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Cool! The one thing I notice the author gets wrong is (out of modesty perhaps) claiming the system isn't very financially successful. But it actually is! > 200

Cool! The one thing I notice the author gets wrong is (out of modesty perhaps) claiming the system isn't very financially successful. But it actually is! > 200W system payback period: $300 / $48 = 6.5 years until payback > Either way you cut it, this is not a money saving machine. Energy prices are just too low. That represents like a 16% rate of return with little risk, which any investor would take in a second. However, the $66 battery expires after about 8 years, you're saving more like $40, not $48, to amortize the cost of replacing the battery every 8 years. So the actual rate of return is more like 13%, which is still very attractive. You'll never find any investment/savings product that returns half that well at such a low risk and is so accessible to anyone with $300. We've hit the point where solar is very economical! It's exciting!

nikodunk 9y ago
Wow that's a really good point.
cr0sh 9y ago
You can also get cheaper batteries and larger panels off Craigslist for much less. You can easily find much larger panels for around $100.00 - same kind you see on roofs. Batteries are more difficult to find cheap, but 6 volt golf cart batteries are readily available and low cost. Sometimes you can also find the 12V 35 AH wheelchair batteries (same as what the author used) cheaply too. Point being, if you look around, solar electric generation at a small scale can be done even cheaper than purchasing off Amazon for some of the components (inverters and charge controllers are mostly exempt - unless you go to a hamfest).
- nikodunk 9y ago
  Very good point! Hadn't thought of second-hand components. That'd help with the environmental footprint, too!
pilom 9y ago
Unfortunately it isn't a 16% return because he can't sell that system for what he paid. If you buy a stock at $300 and sell it for $348, that's a 16% return. But for him, he probably would have trouble selling all of that for $100 (the battery will be worthless in about 2 years given how far it is being discharged and very few people buy these things on craigslist for anywhere near what they cost). If he can sell it in 6.5 for $100 he has now made $400 in 6.5 years, a 4.5% annual return.
- galdosdi 9y ago
  Being able to sell the system is irrelevant as long as the system will last indefinitely (or say, 30 years, which approximates the same value anyway). Everything but the battery is solid state and should last indefinitely -- or certainly more than 8 years. I already excluded the battery as a consumable to calculate the 13% rate of return. But one thing you are right about is the other parts will fail eventually, dragging the return down as well. Solid state parts can last decades though. The best way to calculate the rate of return would be to actually get accurate numbers for lifespans for all the parts and amortize them. It's probably greater than 4.5% and lower than 13%. Regardless, at near zero risk, even 5% is a great return these days, so it's totally worth doing. Since you like the stock analogy -- a share bought at $100, that earns $10 a year, and that for whatever reason we confidently expect to keep earning $10 every year for decades, returns a 10% rate of return. The fact that the stock now sells for $50 makes no difference, as long as we believe we are right and the market is wrong about the likely future earnings.
  - pilom 9y ago
    Honestly I think even my number is a little optimistic because I doubt his battery lasts 2 years. Most lead acid batteries are only good for 100-200 100% cycles. I also doubt that the PWM controller or the inverter last 30 years. I've seen failure rates as high as 50% for cheap PWM controllers like that after 10 years. The inverter is likely similar. Sure you can buy stuff that will last 30 years but that will be much more expensive. 8 years seems like an appropriate amortization schedule which puts my $100 at 6.5 years as a little generous.
  - JumpCrisscross 9y ago
    > as long as we believe we are right and the market is wrong about the likely future earnings In a liquid market like the stock market, the odds of this being true is small. Recognizing a 10% return against a stock that's crashed 50% borders on, depending on if you're investing your money or others', delusion and fraud, respectively. There is no liquid secondary market for home-solar components, however, so approximating cash flows and amortization schedules works. (If you've heard the terms "mark to market" and "mark to model", this is what they're talking about.)
xsmasher 9y ago
Those calculations also assume he'll use all of the energy it produces, every day, with no loss; it's a back-of-envelope best-case calculation, at best.
- galdosdi 9y ago
  Given his current setup, you have a good point. However, with a setup that includes say, his refrigerator, there'll be more than enough load to ensure no collected energy is ever "wasted"
- matt_wulfeck 9y ago
  If we're getting into the nitty-gritty, then let's also include energy cost inflation into the equation. These numbers are for PG&E which is roughly equivalent for SF: 2001: 0.10c kw/h 2017: 0.28c kw/h (as per my recent bill) That's an average of 10% increase in energy cost per year! https://www.pge.com/tariffs/electric.shtml https://www.pge.com/tariffs/electric.shtml
  - nikodunk 9y ago
    Hahahaha that's an awesome point and not something I'd thought of. But it seems that on your recent bill they're including the service fee in that – I'm only paying 14 I believe? Also, wasn't energy super expensive in 2001 due to deregulation? (I'd need to research this, not sure).
  - sokoloff 9y ago
    2.8x increase over 16 years is a CAGR of 6.6%, not 10%. (1.066 ^ 16 = 2.8)
    - matt_wulfeck 9y ago
      Correction acknowledges!
  - jldugger 9y ago
    Isn't 2001 during the Enron fucking with the West Coast for profit years? A quick review of wikipedia suggests that in 2001 prices may have been held artificially low. A quote by Gray Davis seem instructive: > "Believe me, if I wanted to raise rates I could have solved this problem in 20 minutes."
layoric 9y ago
Indeed, this is why the number of solar farms being planned is sky rocketing at the moment across many countries. Another way to maximise output of your panel is to make sure it's in the best location, taking into account seasonal change of the sun depending on your location, avoid shading etc. The azimuth (direction) and tilt of the panel is make a big difference to your output. Shameless plug, you can forecast your output using the (currently free beta) Solcast API. https://solcast.com.au/api/ https://solcast.com.au/api/ US forecasts update every ~30 minutes.
oelmekki 9y ago
Thanks to put that in number. I was unsatisfied with the "not good enough" conclusion after reading it, but couldn't exactly say why. CO2 footprint probably also is better than mentioned. Certainly, it would take 4+ year to pay back for it, but what would have been the footprint for those 4+ years using coal based electricity? It's not only "how does the system perform", it's also "how does it compare".
erikb 9y ago
Well but 6.5 years sound s like a lot of the parts are getting replaced 1.x times which increases costs again.
vedanta 9y ago
I played around with a solar savings calculator a while back out of curiosity, there is an excel spreadsheet on an Australian website I believe that's pretty thorough, but it's not the only one. In short, I don't think it pays to sell electricity back to any utility (they pay back 1/2 of what they charge you) and a battery system probably won't be worth it unless you truly want to stay off the grid. Get a system that's enough for your maximum daytime usage, that's the fastest way to break even, and spend the least amount of money. For such a system, given my local electricity rates, the break even point was ~15 yrs. a decade ago, and it's 7-8 years now. If you can find cheaper panels/inverter the break even can be ~6 years, after which you'll only be left with a much smaller electricity bill. It even makes sense to add panels later if your usage increases. The way the break even time has been shortening is very exciting, more people will be able to afford it; and if you can, it's a no-brainer to do it sooner rather than wait.

nikodunk 9y ago

Wow that's a really good point.

cr0sh 9y ago

You can also get cheaper batteries and larger panels off Craigslist for much less. You can easily find much larger panels for around $100.00 - same kind you see on roofs. Batteries are more difficult to find cheap, but 6 volt golf cart batteries are readily available and low cost. Sometimes you can also find the 12V 35 AH wheelchair batteries (same as what the author used) cheaply too. Point being, if you look around, solar electric generation at a small scale can be done even cheaper than purchasing off Amazon for some of the components (inverters and charge controllers are mostly exempt - unless you go to a hamfest).

nikodunk 9y ago
Very good point! Hadn't thought of second-hand components. That'd help with the environmental footprint, too!

pilom 9y ago

Unfortunately it isn't a 16% return because he can't sell that system for what he paid. If you buy a stock at $300 and sell it for $348, that's a 16% return. But for him, he probably would have trouble selling all of that for $100 (the battery will be worthless in about 2 years given how far it is being discharged and very few people buy these things on craigslist for anywhere near what they cost). If he can sell it in 6.5 for $100 he has now made $400 in 6.5 years, a 4.5% annual return.

galdosdi 9y ago
Being able to sell the system is irrelevant as long as the system will last indefinitely (or say, 30 years, which approximates the same value anyway). Everything but the battery is solid state and should last indefinitely -- or certainly more than 8 years. I already excluded the battery as a consumable to calculate the 13% rate of return. But one thing you are right about is the other parts will fail eventually, dragging the return down as well. Solid state parts can last decades though. The best way to calculate the rate of return would be to actually get accurate numbers for lifespans for all the parts and amortize them. It's probably greater than 4.5% and lower than 13%. Regardless, at near zero risk, even 5% is a great return these days, so it's totally worth doing. Since you like the stock analogy -- a share bought at $100, that earns $10 a year, and that for whatever reason we confidently expect to keep earning $10 every year for decades, returns a 10% rate of return. The fact that the stock now sells for $50 makes no difference, as long as we believe we are right and the market is wrong about the likely future earnings.
- pilom 9y ago
  Honestly I think even my number is a little optimistic because I doubt his battery lasts 2 years. Most lead acid batteries are only good for 100-200 100% cycles. I also doubt that the PWM controller or the inverter last 30 years. I've seen failure rates as high as 50% for cheap PWM controllers like that after 10 years. The inverter is likely similar. Sure you can buy stuff that will last 30 years but that will be much more expensive. 8 years seems like an appropriate amortization schedule which puts my $100 at 6.5 years as a little generous.
- JumpCrisscross 9y ago
  > as long as we believe we are right and the market is wrong about the likely future earnings In a liquid market like the stock market, the odds of this being true is small. Recognizing a 10% return against a stock that's crashed 50% borders on, depending on if you're investing your money or others', delusion and fraud, respectively. There is no liquid secondary market for home-solar components, however, so approximating cash flows and amortization schedules works. (If you've heard the terms "mark to market" and "mark to model", this is what they're talking about.)

xsmasher 9y ago

Those calculations also assume he'll use all of the energy it produces, every day, with no loss; it's a back-of-envelope best-case calculation, at best.

galdosdi 9y ago
Given his current setup, you have a good point. However, with a setup that includes say, his refrigerator, there'll be more than enough load to ensure no collected energy is ever "wasted"
matt_wulfeck 9y ago
If we're getting into the nitty-gritty, then let's also include energy cost inflation into the equation. These numbers are for PG&E which is roughly equivalent for SF: 2001: 0.10c kw/h 2017: 0.28c kw/h (as per my recent bill) That's an average of 10% increase in energy cost per year! https://www.pge.com/tariffs/electric.shtml https://www.pge.com/tariffs/electric.shtml
- nikodunk 9y ago
  Hahahaha that's an awesome point and not something I'd thought of. But it seems that on your recent bill they're including the service fee in that – I'm only paying 14 I believe? Also, wasn't energy super expensive in 2001 due to deregulation? (I'd need to research this, not sure).
- sokoloff 9y ago
  2.8x increase over 16 years is a CAGR of 6.6%, not 10%. (1.066 ^ 16 = 2.8)
  - matt_wulfeck 9y ago
    Correction acknowledges!
- jldugger 9y ago
  Isn't 2001 during the Enron fucking with the West Coast for profit years? A quick review of wikipedia suggests that in 2001 prices may have been held artificially low. A quote by Gray Davis seem instructive: > "Believe me, if I wanted to raise rates I could have solved this problem in 20 minutes."

layoric 9y ago

Indeed, this is why the number of solar farms being planned is sky rocketing at the moment across many countries. Another way to maximise output of your panel is to make sure it's in the best location, taking into account seasonal change of the sun depending on your location, avoid shading etc. The azimuth (direction) and tilt of the panel is make a big difference to your output. Shameless plug, you can forecast your output using the (currently free beta) Solcast API. https://solcast.com.au/api/ https://solcast.com.au/api/ US forecasts update every ~30 minutes.

oelmekki 9y ago

Thanks to put that in number. I was unsatisfied with the "not good enough" conclusion after reading it, but couldn't exactly say why. CO2 footprint probably also is better than mentioned. Certainly, it would take 4+ year to pay back for it, but what would have been the footprint for those 4+ years using coal based electricity? It's not only "how does the system perform", it's also "how does it compare".

erikb 9y ago

Well but 6.5 years sound s like a lot of the parts are getting replaced 1.x times which increases costs again.

vedanta 9y ago

I played around with a solar savings calculator a while back out of curiosity, there is an excel spreadsheet on an Australian website I believe that's pretty thorough, but it's not the only one. In short, I don't think it pays to sell electricity back to any utility (they pay back 1/2 of what they charge you) and a battery system probably won't be worth it unless you truly want to stay off the grid. Get a system that's enough for your maximum daytime usage, that's the fastest way to break even, and spend the least amount of money. For such a system, given my local electricity rates, the break even point was ~15 yrs. a decade ago, and it's 7-8 years now. If you can find cheaper panels/inverter the break even can be ~6 years, after which you'll only be left with a much smaller electricity bill. It even makes sense to add panels later if your usage increases. The way the break even time has been shortening is very exciting, more people will be able to afford it; and if you can, it's a no-brainer to do it sooner rather than wait.