Anybody Else Frustrated By Solar Electric

[Michigander]

As a consumer, I would be willing to pay upwards of $5,000 or so to go off grid with regard to electric/gas (I have a very windy and sunny southern exposure). Last I checked these systems were well above that. Until it becomes more affordable, it isn't likely to take off. As far as whether there is a difference in value; at this point it seems more intrinsic in nature and not so quantifiable, unless you live/work in a region where it has become more common. Out here in the hinterlands of Michigan, I haven't seen it (except for a brief period in the late 70's early 80's).

 

[Lobo Fan]

Atypical utility can produce electricty from natural gas or coal for about $0.085 per KWH. Nuclear is up around a dime. Wind is over 15 cents and solar way above that. Plus the solar fields and wind farms are not connected to the grid, so there is that big investment as well. More fall lines for FHA people.

Once the technology for slar get efficient enough, then it will become more popular. Ihave appraised a couple of "off grid" homes. There was actually a market deduction for not being on the grid.

 

[Caterina Platt]

Atypical utility can produce electricty from natural gas or coal for about $0.085 per KWH. Nuclear is up around a dime. Wind is over 15 cents and solar way above that. Plus the solar fields and wind farms are not connected to the grid, so there is that big investment as well. More fall lines for FHA people.

Once the technology for slar get efficient enough, then it will become more popular. Ihave appraised a couple of "off grid" homes. There was actually a market deduction for not being on the grid.

Agreed on all points. The land value adjustment I extracted was significant in the off grid development. It was far greater than the cost to install the system.

 

[Randolph Kinney]

One issue should be acknowledged; it takes more energy to produce a solar cell than a solar cell will produce in its life.

Also, solar cells work when the sun is shinning.

 

[Metamorphic]

I've been researching it this Am. In Northern Ca. which is a pretty good place for solar, the pay off of a basic home grid system at current power rates is about 30 years. Basically the life of the pannels. However, individual panels can be replaced for less than the whole cost of the system, but its still along pay off.

To get it down to a reasonable pay off time, say 10 years (approx 1/3 the pannel life) you need to have rates at about 2.25 times what they are now. But this is before you consider any government incentives.

Ca. will give you a 100% deduction on the interest payments on the system. But if you did the system on a home equity loan you'd have the same advantage so that's no advantage really. Suffice it to say the money will be free one way or the other.

There's a Ca. installation rebate that's worth about 1/3 the cost of of the system that brings your pay off time at current rates into the 20 year range all by itself. Double rates and you're paid off in less than 10 years.

There's a Fed program that looks like it might net you a couple hundred more a year, but you'll need an accountant.

All total, the programs look they'll take the 30 year pay off and cut it down to 10-15 years at current rates; call it 10 year because I'm sure I'm missing some programs...there's a bunch of them. If you're bear'ish on utility rates over the next decade and dont plan to move, it may be worth doing.

But all that is for a new installed system. If you're buying a house that already has it, you're probably not eligible for all the programs since most of them seem to geared to getting you to install a grid wired system, not own a grid wired system, so you're looking at just the utility savings. Around here the solar calculator says a basic 2.35 kW system will save you $500/year. If you stay in the house 10 years, that's only $5 grand.

So perhaps that's why there's no market reaction. Most of the incentive goes to the installer of the system, and the incentives are the vig that makes the whole thing approach economic viability. Although the ability to have cold beer during a summer power outage or warm soup during a winter power outage is worth quite a bit in my book.

 

[c w d]

All the hybrid cars that sold before gas prices spiked and made them economical suggests that there's a segment of the market willing to pay extra to be "green" even when it costs them money out of pocket that they'll never get back.

You answered your own question Metamorphic. There may be a market reaction that is measurable in sales between those that can afford to be green. Unfortunately, there are many more of us that cannot and will only pay more for something that benefits us economically or when it gives aesthetic or entertainment value. It is very much the new clique' among those that can afford to be green.

Remember, not only does solar cost more than it can save monetarily, it also increases potential household maintenance requirements. Oh sure, over a 60 year period it may pay for itself. I've done the math on off-grid solar systems. I did it years ago. And when I saw it discussed in the forum that it is very affordable now at about $20K - $30K I researched it again. I still can't get below $65K for a house ~1,800SQFT. I don't know what systems the others are talking about. Perhaps partial power systems? But for off-grid, 60+ years seems to be the break even point. And that is not including maintenance or replacement of components and panels for which one would must be prepared. So, as long as there is no economic incentive and since such a purchase would be most people's second largest lifetime purchase and due to the lack of such systems (at least in my area) I would not expect their to be a measurable market reaction.

Amongst the average folk I would wager that someone that is willing to invest in such a system would be prepared to live at that home the rest of their life. The reason being is the typical buyer in the average person's market would most likely not be willing to bare the full cost of the system or even a partial 25% - 50% cost on top of the cost of the home. And such a seller is not going to bare the loss on their investment.

Unless there is a breakthrough in the technology that significantly lowers its cost it isn't going to make significant impacts on the market. And yeah, I know about the nano-tech solar. But, we haven't exactly seen those theoretical cost savings yet.

From the more paranoid/conspiracy theory side of me, we'll never see those savings as it would break the energy cartel's grip on the energy market. Everyone with free energy?!? Right. There's a saying in the solar energy community: "If Exxon owned the sun everyone could afford solar energy."

 

[BOBBYGINE]

So a solar system has no value, even though it cost 35K-45K to install and the home now has no electric bill.

A side note. In California, homes on the net metering plan, never get a dime from the power company. They only get credits, and these credits expire after one year. So either you use it or lose it. Solar is a very good option for people who use a lot of electricity, but for a typical homeowner it is much greener and cheaper to just turn off the lights and open the window. Its about the same as paying $160-200 per month in power bills for 15 years just to pay off a system.

 

[Mike Boyd]

Actually, (although even I was not around then) I bet indoor plumbing and bathrooms, electric lighting and appliances..........were not recognized in the market when they first came out. It will take time. My nephew is a solar contractor. He cannot keep up with work it is so busy. People resist change and saving on electricity cost is not in the minds of people when they are shopping for a new home. A sophisticated solar system is not an aesthetic feature that can be pointed out to your friends. It is not a status symbol....YET.

It won't be too long before the average electric bill will be in the $500 per month range. THEN, homes will be discounted if they DO NOT have a solar electric generating system. Just my prediction.

 

[Metamorphic]

Oh sure, over a 60 year period it may pay for itself. I've done the math on off-grid solar systems. I did it years ago. And when I saw it discussed in the forum that it is very affordable now at about $20K - $30K I researched it again. I still can't get below $65K for a house ~1,800SQFT. I don't know what systems the others are talking about. Perhaps partial power systems? But for off-grid, 60+ years seems to be the break even point. And that is not including maintenance or replacement of components and panels for which one would must be prepared. So, as long as there is no economic incentive and since such a purchase would be most people's second largest lifetime purchase and due to the lack of such systems (at least in my area) I would not expect their to be a measurable market reaction.

You have to draw a sharp line between on-grid and off-grid systems. One reason is that all the incentive programs I saw with only applied to on-grid systems. Secondly, off grid systems have to prepared to store energy during the day to use at night. This means a lot more up front expenses for batteries and switching, and replacement costs for the batteries as they loose their mojo. With an on grid system the power company is your battery; the credits you earn during the day by putting power on the grid earn you power in the evenings when your PV's are dead.

At the end of the day it all depends on what happens to power costs. In Germany the passed a law saying power companies have to buy power from the public at a certain rate....a rate high enough to make PV's profitable. The net effect was to increase rates of the non-solar power buyers. They actually had one guy that was a farmer that took a field that had been overworked and covered it with PV's because it made more sense than trying to get it back in production with what ever crop he did. Although I dont like this kind of government intervention, it wouldn't surprise me if we see it happen at some point.

This appraisal I'm working on (a review btw [snicker]) has the potential to be a lot of fun. The owner of the house is a CEO of some kind of environmental technology investment group (I googled him). The subject report 0'ed out his $40K solar system and it looks like I'll be doing the same.

 

[Randolph Kinney]

At the end of the day it all depends on what happens to power costs.

The inland areas of California will become very high cost areas for power. The areas along the coast where the temperatures are more moderate and constant will maintain their status a preferred places to live.

I use to live in Phoenix, Arizona. The power bill there is outrageous in the summer months but they have to build the power generation for peak demand so even the winter rates are high.

I moved to Carlsbad, CA in 2000 and I saved over $1,000 the first year on utility cost.

Fallbrook, CA and places like it are falling in value. Not only are transportation costs killing it but power cost will add to the burden. Sure, some people will add solar systems and buy a Toyota Prius to cushion the blow from living there since they can't afford locations that are closer to employment and preferred climate.