Solar for your home
 

Looking for opinions on adding solar. Is it worth the money?

Search for other threads on this topic. In my opinion, it is not worth the money. The payback period for the upfront cost is way too long.

People who have solar are happy.

However, it is not worthwhile from a financial perspective here is why:

Your electricity is purchased at retail .12 per KwH but excess electricity generated is sold back to the utility at wholesale, slightly under .08. This coupled with .12KwH is about the national average (no it is not cheaper than the average) and Florida offers no state tax incentives for solar makes this a losing proposition especially when opportunity costs are considered.

OP, you may want to clarify, solar for pool heating, or solar electric for lowering your electric bill. I agree with above comments, solar electric does not have a break even point in my lifetime, solar pool heating appears to be a good idea. There have been many threads on both of these topics so a search on this site will provide lots of info and comments.

This for the home, not a pool. My son-in-law is considering because his electric bill is over $500. per month (pool, kids and lots of house). Located in Va. Got his 1st quote around $56,000. Placed on a metal roof. Seems like very high, but they told him it will pay for itself in 6 years.

I have no idea of the economics associated with a solar electric installation in Virginia, however, I would never rely on the word of the installer about the payback time, they have a vested interest in selling the system. IMHO, 6 years seems too short, but this is highly dependent on the rate the local utility will pay (or credit) the electricity generated by the system.
As noted previously there were several threads on this topic before with several excellent comments about all of the costs and financial considerations for this type of project. I would suggest an internet search on the subject and find an impartial source for info. If you son has a financial advisor they may be able to help with the financial considerations.
There are lots of considerations so please have your son do a complete investigation, also many electric utilities will have customer service people that will provide advice on what needs to be considered or may have a website with info. The state PUC should also have information.
Good luck with your sons project.

Do the math:

$56,000/$500 = 112 months/12 = 9.33 years.

So, even if the electric bill goes to zero, and you consider the lost opportunity investment value of $56,000 to be zero, it would take more than 9 years (not 6 years) to pay for the system.

I agree with finding an impartial source for information. But, good luck in finding one. Even the utility companies and the Government are biased in favor of solar systems. They usually don't consider the lost investment value of the initial cost or the cost to maintain and repair the system. The Federal Government says that the value of your house will increase by the initial cost for the system, but I have never heard a real estate agent who agrees with that assessment.

Before he spends several thousand spend 299.00.

With the whole house energy monitor Home Sense - Sense.com he can see -Why- the bill is 500.00 per month. With Sense he with have granular level of detail. Is the high bill because of a bad or inefficient HVAC? Sense will ID the HVAC and tell him how much he is using in detail. Sense will tell him if the resistance heat is on in addition to the AC. Is his submersible well pump running 24/7? Sense knows.

Real story, I had a 'Profesional" install my smart thermostat. He wired it so all heat was emergency or resistance heat (not a heat pump). Sense gave me the data to see it. Maybe your son has demand based (time of day) billing where daytime electricity costs more, with sense he can tell his wife dry the clothes in the electric dryer after 7 so we can save 38.00 or whatever.

Make sense (ha).

Another story, my neighbors installed solar power -and- solar domestic water heating. Water heating sounds like a brilliant way to save, doesn't it? We all read that somewhere how expensive it is to heat water with electricity, it must be true! Ah, no. He saved less than 15.00 a month. 4,800 to save pennies. If he had installed Sense first he would have known how utterly foolish that was.

Please give me a thumbs up for this detailed reply.

I'm not particularly a fan of solar, but there are several ways to look at break even:
Energy Cost: Conservative history shows yearly increases of approx 3% - assume no decrease in usage
Resulting Energy Bill - many assume to be zero - but there are daily administrative fees - will they and taxes still be there ?
Performance guarantees of solar company - is your net energy bill guaranteed or estimated - how is it trued up
Cash outlay - that is your quoted cash price less your federal tax credit (and state credit if in an income tax state)
This is cash out of pocket and used to compare the opportunity cost of investing these funds vs paying for the system - if you;re an investing genius you'll use 8 or 10 per cent here.. a mere mortal might use 4 or 5%
Solar company provided financing - beware of setup fees - if none, then do the simple math
financing the net cost above for 15 years or 20 years at rates as low as .99% with NOTHING down. Is it less than your current bill ? \
If it is, even just 20 or 30 dollars a month, look at what it will be in Year 5 or YEAR 10. You will be paying the same finance rate, but your electric bill will have compounded up by at least 3% per year. Much higher savings.

Then you get to make the other judgements. Longevity of company making panels and company doing installations. Are their warranties worth anything ?

Did you call your insurance agent to see what your homeowners carrier thinks about panels on the roof ? Will panels hold up to hail damage ? if not who pays ?

Have fun !

Not sure where you got the 3 percent annual increase for electricity. The Federal Government data shows that electricity has only increased by about 1.5 percent per year in the last 10 years. When adjusted for inflation, electricity has actually gone down in cost. And, electricity usage continues to go down as appliances, light bulbs, etc., become more energy efficient.

I agree with questioning the value of solar contractor warranties. It is typical for a solar contractor to offer a 25 or 30 year "parts and labor" warranty. That is ridiculous. No contractor installing anything can offer and perform on that type of warranty and stay in business.

He is still doing research. Thank you for the advice. Hopefully he will just enjoy the pool!

No, not worth it. . . electric bills are very sensitive to amount of usage during times of day and year. Best to get a really good analysis for your usage, as $500 is alot for most houses.

My boss installed solar, and the next summer the region had the highest annual percentage of cloud cover days in recorded history. . . LOL! spending X $ to save maybe 50 per month is a losing proposition, is a cost minimization strategy, and I prefer an income maximization strategy.

but then again, i am in finance and work for an gas and electric utility, and have a small understanding of the economics.

finance guy

We have had 3 off grid homes powered by solar. Solar is much more expensive than grid power and, with limited exceptions, is generally not economically justified. Exceptions are, in some instances, a solar powered pool pump or well pump. Depending upon pump size, these pumps can generally be run by solar panels of 1KW or less. There is currently a 22% tax credit for solar placed in service in 2021 but that credit will expire at the end of the year unless it is renewed by Congress. Solar pool heating is a different topic, at least in my opinion. I have had a solar pool heating system and found it helpful. Another issue with solar panels is roof installation. There are two issues: The first is the stress generated by high winds; the second is the additional cost of removing and replacing the panel when the roofing is replaced.

In MA, it was worth it. SRECs alone were over $15000 a year. Heating and electrical usage costs on our farm were over 10,000 a year. Feb historically costs is $2500 for the month.
We had 175 panels on the roof that cost $200,000. A 5 year payback. In Massachusetts!
I dont think FL has an SREC program or net metering though.

Forgot to add it was 175 panels and I forget the power...maybe 32kw? That doesnt sound right....