17 ms·

Online calculators over-estimate costs for large systems. You can find newer installers who are more willing to negotiate prices, and play them off each other.

Online calculators over-estimate costs for large systems. You can find newer installers who are more willing to negotiate prices, and play them off each other. I negotiated one company down from ~$3.5/W to $2.30/W (before 30% credit) on my large residential system - and these weren't budget panels either (Sunpower E20). If you do the discounted cash flow calculation of solar, at $2.3/W, electricity costs you around 5c/kWh: http://databin.pudo.org/t/19ece6 http://databin.pudo.org/t/19ece6

driverdan 8y ago
You have 30kW of panels? That's a large system. Most people cna't fit that many. The more panels you get the lower the price gets per kWh.
- gibybo 8y ago
  I have found it to be surprisingly proportional. I'm sure it gets slightly cheaper per kwh with large systems, but not by a lot. I had quotes around $2.5/watt for 9 kW systems and $2.5/watt for 15 kW systems.
  - driverdan 8y ago
    Fair point since $2.5/W is over two thirds installation. If you buy the panels and install them yourself you'd save a lot of money.
gibybo 8y ago
I think your numbers are pretty optimistic. You're neglecting depreciation for one. Panels have a lifetime in the range of 20-30 years, inverters have a lifetime in the range of 10 years. 4% is also an optimistic interest rate for a loan that lasts the lifetime of the system. You may be able to get that for a ~5 year loan, but then you need to include the higher opportunity cost of the money that was used to pay that loan off which will be tied up for 20+ years.
- toomuchtodo 8y ago
  ROI for cash invested in your solar install is greater than 4% in almost every state.
  - gibybo 8y ago
    I didn't say it wasn't. We're talking about the cost per kWh which depends on the interest rate that you can finance it with, not your ROI.
    - toomuchtodo 8y ago
      You should always be paying cash whenever possible for the remaining system cost (after incentives). Failing that, you should be able to get a HELOC, home equity loan, or roll the system cost into a first mortgage at low (~4%) fixed rates (that might also be tax advantaged). Higher interest rates would change the equation, but I don't know of people who are using high interest loans (like an unsecured loan) to finance residential solar.
- aoeusnth1 8y ago
  The cost of the system includes buying a new one in 30yr. I didn’t include deprecation of the panel, but modern panels such as Sunpower or Panasonic degrade at around 8% over 25 years, so maybe add a multiplier if 1/.92 to the cost to fudge that in. As for the 4% interest rate, which in this case is really a time value of money discount rate, I’m comparing it to mortgage loan amounts (which is pretty much the average consumer's risk free rate of return). I’m assuming the buyer can afford a cash system.
  - gibybo 8y ago
    I don't se how it includes the cost of a new system in 30 years. 2.3 * 30,000 = $69,000 and your cost listed is only ~$59k. 8% over 25 years is much better than I thought for the panels, but you still need to include about 10%/year depreciation on the inverters since you'll need to replace them every 10 years or so (at least that was about their lifetime last time I checked in Arizona, it may be different in cooler climates)

driverdan 8y ago

You have 30kW of panels? That's a large system. Most people cna't fit that many. The more panels you get the lower the price gets per kWh.

gibybo 8y ago
I have found it to be surprisingly proportional. I'm sure it gets slightly cheaper per kwh with large systems, but not by a lot. I had quotes around $2.5/watt for 9 kW systems and $2.5/watt for 15 kW systems.
- driverdan 8y ago
  Fair point since $2.5/W is over two thirds installation. If you buy the panels and install them yourself you'd save a lot of money.

gibybo 8y ago

I think your numbers are pretty optimistic. You're neglecting depreciation for one. Panels have a lifetime in the range of 20-30 years, inverters have a lifetime in the range of 10 years. 4% is also an optimistic interest rate for a loan that lasts the lifetime of the system. You may be able to get that for a ~5 year loan, but then you need to include the higher opportunity cost of the money that was used to pay that loan off which will be tied up for 20+ years.

toomuchtodo 8y ago
ROI for cash invested in your solar install is greater than 4% in almost every state.
- gibybo 8y ago
  I didn't say it wasn't. We're talking about the cost per kWh which depends on the interest rate that you can finance it with, not your ROI.
  - toomuchtodo 8y ago
    You should always be paying cash whenever possible for the remaining system cost (after incentives). Failing that, you should be able to get a HELOC, home equity loan, or roll the system cost into a first mortgage at low (~4%) fixed rates (that might also be tax advantaged). Higher interest rates would change the equation, but I don't know of people who are using high interest loans (like an unsecured loan) to finance residential solar.
aoeusnth1 8y ago
The cost of the system includes buying a new one in 30yr. I didn’t include deprecation of the panel, but modern panels such as Sunpower or Panasonic degrade at around 8% over 25 years, so maybe add a multiplier if 1/.92 to the cost to fudge that in. As for the 4% interest rate, which in this case is really a time value of money discount rate, I’m comparing it to mortgage loan amounts (which is pretty much the average consumer's risk free rate of return). I’m assuming the buyer can afford a cash system.
- gibybo 8y ago
  I don't se how it includes the cost of a new system in 30 years. 2.3 * 30,000 = $69,000 and your cost listed is only ~$59k. 8% over 25 years is much better than I thought for the panels, but you still need to include about 10%/year depreciation on the inverters since you'll need to replace them every 10 years or so (at least that was about their lifetime last time I checked in Arizona, it may be different in cooler climates)