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The common definition of "savings" is a reduction of cash outlay for the purchaser. The fact that there are government subsidies (or surcharges) involved is not

The common definition of "savings" is a reduction of cash outlay for the purchaser. The fact that there are government subsidies (or surcharges) involved is not relevant for that calculation. The Google site is extremely thorough -- for the case where the consumer is buying the panels, they calculate the time to break even, but also a net present value given a 4% cost of capital. Same thing for the lease cases -- for an example I ran, the lease would cost $96 per month (fixed for the 20-year life of the lease), and offset $115 of a monthly $120 electrical bill at today's rates. So, it would generate cash savings for me from day one. Most solar leases in fact GUARANTEE that you will pay less for electricity after the install. So, "savings" should not be in quotes, it's a real savings for the lessee. As for your argument that we might all be better off if we didn't have to pay higher taxes for the subsidy -- maybe, but my decision to install solar or not is going to have a negligible impact on my personal tax rate, so I should value any savings against a fixed tax rate that doesn't change as a function of my decision.

mbostleman 11y ago
You are correct - the impact on your personal tax is negligible. Solar accounts for something well under 2% of total energy generation and residential rooftop far less. So almost all of your subsidy is paid by others. That doesn't make the over all analysis any more sound. What if we all had solar on our rooftop? Energy would cost more. The savings would be negative.
- URSpider94 11y ago
  I don't accept your conclusion. If we all had solar on our roofs, there are many possible factors that could reduce power rates (including tax burden, by your definition): -- fossil fuel prices would drop, since demand would fall -- we would spend less tax money on grants and subsidies for oil and gas marine terminals -- fewer emergency responses, disaster clean ups, etc. for fuel transportation mishaps -- maybe we could avoid or sit out the next land war in the Middle East ... Additionally, even without a tax subsidy, installing solar on my roof in CA would generate a positive NPV over 20 years. Here in CA, it's just plain cheaper than the utilities, even without the (nice to have) tax subsidies.
  - mbostleman 11y ago
    "Additionally, even without a tax subsidy, installing solar on my roof in CA would generate a positive NPV over 20 years." I would like to see this analysis. I know that there are certain (mostly remote and very sunny) areas of the U.S. that have demonstrated unsubsidized market viability. But even then only with utility scale installations. I would think rooftop surpassing grid parity with conventional energy would be a pretty big milestone. Not doubting you, but I'd love to see it on paper.
    - URSpider94 11y ago
      Go pick an address in Silicon Valley (take for example 2 College Ave, Los Gatos). Set the monthly electric bill to $125. The calculator recommends a 4.25 kW installation, which has a 20 year NPV of $12,056, if you click into the detailed analysis and check the last line. Subtract out the $5028 Federal tax benefit, and you are still left with a $7000 20-year NPV (assuming 4% cost of capital). Still a positive ROI over and above inflation, even without a rebate.
      - IkmoIkmo 11y ago
        I guess it depends on what you count as government support. For example if you pay $50k for your installation, you could depreciate it within 5 years or so by 85%, which reduces your tax payments in total, at a 35% tax rate, by $15k. That's $15k saved, whether you call that government support depends on whether you think that's 'normal business depreciation' or 'solar specific fiscal policy' I guess. Same with RECs, they're government support in the sense the government sets requirements on companies to buy them, thus creating a market for solar producers to sell them. This isn't energy being sold, it's more like a carbon tax thingy. You could see that purely as a tax on non-renewables (which imo it is), or as government support to renewables (which it's technically structured as). So the federal tax benefit, while large, is far from the only incentive.
        URSpider94 11y ago
        OK, but as an individual homeowner, I can not take depreciation, nor can I sell REC's. I'm just buying solar panels and putting them on my roof ... ... And again, to compare apples to apples, you'd have to tease apart the tax benefits given to existing energy companies over the years to get a real accounting.
- deleted 11y ago
  [deleted]

mbostleman 11y ago

You are correct - the impact on your personal tax is negligible. Solar accounts for something well under 2% of total energy generation and residential rooftop far less. So almost all of your subsidy is paid by others. That doesn't make the over all analysis any more sound. What if we all had solar on our rooftop? Energy would cost more. The savings would be negative.

URSpider94 11y ago
I don't accept your conclusion. If we all had solar on our roofs, there are many possible factors that could reduce power rates (including tax burden, by your definition): -- fossil fuel prices would drop, since demand would fall -- we would spend less tax money on grants and subsidies for oil and gas marine terminals -- fewer emergency responses, disaster clean ups, etc. for fuel transportation mishaps -- maybe we could avoid or sit out the next land war in the Middle East ... Additionally, even without a tax subsidy, installing solar on my roof in CA would generate a positive NPV over 20 years. Here in CA, it's just plain cheaper than the utilities, even without the (nice to have) tax subsidies.
- mbostleman 11y ago
  "Additionally, even without a tax subsidy, installing solar on my roof in CA would generate a positive NPV over 20 years." I would like to see this analysis. I know that there are certain (mostly remote and very sunny) areas of the U.S. that have demonstrated unsubsidized market viability. But even then only with utility scale installations. I would think rooftop surpassing grid parity with conventional energy would be a pretty big milestone. Not doubting you, but I'd love to see it on paper.
  - URSpider94 11y ago
    Go pick an address in Silicon Valley (take for example 2 College Ave, Los Gatos). Set the monthly electric bill to $125. The calculator recommends a 4.25 kW installation, which has a 20 year NPV of $12,056, if you click into the detailed analysis and check the last line. Subtract out the $5028 Federal tax benefit, and you are still left with a $7000 20-year NPV (assuming 4% cost of capital). Still a positive ROI over and above inflation, even without a rebate.
    - IkmoIkmo 11y ago
      I guess it depends on what you count as government support. For example if you pay $50k for your installation, you could depreciate it within 5 years or so by 85%, which reduces your tax payments in total, at a 35% tax rate, by $15k. That's $15k saved, whether you call that government support depends on whether you think that's 'normal business depreciation' or 'solar specific fiscal policy' I guess. Same with RECs, they're government support in the sense the government sets requirements on companies to buy them, thus creating a market for solar producers to sell them. This isn't energy being sold, it's more like a carbon tax thingy. You could see that purely as a tax on non-renewables (which imo it is), or as government support to renewables (which it's technically structured as). So the federal tax benefit, while large, is far from the only incentive.
      - URSpider94 11y ago
        OK, but as an individual homeowner, I can not take depreciation, nor can I sell REC's. I'm just buying solar panels and putting them on my roof ... ... And again, to compare apples to apples, you'd have to tease apart the tax benefits given to existing energy companies over the years to get a real accounting.
deleted 11y ago
[deleted]