Last week, I talked about how we got a free dinner for a home solar consultation. Today, I’ll talk about what actually happened with the consult.
Our home assessment
The rep was about 2 hours late, but that was due to a coworker’s family emergency. When he showed up, he checked the direction our house was facing – you want to be facing South ideally; if not, S to SW. Luckily our roof was facing directly at 180 degrees. He then used Google Earth to get a satellite photo of our roof (ingenious.) Again, luckily our back roof was all surface; there wasn’t a fan vent, chimney, or anything like that. The rep then climbed into the attic and measured the pitch of the roof. Ideally you want a 20 degree pitch; ours turned out to be 39 degrees. Taking all of that into consideration (no tree cover either,) we were actually a great candidate for solar panels.
While he was in our attic, he measured the amount of insulation in our attic. I told him the house was only 3 years old, and so we didn’t need to be upsold on extra insulation or insulation wrap. We then proceeded to the kitchen to talk business. He pulled out a binder of some of the solar panel installations. However, 75% of the binder was of attic insulation. It was clear their margins were in the insulation upsell. He mentioned that he’d have to give me the insulation wrap for free since we’d never recoup our cost for it.
I showed the rep our electricity bill. We learned that we used 700 kilowatts last month. Our utility, Puget Sound Energy, charges 9c per kilowatt up to 600 kilowatts. They then charge 12c per kilowatt after that. I know some states charge X during the day and dirt cheap rates at night, but that’s not how it’s done here. I think it makes more sense to move to that pricing model (especially if you charge an electric car at night.)
16 or 20 panels?
Due to the surface area of our roof, we could either choose 16 panels or 20 panels. The more panels, the more expensive the upfront cost, but you’ll also produce more power. Each panel produces 275 watts; thus 16 panels = 4.4 kW. The 20 panels would produce 5.5 kW.
If you want to know how much energy your solar panels will product in your area, you can visit this govt site – http://pvwatts.nrel.gov/. The site tracks how much sun your area would produce. Here is what we put in and the results:
This means per year, our 16 panel (4.4 kW) system would generate 5,000 kW per year. We would sell that back to the utility company for 5,000 * .43 = $2000 per year. We would also save 5000 * .09 = $450 since we wouldn’t pay for that usage (this is a specific to Washington state.)
The full math on 16 panels
- Production per year – 5,019 kW
- Buy price – $0.42
- Total annual rebate – $2,108
- Usage savings price – $.09
- Total annual usage savings – $452
- Total annual savings – $2,560
- 4 year total – $10,239 (too lazy to do present value of money calculation)
The cost of the panels were about $1,100 each, so that meant $17,600 out of pocket. One time federal 30% tax credit of $5,280. Thus the full 4 year math is then $17,600 – $5,280 – $10,239 = $2,081. That means I’d be paying about $2K for the solar panels after 4 years. Then from year 5 on (assuming the utility company won’t buy from us anymore,) I’d save $450 per year. That then means I’d break even at around 4.6 years for a total breakeven point at 8.6 years.
At first, we seriously were thinking of doing that, but after thinking about it some more, due to not knowing what the utility will buy back in years 2-4, if they dropped it by half, that meant our breakeven point would be extended 6+ more years. Thus, we decided to pass. Sure, some will say our home equity will increase, but in today’s seller’s market, I don’t think people will pay that much of a premium for a solar panel house.