminable either. Some of those countries/states heavily tax non-green energy producers and funnel those funds to prop green projects.  Directly or through carbon credits, etc.  Others simply have an antiquated energy generating/transporting systems.  Australia's high prices are attributed to their temporary coal dependency (decreasing in favor of solar).

The chance of those things changing is more likely than the global market crashing IHMO.

Not to mention Australia's notably greater solar insulation than most of the developed world.

So I think solar is great in some geographical areas.  Although it appears to be a bad investment in most areas.... or only a good investment due to temporary government assistance. 

As resources become scarce it will surely become more a more sound investment in more areas.

[nixfu]

>Not to mention Australia's notably greater solar insulation than most of the developed world.


Yes, As a yank, I would be interested to learn how Dave gets away with needing so little air conditioning due to what he said about solar insulation.  We have no such technology in the US, it seems to take much air conditioning in our homes to keep the comfortable anytime you get close to 80F.

[SeanB]

First off Dave probably is comfortable in a warm room, so just keeping it at around 25-28C will not be a worry for him.

Second, he has insulated his house very well, having a thick layer of insulation in the walls and the roof space as well, to reduce heat ingress into the house. Double glazed windows along with a heat reflecting film on all windows as well helps. he did install a vent system into the attic space as well to reduce the heat build up in there as well.

This, along with some strategically located fans and light clothing ( no need for the Australian safety shoes insides), and generally being acclimated to a warm climate, along with low local humidity works to keep him comfortable.

[mtdoc]

There's a big difference between risk free ROI and market risk (despite what central bankers would have you believe).

Anyone who looks at a residential solar PV installation only in terms of a financial instrument will always be able to convince themselves that they can "make more money" by investing their capital elsewhere. They may or may not be correct - but if they don't understand the risks they are not necessarily making a sound financial decision.

I think for most people with solar PV there is a non-financial benefit they enjoy from producing their own electricity and watching their meter turn backwards.   This is not unlike someone who takes joy in building their own electronic gadget or repairing one instead of buying one for less money. Or the person who takes joy in their sports car when a used economy car would get them from A to B just as proficiently.

Installed cost ~$10k.  $13k if I want a ten year inverter warranty.  (Sunnyboy 3000TL factory warranty is five?).  In my area specifically, 2MWh appears to be a very generous annual generation estimate for a 3KW array. 

If you're paying $10 - 13k for a 3kW grid strict grid tied PV installation then you are overpaying.

[nctnico]

>Not to mention Australia's notably greater solar insulation than most of the developed world.


Yes, As a yank, I would be interested to learn how Dave gets away with needing so little air conditioning due to what he said about solar insulation.  We have no such technology in the US, it seems to take much air conditioning in our homes to keep the comfortable anytime you get close to 80F.

I've put a fairly large tree in my front yard to keep the sun out. It works quite well but it does need some maintenance.
I have an airco in the attic to keep my office cool. It would be interesting to determine what effect it would have if I installed solar panels on the roof. It should reduce the need for the airconditioning and simultaneously cut some of the cost (I need to keep the airco running long after the sun went down due to the heat accumulated in the roof tiles).

[Seekonk]

Trees can be an issue.  None of my1.5KW of solar panels are actually on my property. I've kept them low profile and hard to see.

[nowlan]

I do agree, you may be better off investing a lump sum of cash.
However, you havent factored the cost of electricity rising over 10-20 years in your analysis.

You want to size your system to your own demand. My parents are pensioners, who are home all day and can make use of electricity generated, but where will they be in 20 years? More likely the house will be knocked down for apartments sooner.

Golden rule is to minimize before relying on solar. Gas, solar hot water, insulation, energy efficient appliances, cfl/led lights.

[EEVblog]

As Dave mentions, due to Australia's disparity in generated/imported energy costs, his ROI could have significantly shorter if he simply installed fewer panels.  Two years is possible!  The excess panels (over what he consumes) are probably a really really poor investment. 

The thing is, I never really did it as an investment, I just wanted solar panels because I thought it would be cool. Just like for the last 15 years I've been paying an extra tariff to buy green power. There was absolutely no financial incentive to do that, it cost me extra money. I did it because I liked the feeling of supporting renewable energy infrastructure in this country.
This is why I've never done an ROI on the system until this video, because I know that's what most people want to know.

[EEVblog]

Yes, As a yank, I would be interested to learn how Dave gets away with needing so little air conditioning due to what he said about solar insulation.

SeanB nailed it.
We have good insulation in roof and walls, we have a vented roof space to prevent heat build up, blinds, concrete slab for large thermal mass, the house is aligned well etc.
It's only on the more extreme days during either winter or summer that we'll turn the aircon on for an hour or two.
Often I think "gee, we haven't switched it on for 3 months, I hope it still works!" and will in fact give it bit of a run now and then just to exercise it.
Used it much more since Sagan came along of course, SWMBO insists he must have a nice constant temperature  , so his room has his own aircon, But in that case it's incredibly efficient within a single small room.

[EEVblog]

First off Dave probably is comfortable in a warm room, so just keeping it at around 25-28C will not be a worry for him.

25C is starting to get uncomfortable, not so much at home, but in the lab yes. The lab will get to 25-26C without the aircon, so I often need to turn it on to cool it down a bit. I never have to heat the lab up BTW.

[SeanB]

My aircon at home has used 77.2kWh since it was installed. It has been in for over 5 years, and I do not use it much, almost half of that will be using it as a very quiet fan. Setpoint is 26C, as otherwise it is not comfortable for me.

At work the Frankensung in my office has died, rusted all the way through. No budget to replace it, bit I am comfortable at 27-28C with only a 120mm fan blowing air on me. Will brick up the hole soon when time allows, then will wait for another outdoor unit to die and be replaced so I get parts to make a Frankensplit. Otherwise i will look for a cheap $300 off brand split and get that.

[mtdoc]

Good solar insolation does not have to mean hot climate. I imagine that Sydney is similar to coastal Southern California where I grew up. Lots of sunshine and rarely hot. Most homes do not have air conditioners.

[Fungus]

I am comfortable at 27-28C with only a 120mm fan blowing air on me.

It's all about humidity. 27-28C in a humid area is unbearable.

Where I live it can go over 40C in the summer when the wind blows from the West (inland), but it's a dry air. You drink a lot more but you don't get all sweaty.

Those days are much more bearable than when it's 'only' 30C and the wind is blowing from the East (sea) - which it normally does 

[SeanB]

I lived for a few years in a small town, where you could predict the weather very accurately as follows. Daytime sunny, temperature reaching around 42C, night, low of 12C. 365 days a year of this. In winter we would be walking around with cold weather clothes as it was under 20C till 9AM, while the upcountry visitors were dropping from heatstroke. I put up a fan on the ceiling in my room, and turned it on. Only turned it off when I was moving out, and was not going to leave it behind.

[rw]

Hi Dave, love your blog. Solar power output can vary from factors other than the total light hitting the panels at a given time. As the solar panels heat up the power output goes down for the same solar input. The effect can be quite dramatic. I live in southern California, USA and my 5.2kw system has a maximum power output in both spring and fall NOT summer when the days are longer and the the sun is more directly aligned with the panels (read overhead). Also dirt on the panels can have a dramatic effect on output. Extremely dirty panels can derate by roughly 40%. Even seemingly, mildly dirty panels can lose the better part of 20% output. I have measured this effect when cleaning them in the cooler months. In the middle of summer, cleaning the panels with water also cools them so an even greater improvement can be had.

Thanks again for the enjoyable blog.

As a side note, I installed my system about 4 years ago and got similarly high end system and even after federal and state rebates on the system, it still cost me close to $20k. Australia is usually much more expensive for everything, but solar seems to be an odd exception. Input?

[TSL]

Good solar insolation does not have to mean hot climate. I imagine that Sydney is similar to coastal Southern California where I grew up. Lots of sunshine and rarely hot. Most homes do not have air conditioners.

Depends on what you call not hot - summer typically is 28-33 C and it can and does reach up to weeks of 40 - 42C and we get occasional peaks like the 49.1C we had in our backyards in the 2013/14 summers. I'd call that hot. The summer we just had averages around 30 +-3degC most of the time.

We have roof insulation and, before we added our panels, we had the roof painted with a IR reflective paint that reduced internal temps by 10deg.

Given we have lots of trees and thus moving shade patterns, we installed 4kW of Tindo AC panels, i.e. a micro-inverter on each panel. That way if a panel is shaded it doesn't effect the output of all the others.

regards

Tim

[mux]

Installed cost ~$10k.  $13k if I want a ten year inverter warranty.  (Sunnyboy 3000TL factory warranty is five?).  In my area specifically, 2MWh appears to be a very generous annual generation estimate for a 3KW array. 

If you're paying $10 - 13k for a 3kW grid strict grid tied PV installation then you are overpaying.

By like a factor of 4... no wonder the payback period is so incredibly long! That's 2007 prices!

[Slowmo]

Maybe it is worth thinking about burning the excess energy mining bitcoins? While I am not into this thing myself, it's just an idea...

[DimitriP]

Back to solar systems for a moment, , I'm having trouble with the $5000AU cost.
Either solar costs a lot less in AU or someone is lining their pockets in the US.

I'd like to hear from anyone in the US that paid for their own solar system.
Not as a part of any of the usual "knock-on-your-door" "won't cost you anything" deals.
By searcing around it looks like an inverter is somewhere between $2500-$2900 and  250W panels go for about $260 a piece.

12 Panels @ 260 = $3120
inverter @ 2600  = $2600
and we are already at $5720 US
Add installation  by the humans on the roof
Add cost of additional items like wires, conduit etc etc.
Add cost of permits, inspection
and the instalation cost starts going "cactus" as Dave would say !!!

[EEVblog]

Back to solar systems for a moment, , I'm having trouble with the $5000AU cost.

In Oz you can get a 5kW system installed for AU$4000 (USD$3k)
http://www.truevaluesolar.com.au/specials/

[DrGeoff]

Also in AU, about to get a 3kW system installed. 12 x tier-1 QCell panels and Enphase micro inverter under each panel.
All installed for 5K. Hoping to add batteries as well in a few years.

[EEVblog]

Hoping to add batteries as well in a few years.

In Oz battery solutions suck at present 

[DrGeoff]

Hoping to add batteries as well in a few years.

In Oz battery solutions suck at present 

Sure do. Installers recommend waiting for a few years to see what is left after the dust settles.

[EEVblog]

Sure do. Installers recommend waiting for a few years to see what is left after the dust settles.

Yep.
Unless you are on a remote property or something, I'd wait a few years too.
Every solution seems custom and bodged, Tesla will be the winners in this.
I contacted an Oz company that sells a nice looking German solution that seems similar to the Tesla powerwall, but didn't hear back from them. Meh.

[DrGeoff]

Sure do. Installers recommend waiting for a few years to see what is left after the dust settles.

Yep.
Unless you are on a remote property or something, I'd wait a few years too.
Every solution seems custom and bodged, Tesla will be the winners in this.
I contacted an Oz company that sells a nice looking German solution that seems similar to the Tesla powerwall, but didn't hear back from them. Meh.

And bodged lithium high-power battery packs can be quite dangerous. I can imagine that ther may be some regulations regarding their manufacture and installation eventually. It might be better to wait until there are standards and regulations.