Contemplating having solar panels installed
 

Hello-
We are fairly new to the Villages and are thinking about installing solar panels on our roof.
We want to know if it is worth it….monetarily.
We really want to know how much you save on your monthly electric bill here in the villages and what the total cost was to install.

Thanks very much

It would be better to ask a company that provides that service. They have all that information. Here you will get lots of opinions disguised as "fact".

There are several other threads on this topic. Do a search. But, basically, the payback period for a solar system is too long to make the system worth the cost.

True in SOME cases, not true in ALL cases. That is why I suggested talking with a professional so they could evaluate their lifestyle, home and come up with a number.

You will definitely not get the facts from a solar contractor who is trying to sell you a solar system.

And consider what happens if you need a new roof and panels must be taken down and reinstalled.

Agreed lots of threads on this. We thought about it and too many negatives.

OP, when evaluating the monetary aspects of a solar system, make sure that anyone who does an analysis includes the time value of money. If the system costs $20,000 to install, you will lose the investment income from that money, and when the system reaches it's useful life span, you will lose the entire $20,000 investment because the system will be worth nothing. In my case, a solar system would cost about $20,000. My conservative diversified portfolio of stocks, bonds, and cash earns an income of about 6 percent per year, and will always maintain the $20,000 principal. So, for my house, if I buy a $20,000 solar system, I would lose $1,200 per year in income, and I would lose the $20,000. That is about the same amount as my entire annual electric bill. So, even if the solar system reduces my electric bill to zero, I would not benefit at all financially from buying the system.

Many solar contractors and other proponents of solar systems, will give you a payback analysis that totally ignores the time value of money. And, they ignore the fact that, over time, the system will depreciate in value to zero. Also, when you replace your roof in about 15 years, you will incur a large expense to remove and replace the solar panels. Another point is that some solar contractors will give you a 20-25 year parts and labor warranty on the system, which is totally unrealistic. No contractor can expect to honor that type of warranty on any equipment installed on your house.

As you investigate the pros and cons be sure to include understanding how they attach the hardware to the roof.

Every hole they make to attach the unit is an opportunity for water to get into the underside of the roof.

Have the supplier explain in detail how no water will get into your roof (it does happen....recent personal experience!!).

Not to mention not too many of us can expect to be around in 20-25 years and suspect that when you sell your home they void warranty.

Also, ask how much it will increase the value of your house, ie. will it increase the market value of your house?

And then ask yourself if you are only doing it to save money, or to decrease your dependence on the grid, or if you want to feel good about helping reduce your carbon foot print. All reasonable considerations. I am NOT saying it will do any of those things, but only that they are also considerations.

One additional comment under NO circumstances should sign a "zero cost" contract, these type of arrangements have the system installed on YOUR house, but you do NOT own the system. You cannot cancel the contract, there is a lien against your home, if you decide to sell the new owner MUST take over the contract, basically you lose big time.

Excellent point, thank you.

The cost of solar panels has plummeted in the last decade

Don't rely on opinions from people who did their calculations based on old figures

However, do listen to the other caveats expressed as they continue to have validity

Sorry if this mention.
What happens when you need a new roof?
Always extra cost to remove the panels.

Absolutely. Besides the above, you will be sharing the solar output with the company that owns the panels and system. It may not cut your bill all that much. Electricity is much cheaper in Florida than in many other states. In addition, the power companies in Florida don't want you to compete with them, so payback is even less than in other states. If you do put in a system, I would strongly suggest adding an inverter and batteries for backup. Much nicer than a gasoline generator if the power grid goes down.

What’s your monthly electric bill? $75 or $100? A $15,000 system has a 150 month payback (without considering the time value of money) - or more than 12 years. More if the panels can’t provide 100% of your power.

How long do the batteries last? Didn’t even consider the source of the batteries or the cobalt in the batteries (you can google where cobalt is mined)

How is your roof? Do you need to replace now?

I assume they can withstand hurricane winds? Did you talk to your homeowner’s insurer?

As TInker said, make sure you OWN the system.

You left off selling excess back to the grid.

Selling excess back to the grid will be at the wholesale rate, not the retail rate that you pay. This quote from SECO's web site:

Net metering captures the “net” energy used monthly by members with interconnected systems. “Net” is the difference between energy purchased from SECO and energy produced by the solar system. Members who produce more energy with their solar system than they actually use generate power back into SECO’s electric distribution system. These members who generate excess power are in essence small-scale wholesale power providers. Thus, they are credited by SECO for the power their solar systems produce at SECO’s wholesale rate.

Unfortunately, the time value of money is about 1.5% in this interest rate environment using long term US bonds as the base. So that calculation is much less important than if US bonds traded at 6%

But, for the current price of electricity in Florida, I do not know of any home solar power with a payback of less than 10 years. And most are much longer than that. My brother in law installed panels up north 5 years ago and will never recover the cost.

I think it is more appropriate to use the time value of money percentage of a diversified portfolio of stocks, bonds, and cash, which is closer to 6 percent, not 1.5 percent. The risk level of the time value calculation should be equal to the risk level of the solar system investment, which is by no means a guaranteed investment. I don't think anyone should be invested in long term bonds. Very risky in this low interest rate environment.

Solar
 

I agree you are not likely to get the correct information from
a solar contractor unless he/she was your father or mother. I believe post #3 is correct.

I can provide two addresses that had solar. Here are their stories:

One had solar, batteries and solar water. He claimed he paid 80k. Had the system three years. Attempted to sell the home 30k above (non solar) market. It took seven months to sell (in 2020). He sold for 15k below market. Real estate agent stated buyers are fearful of the maintenance on the system.

Second home:. Owner was absolute in his belief that as a "business" solar pays. Installed when he was in his early seventies. 3.5 years later cancer took him. I was in that home, I can testify that the cost of solar would have better been spent on items that appeal to home buyers, basic cosmetics.

There is a third home that I won't say where it is. Owned by a self identifying disabled person (seems to be a social security claim), patio villa. Financed solar to 'save' money. I'm not sure how that math is working for the owner. I mentioned the disability thing because the owner is clearly not wealthy.

I've had solar on a previous home. It hindered the sale of the property because it was a Leased system. It did save a small amount every month, but cost of electricity was higher than our rates in the Villages. With the rates here (about 12cents per KWH) I would not consider Solar to be cost effective.

Well said. I like the idea of having no electricity bill, but the fact is, I keep the AC at 74° all summer, but my highest electric bill was $155. (True, I don’t cook much and seldom use lights.) Come to think of it, I pay less for electricity in a year than I pay for pool maintenance. For the reasons you give, solar electricity is not cost effective for me. It’s more cost effective in places where the cost for electricity is much higher.

The good argument for it is that it is harnessing energy otherwise wasted and taking pressure off power generating plants. Does making the panels require a lot of energy? Yes. How much? I don’t know.

Wow all your answers and no one has a solar panels. Well i do since Dec of 2019. Cut my ele bill by 75%. I produce a pinch more power then i use over the year. The problem is you have to be connected to the grid (about a buck a day ) and you sell your power to ele company at .09 cents and buy back at .11. My ROI will be around 16 years if there are no increases in price fewer if energy prices go up. True i lose the interest i could earn, but i feel I'm also helping my planet. If you want to go deeper PM me. Good luck.

Thanks for posting. Can you share a few details? How big is the system (kWs or number of panels), how much did it cost you, do you have the micro inverters, and who was the installer? I didn't PM you because I thought others might want to see the details.

Quick answer is "No". And when you need to have your roof replaced you are looking at huge additional fees.

You have a really cheap Bill if you're only paying $100 a month. I average 1800 to 2400 a year with the thermostat set at 75

Few people have them. Way too many negatives.

Many solar system proponents will claim that a solar system will increase the value of your house. But, if you install a solar system on a new house in The Villages, you will need a new roof in just 15 years or possibly lose your homeowners insurance. At that point, you will need to pay a solar company thousands of dollars to remove and re-install the 15 year old panels, just to replace the roof. So, even if the house had more value when new (which I doubt), at the 15 year point, I think the solar system will be essentially worthless.

The question was not about helping the planet but whether they would save money. I've looked at it for the last 20 plus years and the answer is simply is no you won't save money based on the average interest rates you can get at the bank. For most years when you could get three four or five percent, that $20,000 was pretty much making up the difference in electricity costs for the interest and you still had 20,000 in the bank. You'd have to ask a real estate agent if it's an incentive or distraction to have solar power on a roof especially in Florida where we're supposed to change our Roofs more often. I would hazard a guess with 95% certainty that it's a detriment to most people unless you're getting the solar system totally free on a new house. There are other things you can do to save money like double and triple pane glass and extra insulation in the Attic with attic fans. If you're happy with your solar that's wonderful . I am in Leesburg and keep in mind there is always a service charge minimum to be connected. If and when the state decides that the electric companies must credit you the same retail prices or that they will give additional monies , then it might be worth it. Now I know that the solar panels have gone down in price it almost every year but they still know where anywhere they should be to be cost effective even in sunny Florida

If you're a semior NO.
Roof leaks. Cost more than double if you ever need new roof. When there are problems your original solar contractor will probably be out of business.

you could do as everyone has said and rely on the solar contractor but I can tell you after years of seeing this done over on the coast that those are sales numbers and not reality.

One thing no one factors in is the wear effects on the roof. Depending on what solar product is installed it does have an effect not only on your shingles, but it can also have an effect on your roof structure.

We had a family apply for a large installation about 5 years ago, nice panels, would cover the entire west side of their house. The install was almost $40k and the monthly bill have Florida Power & Light paying them roughly $240 per month - "when FPL did not require use of the power" net result - over 3 years they received credits not payments of under $1000 total. In the mean time when Irma hit - let's just say those panels are no longer there and the subdivision wasn't even in the path.

Also the black ones that lay on the shingles aren't so hot either - wait until they have to replace the roof..... not fun.

that's all I have - it's really your decision, I just thought I'd share some experiences.

Electricity here is, what, 12 cents/kwh? Solar can't compete with that on a $$ basis.

However, you might have other motivation. To burn less coal....to be self sufficient....to be able to act all morally superior and snooty to your fossil fuel burning liberal friends (LOL, just kidding).

It would be pretty cool to generate all of the power for your household and most of your transportation with solar panels on your roof, gotta admit, that would be neat.

Joe

Treasury interest rates are guaranteed to return interest and principal from when you buy them, whether bought at issuance or in the secondary market. US Treasuries are used as a risk free rate. so when you compare investments, you start with the risk free rate, then you apply the investment risk rate. . . or the discount rate. . . . I always used 10% over the risk free rate for valuing companies when I was performing valuation analysis for buying and selling companies. . . use 15 percent over risk free for highly risky companies. Other people use the funding rate, which is the net return across all funding sources, in companies, debt rate + return on equity (subjective) Home owners don't have the return on equity, but has a return on investments. . .

So, retired guy is using his funding source total, which may lead to an incorrect financial model answer. Why? because if he uses only cash to buy the system and doesn't sell some of the investments in the same proportion, he is not matching the actual funding source return to the investment. If retired guy uses only cash for his funding source to spend for the expense of the solar panels, then his comparison is the return rate for cash only, which matching maturities, will be starting with the risk free rate of the shortest duration treasury bills to estimate the savings over the current use of cash.

Once a break even is estimated, then one can decide the funding source cost. and the model will be wrong, because the future is uncertain, always uncertain, and you won't get all the uncertainties exactly correct, in both future timing and future impact, size of change

For the investment return, the factors are the amount of sunshine to the kHr created, the house rate usage at the same time, and the wholesale and retail rates for sell back and usage from the "back up" system, or SECO, and the risk is roof issues and incremental costs for new roofs given that insurance companies are giving roofs much shorter useful lives. . Also if SECO has different usage rates for the time of day, which some of the northern systems are implementing due to solar generation, then you will have to adjust net daytime usage rates versus nightime usage rates. . .

The risk is future weather, and wholesale and retail rates. The higher the retail rates, without adjusting for anything else, the shorter the payoff period. The rates are set by the Florida utility regulator, which has to balance the guaranteed rate of return to the utility company, by federal statute, and the investments required to maintain, improve and protect the grid in Florida from expected future requirements and risks, including weather and green opportunities and investments for efficiencies.

Put that all into the financial blender, and if you don't get a break even longer than your life expectancy, then you are being greenwashed by the marketing department to sell you their products. . .

Part of capitalism is to create products to solve problems, the second part is to monetize that creativity by selling the product. . . some small problem solutions don't scale and some eventually cost more in the long run than what appears in the marketing fluff. . .

Yes, I work at an electric and gas utility, and in the old world, rural areas, the solar system installations are breaking all the 50 year old electrical grid components, which is driving up the rate of distribution grid electricity for the cost of maintaining and upgrading the distribution system, which is distinctly different than the generation system and costs. You will always have to pay for the distribution system of the "back up" system called SECO today, as long as you have a meter. .

good luck, but its a no for me at the moment when the cost of electricity is currently so low, as the costs are too high for roof units, but at the same time, its a great time to make the investment expecting the cost of electricity to go up tremendously with the green movement, as can be seen in Europe cost of energy at the moment. A better way is to invest in the company stocks which generate solar energy which has efficiencies of scale, than do it yourself, which has no efficiencies of scale.

finance guy

Interesting. I agree with most your points, but I tend to compare all long term investments to my overall portfolio return, which has averaged been between 6 and 7 percent over decades, and I rebalance it periodically as needed. The big unknown is the risk of purchasing a solar system as a financial investment. You can't compare it to a risk free investment. To me, the most significant negative to the solar systems being sold in The Villages is that you need to install the panels on a roof that only has a life span of 15 years when it is new. Installing panels on a used roof makes even less sense. Also, I don't think that a solar system will increase the value of your house, which seems to be a selling point for solar contractors, and they totally ignore the time value of money in their sales pitch.

Sure you can, if cash is your funding source, which is cash and the cash return. . .
Because there is no income from solar investment, there is only cost savings. . . very different type of return analysis. .

the question is if the cost savings is high enough from the cash investment to add it to your long term portfolio which is 6-7% of income. I would not expect you to sell income producing assets of 5-7% to fund a cost savings of 0.5 %, does not make sense.

But you are correct in that solar panels are a long term investments, and therefore should reflect some sort of long term cost savings or income, since it doesn't over the small roof area, generate enough to produce income at the moment. .

I keep hearing solar batteries for cars are improving rapidly. I was wondering if this improvement is also happening with solar panels for houses?

Solar panel’s
 

Be sure to talk to various companies before signing an agreement to buy. We didn’t and now we have payments along with electric bill. They sold us enough panels to make the presentation look like no brainer but after all was said and done not enough to cover our entire monthly electric expenses. Beware!! They got the Gold mine and we got the shaft as the song goes.

So many of these posts assume you pay cash for the solar installation instead of investing that cash in something that provides interest. Not everyone pays cash.