Solar Panel Opinions Please

[msnln]

As result of rising oil prices, my local utility (Long Island Power Authority) has been charging fuel surcharge and that component of the bill seems to be going up steadily. Upon calculating Kilowatt Hour rate for the last 12 months, compared to previous 12 months, average rate is up 19% from 17c KWH to 19c KWH. Most recent month's bill shows my cost at 21c KWH, another 9.5% increase from the average.

Anyway, I am seriously considering getting solar panel installed on the roof to geenerate solar electricity . Yesterday, I spoke to a solar roof contractor whom I found through article in local newspaper and member of NABCEP, renewable energy support group.

The system recommended costs approximately $40K, but after utility company rebate program, federal and state tax credits, my out of pocket cost will be around $14K. At the current usage and rate, I will recoup my costs after 11.5 years.

Wife thinks it's too long to recover initial costs, which I agree to some degree but I plan to live in the house for at least 10 years. However, there is also environmental costs reduction in terms of reduced pollution which would make me feel like responsible citizen of the planet. But this is obviously smaller component of my decision making component than financial aspects. Do you think 11.5 years is too long to wait to recoup initial expenses? I am told there is no maintenance required and my electric bill for next 25 years (expected lifespan) would be $5 (line service charge by utility). Your opinions would be very much appreciated and weighed in my decision-making. Thanks.

[sakigt]

Id do it, but only in a home Id plan on living in for more than 15 years. I dont think 10 would be worth it, although you would probably be able to get the costs back in the selling price.

You would also need to consider how much you can invest 15,000 for over 10 years. Personally, I would discount this part of the equation due to the envioronmental benefits using solar energy would provide.

[Bookie]

I wonder what the impact would be on the resale value of the house? Positive or negative?

What about component service life, maintenance costs and such? Really an interesting proposition and one I think I want to research.

[msnln]

I considered investment return over 10 years while pondering this but how do you price in environmental benefits in dollar terms. Also, utility rates will most likely go up, instead of coming down so it may be less than 10 years before I recoup my costs but I am using current pricing as benchmark to be conservative.

I have been told that resale value of the house will go up because the buyer will never have to pay for electricity, up the the capacity of the panels and there is absolutely no servicing required, unless a component breaks down. Panels are warranteed for 25 years and inverter (which convers sun energy to household energy) has 5 years warranty. I believe labor also carries 5 year warranty. So, I dont really foresee any extra expense.

Also I said 10 years minimum stay at current home but realistically I do not see myself selling the house until kids are grown -- they are 4 and 2 now.

[Fern]

With energy costs going nowhere but up, i can't see how installing solar panels would be anything but a big plus.

It is a long recoup time, but if you really feel you're gonna be around there for a while, i say go for it! we've been talking about doing the same but haven't looked into it seriously yet.

[kealina]

the house my parents bought had solar panels for water heating when we moved in 15 years ago and i believe it does add value to the house when selling as well as being a bonus that will prospective buyers will consider, because i would definately consider it a bonus in a house... i actually think the neighborhood association where we live now is stupid because they won't allow them to be installed (ruins the uniform look)...
the environmental impact is a great thing to consider as well as the financial aspect...only being 14K out of pocket for something that cost 40K that also saves on long-term necessary bills is something to think about long and hard... plus with the it's smart to consider the weather where you live... since we live somewhere that's temperate and sunny almost year round i think solar is a great investment for us but i have no idea how solar would work where you live... still, i'm all for renewabing sources of energy that won't be affected by every new crisis/price spike...

[34saving]

The 25 year expected lifespan is a little troubling to me. Do they just stop working? Do they impact the structure of the house? (When you move 10 years from now, are the inspectors going to report that the solar panels are "approaching the end of their useful life" and scare off potential buyers?) Are they guaranteed for 25 years? Are they expensive to insure?

As far as resale . . .I know this varies HUGELY, but my in-laws looked at a house with passive solar hearting (heating is pretty important here in MN -- and our solar panel potential is pretty limited) and based on its marketing, price, and time on market, that aspect of the house was considered a negative.

[Kirbycruiser]

I would wait. Just my opinion but I think the price will drop substantially in the next five to ten years as more and more people get them.

I used to work for a plumbing and heating company that had opened a little side business, selling, and installing solar panels, in the early 80's when I gather there were various tax rebates available. The thing I remember most was that they got a lot of calls from customers having problems with tracking. I guess the units are supposed to follow the sun so that they collect more energy.

I don't see any advertising for these anymore, but I know the newspaper did write an article about a woman here who had bought a very expensive unit, because of her concerns for the environment. I think she probably sold back to the utility, but I still don't think she would ever recoup anything. This is a very sunny environment, so if it gonna work it will work in a place like this.

I was under the impression though that solar energy would provide electricity. Do you heat with electricity?

I would do a lot of investigating before I jumped into something like this - the plumbing and heating company I worked for I think concentrated on the sales staff in their solar business - and I think it was probably fairly high pressure.

Tax credits are also available for insulation and energy efficient windows, I believe. I think that might be a more cost-effective place to start, and if you want to reduce you electrical usage, the fluorescent light bulbs and energy efficient appliances, when appliances need to be replaced, really do help a lot.

The Dept of Energy website might be able to help you and I know I called the DOE when I was thinking about getting cellulose insulation, and the man was able to kind of give me his opinions.

By the way that website used to have a do it yourself energy audit somewhere on it, based on your location, how many in your house, # of rooms and a lot of other factors that I remember finding very interesting.

In fact, here it is: http://hes.lbl.gov/

[msnln]

Thank you very much for all your feedback. I looked at my notes again and solar panels are warranted for 25 years, not 25 year life expectancy. So I presume they will continue to produce after 25 years but efficiency may get reduced over time.

As for Kirby's view that they panels will decrease in value over time, I absolutely agree. However, rebates and tax breaks will not be around forever. I had looked into installing panels last year as well and utility rebate was even higher. Now, with the higher demand, they cut back. I checked the electric company website and it looks like they allocated set amount of rebates in different rates. If the highest rates are all used up, then rates come down to the next bracket, and so forth. IF I wait too long, rebates will be all gone and government subsidies may not exist any more either. 50% subsidy makes this an attractive option for me.

Charge, you are addressing my wife's concern about recouping initial investment. The numbers look OK on paper but one of her major concerns is whether we will be able to get our investment back. But then, I don't think you get investment back for most home improvements, like updating bathrooms, kitchens, etc. The particular unit I am looking to install is not trackable unit but stationary. I heat with oil and I do not plan to do anything with that right now.

I built an extension to the house five years ago and put in energy efficient windows and new insulation throughout the house. At the same time, I had compact florescent lights installed throughout the house as well. Only place I have regular light is on the porch, and that light is off pretty much all the time.

I also understand there are energy efficient appliances which I looked at but they cost about double of regular appliances and I figure why replace things that work well. When my current appliances start failing, I will consider "green" appliances. I have gone though online energy audit also and about all I need to do is install insulation on the water heater (which I bought but have not gotten around to installing).

Hmmm...I also installed plastic over all windows that are not used to prevent draft and have programmable thermostat so I think I am covering pretty much all the bases.

Thank you again all for great comments and I would appreciate more feedback.

[slimcustomer]

I've toyed with getting a solar system for awhile now, more so recently with the addition of federal tax credits. I still haven't found a way for it to be economically worthwhile for me. Remember that you shouldn't just be looking at the return of your investment. You should compare your investment in a solar system to what you would have earned with your money if you had let it stay invested. Here's a link to a BP's Solar Economic Estimation calculator that I've found useful for coming to my conclusions - link.

[VJW]

Originally Posted by msnln

The system recommended costs approximately $40K, but after utility company rebate program, federal and state tax credits, my out of pocket cost will be around $14K. At the current usage and rate, I will recoup my costs after 11.5 years.

What kind of system ? Is it set of panels and a bank of batteries or a set of panels with a grid tied inverter ?

If it is the latter, another element to add to your consideration equation is whether your state mandates that your utility buy back any excess power you generate in the Summer. That could significantly impact your Return On Investment.

#

[msnln]

It's penels with grid to inverver. Utility buys back any excess electricity panel produces at the current rate. I am told panels will produce excess during March-October but during winter season of November to February, will have to buy electricity from the utility. Average usage will even out, though.

[msnln]

I found some research on solar power's return analysis and affects on the home's resale value. From the papers, it looks like I will be able to recoup the cost the day solar is installed from appreciation on the home value.

I have appointment with the contractor this saturday and I will keep everyone updated on the decision. It looks like i will go through with this as long as I can verify information I have been told is viable.

Thanks everyone for the input.

The link is: http://www.ongrid.net/papers/index.html

[Crystallas]

How much juice is the system rated at?

I did my own home last year for $6k 7.4kW worth of independant peak power.

[msnln]

I am told I need 4.8 KW system. How did you get yours so cheap? My system is going to cost bit over 21K after the utility refund. My utility has $3.75/w refund, and I thought that was pretty good. I can also get state tax credit of 25% of cost and 2K federal tax credit, bring my out of pocket to around $14k.

Also, I read somewhere that refund may be treated as income by the IRS. Do you know if that is the case? I need to contact my accountant to verify after talking to the contractor.

[TBH]

What a great discussion.

This point jumped out at me from the original post:

Originally Posted by msnln

I am told there is no maintenance required and my electric bill for next 25 years (expected lifespan) would be $5 (line service charge by utility).

You have no guarrantee that the utility companies won't raise their line service charge, especially as energy gets more expensive and more and more people switch to alternative sources. Just a thought. I also feel pretty suspicious of the "no maintenance required" promise. Show me the equipment that doesn't need ANY maintenance.

That said, I think it's a great plan. I'm envious that you're going to be able to add panels while the credits and rebates are still around. I don't plan to be in my house more than a couple of years, so it's not worth it for me, and the neighborhood isn't one that can support high-tech home improvements like solar panels. I doubt I'd get any of it back in resale value.

Since solar isn't an option for me, I pay an extra charge every month to replace all my electrical usage with wind energy. I buy my electricity from the regular city power company, and then they turn around and buy however many kilowatts I used from the wind energy company.

I've done some energy efficiency stuff in my home, but could do more. I haven't replaced my light bulbs because fluorescent lights give me migraines sometimes and I don't know if those energy-efficient bulbs will do that too. Anybody know if they're the same as regular fluorescents like we all have in our offices?

[msnln]

Good point Claire,

I suppose utility can charge whatever they want for service, and they have. As they could not increase electric rates without state approval, they have been charging fuel surcharge, which has caused electric bill to go up some 40%+ over the past few years.

As for maintenance on the system, I have been reading up on the solar panels and it is correct that panels will continue operating at least 25 years and after that, efficiency will reduce to 80% but still will continue to operate. The weak link seems to be the inverter, which is gadget that converts direct current produced by the sun into alternating current, which we use at home. Average life for an inverter is about 10 years and I will need to find out the replacement cost for an inverter, if it should fail. I am hoping economies of scale will bring prices down 10 years from now, if we decide to go with this.

As for compact florescent bulbs, prices have come down so much that it would make sense for you to try out one room in your house with these bulbs. And if you dont have problem in the room, you can replace the whole house. I got my bulbs online at http://www.energyfederation.org/consumer/default.php while they were having a sale and got great prices. I got reflectors for recessed lighting and globes for bathroom at $$2-2.50 a piece. Of some 30 bulbs replaced, I had 3 or 4 go out (over past 5 years) that I had to replace and I had purchased extras to make sure I had "uniform look" with all fixtures having same bulbs.

[TBH]

Thanks, msnln, for the bulb resource. That's a great idea to do one room and see how I like it.

I have to say again how useful this discussion is. Sometimes I feel like I have a split personality: in my offline life, I'm on the left politically, vocal about environmental conservation, and practice my own version of progressive politics. In my online life, I'm a personal finance geek. It's always fun when the two sides intersect.

[msnln]

You are welcome. I lean more to the right, but when it comes to natural resources, we only have limited amounts and I really do not want by-products from burning them to leave negative legacy to my kids.

I think conservation of environment and personal financial responsibility go hand in hand and I don't know why these should be viewed as opposing forces, especially now. Large businesses need cheap source of energy and they lobby government for favorable energy policies at the cost of environment. Obviously the government must weigh $ vs. environmental costs in deciding on policy and usually $ wins.

However, with such high prices for energy these days (oil, gas, which leads to higher elecricity), conservation of these resources could be achieved without having to add to cost. Prices for alternatives that substantially reduce reliance of these resources have come down so much that it makes financial sense to switch and in the long run, you end up saving more and get the dividend of helping the environment.