Got Solar?

Create your own rooftop power plant

Table of Contents
We see how solar panels make you money We explore the hidden costs of financing and package pricing We take a quick look at whats involved in an installation We learn the definition of system size and explore installation sizes in California We will look at total installed prices homeowners paid in California We will look at prices for foreign and domestic solar panels as of 1/1/2012 Well discuss some online resources for figuring out what system to get and where to get it professionally installed We will learn how to evaluate if we are getting a good deal

The Grid

The graph shows the May Oct weekday schedule for Californias Pacific Gas & Electric utility

The utility charges a higher rate for higher monthly consumption Tiers (like tax brackets) and higher rates during partial peak and peak times for electricity demand.
You sell your net solar power during the day at these same peak or partial peak rates and buy back what you need in the evening and morning at partial peak or off peak rates

Using your roof as a piggy bank!

PARTS LABOR FREE ELECTRICITY

8 10 YEAR OF OPERATION OF SOLAR PANELS

16

20

(Payback graphed are after the Federal tax credit and State rebates are taken into account)

After 8 years the above system will pay back the up front cost of the system (PARTS & LABOR) by saving you money on electricity bills After another 8 years you will have a 100% Return on Investment (ROI) from Free Electricity Thus you will have obtained an annual APR of 6.25% each year over a 16 year time period It is highly unlikely you will see these kinds of interest rates from banks or possibly even the stock market over the next 16 years This is a very secure investment because your utility company is a guaranteed customer that is mandated to buy your electricity production and the rates never go down Investments like this dont come by often which is why so many financing companies are willing to buy your panels for you and get an even higher return from you

The lure of financing

Purchase PARTS LABOR FREE ELECTRICITY

Finance

PARTS + LABOR

OVERHEAD

RATE OF RETURN FOR INVESTOR

10 YEAR OF OPERATION OF SOLAR PANELS

20

(Payback graphed are after the Federal tax credit and State rebates are taken into account)

Financing is an option for those unable to purchase the system

Power Purchase Agreements and Solar Lease Agreements are both essentially Financing with investors or creditors who need a rate of return on their investment
The monthly cost for both types of financing are deliberately set below your current cost for buying electricity

I noticed installation corporations that refused to quote parts & labor separately came in with higher bids and often these companies had CEOs and extra overhead to pay for
You arent getting free electricity as much as buying cheaper electricity for the life of the panels The APR for 20 year financing works out to between 8% and 12% Financing smaller systems may not qualify for Zero up front costs

Get to know whats involved

SOLAR PANEL & MICRO-INVERTER INSTALLATION

Solar Panel System Size

The size of a Solar Panel System is defined as the sum of the rated maximum wattage (AC) for the power inverter(s) in the system This definition assumes the rated solar panel wattage (DC) is high enough to achieve the maximum output of the inverter(s) after accounting for energy losses from:
The DC -> AC conversion Hot temperatures at the panel An imperfect location or horizontal tilt of the panels Your latitude (distance to sun)

The panel rated wattage is measured on a sunny day at 70 F when the panel is perfectly perpendicular to the sun. For northern latitudes this is only possible when the panel is on the (S, SW or SE) facing slope of your roof and the horizontal tilt is ideal

Graphic courtesy of freeonplate.com

Determining the system size for your particular installation involves multiple factors including available roof space, projected electricity usage, the utility rate paid on average, the rate Tiers used and your budget

Num Projects in Step 7, 8 (a & b), 9 (a & b)

100 200 300 400 500 600 0

System Sizes in California

Peak kW has surprisingly high variation for installations throughout CA

Peak kW of Residential Installed Solar PV

<= 0.8 1 1.2 1.4 1.6 1.8 2 2.2 2.4 2.6 2.8 3 3.2 3.4 3.6 3.8 4 4.2 4.4 4.6 4.8 5 5.2 5.4 5.6 5.8 6 6.2 6.4 6.6 6.8 7 7.2 7.4 7.6 7.8 8 8.2 8.4 8.6 8.8 9 9.2 9.4 9.6 9.8

System Sizes less than 1.2 kW

For smaller roof areas like San Francisco, Berkeley and Oakland, the most common system size is less than 1.2 kW
500
400 300 200

100
0

The number of panels is limited by your roof space and how much electricity you use. Building a system that produces more power than you use in a year will increase your system payoff time period.

0 0.8 1.1 1.4 1.7 2 2.3 2.6 2.9 3.2 3.5 3.8 4.1 4.4 4.7 5 5.3 5.6 5.9 6.2 6.5 6.9 7.2 7.6 8.2 9.1

Pricing per Watt (Peak AC)

The State of California provides records on total costs to install solar panels and the peak wattage (AC) of the installed system This ratio is a good way to compare large and small installations and across geographies

Exploring the Price per Watt ratio

Exploring the Price per Watt ratio

Exploring the Price per Watt ratio

Price Variation by Solar Panel (PV) Manufacturer & Country of Production

Popular Brands w/ some panels Made in USA or Mexico ($1.43 - $4.20 per Watt DC)

Made in USA Brands ($1.46 - $2.69 per Watt DC)

Made in China Brands listed on NASDAQ ($1.29 - $2.06 per Watt DC)

Prices obtained from CivicSolar.com and SolarPanelsOnline.com 1/1/2012

The Problem Huge variation in system cost

We suspect the variation in system cost is due to: 1. Some customers opting for Financing with significant extra total costs 2. Some customers being sold more expensive brands of solar panels and not being given choices regarding different solar panels at different price points.
(A lot of the panel price drops publicized in the media were from smaller and lesser known panel manufacturers and therefore doesnt explain much of the variation seen in the data of actual installations.)

3. More generally customers not aware of parts prices separated from the labor costs being taken advantage of with package pricing 4. Some customers are not looking at the installation as a financial investment and therefore not measuring the system payback period, APR or other financial metrics
Purchase PARTS LABOR FREE ELECTRICITY

Finance

PARTS + LABOR

OVERHEAD

RATE OF RETURN FOR INVESTOR

10 YEAR OF OPERATION OF SOLAR PANELS

20

The Solution Shop for Parts prices, then contact local Installer
PARTS LABOR FREE ELECTRICITY

Lets explore the PARTS needed and whats included in the LABOR charge

PARTS List:
1. Solar Panels: Shop around (browse) for acceptable quality panels with the lowest $/Watt
For example in Jul 2011 I found Siliken panels for $2.71 / Watt (listed DC rating) which is equivalent to $3.45 / Watt (AC). These prices are taxed and shipped for inside garage delivery . The price per watt sweet spot for this manufacturer was at the 240 Watt (DC) size.

2. Estimate the Inverter(s), monitoring and cabling to be $1.35 / Watt (AC), taxed and shipped 3. Estimate the Balance of the System to attach the panels to your roof to cost $100 per solar panel or $0.55 / Watt (AC) So the total parts cost was $5.35 / Watt (AC) prior to any rebates (e.g. 30% Federal tax credit) LABOR can be estimated to be $200 per panel or $1 / Watt (AC) and includes: 1. System sizing and panel location design included with a permit application paperwork that meets local building codes and city requirements

2. All paperwork to obtain permission from your utility company to operate and obtain rebates
3. Install above parts. Provide incidentals such as wire, conduit, nuts, washers, breakers, signage 4. Provide a 10 year labor warranty

Rebate Programs for Renewables

www.dsireusa.org / December 2011

DC

State program(s) only Utility, local and/or non-profit program(s) only State program(s) + utility, local and/or non-profit program(s)
Notes: This map does not include rebates for geothermal heat pumps , daylighting or other energy efficiency technologies. The Virgin Islands also offers rebates for certain renewable energy technologies.
Puerto Rico

+ DC & PR offer rebates for renewables

18 states

Measuring Solar Energy Production (the Payback)

The Peak Wattage (AC) measure only looks at the peak system power production when the sunlight is ideal and is how the size of a system is measured and priced Energy produced or consumed over a period of time is measured by kilowatt-hours (kWh) kWh is typically measured over a day or a month or for the year Solar production varies with seasonality and time of day, see chart: Solar energy production is affected by:
The Peak kW of the system The total sunlight hours and ambient temperature of your geographic location The horizontal tilt of the panel installation. If your latitude is between 25 and 50, the optimum horizontal tilt is the latitude, times 0.76, plus 3.1 degrees The orientation of a fixed panel installation. The best is South and for coastal California the second best is Southwest due to cloudy mornings and sunny afternoons

Using Desired Energy Production to Size the Solar Panel System

The simplest way to estimate the size a system is follows:
Peak kW (AC) = Desired Energy Production / Solar Potential where Desired Energy Production = 60% - 100% of prior years use in Watt-hours where Solar Potential = typical Watt-hours produced annually per 1 kW system:

Cost / kWh Pricing Analysis

A simple calculation to compare different bids, both financed or purchased, is as follows: Cost / kWh for your solar power = the total money youll spend on the solar panel system over a 25 year period, divided by the total kWh generated over that 25 year period. This cost should be lower than the average rate paid for electricity, see map:

2010 average rates courtesy ElectricChoice.com

Online Resources

Finding Local Installers (after youve done your research)

Summary
1. We learned how solar panels make you money, returning much better than savings accounts and CDs and are safer than the stock market. 2. We learned whats involved in designing and installing solar panels. 3. We learned there is a huge variation in the prices Californians are paying for these systems. 4. We learned that the costs of financing are hidden in the length of time one has to pay for this privilege and explains a big part of the price variation. 5. We learned that this price variation is also due to marketing and shipping costs for panels. 6. We learned that it is important to know the parts and labor costs separately and you may have to order parts and pay an installer separately to get the best deal. 7. We learned that installing smaller systems for smaller use is common in the San Francisco Bay Area and that Zero Down financing may not be available for these systems.

8. We learned most American made panels are cost competitive with foreign brands but are not well known and are not promoted by the big solar panel installers.
9. We learned a few different ways to evaluate if we are getting a good deal.

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