One year with solar energy at home: Mostly sunny!

93 Comments

Enphase Envoy solar panel monitoring serverJust over a year ago, we took the plunge at my house and covered the back roof with solar panels: 41 of them, to be exact. After 12 months, we’ve created 13.8 megawatt hours of electricity while using only 7.59 megawatt hours. The energy surplus becomes a credit on our electric bill and once per year, our electric company issues us a check for any unused credit. So what was the installation and usage experience like? Overall, it’s been excellent and I’ll share the pros, cons, and actual costs of our project in an effort to shed more light on any solar panel projects you might be considering.

First things first: Decisions and costs

Our family has always tried to be green when possible. We’re avid recyclers, we tried a small composting project, we use CFL or LED bulbs throughout the house, and I can’t tell you how many solar-powered chargers I’ve tried for my mobile devices. (The most recent one is outstanding.) But we never had the money to “go solar” even though we wanted to. That changed due to a unique financial situation. In the spirit of transparency, I’m going to share the details.

My wife inherited a family member’s IRA account several years ago and the law required that the funds be liquidated over a five-year period. We got to the final year in 2011 and realized we were going to be hit with a large tax bill on the remaining IRA funds and decided to invest the funds into something with a tax incentive. After much research on solar energy — this is a great site to estimate system sizing, pricing and benefits — return on investment and such, we decided to go with solar panels, moved in part because our rear roof faces south.

It turns out that a local contractor nearby put solar panels on his office and became a certified solar panel installer. I requested a number of quotes from companies in the area, but he gave the best price at the time: $5.50 per watt. I then looked at our electricity usage for the prior year — we’re a family of four, with two full-time work-at-home people — and over-specified the system by 25 percent capacity for two reasons. We have a four bedroom house, so I planned for the next homeowner to have five occupants. And I wanted to maximize the tax benefit, which was a 30 percent federal tax credit on the entire project.

The specified 9.43 kW (DC) system turned out to be 41 panels — 230 Watts each — which produced 12.05 megawatt hours of electricity from Nov. 1, 2011 to Oct. 31, 2012. That cost us $51,865 up front, including installation, permits, inspections, parts, labor and warranty. Yup, it’s a big chunk of change but that federal tax credit totaled $15,560, which helped offset taxes on the IRA liquidation. And many states offer rebates on solar projects; ours provided us a check for around $7,100 once the system was up and running. Our net cost then was $29,205.

It’s also worth considering companies in some states offer no-money down solar panel systems: essentially you let them install a system on your property and then lease the system. The company itself reaps the incentive benefits, but you may save money on your electricity bill.

Installation of the puzzle pieces

Enphase microinverter

I had thought the system would be complicated by many parts, but it’s actually quite simple. Obviously, we have the panels, which generate electricity from sunlight. All of that power is DC, or direct current, so the system needs an inverter for AC power. We considered one single inverter but instead opted for individual microinverters attached to every panel. There are several benefits to this approach.

For starters, if one panel or inverter fails, it’s easier to locate and fix the issue. Second, the microinverters feed real-time data from every panel via Ethernet over powerline  to a small web server included for monitoring purposes. I can get tons of useful information from the system. You can view most of my system details here online, for example.

Solar panel framingThe microinverters, as well as the small web server that tracks them, are made by Enphase. Each one converts the DC power from its connected panel to AC power. Each microinverter is linked to the next one in the solar panel array so essentially, these are plug-and-play devices. Each connects to the next, and the last microinverter feeds a power line, which we fed through our attic and down along the outside of our house near our electrical meter. The panels themselves are attached to the roof with aluminum framing so the install process is fairly simple: Install the frame, connect the microinverters to their respective panels, attach the panels to the frame and link the microinverters.

Because of the solar panels, two additional electrical meters were needed. We still have the original meter that measures our electricity use from the grid but a new meter is needed to measure power output and a third measures the difference between electricity created and used. More on that in bit.

Smart meters for solar panels

So how well is the system working?

In a word: great! In this graph below — from Enlighten’s web service that creates reports from our solar panel system — you can see exactly how much energy we produced on a daily basis.

In fact, this graph gives you rough history of the weather where we live in southeastern Pennsylvania. The drops on the graph represent days with little or sun, although even on a cloudy day we make a little energy. You can also see when the days get longer and provide more direct sunlight to our roof; we’re in the downward trend now as the shortest day of the year is approaching. Here’s a look at the numbers for production and usage by month:

There’s no maintenance to the system; it’s just always working to create power when there’s enough light. I haven’t yet had to do a thing to the panels, which have a 25 year warranty, same as the microinverters. So with the solar panels then, you’d think we’d be fine during a power outage, like the one we experienced for 4 days last week. Not quite….

Different systems for different needs

One of the upfront decisions you’ll need to make when planning a solar panel system is will you still be tied to the electric grid? Or will you go off-grid? There are pros and cons to each; the former costs less up front while the latter provides stored power during the evening hours or during an outage. Since we had no power during Hurricane Sandy, you can guess which system we have: One that keeps us tied to the grid.

That means all of the power our panels create is actually fed back into the grid; we still get all of our power from our electric company in this configuration. And in the case of an outage, grid-tie systems such as ours are automatically disabled. Why? Because if we were feeding power into the grid during an outage, it would be unsafe for the workers trying to fix the outage.

To go completely off-grid and have batteries store excess power would have added approximately 20 percent to our up-front project costs. My wife felt we’d never regain that cost because we rarely have outages. During Hurricane Sandy, of course, I gave her one — and only one — light-hearted “I told you so.” And at this point, I’m reconsidering what to do for backup power, but that’s another post for another time.

Is solar right for you?

Solar panel materialsI can’t answer that question, but hopefully, I’ve provided some insights to help you decide. Having a house some south-facing roof is a must unless you plan to have panels on your grounds. Local or state incentives vary by location as well so you’ll need to check them in your area.

The biggest issue for most is likely the large up-front cost involved although you could start small and build up the system over time. I can’t argue that the costs are still high, although they should be lower now than a year ago. And the payback period — which will vary based on your system, location and energy costs without solar — can be high. Our break-even point is around 7.3 years, but that includes the home appreciation expected due to the system.

We may not be here long enough to break even but we’ve already gained an appreciation benefit from the panels. Taking advantage of the low rates, we refinanced our home last month and the added value of the solar panels was around $30,000. And why not when the next owner of this home is unlikely to have an electric bill ever? We were paying around $2,500 per year for electricity before the system was built; now build up a credit in most months. But for us, it’s not all about the money or the investment, even though we have a hedge against a rise in electricity costs: Any price increase means we’ll get more for our excess energy production.

We feel we smartly took advantage of certain tax incentives, added value to our home and are one step closer to being energy independent, save for a backup system. If I could go back in time, I’d probably add some type of battery backup. At this point, we’re making enough excess power that we’re considering a plug-in car to replace our current vehicle. Why not let the sun power our home and our wheels while cutting down on our annual gasoline costs at the same time?

93 Comments

Steuer Gray

Good article. Sorry about the hate mail. Kevin, as I wrote in my book “The Moment of Truth” Steuer Gray on Amazon, there are two problems which are killing the industry. One is the parts cost. They have come down tremendously and would come down even further if solar was being mandated for high users. It’s like the digital TV’s. Congress mandated them, they were expensive at first but now because we produce a zillion of them they are dirt cheap. The other cost factor is installation. States have ridiculously burdensome certification so there aren’t that many installers. It’s supply and demand. If there were a million installers, the labor cost would drop dramatically. If we did my plan *see my book, it wouldn’t cost taxpayers one cent.

Johannes p visagie

Hi am in South Africa and drive a hybrid want to go solar and brows for info. Thanks for this.

Andre

Actually there is something from stopping folks doing this, and that is the high cost of entry. I just installed a 4.41KW system here in FL 4 weeks ago at a cost of $18k up front, with 30% tax credit in March, and a 50% rebate promised in 6-8 weeks from FPL (utility company). Payback in 3-4 years hopefully. But I am fronting the whole $18k for 2-3 months, and another $5k or so for a month or so more. Most people aren’t able to do that.

FPL buys back at the same rate apparently.

Kevin, have you looked at the energy credit trading? I think PA is included?

Kevin C. Tofel

Agree on the up-front investment costs, Andre. If not for our unique situation, we wouldn’t have been able to make that investment either. As far as energy credits, or SRECS, yup, we have them, but they’ve dropped in value dramatically. I’ll have to take a second look. Thanks!

Diego

Congrats Kevin on going solar, but…

I would advise readers that are considering installing solar to do the following first before installing solar:

Invest your money in all possible energy efficiency measures first, because every dollar saved on your electricity bills will save you $3.5 on your solar system. So if Kevin’s family would have cut their electricity consumption by half (this is easily achievable), corresponding to $1250 savings per year or 3798kWh per year, your system would have been $29,205 / 2 = $14,602 cheaper. To achieve, that savings one has of course to invest for example in an energy audit, a new fridge, LEDs or insulation and so on, but the costs will be way cheaper than the $14,602.

As an accredited BPI Energy Auditor, let me assure you that your electricity usage for four people and two working at home is at least double as what it could be, especially since you “use propane for heat and hot water”.

20.8kWh electricity usage a day (7596kWh/365 days) is just way to much for four people and no electric hot water.

7kWh a day would be a more reasonable amount,
Didn’t your solar installer advise you to become more energy efficient first?

Every day I’m still amazed how wasteful american families are with their energy usage.
It’s time for a change to get the country back on track.

Nevertheless, keep up your good work and thank you for sharing your experience.

Kind Regards,
Diego

PS: And by the way Kevin, did your family subscribe to 100% green electricity from your utility?

Kevin C. Tofel

Diego, thanks much for the comment and insights. Few other data points that might affect your estimate on our electricity usage. The home is 2900 square feet, has a well (so *all* of our water is pumped by our electricity), and we have forced air heat; meaning although the air is heated by a propane burner, the fan runs on electric to circulate the hot air. We also have a central air unit for the summer, which of course, adds to the electricity usage. And we have a 7×14 Endless Pool that runs from April-ish to September; aside from electricity powering the filter, it also powers a propulsion system so you can swim in place.

Having said all that, our initial energy before solar was well over 10,000 kWh a year; we’ve cut it down by 30% since going solar via a smart thermostat, LED and CFL bulbs throughout the house (and there’s a LOT of ’em), smart plugs to eliminate vampire drain, etc…. Could we do better? Probably, but we’ve done the majority of what we can do. Thanks!

Canadian

Keven,Many thanks for your effort to share a valuable experiences, with enough details for many like me to assess cost/ benefit of solar panels at home.
As for the comment of billions made by “. I guess BP, Exxon, and other oil ….” similar green projects would cut Hidden costs on tax payer and save souls, lowering the need to finance wars in other parts of the world for petrol BP exxon ……..sake,
Good artiocle

jeffhre

You should send Lyle his .o3 cents back, if he would first sent you a self addressed stamped envelope to cover your costs.

If you have covered the cost of the solar installation with your refinancing, then you have already received more back from savings and utility company power surplus rebate checks than you have put out in cold hard cash. If your payments for financing the solar power with your home loan are less that your previous power bill, you will not ever have to come out of pocket for a single dime for power or panels. Seems like an investment with an immediate payoff, if you can qualify for the financing, and not a 22.5 year payback.

Manoj Gangal

Kevin

Thanks for putting the numbers and the experience in one great article. Also thanks for patiently handling the brick bats. Great job.

Brian Hall

Fascinating article, thanks for writing it! I do have one question though: you said the break-even point was “around 7.3 years, but that includes the home appreciation expected due to the system” but you said the refi-appraisal pegged the instant appreciation at 30k…but the system was less than that after rebates and tax breaks, so isn’t your net ROI instant?

So if you sold your house right after the system was finished and the appraisal was an accurate depiction of realizable value, then your return on investment of ~$30k was 100% <1 year. (of course there would be capital gains taxes, brokers fees, etc, but that's more of a liquidating transaction cost than anything else)

The "realization" of the return on your investment is delayed, but in theory you reached break-even as soon as you turned the system on. Therefore, cost savings and surplus energy payments are not a question of reaching break-even, but are actually outright profit – which is realized monthly in cost savings and yearly in the form of a check.

At the risk of making you feel even better [ ;) ], figuring 2500 (reduced cost) + 500 (surplus payments) yearly, you are realizing a cool 9-10% yearly non-compounding ROI on your investment. In short, your "pay back" period is the time it takes to recover the invested principle without selling your house (liquidating the asset) – not really the break even period at all!

In summation, you converted a $30k windfall inheritance into a long-term durable investment that is ethical and good for the environment, pays a 5-7% dividend right back to you in a way that is nearly tax-free, and even after you cash out the next guy isn't getting screwed but gets to enjoy their own set of dividends for having chosen to buy your house.

That's pretty damned awesome, so well played! :)

Luscious

I would definitely get a bypass switch installed to let the panels feed power into the home when grid power goes out. Even if all you’re powering is just the refrigerator/freezer, it’ll prevent your food going bad and save you from an expensive grocery bill.

For extended outages, you could invest in a small generator to use overnight, or just enough battery capacity to keep essential appliances running, again the refrigerator being the most important. You’ve obviously got enough solar capacity to charge those batteries up during the day in such a case.

Thanks for sharing your experiences Kevin – and by all means get that plug-in vehicle!

Tony

Either way you pay; either pay the electric company over time or pay the solar man up front. You have prepaid your electric for next couple of years at a fixed rate, no increase from the utility company. Just remember the solution rises every morning and sets every evening.

Kevin C. Tofel

Actually, my electricity rate can increase but I don’t really mind if it does as the electric company will pay me the higher rate for excess energy. ;)

energiefreiheit

Residential solar sections give off no contamination, the only contamination produced as a result of solar sections is the manufacturing of these devices in industries, transport of the goods, and installation.
Infrarotheizungen

Liz Karschner

Great article. I recently went to http://1bog.org/ and signed up to have someone talk to me and give me an estimate. It is so totally worth it (I have a 4/2 as well) and I am hoping to do this next year. I am just waiting to update my HVAC (which is 22 years old) and add insulation and new windows to the house (mine are from 1975 and no insulation). Once those projects are done, solar is my next step. Unfortunately I have an East / West roof, but am planning to have a ground mounted system and going to even see if they can do an awning structure like they do for parking lots so I can use the ground underneath. Thank you for sharing your honest opinion on your solar system.

Rick

A Ground source heat pump will pay back faster than a solar PV system.

Eddie

Great article. What type of panels are you using? We went solar this year as well and are using Sunpower panels which we have found to be incredibly efficient. By comparison, based on your numbers we are getting about the same production as you but with 28 panels; 21 South facing, 7 West facing. I suppose it is also a function of location (we are in Colorado). Something to consider for people reading this article and trying to determine which panels to use if they have a choice.

One correction though to your opening paragraph…you generated about 13,800 kilowatts of power, not megawatts. 13.8 megawatts would be like having a nuclear reactor attached to your property.

Fran

Kevin, thanks for sharing all the information and thanks to those that added input. I’m considering a solar leasing program and it just seems too good to be true. I’m researching all the information I can find and all your input is helpful. I believe that using solar is one act we each can take (besides recycling and conservation) to help our planet. The money savings is not the only factor, but it’s a terrific incentive. I’d have wind turbines in my yard if there was a enough room and my neighbors wouldn’t have a cow because it would ruin the aesthetics of our “hood”. Yes, WE the paying part of government is funding some of this, but it still takes our own investment and a leap of faith to change from a 100% user to a 99% provider of power. I’d rather my tax dollars be spent on a program like this than the millions that were spent on a political campaign that demonstrated our inability to speak and react with logic, intelligence and common sense.

jrrr

How will this affect the cost of re-roofing your house? It looks like you’ll need to pay licensed solar guys to remove the panels, then the roofers can do their thing, then the solar guys replace the panels?

Kevin C. Tofel

We’re still figuring that out – great question. The panels are strung together, so I could easily remove the wires. And they’re clipped to the framing so I might even be able to do that as well, although I’d need a bucket truck to get the panels off the roof. At that point, we should be set and I can then re-attach and rewire although I may get a labor quote from my installer. Glad he’s only 10 minutes away!

Mark

So, again, I have no idea how old Kevin’s roof is… but I’ll share some info from my situation. We have 22 panels and will likely need to re-roof in 5-8 years. I doubt very much we’ll put the same system back up unless progress comes grinding to a halt. I have 170 watt panels, Kevin has 230 watt panels. (His roof looks to be in great condition by the way.)

If things go on the current trajectory, I expect 300 watt panels to be the >bare minimum< that is available in 5 years and to run about $120-140 apiece. If I get 14 panels then, I'd guesstimate we are looking at <$2000 in panels and perhaps another $1000 in microinverters (guessing they fall by 1/2 as well). That's 8 fewer panels than I have now and more generation, which would simply my reinstallation while increasing power output.

I'm hoping that come 2017, there will be someplace I can donate the old system to a "Solar for Africa" program that can make use of the older panels. If not, I'll have to reconsider this.

Kevin's stuff is newer than mine so he'd be more likely to keep it, unless of course we are talking 15 years, in which case he might face the same choice. Fewer panels for very little money to replace his existing system.

Peter Ghosh

Great article. I understand that the tie-in to the grid is severed during a utility outage, but if there is still daylight, and the panels are technically producing AC, why can’t some of that power be used for your own consumption? With Sandy, we were without power for several days but did have natural gas (which was useless aside from hot water since there was no AC to power the forced-air system). Even if it was for 6-8 hours, having electricity during the day would have proven invaluable to keep the house heated.

Mark

I have a grid-tied system like Kevin and I >think< the reason you can't use the power is that there is no way to deal with the excess, nor to correctly handle the demand for additional. In other words, our grid-tied systems expect the grid to be there and to handle voltage stabilization, amperage on demand, etc. We don't have anything to handle that so we can't just "use our power" without consequences, even after disconnecting from the grid.

What battery backup does is allow you to fill a "reservoir" with any arbitrary amount of power and then use it in finite amount in a controlled manor. If there is "extra", the batteries can take more (or, presumably, disconnect from the array if you are "full") and if try to draw too much current, the system is designed to handle that and shut down more elegantly.

Peter Ghosh

Thanks for the clarification, Mark! I think it would be nice if the microinverters could sense this some way or if a transfer switch (much like you would use with a backup power system) could be used to throttle the power output.

JP

Thanks for posting this info! I live just North of Atlanta, Georgia, and have been curious what I could do with solar – your living in PA and ending up with a surplus is very encouraging. After we finish paying of a bit of debt I will be looking into purchasing my own solar power system!

Matt

Kevin,
Great piece, thank you for the detailed information.

It appears there is a disconnect switch located next to the electric meters. This is also required where I live in order to ensure the system is disconnected in the event of an outage (redundant protection on top of the anti-islanding feature of the microinverters).

My question – in the event of an outage, can you manually disconnect the system with this switch and directly use the electricity generated from the panels? If not, why not? Utility tariff requirement?

You would of course be limited inside your house by the amount of power your system was producing, but some power is better than none, no?

Kevin C. Tofel

There is a disconnect there, Matt, and perhaps there’s a way I could “rig” a way to use the panels. Not sure how just yet and I worry about the safety of such modification.

Matt

I understand. Always assumed if you just threw the disconnect, the electricity would stay at home and not feed back to the grid.

ldhoore

A consumption of 7596 kWh per year and you consider yourselves green? We are also a 4-family household and only consume 2000 kWh per year. I guess there is a huge difference in the definition of green in the US compad to Europe

Mark

I’m really confused why you oversized the system. What is your utility paying for the excess power? It’s one thing to leave a little headroom for a future homeowner, but you went way beyond and I don’t really see why.

In California, the value of power generated beyond breakeven usage is effectively nothing, so this would destroy your breakeven. I guess that’s different in Pennsylvania and they have to buy your power up to any amount? But you seem to have no time-of-use metering option?

Kevin C. Tofel

Mark, bear in mind that in my state, we get paid a competitive rate for the excess and AFAIK, there are no limits. Part of the project was to take full advantage of the tax offset since the project funds were taxable from the IRA. And when we sized the project we were much closer to 9500 kWh in annual usage. At the same time we were creating energy, we took steps as a family to reduce our energy needs, which inflated the energy overage. Hope that helps explain.

Mark

It does help explain. Can you tell us what PECO pays for the excess power, per kilowatt/hour?

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