3.1 kW SolarEdge/Canadian Solar coming to San Diego soon

[JBinCBad]

Absorbing info, or at least trying

Thanks for the thread, Sens, I've been trying to absorb it all and apply it to my situation. I noticed your system is relatively small, especially with an EV in the house. I have limited roof space for S/SW facing exposure, so I'm considering about a 4 Kw system. I've gotten quotes hovering around $3.50/W cash. Can you PM your installer info? I had thought I needed higher-rated panels because of my roof limitations, so got a quote with Solarworld 335's, but may need to reconsider. I'm not as effective with the mathematical analysis as you guys. My SDGE bill ranges from $150-$200, so I don't think I need a huge system. Would like a Tesla (or two) in the garage in the next few years. . . Any suggestions welcomed. Sorry if this was a threadjack, just learned a lot reading through this. . .

[sensij]

Sensi that PV Output thing is cool, thanks. Can you remind me, when it was all said and done, was it $3.30/W ? What if you didn't want to finance, do you think they'd have gone lower?

The final quoted price was $3.30 / W, cash. I ended up scrapping the finance option, because the closing fees were >15% of the loan.

[sensij]

The only downside is you need to live 25 years in order to realize the investment's growth.

I would argue that maintaining possession of the house for 25 years is likely to be the bigger obstacle to realizing the returns you've suggested. Americans, on average, move a lot more often than that, and there isn't conclusive evidence that I've seen that the PV system will meaningfully add to the capital value of the house in a sale. In my case, my living situation ~8 years from now is definitely undecided, so it was important to at least be close to breaking even over that time.

This thread was started before I had known for sure I would be driving an EV, so my numbers will look even better now than they did at the time I signed the contract.

[sensij]

Absolutely!

We can think of our solar installation as an investment that pays in after-tax dollars.

<snip>

I'm sorry if I've hijacked your thread here, but I think the way we view solar as a way to manage our costs needs to include how it also works as long term income. Hope this helps!!

I don't mind the discussion at all. In my case, the discount rate I used was based on the interest I am paying on a loan. I don't get any meaningful tax benefit from that loan, so it was truly an after tax-after tax comparison. The choice was to pay down the loan (eliminating the interest costs), or install solar.

The art of choosing an appropriate discount rate is not simple, and although your point about tax implications when investing in stocks (or whatever) is good, I wouldn't say that it is universally applicable.

[skipro3]

The part about before and after tax dollars -- I think you are making the case that the payback may actually be shorter if one takes that into account, is that correct?

Absolutely!

We can think of our solar installation as an investment that pays in after-tax dollars. It's like a Roth IRA in that way; pay taxes on the conversion of your money up front and the dividends are tax free for the rest of your life. So in this case, with solar, taxes are paid on the money we use to purchase the system with, that's the capitol, and the return is that you are 'paid' in the amount of money you keep in your checking account instead of paying it to the electric company. You can also view your solar as long term investment like an annuity or a pension. If you use any of the many annuity calculators available from insurance companies, you can plug in the money you spent on your solar and see what they would have paid you as an income for the rest of your life. Be sure to include that it's adjusted for inflation, because your electric company is going to keep adjusting it's rates for inflation. I mention an annuity, but you can compare this to any sort of long term income producing investment as well.

So figure out how much your solar cost you. Then, using an investment calculator, figure how much income you could draw if you had invested this money instead. Use a 25 year draw down on the investment to account for the fact your solar is warrantied for 25 years. Also figure the draw has to cover taxes both federal and state.
Let's use my solar as an example;
I paid a total of $16,414 for my solar which consists of 16 panels of SolarWorld 315 watt panels and a SolarEdge inverter. (plus all the incidentals) A 5kw solar installation. Actually I paid $18,414 and got a $2,000 refund because they missed deadlines I had insisted be in the contract. Now deduct the tax credits you get as a refund on your federal tax return which is 30%. For me, I can use the $18,414 dollar figure since that's what my receipt says and my tax accountant will use. I get a $5,524 credit on my taxes. Now my system has cost me an actual $10,890.
My electric bill was $130 a month and I used the monthly averaging option to pay my bill, where PG&E figures out your annual payments, then divides by 12 months and bills you a fixed monthly amount with a correction once a year to zero out the account, sort of like solar does.
For me to get a return of $130 a month on a $10,890 cash investment that draws down to zero dollars after 25 years I would need to invest that money in an account that has a return of 14%. I'd be lucky to find an investment that pays 4%, let alone 14%. Now figure in the return, $130 a month, is adjusted for inflation at 3% a year. The return would have to be more than just 14%.

What a DEAL solar is!!

Use your own actual dollars spent to buy your solar and the amount of money it saves you from paying to the utility company as see for your self what the comparable interest rate would need to be. Even if I had paid the full $18,414, never got a refund of $2,000 and never got the tax credit of 30%, I would still need to invest at 7% to get the same return I'm getting by not paying a monthly electric bill.

This is astounding! Anyone who has some long term investment money that is looking to convert it to income, as most will as they retire, needs to consider solar as a way to diversify out of the volatility of the stock market.

The only downside is you need to live 25 years in order to realize the investment's growth. But since there is still the investment solar installation if you were to die early that someone else will benefit from, it's even better than a pension or annuity as those evaporate upon your death and the capitol is lost back to the investment house or insurance company.

I'm sorry if I've hijacked your thread here, but I think the way we view solar as a way to manage our costs needs to include how it also works as long term income. Hope this helps!!

[J.P.M.]

There is a lot to be gained sometimes by an understanding of things such as process economics, life cycle costing and the time value of money. Such understanding not only helps identify what can influence cost effectiveness, but also help identify what may be more/less important priorities to the party footing the bill, such as tax treatment.

[albert436]

Sensi that PV Output thing is cool, thanks. Can you remind me, when it was all said and done, was it $3.30/W ? What if you didn't want to finance, do you think they'd have gone lower?

Skip, thanks for the discussion about rates and so forth. So much politics involved. It is early and my brain isn't working at full speed yet today. The part about before and after tax dollars -- I think you are making the case that the payback may actually be shorter if one takes that into account, is that correct?

[skipro3]

With these assumptions, I estimate the system would break even at something close to 10 years. I have defined break even in this case as the point at which the NPV of difference in cash flow with and without solar is 0. It is a little bit longer than I hoped for going into this, but I hope the assumptions are skewed conservatively and the errors in them will tend to push the break even point sooner..

I've done the same math and came to the same conclusions; based on lost investment potential on my cash outlay for solar, I have 10 years for a payback. Except for two things I didn't consider;

1. The solar payback is in after-tax dollars. You see, most likely you would have $10K+ in something other than a passbook savings account. Something that was probably tax exempt. Meaning you would be paying taxes on that when you withdrew it over the 10 year draw down to the 'break even' point. Say you figure your solar saves you $100 a month. That's after-tax dollars. Money you are paying to the utility company that you already paid income tax on. But if you wanted to pull the same $100 out of your 401K, IRA, 457 or other tax deferred account, you would have to withdraw $127. $100 for you, $20 for the federal income tax and $7 for the state of California for income tax.

2. The inflation rate on electricity. Right out of the shoot, the PUC met a couple weeks ago and came to a BIG conclusion about tier rates in California. The issue is with Tier 1 being a frozen rate since 2001 and is now being subsidized by tiers 2, 3 and 4. The courts have ruled that utilities can not charge more than what it cost them to get the electric to your door. (plus a modest profit if the utility is investor owned and not a municipality. ) So no more subsidized tier 1.
With that in mind, the other big bitch about electric rates in California is that the state has HUGE diversity in climate. Coastal communities rarely need air conditioning. Central Vally communities regularly bake for weeks with 100+ degree days. Add to that, the coastal residents are rich. They live on the Pacific Ocean. They are a lot more wealthy than some farmer in the hot central valley. So the richest of the state, those with beachfront property, pay the subsidized tier rate since they have the Pacific ocean as a natural air conditioner.
So the PUC decided this;
Only two tiers.
The difference between tier one and tier two will not exceed 25%.
For the utility to maintain the same cash flow, this will mean tier one is gonna go up. A lot. So the rich people along the coast will get hit. Hard. But since Central Valley folks already use more electricity due to a need for air conditioning, their bill will most likely drop as tiers 2 and 3 are pretty darn steep. More than a measly 25% anyway.

What does that mean for you, down in a coastal town like San Diego? It means the local utility will be raising it's rates on tier one, and you are in since you won't care what they do with it; you are on solar. Well,,, unless you only sized to keep you out of tier two and three. Many folks do that you know. Willing to pay the subsidized tier since it's a diminishing return on solar for the investment in the infrastructure to include tier one in the design sizing.

But here's another thing;
I keep meticulous records using Quicken. I know exactly what I pay for electricity and I know exactly how much it's inflation over the past several years has been. In a nut-shell; my electric bill has gone up an average of 7% every year for the past 5 years. Not to say it will continue to do so, but....

Here's yet ANOTHER thing;
The state's legislature has a bill that will require energy to be at least 50% renewable by 2030. Ouch! That is a whole lot of NEW construction to build that much renewable generation. That is going to have to be paid by someone. Who? Well, not YOU since YOU got solar.

So don't worry about what time table you have in mind for the recovery of your capitol investment. I'm pretty sure most, if not all of these scenarios I pointed out here are going to come to pass.

[sensij]

A lot to absorb here, just found this and the other thread, so I hope you will bear with a very elementary question.

You have a separate meter on your EV outlet ? So does that separate that out from your TOU billing arrangement?

Owning or leasing an EV makes two SDG&E plans available: EV-TOU and EV-TOU2.

EV-TOU requires the EV to be separately metered, and offers low rates for nighttime charging. The main household remains on the standard DR tiered plan (or whatever other plan you have selected), and any solar generation credits are under that plan, not the EV. The cost to have the EV meter installed is probably somewhat case specific but a guess of $1000-$2000 seems not far off with information that can be found with google.

EV-TOU2 does not require a separate meter, but subjects all of the household loads to TOU pricing, not just the EV. This works well if midday loads are low and solar is generating a credit during peak summer hours, when the credit per kWH generated is more than 2X the price per kWh bought when the sun is down. Any loads that can be shifted to nighttime will help minimize a bill under this plan.

FWIW, even without an EV, the entire household can go onto a TOU rate plan once solar is installed by selecting the DR-SES plan.

To answer your question, I am on the EV-TOU2 plan. The method by which I estimate the monthly consumption of the EV is to monitor how many hours the charger is running each day (it is obvious if you look at my consumption chart by following the link in my signature), and knowing that the charger is rated at a 3.3 kW rate (or maybe more like 3.34 kW if I look hard at it).

Physically, the car gets the charge power through a dryer outlet that was repurposed for this (30 A circuit). That is OK for a car with a 3.3 kW max, but for EV's with 6.6 kW or more, a 40 A circuit (at least) is required to get maximum 240 V charging.

[albert436]

A lot to absorb here, just found this and the other thread, so I hope you will bear with a very elementary question.

You have a separate meter on your EV outlet ? So does that separate that out from your TOU billing arrangement?

[sensij]

I'll figure out how to present these numbers in a more coherent way, but the extremely short version is that solar is working out very well! My 492 kWh generated is offsetting (578 kWh + $58 / 0.18) = 900 kWh of consumption, which suggests a system size of only 57% of consumption is needed to zero my bill. That ratio should drift higher in winter, and I'm not counting on 12 pm - 6pm peak TOU to last much longer. Once it switches to 2 pm - 9 pm (or whatever), the ratio will definitely be worse.

I've got to admit, I look forward to my monthly electric statement now. Can't call it a bill when they are giving me credits, right?

For July's 32 day period:
Total Generated (RGM) = 508.92 kWh
Net Consumed (SDGE) = 103.02 kWh
Gross Consumed (Calculated) = 611.94 kWh
EV Consumed (Estimated) = 315.74 kWh
Baseline Consumed (Estimated) = 296.2 kWh
New carryforward credit earned = $61.27 (worth approx 275 kWh of Off Peak)
Total remaining carryforward credit = $119.25

508.92 kWh generated approx equaled (611.94 + 275), in other words, generating 57% of the energy consumed results in a 100% bill offset, same as last month.

Last year in the same period I had consumed almost 400 kWh in the household, so removing the attic fan, and other efficiency improvements seem to be showing up.

With respect to the EV, averaging about 230 kWh / mi over the past month.

[vav925]

Cool, thanks for sharing.

[sensij]

I've got some spreadsheets in dropbox that might help

SDG&E TOU rates

SCE TOU rates (collaborated with InsaneOctane)

I haven't done one for PG&E yet, but would be happy to collaborate on adapting one of these if someone in that area cares to help.

There are no real instructions on how to use these, make sure to refresh the pivot table with results after updating any information. If you have any questions, ask here or by PM.

Looking at some other TOU rates for my usage this past month..

DR-SES, $59 credit
EV-TOU2, all the same except 2pm - 9pm peak instead of 12pm to 6pm, only $15 credit.

[vav925]

Thanks for the update. You mentioned in another post you have a spreadsheet that helped you calculate the size of your system - mind sharing (PM or email perhaps?)? I'm in a similar spot. EV TOU plan in the Bay area (peak is 2-9 pm here...) and trying to figure out what size I should go for given that I'm generating kWh during peak and using more during partial peak or off peak. I have a south facing roof with no shading issues. Thanks!

[sensij]

An update... after some discussion in this thread, I switched to EV-TOU2 rate plan, and just completed my first billing month. Here are the numbers:

From SDGE
Number of billing days = 28
Net kWh consumed = 90 (89.7 kWh in downloaded data)
Carry forward generation credit = 57.98

Estimates from PVOutput
Gross kWh consumed = 578
Gross kWh generated = 489
Net kWh consumed = 89 (one bad day before I got my monitoring system working right accounts for most of the difference with SDG&E)
Carryforward generation credit = 55.65

Some other numbers:
Consumption from EV = 275 kWh (on pace for 15000 mi annually... averaging better than 100 mi / 25 kWh)
Consumption without EV = 578 - 275 = 303 kWH
Consumption over same dates in 2014 (no EV) = 298 kWh
PVWatts modeled output for this period = 442 kWh (premium, roof mount, 8% loss)
Gas cost avoided by EV, assuming 41 mi /day, 27 mpg, $3.50 / gal = $149

Compared to Tiered pricing:
Baseline allocation = 9.6 * 28 = 269 kWh
Rate DR cost avoided, no EV or solar = (269 * 0.1741) + (34 * .2046) = $54
Rate DR cost avoided, w/EV but no solar = (269 * .1741) + (81 * .2046) + (188 * .4036) + (41 * .4236) = $157
Rate DR cost avoided, w/EV and solar = (90 * 0.1741) = $16
(not counting carry forward credit until I actually use it)

I'll figure out how to present these numbers in a more coherent way, but the extremely short version is that solar is working out very well! My 492 kWh generated is offsetting (578 kWh + $58 / 0.18) = 900 kWh of consumption, which suggests a system size of only 57% of consumption is needed to zero my bill. That ratio should drift higher in winter, and I'm not counting on 12 pm - 6pm peak TOU to last much longer. Once it switches to 2 pm - 9 pm (or whatever), the ratio will definitely be worse.

I'm disappointed to see my baseline consumption unchanged... might be because I added a refrigerator and some networking equipment this year, although I removed a hardwired attic fan and started switching to LED's so I thought I might still see some reduction.

The EV consumption is tracking much lower than expected (advertised at 100 mi / 28 kWh), making the credit a bit more than I expected for the month when I made the plan switch.

One other nice thing is that the california climate credit is mostly paying the $5.17 / mo minimum charge, which can't be offset by TOU credits. It is technically money out of my pocket, but since I didn't do anything to earn that credit, I don't feel bad about SDG&E taking it back.