OT: Honest Analysis of Solar Power

Ian Malcolm prodded the keyboard

I concur ! That would be my assesment too. The only people making money are the ones collecting government funds for pushing installations. Curious how they say 25 year life span without being prepared to say how efficient or productive the panels will be after

10 years never mind 25.
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Reply to
Baron
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Solar hot water is a good idea - photo-voltaic's not so good

Reply to
David Eather

[ I won't comment on the above numbers, though I do not endorse them. ]

Conventionally, one assumes that the alternative would have been to invest the money in bonds and assume a certain rate of return. Therefore, when people claim a payback / breakeven period for a solar installation, they expect it to not only pay back the capital cost, but also to create profits (or avoided utility expenses) that would (at the payback point) equal the average profits made from putting that amount of capital into some very low risk financial investment. At present that makes little difference to the analysis as bonds pay hardly any interest, but over previous decades it made quite a difference to the payback analysis. In spite of this, in areas with high retail electricity prices and high insolation, PV can pay back within a few years. In areas with very little sun and cheap electricity prices, of course it doesn't.

The PV installation may still be worthwhile even if the payback period is quite long, because after that you are getting free electricity until it breaks and needs servicing, which might be a lot of free electricity if you use good quality panels. That might be valuable if you will be around to take advantage of that free part of the energy, or if you can find a buyer for your house who places value on that.

Some people also assume that the price of electricity will go up in future. I won't get into that here.

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Reply to
Chris Jones

I forgot to include the $500 central controller.

Thank you. If there were ever any agreement, much less a consensus, in sci.electronics.design, the repercussions surely precipitate the demise of civilization as we know it. I suppose a nolo contendere neutral stance is sufficient to avert this impending doom.

Which bonds? CD's, treasury notes, and bank deposits are running about 1.5% AER. Longer term notes are perhaps twice that. If I go for private placement notes, I might get what the banks are charging for a 30 year mortgage, or about 3.5% APR. I'll pretend that I'm lucky and can get 2% APR interest on a 30 year note and take monthly payments to offset my electric bill. $33,000 over 30 years at 2% is about $120/month income, or $1,440/year income. Income taxes will take about 20%, resulting in $1,152 net income.

Therefore, the annual cost of electricity will be: 10,800 kW-hr/yr * $0.15 = $1,620/yr The $1,152/yr in investment income will pay 71% of the electric bill, which is quite nice at the beginning. However, as the cost of electricity and inflation increase over the 30 year term, the investment income will remain constant. Assuming a very conservative

5% rate of inflation, the cost of electricity will go from $1,620 to about $3,500/yr(?) while your $1,152/yr in investment income will remain constant or only 33% of your expected electric bill. In my never humble opinion, the 5% inflation rate on the cost of energy is very conservative over a 30 year period.

The difference between producing your own power and buying from a utility is that the value of the power you produce keeps up with inflation, while your fixed interest income does not.

Yep. I'm getting about 1.5% on my investments today, while in the past, I was getting up to 12%. Just bring back sub-prime loans, programmed trading, junk bonds, creative derivative trading, and dot.com companies without products, and we can return to those glorious days.

I know the feeling. I live in a dense forest facing east. Solar can be made to work, but only in the summer. However, the OP lives in Arizona, which is fairly close to the ideal location for solar power. I'm addressing his situation, not mine.

I'm not so sure. The recent dramatic price drop in Chinese panels, that has made solar power a reasonable proposition, has also made it a miserable long term investment. I might expect the cost of panels to continue dropping in price. At best, I might build an expandable array, starting with a few panels and adding more when the price drops. That's one of the benefits of micro-inverters. The panels do NOT need to all be identical or even similar. I know of one such array of mixed panels that is truly ugly, but works just fine.

The panels certainly add value to a home appraisal, but not if they're leased:

The cost of electricity has dropped if measured in inflation adjusted dollars. The reason it seems to be getting more expensive is not that electricity now costs more to produce, but that the dollar is shrinking:

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Jeff Liebermann     jeffl@cruzio.com 
150 Felker St #D    http://www.LearnByDestroying.com 
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Reply to
Jeff Liebermann

Neither do the others posting on this topic.

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Rick
Reply to
rickman

Thanks for the analysis. Got any statistics for: How long the typical person lives in the same house? How much of your investment can you get back when you move and sell your house?

Reply to
mike

  • Municipal bonds, rolled over. Other excellent investments: Eli Lilly, P&G, Coke, Hershey, WalMart, Altria, etc; "boring" & steady dividend producers that are stable over wide market conditions and (mostly) world wide dominators; history of increasing dividends. Like a financial boat so inflation changes the numbers but not the income rate which is what counts. Munis part of mix to decrease taxes.
Reply to
Robert Baer

Y'er welcome. It's not very accurate or complete, but it is in the ballpark needed to answer the original question. Breakeven at about

18 or so years (excluding all incentives).

I've lived in my house now for 41 years. However, you probably wanted a bigger population sample than one.

Googling, I found this page: which proclaims that about 50% of home owners are in their homes for more than 10 years, and about 28% for more than 20 years.

Further down the page, a graph shows that half the buyers move within

13-22 years depending on region. Note that this includes rental conversions.

I don't know. The ROI varies radically with the appraised values of the old and new homes, current mortgage interest rates, and location. If you tried to sell a recently purchased home in about 2010, you might have found that your could not sell for more than the mortgage payoff, resulting in a net loss on selling the house (underwater mortgage). The length of time into your mortgage also has an effect as you could be half way through a 30 year mortgage but still owe 63% of the principal. Lots of other complications that prevent me from offering a single figure for ROI on your house swap. My guess(tm) is that moving is a break even proposition when you reinvest in a similar house in the same region, minus the realtors commissions, closing costs, fees, and changes in tax basis. The increase in property taxes precipitated by a change in valuation at time of purchase is usually the deal killer. You can test this by calculating what it would cost to purchase your own house and qualify for a new loan to make the purchase.

The solar power system is just another improvement to the house that is handled by the bank appraiser at the time of sale. There may also be a home inspection involved, intended to highlight defects and maintenance problems. It's the bank appraiser that largely sets the value of your house and its improvements. You can try to sell for more than the appraisal, but if the prospective buyers cannot obtain a loan at your price, you won't be able to sell. I don't know how the appraisers currently handle solar systems and the underlying roof. My guess(tm) is that they'll take the easy route, and simply value it on the basis of replacement cost or fair market value, and then depreciate that over a 20-30 year life.

"Solar Valuation" (6MB, 145 page)

"Valuation of Solar Generation Assets"

Much more:

Skimming the above, it appears that there are multiple methods of valuing a solar power system. For example, cost, income, or market vlue. Each look like they will produce radically different appraised values. I have no idea which is favored in your area or approved by your local banks. I'll try to ask.

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Jeff Liebermann     jeffl@cruzio.com 
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Reply to
Jeff Liebermann

Our geothermal uses our existing well as the thermal mass/radiator/exchanger. Pumps water out of the bottom (480 ft down), runs it through the system, and returns it to the top of the well (100 ft down). There's 750 gallons of water in the well, so it's pretty effective.

Reply to
DJ Delorie

Greetings DJ, In my well are bacteria that use iron in the cell wall. I don't remember the name of this bacteria but it is common throught the world and is in virtually all wells. The bacteria makes a biofilm on the inside of pipes and depending on several factors this film grows at different rates. Has adding heat caused any problems with bacteria growth in your system? Eric

Reply to
etpm

My wife works for a company that does community water systems, so she's very picky about water, and yes, we have iron bacteria in our water. We have a few whole-house water filters to clean up the water we drink (not part of the geothermal loop). The geo loop mostly *cools* the water anyway, down to near freezing in the winter. In the summer it warms up a bit but not that much, at most to 50-60F.

But also, it's not a closed system. We're constantly using water (drinking, showers, etc) and the well is open to the aquifer, so it's not like, say, an aquarium where bad goes to worse over time. The water in the system is constantly being refreshed from the outside.

Reply to
DJ Delorie

What sort of temperature gradient across the well?

Reply to
Don Y

It's a 6 ton (72,000 BTU) system. A 30 degree F change in air temp causes about a 4-6 degree F change in water temp, depending on various conditions, at about 18 GPM water flow. Full power is an 8 degree step, and the system varies the airflow to maintain the outgoing air temperature.

Also, if the water temp gets too close to freezing, the system dumps 10% of the water flow downhill of the house, forcing the well to draw in warmer water from the surrounding aquifer. The setup was designed by a local company to handle the cold New England winters.

In the summer, the same well provides water for the automatic lawn sprinklers too, so there's even more turnover in the well.

Reply to
DJ Delorie

"Lawn"? What's that?? :>

Water is scarce, here (desert southwest) -- i.e., you wouldn't "hose down" your driveway like was common in NE (when I was young -- haven't lived there in decades so no idea what water policies are there, now).

OTOH, if you opted to have a "large body of water" at your disposal i.e., O(10,000G) for "other purposes", it makes a great heat *sink* (as our problem for 9 mos / year is *cooling*). When contrasted with trying to cool the hot gases by exposure to "air" (at 100+F), even

90F pool water is a (big) win!

Of course, a smarter move (here) is earth-bermed/below-grade living structures to cut the cooling costs *and* effectively eliminate the heating costs (winters typically have day-time temps in the 70's).

Building an off-grid structure here would be a piece of cake!

Unfortunately, local builders tend to take the easy way out (why put in a basement if we don't have to worry about frost-line/heave? Just pour a slab and be done with it!)

Reply to
Don Y

Our problem here is often too much water. We have a couple of drainage systems around the house to keep the water *out* and to keep it from accumulating in the yard. We get about 1 GPM of drainage all year long.

We have a well, so there are no policies :-)

Reply to
DJ Delorie

Yeah, when I lived in NE, "damp" was synonymous with "basement" :-/ We had a corner where the cement foundation was always "moist" (but never "wet"). And, of course, snow melt was always a challenge as the soil just couldn't keep up with it (lots of clay).

Until the well runs dry :-/

We rely on wells, here (only about 11" of annual precip) but we don't have (direct) control over them -- municipal resources. Friends who live "farther out" and rely for wells exclusively (too costly to bring city water out to their properties) have had some problems in recent years having to redrill as the water table falls.

It's a very interesting adjustment to your mindset to go from a place where you don't think twice about water usage ("wastage") to one where you factor it into all of your considerations (I lament planting all the citrus, here -- but SWMBO considers it "her indulgence", offset by *my* rain water harvesting. Hmmm... and what am *I* getting out of this??)

OTOH, I have grown to truly enjoy *watching* it rain! Something I would never have imagined in any of the other places I've lived.

[My first year here, I thought everyone crazy to watch them "drop everything" to watch the rain: "Sheesh! It's JUST RAIN!" Now, I find myself equally enthralled...]
Reply to
Don Y

"Jim Thompson" wrote in message news: snipped-for-privacy@4ax.com...

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excerpt:

Researchers have developed a clever way to turn everyday surfaces into solar panels: Just cover them in a flexible film treated with spray-on solar cells.

"My dream is that one day you'll have two technicians with Ghostbusters backpacks come to your house and spray your roof," University of Toronto's Illan Kramer says in a news release. And it's not just for the roof of your house. Spray-on solar works for surfaces ranging from patio furniture to car tops and airplane wings. You might even be able to use it to power your tablet.

Kramer and colleagues developed the "sprayLD" system using tiny light-sensitive materials called colloidal quantum dots (CQDs). Once they're printed onto a flexible film or bendy plastic, these miniscule solar-sensitive dots can be used to coat various surfaces. A car roof wrapped with CQD-coated film can convert enough energy to power three

100-watt light bulbs or 24 compact fluorescents.

The name sprayLD is a play on ALD, or atomic layer deposition, a manufacturing method where materials are laid down in single one-atom-thick layers at a time. Until now, CQDs were only incorporated into surfaces through a slow, expensive process called batch processing, which works like an assembly-line for chemical coating. Instead, with sprayLD, liquid containing CQDs is blasted onto flexible surfaces directly--like printing the news onto rolls of paper. Compared with the assembly-line approach, the roll-to-roll coating method simplifies the incorporation of solar cells into existing manufacturing processes. ...

--- news://freenews.netfront.net/ - complaints: snipped-for-privacy@netfront.net ---

Reply to
Bill Bowden

Interesting. I have no problem with solar where it makes sense. More and more of our traffic signals like flashing yellow in curves, etc., are solar powered.

Of course Arizona is near optimum for available sunlight. ...Jim Thompson

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| James E.Thompson                                 |    mens     | 
| Analog Innovations                               |     et      | 
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Reply to
Jim Thompson

Obviously if it wasn't a loser everyone would do it with no subsidies.

But, to be clear, that's only obvious to Republicans.

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Reply to
Tom Del Rosso

Welcome to the New Economy:

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yep, Algore, entrepreneur, made his money the old fashioned way -

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Rich
Reply to
RichD

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