Question for solar energy savants

[RainDog]

Someone was asking me about ROI on solar panels, etc, and affordability - even if one technology is better for the environment than another - when it's so much cheaper to stay on the grid - that's what people will do, simply b/c it's cheaper.

So, my question is - do people here know of situations in which solar is becoming more affordable - what are the projections down the line (near, not far from now) and - is it true that the cost of storing the energy is the biggest cost?

Does anyone know of more affordable solutions for storage?

Inquiring minds wanna know from those in the know (I'm not.)

Bright moments...

Cause space is the place - to channel a little Sun-Ra into a solar energy thread...

[jeff47]

1. I won't claim to be a savant...

...but the ROI depends greatly on where you live, because the ROI is highly dependent on how much you have to pay for electricity as well as how much sun you get.

So in expensive electricity markets with lots of peak sunlight, such as Southern California, the ROI is pretty good. In cheap electricity markets or places with less peak sunlight, ROI is not as good.

There's several calculators out on the Internet which can give you a ballpark estimate. A few years ago, solar barely broke even. When I ran those calculators a year ago for my cheap-electricity-but-decent-sun house, it would take about 8-10 years for the panels to pay off.

[RainDog]

2. Thanks for the reply

So, southern climes would have better ROIs in the short term, on avg.

...it's sort of ironic that the oil industry has such a stake in the south, considering.

[jeff47]

3. It's latitude as well as average cloud cover.

The Southwest does best because of the low latitude and the lack of clouds.
The Southeast doesn't do nearly as well due to cloud cover, but does better than the Northeast.

[Travis_0004]

4. And electricity costs

Hawaii has great sun, but very very expensive electricity (and great incentives to install solar), so ROI is a few years.

[oldhippie]

5. I do such analyses for residences and small business ...

I have a spreadsheet that I use that has a dozen or so key variables and then run out a 20-25 year cashflow and then discount the cashflows back to get an ROI (which is different than payback period, which most people think of.)

The initial cost of the system, whether purchased or financed, whether there is storage or not, and roof preparation and racking system choices are initial cost drivers. As has already been mentioned, payback will depend on how much energy your system will displace, how much you can trade with the utility company (net metering terms) and other tax breaks, incentives, and tax abatements. In my experience, the biggest factors in a payback calculation (or better, an ROI calculation) is your current cost for electricity, it's structure (time of use or tier factors) and (the biggie) how much do you estimate the cost of electricity will increase (or decrease) over the next 20-25 years. That is usually the most sensitive factor in my analysis.

Another factor that many folks forget is operation and maintenance costs. It's usually assumed that a PV system has no moving parts and will run forever without any care. But, panels do get dirty, they do drop off in power with age, they do sometimes get damaged. There is sometimes maintenance cost involved in cleaning repair or replacement. There are also sometimes maintenance issues involving the roof and/or mounting structure. The DC-AC inverter is also a major piece of the cost. Right now they tend to be warrantied for 10-12 years, so I throw a replacement cost into the spreadsheet at the 12 year point. But the inverters are getting better and the warrantees are stretching out so that may not be necessary in the future.

Anyway, there are a lot of websites out there that can walk you through the calculations better than I can here. I usually charge $100-200 for a residential analysis here in my home area of Central Texas, and $500 for a business analysis in an area where I have to do some research on local rate structures, tax incentives, regulations, etc. It generally takes a couple of hours to run the variables and alternative scenarios.

Not sure that helped you, but it shows some of the things to consider.

[oldhippie]

6. As for the storage question .....

Does anyone know of more affordable solutions for storage?

I only wish. Flooded electrolyte lead-acid batteries are still it for residential and small commercial scale systems. They are heavy, dirty, somewhat dangerous, require continuous maintenance and are generally a pain in the ass. And (at least in my reckoning) they are expensive, though cheaper than any other equivalent technology. But they are still what's being used. Someday other battery technologies or maybe even electrolysis and hydrogen storage will become feasible and affordable, but it ain't in sight to me at this time.

(Note: I am dying to gin up an affordable hydrogen electrolyzer to my PV system and play with it and fuel cells. It can be done, it has been done, but it's not yet in my price range.)

[nationalize the fed]

7. Mike Strizki

You might find this video interesting.

a search of his name will bring up more videos

Inside the Solar-Hydrogen House: No More Power Bills--Ever
A New Jersey resident generates and stores all the power he needs with solar panels and hydrogen
http://www.scientificamerican.com/article/hydrogen-house/

[oldhippie]

8. Oh yeah, I've been following his story ...

... From the beginning in the alternative energy blogs. He has done what I would like to do, but he seems to have a considerably bigger budget than I do.

[RainDog]

9. Thank you for all the information

...and for fine tuning the idea of ROI related to solar.

It seems like the only way solar will be competitive on a wide scale is when the cost of other energy forms are factored into the cost to users - pollution, etc. and... yeah, won't hold my breath for that one.

The other option would be to have something sort of like the TVA project from FDR that brought electricity to rural areas - in this case, and, yeah, won't hold my breath that Republicans would do anything the oil industry doesn't like.

[Finishline42]

10. The answer is in a valid 25 year warranty for the Solar system

The answer is in a valid 25 year warranty for the Solar system - panels, electronics, and mounting systems. If it's a 'valid' 25 year warranty then it becomes a 40 to 50 yr system - panels typically lose a half percent a year in output.

The ROI certainly depends on what the local cost per kwh, but also to be considered is that the cost of your electricity for the system is locked in at time of purchase.

Mounting the panels on the roof of your house also will decrease you AC cost as the panels will keep the roof from heating up.

So PV is definitely competitive if you look long term, plus the more we install, the cheaper the systems will become.