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]

Re: Solar Panel Opinions Please

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]

Re: Solar Panel Opinions Please

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]

Re: Solar Panel Opinions Please

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]

Re: Solar Panel Opinions Please

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]

Re: Solar Panel Opinions Please

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]

Re: Solar Panel Opinions Please

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]

Re: Solar Panel Opinions Please

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.

[msnln]

Re: Solar Panel Opinions Please

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]

Re: Solar Panel Opinions Please

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]

Re: Solar Panel Opinions Please

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]

Re: Solar Panel Opinions Please

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]

Re: Solar Panel Opinions Please

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]

Re: Solar Panel Opinions Please

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]

Re: Solar Panel Opinions Please

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.