Price paid per watt

[J.P.M.]

What you don't understand that it's often not possible, due to space constraints, to have the same orientation when you increase the number of panels and use less efficient panels. A lot of residential installations are roof-space constricted. For a company like Solar City, who is doing leases, they're marketing slightly reduced electric bills with zero-outlay and this looks attractive to some people even when they are only getting enough panels to offset 50-60%.

I believe I do understand space constraints and solar panel limitations to some degree. Still learning however.

After reading all you have presented, it seems to me what you do not have is a good understanding of the ideas and concepts that I and others have been writing about in this thread (and others).

One such concept is the idea that it just may make more economic sense to put less expensive equipment in an available space and not offset the lower tier (less expensive) electricity than to spend more on Sunpower (or some other expensive equipment) to replace the cheapest electricity you buy. That is, some years down the road, you may be $$ ahead with a smaller (electrical) size system at a lower $$/Watt cost.

The future of electrical costs is never set and never predictable, so all sizing and economic analysis based on anticipated electric rates is, to the extent that the future is not very predictable, a guess. One of the other things posters discuss here, sometimes vigorously, is electrical rates and their future. That, IMO, seems to be another area where you could perhaps benefit from some additional background.

I sort of get the sense that you have convinced yourself of a course of action, came here looking for reinforcement and, having no small amount of your possible ignorance of the subject exposed, seem to be backing into justifications for that preordained decision.

For example, I think using Sunpower equipment is not cost effective for most applications, and I believe I can make a logical case for my opinion, based on sound engineering principles, experience and process economics. Those tools and others also allow me to estimate when and under what conditions and constraints a Sunpower system may make sense. Such information and knowledge is available and relatively easy to master. My point here is, I do not believe you have that knowledge, experience or expertize yet. I think you have your mind made up and don't want the be confused with concepts about which you may be ignorant.

I suspect most folks around here (at least me) have nothing to gain by sharing their opinions and experience. At times, we disagree a fair amount, but none of us is as smart as all of us.

If more people who are considering solar energy spent a few hrs. reading things on this forum, and also spent some time informing themselves about the subject, I'd bet they would have better systems, probably smaller, less expensive and better fit for purpose. You may be in that situation.

Just opinion. Take what you want/need of the above. Scrap the rest.

[sms]

I believe I do understand space constraints and solar panel limitations to some degree. Still learning however.

After reading all you have presented, it seems to me what you do not have is a good understanding of the ideas and concepts that I and others have been writing about in this thread (and others).

One such concept is the idea that it just may make more economic sense to put less expensive equipment in an available space and not offset the lower tier (less expensive) electricity than to spend more on Sunpower (or some other expensive equipment) to replace the cheapest electricity you buy. That is, some years down the road, you may be $$ ahead with a smaller (electrical) size system at a lower $$/Watt cost.

That used to be the case in my area. Not sure where you are or how the utility is structuring rates but here is how things changed in just one year where I am (PG&E):

Per KWH rates rounded to the nearest cent:

December 2013
-------------
13¢ Tier 1
15¢ Tier 2
32¢ Tier 3
36¢ Tier 4

December 2014
-------------
15¢ Tier 1 (+15%)
18¢ Tier 2 (+20%)
26¢ Tier 3 (-19%)
32¢ Tier 4 (-11%)

Offsetting the lower tiers is now starting to make sense. It's important to take a big-picture view when you size a system and take into account rate trends. Larger systems that didn't make sense in the past are starting to make sense as the rates change. Even the lowest tier rates from PGE are way higher than what Silicon Valley Power charges in the city of Santa Clara (10¢ for the first 300KW, 11¢ over 300KW). You also have to look at how the tier allocations change over time. Suffice it to say, the changes always favor the utility.

An article about the changes is here: http://www.sfgate.com/news/article/P...em-5004968.php . What PG&E is doing is raising the artificially low base rate and lowering the higher tier rates which had subsidized the base rate. This affects the economics of solar systems because many existing systems were sized to offset only the higher tiers, which made sense at the time.

[J.P.M.]

That used to be the case in my area. Not sure where you are or how the utility is structuring rates but here is how things changed in just one year where I am (PG&E):

Per KWH rates rounded to the nearest cent:

December 2013
-------------
13¢ Tier 1
15¢ Tier 2
32¢ Tier 3
36¢ Tier 4

December 2014
-------------
15¢ Tier 1 (+15%)
18¢ Tier 2 (+20%)
26¢ Tier 3 (-19%)
32¢ Tier 4 (-11%)

Offsetting the lower tiers is now starting to make sense. It's important to take a big-picture view when you size a system and take into account rate trends. Larger systems that didn't make sense in the past are starting to make sense as the rates change. Even the lowest tier rates from PGE are way higher than what Silicon Valley Power charges in the city of Santa Clara (10¢ for the first 300KW, 11¢ over 300KW). You also have to look at how the tier allocations change over time. Suffice it to say, the changes always favor the utility.

An article about the changes is here: http://www.sfgate.com/news/article/P...em-5004968.php . What PG&E is doing is raising the artificially low base rate and lowering the higher tier rates which had subsidized the base rate. This affects the economics of solar systems because many existing systems were sized to offset only the higher tiers, which made sense at the time.

Check my masthead for my location.

No offense intended, but what you are doing is somewhat equivalent to preaching to the post graduate divinity school. Read prior threads. These subjects have been and continue to be much discussed. You're a bit late to the party. Some of us have seen, studied and commented on what you present here in more detail and with broader scope than you may appreciate.

The driving force for rate reform is primarily from AB 327. Do as you wish, but I'd suggest, if you have not already done so, a read or two of that legislation and the impetus behind it. That's been with us here in CA for about a year or so. I'd also suggest not placing too much reliance on stuff you get from the common media. Most of that tripe is written by people ignorant of the subject and/or with skin in the game.

[sms]

Check my masthead for my location.

No offense intended, but what you are doing is somewhat equivalent to preaching to the post graduate divinity school. Read prior threads. These subjects have been and continue to be much discussed. You're a bit late to the party. Some of us have seen, studied and commented on what you present here in more detail and with broader scope than you may appreciate.

The driving force for rate reform is primarily from AB 327. Do as you wish, but I'd suggest, if you have not already done so, a read or two of that legislation and the impetus behind it. That's been with us here in CA for about a year or so. I'd also suggest not placing too much reliance on stuff you get from the common media. Most of that tripe is written by people ignorant of the subject and/or with skin in the game.

Yep, AB327 is what is driving the increase in the lower tiers to decrease the big gap in tiers, and this will continue. This is what is changing the economics of solar systems that used to be sized to offset only the higher tiers because offsetting the lower tiers cost more in panel costs than could be recovered.

From this thread, it appears that many people are not aware of how the changed in tiered rates, at least in California, are changing the size of a solar system that makes economic sense. These changes do help the makers of the more efficient panels because of limited roof space on residential properties. The changes should also help drive sales of solar systems to lower quantity users that wouldn't have benefited from going solar when the lower tiers were much cheaper, though that's a few years off still.

[SunEagle]

Yep, AB327 is what is driving the increase in the lower tiers to decrease the big gap in tiers, and this will continue. This is what is changing the economics of solar systems that used to be sized to offset only the higher tiers because offsetting the lower tiers cost more in panel costs than could be recovered.

From this thread, it appears that many people are not aware of how the changed in tiered rates, at least in California, are changing the size of a solar system that makes economic sense. These changes do help the makers of the more efficient panels because of limited roof space on residential properties. The changes should also help drive sales of solar systems to lower quantity users that wouldn't have benefited from going solar when the lower tiers were much cheaper, though that's a few years off still.

IMO based on the CA legislature and increase of PV installations, I see your rates will continue to rise due to the way power is generated and the cost to import power that you can't generate.

The answer to your problem is not to install a larger PV system but to find ways to reduce your consumption so you naturally fall into the lower Tiers.

[sms]

IMO based on the CA legislature and increase of PV installations, I see your rates will continue to rise due to the way power is generated and the cost to import power that you can't generate.

The answer to your problem is not to install a larger PV system but to find ways to reduce your consumption so you naturally fall into the lower Tiers.

The utility understands that too and it's what is driving the increase in the price per KWH in the lower tiers. So unfortunately, just reducing usage to get into the lower tiers isn't going to solve the problem. I have done most of what I can do to reduce usage. The tile roof, while a pain in the butt for solar, keeps the house much cooler than the old shingle roof, so we rarely need the A/C anymore, maybe two weeks per year. When I lived in Florida, tile roofs were the norm, not the exception, but here tile roofs are less common except on very new houses. The big use we have is the pool pump. Short of filling in the pool (which I would do but SWMBO has vetoed) there's not much more we can do. Gas heat. gas dryer. gas water heat are already being used, and most houses here have all of those. Actually I now have a very efficient nuclear fusion powered clothes dryer which I use whenever possible, see http://oi60.tinypic.com/nyzrdf.jpg, I think I'm about the only person in my city using this high technology to dry clothes.

What does Florida Power and FP&L charge per KWH?

[russ]

Offsetting the lower tiers is now starting to make sense.

At those costs? Come on! Higher tiers OK but the lower tier requires Obamanomics to make it work. Oil/gas prices may well stay low for some time to come.

[sensij]

That used to be the case in my area. Not sure where you are or how the utility is structuring rates but here is how things changed in just one year where I am (PG&E):

Per KWH rates rounded to the nearest cent:

December 2013
-------------
13¢ Tier 1
15¢ Tier 2
32¢ Tier 3
36¢ Tier 4

December 2014
-------------
15¢ Tier 1 (+15%)
18¢ Tier 2 (+20%)
26¢ Tier 3 (-19%)
32¢ Tier 4 (-11%)

Offsetting the lower tiers is now starting to make sense. It's important to take a big-picture view when you size a system and take into account rate trends. Larger systems that didn't make sense in the past are starting to make sense as the rates change. Even the lowest tier rates from PGE are way higher than what Silicon Valley Power charges in the city of Santa Clara (10¢ for the first 300KW, 11¢ over 300KW). You also have to look at how the tier allocations change over time. Suffice it to say, the changes always favor the utility.

An article about the changes is here: http://www.sfgate.com/news/article/P...em-5004968.php . What PG&E is doing is raising the artificially low base rate and lowering the higher tier rates which had subsidized the base rate. This affects the economics of solar systems because many existing systems were sized to offset only the higher tiers, which made sense at the time.

With this post, I think you and I are stating to find some common ground in the analysis. From what I've read, the AB327 reform is not a cash grab by the utilities, but is likely to result in a net revenue increase that is consistent with long term national trends in electricity costs.

The extension of the argument I think we are both making is that as each panel is installed, its relative cost-effectiveness can be determined by looking at the cost of the electricity it is replacing. Spending $4.70 / W to offset electricity that costs $<0.20 / kWh is not a decision I would make, but do not object to others who consciously make that decision. Yes, the increasing rate of base tier electricity increases the relative benefit of replacing base tier consumption with panels, but that does not mean that it is a good investment yet. It has a lot to do with the price being paid. For my system, I calculated that paying $3.30 / W to replace base tier electricity (in SDG&E, similar to PG&E) would break even in about 9 years, which was barely acceptable. Paying $4.70 / W would not have been.

Edit: Just so it is clear, the calculations I used on my own system were not as simplistic as the example I presented above, but was done using annual rate modeling using the recent testimony heard by the CPUC. You can see more details in my thread here.

[sms]

At those costs? Come on! Higher tiers OK but the lower tier requires Obamanomics to make it work. Oil/gas prices may well stay low for some time to come.

You can see by the difference in publicly owned utilities versus privately owned utilities that the cost of fuel is not a big factor in rates. When one house is paying 34¢/KWH for the top tier and a house a block away is paying 11.3¢/KWH for the top tier, just about exactly three times the cost, you know that fuel cost is not all that big of a factor. In fact the smaller, publicly owned utility, is likely paying a higher price for the electricity that they resell because they are buying much less of it from the generating facility.

Don't just look at bottom versus top tier, look at the actual rates in each tier. I looked at FP&L rates and it looks like 8¢ and 11¢ for the two tiers (1000 KWH is the base tier). The number of KWH in FP&L's base tier would put you in PG&E's highest tier! PG&E's lowest tier costs much more per KWH than FP&L's highest tier. I can't imagine solar being cost effective in Florida. Especially in the coastal regions where you have the added expense of protecting the panels during hurricanes, or replacing broken panels.

It's not Reaganomics that is the cause for the disparity in rates, it's how much the utility companies own the rate-setting agencies of the government. See http://www.latimes.com/business/la-f...131-story.html.

The bottom line: the more your utility gouges for electricity the more it makes sense to offset more of the usage with solar.

[sms]

With this post, I think you and I are stating to find some common ground in the analysis. From what I've read, the AB327 reform is not a cash grab by the utilities, but is likely to result in a net revenue increase that is consistent with long term national trends in electricity costs.

The extension of the argument I think we are both making is that as each panel is installed, its relative cost-effectiveness can be determined by looking at the cost of the electricity it is replacing. Spending $4.70 / W to offset electricity that costs $<0.20 / kWh is not a decision I would make, but do not object to others who consciously make that decision.

Nobody would pay $4.70/watt, it's the federal subsidies via the tax credit that make residential solar palatable at all.

My electrical panel needs replacement anyway. It's already over-capacity. http://www.ismypanelsafe.com/zinsco_damage.aspx. So take that $2000 out of the equation.

$27,524 ($29,524-$2000)
$-3,000 (60¢/W F&F)
$ -8,857 (tax credit on $29,524)
$ - 590 (2% CC rebate)
$ 600 (approximate income tax on F&F rebate)

The net is really $15,700, or $2.84/W.

The real question is can I find an installer of Sunpower 345 watt panels that will be significantly less expensive than Sunpower Direct. I don't think that there is a F&F rebate from the independent installers.

Like I said, I'm not married to Sunpower panels but am looking at both the higher initial production versus other panels, plus the power generated over the life of the system since according to independent tests the Sunpower panels lose less capacity per year than the less expensive panels. Too many people just look at the cost divided by peak watts, without looking at the big picture. I don't care about paying another $2-3K up front to offset more usage since I am roof-space constrained. I need to scan some of the proposals I was given with the lower-efficiency panels—they are quite amusing. These salespeople will say or do anything. By the same token, it's rather amusing to see some of the posts in this thread from those that don't understand the situation regarding rates in different parts of the country. When the PG&E base tier rate is much higher than say the FP&L top tier rate, AND the KWH quantity in the FP&L base rate would put you into the fourth tier of PG&E, it's easy to insist that the key is usage reduction. With people in much of Florida running their A/C 10-11 months out of the year, the rates paid in California would bankrupt them.

[sensij]

Nobody would pay $4.70/watt, it's the federal subsidies via the tax credit that make residential solar palatable at all.

$27,524 ($29,524-$2000)
$-3,000 (60¢/W F&F)
$ -8,857 (tax credit on $29,524)
$ - 590 (2% CC rebate)
$ 600 (approximate income tax on F&F rebate)

The net is really $15,700, or $2.84/W.

The real question is can I find an installer of Sunpower 345 watt panels that will be significantly less expensive than Sunpower Direct. I don't think that there is a F&F rebate from the independent installers.

Like I said, I'm not married to Sunpower panels but am looking at both the higher initial production versus other panels, plus the power generated over the life of the system since according to independent tests the Sunpower panels lose less capacity per year than the less expensive panels. Too many people just look at the cost divided by peak watts, without looking at the big picture. I don't care about paying another $2-3K up front to offset more usage since I am roof-space constrained. I need to scan some of the proposals I was given with the lower-efficiency panels—they are quite amusing. These salespeople will say or do anything.

That is some creative math on the tax credit. Why not inflate the price of the system by 333%, collect the tax credit, and then take a rebate that brings the price back to 100%? The system would be free, and all you would have to do is pay taxes on the rebate.

I think you may be unwittingly providing the same amusement you that want to assign to others, but in any case, I hope your system serves you well.

[sms]

That is some creative math on the tax credit. Why not inflate the price of the system by 333%, collect the tax credit, and then take a rebate that brings the price back to 100%? The system would be free, and all you would have to do is pay taxes on the rebate.

It does not work that way, but you're welcome to try it. The Friends and Family is essential a referral bonus. It is provided to the purchaser after the system is installed and paid for. Because it is greater than $600, you have to provide your taxpayer ID via a W9. Depending on your tax bracket, and whether or not your state has a state income tax, it may cost more to have to declare the referral as income than to have the system be reduced by the F&F discount in the first place. Consult a tax professional if you're going to try inflating the price like that because you may find it costs you more.

[foo1bar]

That is some creative math on the tax credit. Why not inflate the price of the system by 333%, collect the tax credit, and then take a rebate that brings the price back to 100%? The system would be free, and all you would have to do is pay taxes on the rebate.

I believe that the "taxes on the rebate" would be 30%. So technically your sentence could be true, but really it'd just be shuffling money from one pocket to the other so that you can claim it's "free".

"Look - I got a free car. Yes, my wife gave the dealership $20k, but I didn't, so it's free!"

[sms]

I believe that the "taxes on the rebate" would be 30%. So technically your sentence could be true, but really it'd just be shuffling money from one pocket to the other so that you can claim it's "free".

"Look - I got a free car. Yes, my wife gave the dealership $20k, but I didn't, so it's free!"

Exactly. I think I will gain a slight advantage with declaring the rebate as income rather than having it deducted off the price and not getting the 30% tax credit, but only because we have a lot of deductions that bring down our taxable income. For others it would end up being a disadvantage. But it's immaterial because you don't get a choice in how they do it. It's probably designed to be financially advantageous to them.

[J.P.M.]

That is some creative math on the tax credit. Why not inflate the price of the system by 333%, collect the tax credit, and then take a rebate that brings the price back to 100%? The system would be free, and all you would have to do is pay taxes on the rebate.

I think you may be unwittingly providing the same amusement you that want to assign to others, but in any case, I hope your system serves you well.

On the tax credit issue - sounds like a page out of the leasing slugs playbook.