Solar Interest and Selling Power Back

[MossRoad]

Moss, I respect you and I get what you are saying but that's fuzzy math. If you approach it that way it would be a 50 year payoff and no one would own one. With that approach you would be just as well off putting $20K in an interest bearing account and using it to pay your power bill until it runs out. Only difference is at the end of that time you will be back to paying a $200 to $300 power bill with no production. Look, I haven't decided to do this yet and my wife isn't crazy about the idea but I must say it is enticing to think of no power bill when I retire.

What’s fuzzy about it?

It’s based on a $150 average electric bill. You only get $50 per month to put towards paying off the system once you subtract the $100 minimum monthly charges from the electric company.

Let’s plug in a $250 average electric bill. Now you get $150 per month towards paying off the system ASSUMING that the system is the same size and cost as the previous example.

That’s what I’m trying to point out as to why you really have to run the numbers carefully To figure the actual amount you can put towards paying off the system each month, and hoping they don’t do away with net metering during that time period before it’s paid off.

- Figure the cost of the system sized to meet your current needs.
- Look at your average monthly electric bill for the past few years.
- Assume it’s going to go up a bit over the next few years (it always does).
- Take that figured monthly average bill
- Subtract the minimum fee that you’re going to have to pay to the electric company per month.
- The amount left over is the maximum you’re ever going to save per month (and assuming your solar will completely offset that fee each month) that you can put towards the cost of the system.

That’s best case most realistic scenario I can come up with.

And yes, you’re correct that putting money in an interest bearing investment would work. In fact, that’s what my wife and I have done over the past 42 years. We scrimped and saved and our investments now make more than our two incomes combined. They’ll pay the bills should we retire. That’s the end game. To have your money work for you should you survive long enough to see it. Isn’t that what most of us are trying to achieve?

 

[LD1]

Who knew it costs almost nothing to generates and a fortune to distribute?

Thats why distribution rates (especially in rural areas) are so much more per kwh than generation.

Look at the miles of power lines, millions of poles that need periodic maintenance, and all the employees, linemen, etc it takes to distribute. All the transformers, meters, etc etc. The distribution side is indeed a HUGE cost of our electrical grid

 

[LD1]

What’s fuzzy about it?

It’s based on a $150 average electric bill. You only get $50 per month to put towards paying off the system once you subtract the $100 minimum monthly charges from the electric company.

Let’s plug in a $250 average electric bill. Now you get $150 per month towards paying off the system ASSUMING that the system is the same size and cost as the previous example.

That’s what I’m trying to point out as to why you really have to run the numbers carefully To figure the actual amount you can put towards paying off the system each month, and hoping they don’t do away with net metering during that time period before it’s paid off.

- Figure the cost of the system sized to meet your current needs.
- Look at your average monthly electric bill for the past few years.
- Assume it’s going to go up a bit over the next few years (it always does).
- Take that figured monthly average bill
- Subtract the minimum fee that you’re going to have to pay to the electric company per month.
- The amount left over is the maximum you’re ever going to save per month (and assuming your solar will completely offset that fee each month) that you can put towards the cost of the system.

That’s best case most realistic scenario I can come up with.

And yes, you’re correct that putting money in an interest bearing investment would work. In fact, that’s what my wife and I have done over the past 42 years. We scrimped and saved and our investments now make more than our two incomes combined. They’ll pay the bills should we retire. That’s the end game. To have your money work for you should you survive long enough to see it. Isn’t that what most of us are trying to achieve?

The problem is, that "some" electric companies allow you to offset the entire bill. Like in Roric's example where he posted his bill with an actual credit.

People see this and think that is the "norm". When in fact its rare and MOST electric companies still have minimums even with 100% offsetting solar.

Basically......you need to figure out what your average bill is pre-solar......and what your average bill WILL be post-solar. That difference is the savings that goes towards the initial cost of the solar. And if the payback is 10-15 years or more.....it simply is not worth it IMO.

But it seems a few people, with very generous electric companies, have been able to get that payback/ROI in as little as 4-6 years. Not realistic or attainable for the majority of us....but kudos to those that can take advantage of it

 

[CobyRupert]

At the root of the “fuzzy” math is the fact that the price consumers pay (or earn) for electricity is disassociated from actual (supply and demand) market forces (which change hour by hour, day by day).
You pay the same price whether there’s a 5000% supply surplus on a windy, sunny day, and conversely, when the demand is so high the utility has to buy power at 2x the rate they bill you for it.

The consumer is removed from reality of the supply and true market forces.

This is because: 1) How meters currently work and are billed. 2) Household levels of electrical power can’t be (practically) stored. 3) Consumers expectations and consciousness of their energy usage. (“I want it now!”)

 

[beowulf]

Solar has worked out well for us. Cash cost was $29,200, net cost was about $20k after tax credit. Our monthly electricity bills at that time were about $340 a month - today at current rates would exceed $450 a month - and that cose keeps increasing. The system will have paid for itself at the end of this year. If I use an average electricity bill of $400 a month, we are saving $4,800 a year - year after year.

As for selling back any excess electricity you generated - don't count on that. There is a huge difference between what they charge customers and what they will pay you - if anything. I called the utility to ask about that and they said they pay their solar customers for excess power at the same ratd as they can buy the power from elsewhere - and that the difference between what they pay and charge is attributed to the costs of maintenance and distribution.

And - if you have two meters and aggragate, in Califronia, they don't buy any of the excess power at all.

But, we are very happy with solar - don't worry about running the AC jacking up huge power bills - even though I still go around turning off unused lights - that is just a habit. A storage system would be nice - in case of an outage - but still a bit costly.

 

[MossRoad]

The problem is, that "some" electric companies allow you to offset the entire bill. Like in Roric's example where he posted his bill with an actual credit.

People see this and think that is the "norm". When in fact its rare and MOST electric companies still have minimums even with 100% offsetting solar.

Basically......you need to figure out what your average bill is pre-solar......and what your average bill WILL be post-solar. That difference is the savings that goes towards the initial cost of the solar. And if the payback is 10-15 years or more.....it simply is not worth it IMO.

But it seems a few people, with very generous electric companies, have been able to get that payback/ROI in as little as 4-6 years. Not realistic or attainable for the majority of us....but kudos to those that can take advantage of it

I thought that‘s what I said.

 

[MossRoad]

Solar has worked out well for us. Cash cost was $29,200, net cost was about $20k after tax credit. Our monthly electricity bills at that time were about $340 a month - today at current rates would exceed $450 a month - and that cose keeps increasing. The system will have paid for itself at the end of this year. If I use an average electricity bill of $400 a month, we are saving $4,800 a year - year after year.

As for selling back any excess electricity you generated - don't count on that. There is a huge difference between what they charge customers and what they will pay you - if anything. I called the utility to ask about that and they said they pay their solar customers for excess power at the same ratd as they can buy the power from elsewhere - and that the difference between what they pay and charge is attributed to the costs of maintenance and distribution.

And - if you have two meters and aggragate, in Califronia, they don't buy any of the excess power at all.

But, we are very happy with solar - don't worry about running the AC jacking up huge power bills - even though I still go around turning off unused lights - that is just a habit. A storage system would be nice - in case of an outage - but still a bit costly.

AT $400 per month it would take 50 months to pay off your $20K system. That’s just over 4 years, and a good return on investment.

 

[ponytug]

Yep, they are all different for sure. With 12 kW solar system I would have to sell back enough excess to offset the $23/mo meter charge + $60/mo so;ar charge to end up net zero. The $60 is to penalize the solar customer for the customers that aren't solar. That being said, I have no idea how to calculate my excess power per month to even know if I can end up net zero. I think that is realistically doable. The wrench in the whole thing is that they can change the rules we play by at any time. It's definately a risk but is it a risk worth taking?

I don't see it as penalizing solar customers.

Thats why distribution rates (especially in rural areas) are so much more per kwh than generation.

Look at the miles of power lines, millions of poles that need periodic maintenance, and all the employees, linemen, etc it takes to distribute. All the transformers, meters, etc etc. The distribution side is indeed a HUGE cost of our electrical grid

I agree.

This is why a power bill has two basic parts; one part is the electricity that you use, and utilities charge us the generation cost plus a little markup to cover the vagaries of changing power costs over time. Fine.

The second part of the bill is all the fixed costs associated with actually getting the power from the various places that is generated to us. That's wires, poles, towers, transformers, switches, and all of the costs of the employees to run the organization.

Even if you generate solar to cover most or all of your bills over the year, chances are that some moments you are sending power to the grid, and some moments you are taking it from the grid. For us, we are net exporters March through October, and net importers the rest of the year. At the end of the year, we are net exporters, but the payment is at close to wholesale generation rates, and less all the meter fees and certain fees not directly canceled by our exports. We have a local electrical storage system, so we actually draw nothing from the grid from March through October, but that is an unusual setup at the moment. With more electric vehicles capable of vehicle to home or vehicle to grid, it will become more common.

In the big picture, we effectively use the grid as a battery storing our summer excess for winter use.

Personally, I think it is fair for the utility to charge us for use of the grid, aka all of the part two charges above. It is often billed as meter fees, distribution fees, etc. Historically, it didn't really matter how the fees were constructed, and by making the fees per kWh, it was actually a progressive tax on the biggest users, who subsidized small users. Widespread solar is disrupting that because the per kWh billing of distribution fees breaks down. I see utilities across the world scrambling to figure out a solar compatible fee structure and at the moment it isn't quite chaos, nor exactly the Wild West, but it is unsettled and evolving.

I think that the utilities would be well served to have a fixed monthly fee for grid access, and it will be required to be connected to the grid, so that there aren't a small remaining pool of customers paying for the whole grid. I think that the uproar a single fee would generate means that there are going to be a couple tiers based on something (total import level, income, usage at peak TOU, size of your meter, etc.). It will be interesting for sure, and being large utilities that are all government regulated, I think that change will take time, a long time.

FWIW: our system was paid off in 5.5 years, though at installation the ROI timeline was 7 years. That counts not just the cost of the system against the utility bills, but also the return on investment for the funds had they been invested elsewhere. California's energy costs are high. Some might say crazy high. That has made installing solar an easy decision, even for those who financed it. With rising interest rates, but with rising inflation, and rising utility costs, I think that the decision is complex these days.

All the best,

Peter

 

[techman]

There are studies that show that residential solar is actually a benefit to the utility companies. As the amount of solar increases, the utilities find that they can forgo upgrades in generation capacity and transmission despite increase demand. Of course the downside for the utility is a decrease in revenue and profit. It is more of a myth that customers without solar are paying the price to subsidize those with solar. All of these fees that some utilities add if you have solar installed are primarily to offset the loss of revenue. Most utility peaks occur during the day, when AC might be peaking in warm climates and most businesses are additional load on the grid. This is also the time when solar is at the max output. If your utility penalizes you for adding solar, ask them why.

paul

 

[LD1]

There are studies that show that residential solar is actually a benefit to the utility companies. As the amount of solar increases, the utilities find that they can forgo upgrades in generation capacity and transmission despite increase demand. Of course the downside for the utility is a decrease in revenue and profit. It is more of a myth that customers without solar are paying the price to subsidize those with solar. All of these fees that some utilities add if you have solar installed are primarily to offset the loss of revenue. Most utility peaks occur during the day, when AC might be peaking in warm climates and most businesses are additional load on the grid. This is also the time when solar is at the max output. If your utility penalizes you for adding solar, ask them why.

paul

It's not a penalty. It's cost of doing business.

My coop buys power from AEP and first energy. They pay 3¢ per kWh.....they add 8¢ per kWh to cover their costs of line maintenance, equipment, distribution, billing, etc etc. And a $50 meter fee.

Joe blow down the street installs solar and generates excess. Is it fair to pay him 11¢ per kWh? Sure....the electric company charges me and him that amount. But they have to pay their bills too. So if they start paying 11¢ to buy electricity instead of 3¢....it's driving up everyone's cost.

 

[ultrarunner]

Thats why distribution rates (especially in rural areas) are so much more per kwh than generation.

Look at the miles of power lines, millions of poles that need periodic maintenance, and all the employees, linemen, etc it takes to distribute. All the transformers, meters, etc etc. The distribution side is indeed a HUGE cost of our electrical grid

True enough but highest rates at my solar location is city with half million users and mostly 4,000-5,000 feet residential lots

The utility poles date from the 1920’s and some checked so much I can put half my hand into the pole

 

[cqaigy2]

Thats why distribution rates (especially in rural areas) are so much more per kwh than generation.

True enough but highest rates at my solar location is city with half million users and mostly 4,000-5,000 feet residential lots

The utility poles date from the 1920’s and some checked so much I can put half my hand into the pole

Stock holders need some love too. Those poles are still standing, some must be good enough....

 

[Roric]

In following with the title of this thread; (but not to do with the initial
question):
With the gathering momentum money and interest in electric cars, it is
probable that they will be common.
Much is said about the coming stress on the existing power grid and all
of the problem pressure points this will cause.

What if this could be headed off before it is out of hand?

California has a program is in place to buy power from Tesla Powerwall units
at times of great electrical demand. (did I hear at $4.00 per KWH?)
A Powerwall is about 10KWH. The amount of power that can be used from the
owners battery is adjustable and 'tunable': you can opt in/out for certain times.

Late model electric car batteries are around 60KWH.
These cars are charged by and connected to the grid.

A large scale adapted vehicle-to-grid scheme might accomplish a few things:
-Time shift power demand on utilities.
-reduce power disruptions from 'brownouts'
-reduce the need for 'peaking plants' built to ride out solar
and wind shortcomings.
-decentralize the existing large and aging electrical grid.
-combined with solar production to avail a different power source.

Supposing that the needs of the electric utilities, the requirements of the
car owners and the needed level of safety and reliability could be engineered
into this scheme it could become a viable thing.
In addition to or in place of huge 'battery farms' already coming to a
place near you. EV batteries will soon be a standing resource.

Maybe in addition to, or replacing part of the infrastructure bill spending
making power a two-way street could be something
Needed compromises on the utilities part would be titanic, power brokers across the
nationwide grid would need oceanic adaptations. The engineering exists now.
California may be laughed at and criticized, but many times it leads the way.

This is just an idea.

 

[Pearlsnaps]

My $.02 worth...
I have a small system about 6kw. Ground mount, and I've done everything bit by bit. I don't sell back yet, TVEC (co-op) does not like it's members to sell back. My inverter is a Sol-Ark unit. It has the option for Zero export mode. I think that's what it's called. There are these sensors that you place on the power lines that feed your house, and it will basically use enough solar that's available to offset what your house is using. I do have batteries that will get me through the night on all but the hottest days here in North Texas. My family of seven live in a small home as energy efficient as possible with mini split air conditioners and LED lights. We average in the highest months about 400 kW for the whole month. That's what we pay for. The co-op has all kinds of extra fees added on for the privilege of being of a member and using their electricity. I would need to add more panels to make enough to sell back at their very low purchase price of my electricity. It's not really worth it.
The best part about my system is when the grid goes down, I keep going. With all the storms and accidents that happen out here where I'm at, I've never run out of electricity. Doing it yourself nowadays, there are so many systems out there that do grid tie and don't even have to use batteries. Everything is set up where it's one unit and you just plug in your solar, then you plug in your house wires and it does all the work for you. I have 15 kilowatt hours of storage and I've done all of the work myself. My inverter cost about $5,500 and it will do everything from off-grid to grid tied and sell back if I turn that option on. I bought slightly used solar panels instead of brand new retail price solar panels. All in all I have about $11,000 in my build, that took me about 2yrs to put together.
Currently it should last me the next 10 years and by the end of September I will not use any electricity at all as my batteries will power me through the evening and well into the next day.
Just my $.02 worth.

 

[ponytug]

The California buy back program is only on specially declared high demand days, for the moment only for Tesla batteries, and only in Pacific Gas and Electric territories.

The rate is currently $2./kWh of excess power that you use from your batteries during the declared time period. So if the time is 5-9pm, and you normally use 4kWh between 5-9pm on a normal day, and you discharge 24kWh from your batteries, you would get 24-4=20x$2. forty dollars.

More here if you are curious.

Emergency Load Reduction Pilot | Tesla Support

Participate in the Emergency Load Reduction Program (ELRP) pilot offered by Pacific Gas and Electric Company (PG&E) and support the grid while also earning compensation and maintaining your energy security.

www.tesla.com

National grid runs one in Massachusetts and Connecticut that is similar.

All the best,

Peter

 

[ultrarunner]

kW usage seems to varies a lot depending on location, size and efficiency...

I have years of data in Oakland CA for 2400 square foot 1950's home of 2.5 bath and 4 bedrooms...

No double pane windows or energy savings that was not available in the 1950's except LED lights.

Year in and year out, summer or winter the usage is 12 kW per day or 360 kW per month.

40-60 year old electric appliances including 1980 Amana Refrigerator and 1965 Amana Freezer...

I think some nearly use in a day what we use in a month unless I'm missing something?

 

[LD1]

My $.02 worth...
I have a small system about 6kw. Ground mount, and I've done everything bit by bit. I don't sell back yet, TVEC (co-op) does not like it's members to sell back. My inverter is a Sol-Ark unit. It has the option for Zero export mode. I think that's what it's called. There are these sensors that you place on the power lines that feed your house, and it will basically use enough solar that's available to offset what your house is using. I do have batteries that will get me through the night on all but the hottest days here in North Texas. My family of seven live in a small home as energy efficient as possible with mini split air conditioners and LED lights. We average in the highest months about 400 kW for the whole month. That's what we pay for. The co-op has all kinds of extra fees added on for the privilege of being of a member and using their electricity. I would need to add more panels to make enough to sell back at their very low purchase price of my electricity. It's not really worth it.
The best part about my system is when the grid goes down, I keep going. With all the storms and accidents that happen out here where I'm at, I've never run out of electricity. Doing it yourself nowadays, there are so many systems out there that do grid tie and don't even have to use batteries. Everything is set up where it's one unit and you just plug in your solar, then you plug in your house wires and it does all the work for you. I have 15 kilowatt hours of storage and I've done all of the work myself. My inverter cost about $5,500 and it will do everything from off-grid to grid tied and sell back if I turn that option on. I bought slightly used solar panels instead of brand new retail price solar panels. All in all I have about $11,000 in my build, that took me about 2yrs to put together.
Currently it should last me the next 10 years and by the end of September I will not use any electricity at all as my batteries will power me through the evening and well into the next day.
Just my $.02 worth

Family of seven......only using 400kwh....

Must be all gas? Gas water heater, gas stove, gas dryer?

 

[workinonit]

Yea, I've read some ridiculously low usage numbers. Mine is 30 times that.

 

[LD1]

Im a family of 4, all electric, geothermal, central ohio climate.......and I am usually ~1300kwh in the spring and fall when very little HVAC is needed. ~1700-1800 in the heat of the summer and peak AC loading. And ~2300 in the coldest months of the winter.

I do run some rope LED lights, a waterfall pump, and leave the front LED porch light on that total ~250w.........or about 180kwh per month. Thats about the ONLY think I could eliminate to conserve energy if I truly wanted to.

My shop is on a separate meter. Im only at my shop on average 1-2 times a week. With ONLY a fridge, and a 175w dusk to dawn running when Im not down there......I still hit 5-6kwh per day. So dont understand how a WHOLE home with SEVEN people can live on ~13kwh/day unless everything is a gas appliance and the ONLY thing your electric does is lights and a fridge

 

[hube2]

I don't know if this has been mentioned, but the most important thing for me was the ROI, how likely it was that I would see the break even point where my solar had saved me as much as my out of pocket expense to put in. For my usages and the system I put in that was right around 10 years not taking into account any increases in the cost of electric in my area.

Another factor for me was how long I could expect it to keep working after the break even point, how many years I would continue to see savings after it paid for itself and how many of those years I was likely to see.

The goal for me was to save money and not be paying for 100% of my electric usage when I retire.