Can solar be a good investment?

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Networkn
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#1669852 13-Nov-2016 00:51

Talkiet:

networkn:

Yeah, I think that most eco people I know would argue, you can always get more money, probably not so easy to get a new planet. I haven't gone Solar yet but certainly will regardless of payback timeframe.

Surely that's mostly about feeling better about your consumption than actually doing something significantly better than drawing from existing renewable energy sources? I'm not a greenie in any sense (except that I like the colour!) but I thought that a really good proportion of the power I consume here in Chch through the grid is from renewable sources.

It's a similar argument to buying a new Electric car vs buying a secondhand efficient petrol or diesel car... The overall impact on the environment has a significant overhead component before you get to the impact of the fuel.

I suspect a large number of the impact assessments done to figure out whether buying a new energy efficient "thing" (car/heating/insulation etc) is a good idea usually are fairly biased based towards the outcome that is shinier or feels better (to ourselves or to others).

Personally, I want an electric car, but only because a Tesla Model S is a kickass fast car. If the same car was powered by crushed Unicorns I'd still want one :-)

Cheers - N

It would depend on whether you were actually drawing from renewable energy sources, but you are right. Strictly speaking, the sun is not renewable energy though :)

I'm with you, I like nice fast cars, and I wouldn't care if they were fuelled with crushed up (baby) unicorns either, in fact I am sure I saw a Top Gear episode and another from Mythbusters that shows that despite protests, crushing up unicorns and mixing it with normal fuel improves economy and kW output on cars significantly!

IF they made a Tesla S wagon with 250KM range, I'd have one already :) Back when fuel was getting really expensive, everyone I know was buying smaller cars and I bought a V8 Audi S4 Avant. Everyone was HORRIFIED and spoke to me about the impact on the environment. I said I'd recycle some extra stuff each week :)

If you find a cost effective source of Unicorns let me know, I did consider farming them myself, however, the netting to keep them flying away was SO expensive.

Aredwood

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#1669854 13-Nov-2016 01:44

Main problem is you are relying on the current policies for electricity pricing remaining the same. As an example in Auckland average usage is 7200 units per year. Yet anything under 8000 units is considered low usage. The low user regulations cause alot of uneconomic investment. As they artificially increase the per unit cost of power, while artificially lower the fixed costs (as billed to the end consumer). They are also very poorly targeted. As how much power you use has no connection to how rich / poor your household is. They are also a subsidy for solar power. As the higher unit price inflates your savings.

This also causes higher carbon emissions than what would otherwise occur. As electric hot water cylinders are ripped out and replaced with LPG gas water heaters. As in Auckland LPG costs 16c per kW/hr. So far cheaper than electricity on a low user plan. Despite the electricity being 80% renewable generated. (and often over 90%). And the LPG being 0% renewable. Cooking is still best done with gas as the issues caused by peak loading massively outweigh any on paper emissions savings from electric cooking.

Low user plans also mean that standard user plans have to be more expensive. As power companies are not allowed to offer a standard user plan that would result in lower bills for someone who uses less than 8000 units / year. Which also means you have low income people who are on standard user plans (due to their usage). Paying extra to subsidise rich, but low users, and people with solar panels. Especially as low income people will likely be in rental properties, so won't be able to get solar installed.

So some scenarios: low user plans being scrapped completely or maybe introducing a rule requiring you to have a community services card to get low user pricing. Only a matter of time before the usual left wing suspects pick up on this. And turn it into a election issue.

Mandatory "time of use" pricing plans. Peak pricing would be morning and evening. So little scope for non battery backed solar to make much savings.

Mandatory capacity based pricing. (Same as used by "The Lines Company" in Turangi, central plateau area) again solar won't do much to reduce lines capacity used by a household. So not much savings.

And In NZ solar doesn't help the environment much. As it can't reduce the morning or evening peak loads during winter. And during the middle of the day, usage is mostly provided by renewable generation. It is far cheaper to build wind generation than subsidise residential solar. So any subsidies should be removed. (either intentional or unintended like the low user distortions) As electricity prices that are higher than necessary simply mean more fossil fuels get used for purposes that could have been met by almost fully renewable electricity. And lowering peak demand by time shifting usage to low usage times, means lower carbon emissions. Despite total usage being the same. And this would also encourage more renewable generation to be built. As most renewable generation has to run when the wind, water ect is available. As they can't store their energy source like you can with fossil fuels. So peak demand management is very important to reduce fossil fuel usage from electricity generation.

And an "all electric" hosehold can often lower their carbon footprint just by time shifting their power usage. Put the hot water cylinder on night rate power if your lines company offers it. Otherwise put it on a timer so it only runs late at night. And time shift when you run the dishwasher, dryer ect if you can.

Biggest risk with solar is the rules getting changed. Or other disruptions - like Flick electric appearing. Im normally paying around 10c/unit off peak with Flick electric. (and often less) So grid connect solar would have a stupidly long payback for me. Imagine if rule changes meant that everyone was paying approx 10c per unit. This could very easily happen.

tdgeek

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#1669884 13-Nov-2016 08:41

Another great detailed reply from @aredwood !

Someone mentioned solar hot water. We have that. I have no idea on savings, as we have only been here 8 months, and population has been anywhere from 2 to 5. As winter ended I sought advice on turning the grid off. Tks @Aredwood and Apricus the supplier. I do that now, and very occasionally need to turn it on, so that must be helping the hot water bill, given that hot water is circa 40% of the power bill. The house is 6 years old, the solar hot water was $8k, and no batteries to build into a payback calculation. Over 10 years thats $800 a year, or $66 a power bill on average. That seems easily achievable. In non summer, when we have a cold but sunny period, off it will go.

TwoSeven

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#1669887 13-Nov-2016 08:45

Talkiet:
I'm building a new house and I really want to install solar, but I can't justify it however badly I fudge the pricing, my usage, the costs, interest rates etc.

The only thing that would make me get solar at the moment would be if all the following were possible and the whole system could be paid off (including cost of credit) in 10 years or less.

- 2.5kW

- Battery large enough to store a complete summer night of use

- Battery able to be automatically used _AND CHARGED_ during a powercut

With those features, for $10k, I'm in. (Assuming 20 year lifetime of panels and perhaps 6-7 years? of the battery)

But I think it's not possible at this point, so my basic answer is that I don't think there's any current options that would make sense for me.

Cheers - N

I have always wondered about this as well.

I would think that If one looks at it from an OPEX point of view on a new build, along with other design features that support solar, one may find the costs different. By OPEX I mean, how much per month will it cost you to own and operate the house - including rates, insurance, power, phone, water and general maintenance and mortgage for both summer and winter.

An idea behind going sustainable to a particular level is to try and reduce that monthly cost.

For example, spending slightly more to put in double glazing and better insulation could reduce the heating cost meaning lower power bills. A solar water heater and solar cylindar system could further reduce the water heating cost. Adding solar PV could offset the weekly power draw from the grid reducing costs again.

I note that the stated requirement is 2.5kW/hr. but have you calculated the total hourly power draw of the house?

Also is one mixing an off grid solution with an on grid solution, if so, is it worth it. An off grid solution I would suggest requires a different house design than an on grid one. Passive house design techniques may also be considered.

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#1669892 13-Nov-2016 08:58

Evening use question. If evening use was only lights, couple of TV's, a games console, charging phones and tablets, maybe an electric blanket, what kW/hr system would cater for that?

I know someone with a non battery PV, she is retired. I work from home. I think hers was 10k on a new build. For me, that seems sort of viable, again with no ongoing battery expense to need to build in. Run work Citrix box, two screens, Hot water cylinder if our solar HW isn't cutting it in non Summer, microwave, dishwasher, washing machine? Thoughts? If the high use devices, DW/WM were staggered, is that viable?

Can a non battery PV system, easily have a battery add-on option?

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#1669895 13-Nov-2016 09:02

Are we talking about cost or environment here? We live in the countryside and have a wetback wood heater and endless free fuel from the trees that die naturally and come down in windstorms. Our water heating costs are almost zero, but I can't imagine our carbon footprint is all that great. I think cost and environmental impact are two seperate things, and need to be looked at as such. We would like to go solar, but can't afford the investment required for a worthwhile system.

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Talkiet

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#1669904 13-Nov-2016 09:26

TwoSeven: [snip]
I note that the stated requirement is 2.5kW/hr. but have you calculated the total hourly power draw of the house?

Also is one mixing an off grid solution with an on grid solution, if so, is it worth it. An off grid solution I would suggest requires a different house design than an on grid one. Passive house design techniques may also be considered.

I have been measuring actual usage for years, although the new house will be better insulated, larger and have electric hot water not gas. Despite that I have a good baseline to work from. The 2.5kW/hr size with a battery (and the size of that is both $$$ dependant and can be added to easily) is based on satisfying almost all consumption over probably 50% of the year, and about 75% of consumption for another 2-3 months. The remaining winter hole is too deep to consider solar having a real impact so I'm not bothering to model how bad it would look then :-)

Definitely not considering an off-grid solution. The huge extra costs for that winter hole and peak demand cover are too much, and the compromises to mitigate the size of the peak loads are not things I am prepared to consider. (I'll use a microwave and a drier at the same time - I'll install a big car lift. I'll have a high capacity in-ceiling heatpump system).. Oh, and I already have a high capacity induction cooktop purchased and sitting in a spare room waiting for the build :-)

Cheers- N

Please note all comments are from my own brain and don't necessarily represent the position or opinions of my employer, previous employers, colleagues, friends or pets.

Stan

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#1669941 13-Nov-2016 10:14

Okay lets do the calculation another way

We are looking at a solar system that costs $3999 installed its a 1.5kw, its designed to take care of your base load during the day this has no subsidies attached to it.

If you are like me and have a server, pcs running 24/7 you have a reasonable base load but lets assume you allow 15% of the generated power to back to the grid and you are on a high user plan.

In my area a higher user plan is around 25c per kwh so that would = $460 (including an 8c per kwh rebate on the power sent back to the grid)

So with a 17 month interest free no payment option you would be looking at a payback of just over 7 years or and ROI of 14% PA

At 14% why not do it? or do you have an investment portfolio give you a better return than that?

Talkiet

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#1669944 13-Nov-2016 10:20

Stan:

Okay lets do the calculation another way

We are looking at a solar system that costs $3999 installed its a 1.5kw, its designed to take care of your base load during the day this has no subsidies attached to it.

If you are like me and have a server, pcs running 24/7 you have a reasonable base load but lets assume you allow 15% of the generated power to back to the grid and you are on a high user plan.

In my area a higher user plan is around 25c per kwh so that would = $460 (including an 8c per kwh rebate on the power sent back to the grid)

So with a 17 month interest free no payment option you would be looking at a payback of just over 7 years or and ROI of 14% PA

At 14% why not do it? or do you have an investment portfolio give you a better return than that?

At this point, using real numbers (and not rounding to $4000) and trying to reframe the scenario so that it still looks good, I'm going to suggest you're trying to sell us something... Am I right?

Put your numbers through the calculator here... https://www.energywise.govt.nz/tools/solar-calculator/ Use your input values and supply all of those to us here. I'm not saying your numbers don't stack up - they might... But if they don't then you'll have to explain why your model is more accurate than the one several researchers have spent years on.

Cheers- N

Please note all comments are from my own brain and don't necessarily represent the position or opinions of my employer, previous employers, colleagues, friends or pets.

Stan

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#1669947 13-Nov-2016 10:31

Talkiet:

Stan:

Okay lets do the calculation another way

We are looking at a solar system that costs $3999 installed its a 1.5kw, its designed to take care of your base load during the day this has no subsidies attached to it.

If you are like me and have a server, pcs running 24/7 you have a reasonable base load but lets assume you allow 15% of the generated power to back to the grid and you are on a high user plan.

In my area a higher user plan is around 25c per kwh so that would = $460 (including an 8c per kwh rebate on the power sent back to the grid)

So with a 17 month interest free no payment option you would be looking at a payback of just over 7 years or and ROI of 14% PA

At 14% why not do it? or do you have an investment portfolio give you a better return than that?

At this point, using real numbers (and not rounding to $4000) and trying to reframe the scenario so that it still looks good, I'm going to suggest you're trying to sell us something... Am I right?

Put your numbers through the calculator here... https://www.energywise.govt.nz/tools/solar-calculator/ Use your input values and supply all of those to us here. I'm not saying your numbers don't stack up - they might... But if they don't then you'll have to explain why your model is more accurate than the one several researchers have spent years on.

Cheers- N

All the maths is there Talkiet explain to me what is incorrect. Im not trying to sell you anything (It makes 0 difference to myself if I sell 1 system or 1000 systems) I want you to tell me why its not a good investment? I want you to do the maths for yourself and please explain to me what im doing incorrectly.
The problem I have with the energywise calculator is the lack of transparency I have no idea what losses they are accounting and how they are getting there numbers I have sent them an email on it and if you like I will let you know as soon as they email back.

I would suggest using http://pvwatts.nrel.gov/

Talkiet

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#1669950 13-Nov-2016 10:40

Stan:

Talkiet:

Stan:

Okay lets do the calculation another way

We are looking at a solar system that costs $3999 installed its a 1.5kw, its designed to take care of your base load during the day this has no subsidies attached to it.

If you are like me and have a server, pcs running 24/7 you have a reasonable base load but lets assume you allow 15% of the generated power to back to the grid and you are on a high user plan.

In my area a higher user plan is around 25c per kwh so that would = $460 (including an 8c per kwh rebate on the power sent back to the grid)

So with a 17 month interest free no payment option you would be looking at a payback of just over 7 years or and ROI of 14% PA

At 14% why not do it? or do you have an investment portfolio give you a better return than that?

At this point, using real numbers (and not rounding to $4000) and trying to reframe the scenario so that it still looks good, I'm going to suggest you're trying to sell us something... Am I right?

Put your numbers through the calculator here... https://www.energywise.govt.nz/tools/solar-calculator/ Use your input values and supply all of those to us here. I'm not saying your numbers don't stack up - they might... But if they don't then you'll have to explain why your model is more accurate than the one several researchers have spent years on.

Cheers- N

All the maths is there Talkiet explain to me what is incorrect. Im not trying to sell you anything (It makes 0 difference to myself if I sell 1 system or 1000 systems) I want you to tell me why its not a good investment? I want you to do the maths for yourself and please explain to me what im doing incorrectly.
The problem I have with the energywise calculator is the lack of transparency I have no idea what losses they are accounting and how they are getting there numbers I have sent them an email on it and if you like I will let you know as soon as they email back.

I would suggest using http://pvwatts.nrel.gov/

Have your calculations accounted for the cost of finance? ie the capital cost either has to be borrowed (or could be invested). Are you assuming zero drop-off in the efficiency of the panels? Does your model assume perfect unobscured alignment North? What roof pitch have you assumed? How many sunshine hours where you are? Are you modelling for Napier or invercargill?

You're throwing out headline figures and there's no way to know at this stage whether you have assumed best, worst or average case values for many of the inputs that will dictate the performance and return.

Clearly you know a lot about this since by the sound of it you sell the systems... It seems unreasonable to ask individuals that don't know as much as you do to pick holes and do the calculations when you're obviously more qualified. By not showing your working though, you make me think you are hiding something for the purpose of making the solution look more attractive than it would be in reality.

I might be wrong, but in this situation, with this audience, you are being asked to prove your model to skeptics. If you don't want challenging questions, you're in the wrong place.

Cheers - N

Please note all comments are from my own brain and don't necessarily represent the position or opinions of my employer, previous employers, colleagues, friends or pets.

Stan

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#1669956 13-Nov-2016 11:00

Talkiet:

Stan:

Talkiet:

Stan:

Okay lets do the calculation another way

We are looking at a solar system that costs $3999 installed its a 1.5kw, its designed to take care of your base load during the day this has no subsidies attached to it.

If you are like me and have a server, pcs running 24/7 you have a reasonable base load but lets assume you allow 15% of the generated power to back to the grid and you are on a high user plan.

In my area a higher user plan is around 25c per kwh so that would = $460 (including an 8c per kwh rebate on the power sent back to the grid)

So with a 17 month interest free no payment option you would be looking at a payback of just over 7 years or and ROI of 14% PA

At 14% why not do it? or do you have an investment portfolio give you a better return than that?

At this point, using real numbers (and not rounding to $4000) and trying to reframe the scenario so that it still looks good, I'm going to suggest you're trying to sell us something... Am I right?

Put your numbers through the calculator here... https://www.energywise.govt.nz/tools/solar-calculator/ Use your input values and supply all of those to us here. I'm not saying your numbers don't stack up - they might... But if they don't then you'll have to explain why your model is more accurate than the one several researchers have spent years on.

Cheers- N

All the maths is there Talkiet explain to me what is incorrect. Im not trying to sell you anything (It makes 0 difference to myself if I sell 1 system or 1000 systems) I want you to tell me why its not a good investment? I want you to do the maths for yourself and please explain to me what im doing incorrectly.
The problem I have with the energywise calculator is the lack of transparency I have no idea what losses they are accounting and how they are getting there numbers I have sent them an email on it and if you like I will let you know as soon as they email back.

I would suggest using http://pvwatts.nrel.gov/

Have your calculations accounted for the cost of finance? ie the capital cost either has to be borrowed (or could be invested). Are you assuming zero drop-off in the efficiency of the panels? Does your model assume perfect unobscured alignment North? What roof pitch have you assumed? How many sunshine hours where you are? Are you modelling for Napier or invercargill?

You're throwing out headline figures and there's no way to know at this stage whether you have assumed best, worst or average case values for many of the inputs that will dictate the performance and return.

Clearly you know a lot about this since by the sound of it you sell the systems... It seems unreasonable to ask individuals that don't know as much as you do to pick holes and do the calculations when you're obviously more qualified. By not showing your working though, you make me think you are hiding something for the purpose of making the solution look more attractive than it would be in reality.

I might be wrong, but in this situation, with this audience, you are being asked to prove your model to skeptics. If you don't want challenging questions, you're in the wrong place.

Cheers - N

Glad you asked

Its calculated for Hamilton weather conditions (as are the power prices) the drop in panel performance is approximately 1% PA worst case scenario (they are warrantied to this) this is offset by annual power price increases (an average increase over 10 years of 10%) The model is for a north facing roof and a tin (or color steel roof). The cost of finance is depends on the persons circumstances if they already have the required card. The capital cost is not accounted for its assuming after the 17 months you already have the money in the bank, in that case you would take the current average of 3.5% off the ROI.

Why do I want to do this? Well to be honest I looked at the market and it was full of people hard selling systems far larger than the customer needed just to get more money, honestly unless you have a very specific set of circumstances or are a business you should not be putting anything larger than a 2kw system on your roof if it is purely grid tied, as all it will do is pump huge amounts of power peak time back into the grid. This is an industry in its infancy in New Zealand the market penetration is tiny and unfortunately its getting a bad name fast because of the hard selling sales people who put money above what the consumer should be ideally looking at.

Also Talkiet I have been on geekzone over 10 years I know what im getting myself into ;)

Talkiet

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#1669957 13-Nov-2016 11:00

Running the EECA calculator I get this...

Running the PVwatts calc with as close to the same inputs as I can, I get this..

I'm presuming those values and savings are based on me being able to consume 100% of the generated power? It's not clear to me how they do that. In any case I think their analysis is very simplistic and ignores quite a few external variables that are going to affect the financial viability of a solar install.

Cheers - N

Please note all comments are from my own brain and don't necessarily represent the position or opinions of my employer, previous employers, colleagues, friends or pets.

Stan

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#1669959 13-Nov-2016 11:04

Also if it makes me more transparent will make you the promise that if someone PMs me and asked me where to buy said system I will not tell them who I work for or where to buy it.

Stan

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#1669960 13-Nov-2016 11:07

Talkiet:

Running the EECA calculator I get this...

Running the PVwatts calc with as close to the same inputs as I can, I get this..

I'm presuming those values and savings are based on me being able to consume 100% of the generated power? It's not clear to me how they do that. In any case I think their analysis is very simplistic and ignores quite a few external variables that are going to affect the financial viability of a solar install.

Cheers - N

Do you really only use 2500Kwh per year?? $50 per month worth of power on average?

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