Does Solar Make Sense

[DanS26]

Bruce we have talked about this before.....transmission and distribution costs are FIXED....they do not vary by production. Your production did not save your POCO a single penny.

[bcroe]

Bruce we have talked about this before.....transmission and distribution costs are FIXED....they do not vary by production. Your production did not save your POCO a single penny.

Yes and what I said still stands. Billing for transmission and distribution may
be fixed, but the actual costs vary some, since IR losses vary with the SQUARE
of the current. And without doubt saving the PoCo generating and distributing
2000 kWh does extend (a tiny amount) the time before our Nuke needs refueling.
But my real point, I am NOT cheating them of transmission costs, as is sometimes
claimed. Bruce Roe

[DanS26]

You are not cheating them of transmission costs, but the transmission and distribution costs that you would have paid will now have to be paid by someone else namely the other members of the REMC. There is no free lunch.

[Mike 134]

Bruce you and I are both in Illinois. Why on earth would a properly run business pay you the distribution cost of the electric you generate? Who repairs your power lines if a tree falls on them? Certainly not going to be you. But like I said I'll take the money and run.

[bcroe]

Bruce you and I are both in Illinois. Why on earth would a properly run business pay you the distribution cost of the electric you generate? Who repairs your power lines if a tree falls on them? Certainly not going to be you. But like I said I'll take the money and run.

I have had plenty of natural event causes of short power interuptions.
Those are not related to how much power I consume, which has been
huge, extremely low, or negative over the decades. The repairs are
paid for by my monthly connection fee, which I still pay.

I collect no money with my plan. I already explained that the distribution
is being paid for, by those who use the power. Bruce Roe

[bcroe]

You are not cheating them of transmission costs, but the transmission and distribution costs that you would have paid will now have to be paid by someone else namely the other members of the REMC. There is no free lunch.

I am not sure if you are agreeing with me. When my neighbors use the
energy I generate, the PoCo gets paid for that energy and transmission
that they did not provide. Later though, they supply what they were paid
for when I use my credits in winter.

Other programs do not work this way. Bruce Roe

[Mike 134]

I have had plenty of natural event causes of short power interuptions.
Those are not related to how much power I consume, which has been
huge, extremely low, or negative over the decades. The repairs are
paid for by my monthly connection fee, which I still pay.

I collect no money with my plan. I already explained that the distribution
is being paid for, by those who use the power. Bruce Roe

and also, the distribution portion of the bill which to my point we contribute ZERO labor and materials, yet we get paid for it.

[bcroe]

As I said, there are charges related to amount of energy used,
and charges that are not, which I do pay. Bruce Roe

[Ampster]

I have batteries for load shifting on a daily basis..I need the grid as a battery for seasonal load and production differences. I don't mind paying a reasonable fee for the infrastructure and pricing mechanism that does that.

At another location I pay fixed demand charges for the kW peak that my tenant uses when he charges his EV. Solar offsets the kWhs consumed by that charging. The demand charge is not offset by the credits from export.

[DanS26]

I collect no money with my plan. I already explained that the distribution
is being paid for, by those who use the power. Bruce Roe

Well therein lays the misunderstanding. If you do not have to pay for any of the distribution FIXED costs for the power you use at night then the unchanging cost has to be absorbed by the remaining REMC members. As more members sign up for the net metering plan you then have more fixed costs to be allocated to a smaller paying group. It is an unvirtuous cycle that CA is now dealing with and will come home to roost for the rest of the net metering world.

Just be happy with your good deal, it may or may not last much longer.

[Ampster]

......If you do not have to pay for any of the distribution FIXED costs for the power you use at night then the unchanging cost has to be absorbed by the remaining REMC members. As more members sign up for the net metering plan you then have more fixed costs to be allocated to a smaller paying group. It is an unvirtuous cycle that CA is now dealing with and will come home to roost for the rest of the net metering world.

Just be happy with your good deal, it may or may not last much longer.

I agree. I use the grid as a seasonal battery so some reasonable fixed cost would be okay with me. Five months into my relevant period I am at a deficit of over 1,000 kWhs. Even at $200 per kWh hour for storage that would require me to make and investment of over $200,000 for storing that amount of power for a few months. As it is, I already have 42 kWh which is enough to get me through some power outages and do peak shaving so I purchase very little energy at peak rates. With current pricing I am able to end the relevant period with a small credit so I only pay Non Bypassable Charges of $230 a year. That is based on My NEM 2.0 agreement. I do try to charge me EVs from excess solar to avoid the NBCs. Most of the NBCs are acumulated during the winter when I actually have to use the grid to charge my batteries because production is reduced by weather an lower sun angles.

[bcroe]

I do not speak for the many other Net Metering plans, only mine. As
I said, I pay the fixed connect costs same as before, same as other
customers here. This plan works well for me since the time shift
between generation and use is half a year, far beyond the capability
of batteries. The idea of overnight does not enter into it, for those it
does batteries might work. Bruce Roe

[Ward L]

I compare the solar financials to a tax free bond. I invested $26k net, after credits, and it saved me $26k after about 8 years. I tracked what my power bill would have been without solar. That is a 12.5% ROR. On a tax free basis or 15%+ taxable. Probably the best investment I ever made. My point is to consider the tax savings when calculating the ROR of your solar purchase. I know with NEM3, the return isn’t nearly the same. Now with my 2 EVs and electric HWT, I’m starting to consume more than my panels produce. I worked for an oil company (boo!) for 37 years and my wife made me put in solar! She is a good woman!

[J.P.M.]

I compare the solar financials to a tax free bond. I invested $26k net, after credits, and it saved me $26k after about 8 years. I tracked what my power bill would have been without solar. That is a 12.5% ROR. On a tax free basis or 15%+ taxable. Probably the best investment I ever made. My point is to consider the tax savings when calculating the ROR of your solar purchase. I know with NEM3, the return isn’t nearly the same. Now with my 2 EVs and electric HWT, I’m starting to consume more than my panels produce. I worked for an oil company (boo!) for 37 years and my wife made me put in solar! She is a good woman!

But, with the tax free bond, at maturity, in all likelihood (or some version of reality) you'll get your $26K back, even if it's callable.
In a bond fund that money is much more available, maybe a week or two.
Now, realistically, you can't sell the PV system by itself as you can a bond and it's a moot point how much the PV system will add to the value of the property it's sitting on.
Realtors will tell you an in situ grid tied PV system will add more to the property than those knowledgeable about such things will (probably) more accurately guess, but depending on a number of things that are mostly opinion based, at sale, that PV system will usually add to the property sale at a much lower value than the original installed, after tax credit system cost.

And, if you're a bit less risk averse, over the last 8 years, an S&P 500 index fund has had an annual return of 14.8%/yr. (and pretty close to 11% average/yr over the last 32 years).
Now all that's taxable once cashed out, but when you do, you'll still get your original investment ($26K ?) back.
I appreciate that there is some risk involved in a stock mutual fund, or any investment but that risk is usually a lot less than most people probably think.
Besides, fortune favors the bold but slaughters the foolish.
I've found being an informed and somewhat cautious gambler over close to the last 3/4 century is more financially beneficial and also more interesting.
Life is a set of situational probabilities.
Risk nothing, be nothing.
No guts, no glory.
No balls, no babies.

[Ward L]

All good points. My solar comparison to an after tax bond investment matures with a zero value when the system is no longer functional in 20-30 (?) years. I realize it is not a perfect comparison to a tax free bond. It is also good to diversify your investment portfolio. When the market goes up and down, my solar bond is steadily covering my electricity costs. I’m not going to get rich by installing solar. 8 years at $270/mo is $26k, now you have recovered your investment, have your $26k back, and still get solar savings on your power bill each month. You could have taken the $270/mo and invested it. This bond is also “inflation protected” if you consider the increase in power rates. My current electricity bill would be $450/mo without solar now. All-in-all, it is a nice monthly savings with significant impact on your finances. Diversify, young man!