Our developing solar economics

posted by Jeff | Saturday, November 10, 2018, 11:00 PM | comments: 0

One of the big considerations around installing residential solar is the issue of return on investment, or the time it takes to make back that money with "free" electricity. The calculation is pretty simple: Take the system cost, subtract the federal tax credit, and add up all of the electricity generated until it totals that amount. For us, that means about $24k, -30% to get $16,800 for the net cost.

We're producing just under 1,200 kWh per month, and we would normally pay about 13 cents per kWh. That's about $156 worth of power every month. It doesn't matter how much we actually use... we're just trying to calculate the time to pay back. At this rate, we're looking at about 107 months, which is just under 9 years. The system should last around 30 years, so after 9, it really is free power. Twenty years of power, if the rates stay the same, is $37,440 worth of electricity. Not bad. Don't forget that it's cost we theoretically get back if we ever sell the house, too.

Hours of daylight in Orlando bottom out in mid-December, as they do anywhere in the northern hemisphere, with two less hours even now than we had in August. The trick is just how sunny it is or isn't. We still get decent production unless it's super overcast, like Ohio winter style. The problem in July and August is the almost daily afternoon thunderstorms, which cause a sharp drop in production. To that end, it sounds like April and May might be the best months for production.

Putting the ROI aside, the more interesting, monthly impact is just around cash flow. With two electric cars, we use around 300 kWh per months just to get around. (If you're wondering, it comes out to around 3.25 cents per mile. Even if you have a gas car that gets 50 mpg, at current gas prices you'll spend at least 5 cents per mile. At 20 mpg you'll spend 12.5 cents per mile.) Our biggest problem though is air conditioning. Even a new, energy efficient Florida McMansion is hard to keep cool, so despite a slightly cooler October, we still used almost 2,000 kWh. That would normally flirt with a $300 bill, but with the solar, we only paid $116. Based on last year's usage, with inadequate insulation as we later discovered, there's a good chance we could get close to a credit this winter, as long as it's generally sunny.

If I knew I was going to be commuting again, I would have installed a slightly larger system, but it's still great to see where we are. The technology exists today, and sustainable energy is a solvable problem. It doesn't make sense that we culturally can't grasp that, and worse, hang on to powering stuff with dead dinosaurs.


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