Mini-Series Part 3: Is Solar Worth the Money Invested?
Welcome to our Solar Mini-Series. Our Mini-Series will try to answer questions about solar that homeowners may have. This third video discusses the purchasing considerations for solar power. A full transcript of this video is found below the video. Feel free to check out the other videos in our Solar Mini-Series.Full Transcript:
Hi my name is Cecil Harrison. I’ve been a nationally certified solar design engineer for the last 14 years. Welcome to this series of mini classes on solar power. I hope to answer in these videos most of the questions that homeowners have as they consider installing a solar power system.
Let’s start with a quick review of the different system types and some strengths and weaknesses. Grid interactive systems come in three types: string inverters, micro inverters, and optimizers. All of these systems produce and sell energy to the grid. They are the cheapest to install. They have the quickest payback time, but they provide no power. In an outage, if the grid goes down they go down.
Grid interactive with storage – there are two types. The first provides storage for load shift load shape, but again if the grid goes down it goes down. However it does give you a net zero home. Net zero means your home makes and uses all its own energy without buying from or selling to the grid. The second type provides backup in an outage. These systems have the ability to isolate from the grid forming a micro grid. They do have a longer payback time. Stand-alone systems are usually not grid connected and most often use a generator. The thing is backup these systems are the most expensive with the longest payback time.
While utility bills do not all look the same they all contain the same information. This is an example of a Rocky Mountain power bill. The graph in the upper right corner shows the average daily usage for each month of the year. By adding up the amount from each month and then dividing by the number of months (in this case 13) will give us the average daily usage. You can also add each month’s actual usage from 12 months bills and then divided by 365 days to get an accurate daily usage. The first question that you need to ask when considering a solar power system is “how much do I need?” Some companies are happy to fill your entire roof with solar panels; however there is no reason to install more solar than you actually need. If your bill goes to zero with 12 panels it will go to 0 with 30 panels; however you don’t know the difference and the power company gets all that extra energy for free while you have the added cost of solar panels (which will never pay for themselves since these systems are modular). It’s best to install only what you need. If your lifestyle or electrical needs change (like adding an electric vehicle) more panels can be added at a later date. Let’s look at numbers from a real project. The cost for this homeowner to generate their own electricity is a little over eight cents a kilowatt hour figured over its 25-year warranty lifetime. Most systems however will continue to provide this cost savings beyond that 25 year period. Using the available incentives can make a huge difference in the lifetime cost of the power produced. These incentives have started ramping down and will be gone by 2024. If we look at the actual out-of-pocket cost for this homeowner, the cost of generating energy is about five cents a kilowatt hour. To compare this to the cost of the power that you purchase from the utility company, you will need to take your bills total cost divide it by the total kilowatt hours used during that billing period. To get a true cost per kilowatt hour, since your utility bill includes taxes, multiple rate tiers, franchisee and other fees, you don’t get a true cost by just using the stated cost per kilowatt hour. For the customer in our example, it is 11 and a half cents. This customer saves 6 and a half cents per kilowatt hour by generating their own electricity. To show you how we figured the actual cost per kilowatt hour here is the customer’s bill. If we take the total cost $95 and divide that by the total usage 823 kilowatt hours we come up with a cost of eleven and a half cents.
As you can see, a properly installed system can save you money over its lifetime. These numbers are based on projections and what you personally experience will be different, but you will certainly realize the savings. If this customer were to purchase their next 25 years of energy at the current cost with no rate increase their solar power system, it would save them a little over $17,000. If the utilities continue to receive their normal rate increases their solar power system will save this customer over $94,000 in that twenty five year period. I hope that the information in this video has been helpful and that you will join us for the other mini classes in this series. Thank you.
