Can solar be a good investment?

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Stan

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#205426 12-Nov-2016 19:03

So full disclosure, I work in a position that allows me to invest in new products and solar is something I have been looking at bringing into our business since 2012 however I do not want this to come across as an advertisement I am after opinions on the viability of solar at a price point.

A touch over a year back I asked the question on geekzone “What price does PV solar have to be to make sense?” I got alot of responses (Thank you) I looked issues that were raised and I would be interested in hearing feedback to my solutions.

First of all one of the biggest problems with solar is cost and scalability of that cost for example, a 4kw system average installed cost per watt is $3 per watt but a 1.5kw system is $4 per watt however due to the solar production curve, the cost (and lifespan) of batteries and the working habits of a average New Zealander the larger system is not going to give a good return on investment as, during the day a large amount of power will be pumped back into the grid at 8c per KW.

So lets look at the average costed small system at $6000 for a 1.5kw system I will be taking into account my own weather data and assume we are on a good roof pitch facing north.With those conditions the 1.5kw system would be producing 2056kw annually, on my low user plan I am paying around 29c per KWH. Now assuming you can use all the power produced on the low user plan you are looking at around $600 per year. So without taking into account electricity price rises or efficiency decreases of the panels you are looking at an absolute best case scenario of a 10 year payback or 10% return PA on investment. From you and others have said this is not good enough to justify the outright purchase. So to make solar appeal to the mass market and make better financial sense that would mean dropping the price per watt of the smaller systems to take care of the base load below the price per watt of an average larger system.

So if we took a 1.5kw system and priced it at $3999 installed (installed cost per watt $2.66) using the same calculation as above you would be looking at a payback of 6 years 7 months or 15% return PA on investment if you took into account a 17 month no interest no payment plan you would be looking at $2.10 per watt and a payback of 5 years 2 months or a 19% return PA on investment. All this is assuming a best case scenario (in terms of utilizing power the system produces) and low user power plan (less cost per day higher cost per kwh) location power production could be higher or lower than my own house.

What I would like to know is in your situation what would you estimate the payback of a small system like this to be working off the cost of power in your location and your usage habits? Would you change your usage habits if you got solar?

Personally I have this 1.5kw system installed on my own house so if you have any questions feel free to fire away.

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#1669753 12-Nov-2016 19:45

Compare it to newer power suppliers like Flick, not just your current supplier.

TwoSeven

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#1669757 12-Nov-2016 19:49

Are you talking about installing for consumer or business?

Also, are you looking at ROI or lowering monthly OPEX?

Is the solar part of a new build, part of a smart home with a homestar rating of 10 etc.

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Stan

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#1669758 12-Nov-2016 19:58

timmmay:

Compare it to newer power suppliers like Flick, not just your current supplier.

That would be up to you to do if you are with flick and remember power prices change per region

Stan

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#1669759 12-Nov-2016 20:00

TwoSeven: Are you talking about installing for consumer or business?

Also, are you looking at ROI or lowering monthly OPEX?

Is the solar part of a new build, part of a smart home with a homestar rating of 10 etc.

Consumers generally just an ROI.

The solar is just a kit you buy and have installed.

Talkiet

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#1669761 12-Nov-2016 20:03

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

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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#1669765 12-Nov-2016 20:08

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

Its closer than you might think, LG chem has just released lower cost batteries but with out battery but with a SOLAX hybrid inverter you could possibly get in at $7k but the battery kills it

Talkiet

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#1669766 12-Nov-2016 20:11

Stan:

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

Its closer than you might think, LG chem has just released lower cost batteries but with out battery but with a SOLAX hybrid inverter you could possibly get in at $7k but the battery kills it

Soooooo. "not possible at this point" then ? :-) I think it will be available in 3-4 years, but I'm building a house now, not in 3-4 years :-)

Also, note that most systems do NOT allow charging of the battery during a power cut and many don't even allow the battery to supply any power during a powercut - at least not as standard without appropriate interlocks. (And are possibly barred by law - I haven't checked the local regulations)

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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#1669768 12-Nov-2016 20:14

Talkiet:

Stan:

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

Its closer than you might think, LG chem has just released lower cost batteries but with out battery but with a SOLAX hybrid inverter you could possibly get in at $7k but the battery kills it

Soooooo. "not possible at this point" then ? :-) I think it will be available in 3-4 years, but I'm building a house now, not in 3-4 years :-)

Also, note that most systems do NOT allow charging of the battery during a power cut and many don't even allow the battery to supply any power during a powercut - at least not as standard without appropriate interlocks. (And are possibly barred by law - I haven't checked the local regulations)

Cheers - N

Yes unless you went with a small battery no :)

Check this out the only thing I am unsure of is if it still charges the batteries during a power outage http://solaxpower.com.au/x-hybrid/

timmmay

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#1669770 12-Nov-2016 20:35

Stan:

That would be up to you to do if you are with flick and remember power prices change per region

A friend of mine spent $14K on a solar system, I spent nothing changing to Flick Electric. His savings are approximately the same as mine, and my investment was $0. My point is to consider alternatives. It is a little tricky to compare with Flick prices as they very constantly, but averages will be available.

PhantomNVD

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#1669774 12-Nov-2016 21:14

I'd say solar at this point only works as an entirely 'off grid' setup...

By changing usage habits and maximising your solar input hours and NOT expecting to get every iota in storage, but speccing batteries "to last the night" instead, I'd say it's perfectly possible... IF you're prepared to compromise and economise your use.

I lived with my wife and two young sons entirely 'off grid' for a year in my self converted bus last year while having my house built, and 'survived' on 1Kw solar and 200ahs of batteries. I did need a weekly laundromat trip ($15) and a monthly 9kg gas bottle ($26) for cooking and califont (hot water). I had 'only' a 1500w inverter, but happily watched telly, ran a Skinny router full time, and charged phones/iPads/laptops etc as needed, ran LED lights till 23:30 most nights and never ran the batteries flat. In the North Island winter 1Kw took all the 6-7hours daylight to fully charge my batteries (even with regular rain spells) and maxed out the batteries by 11am most summer days (sunrise 05:30ish)

Could I manage like that in my 260m2 fully-insulated, double-glazed, LED-lit, wood burner warmed, and califont water heated house this year? NO
My wife loves using her own washing machine and oven, and we enjoy the benefit of a large screen tv and bathroom heating.

FWIW I now average 8.8kw/day... <$100/month
do I need to? No
Is it worth it? Yes!

Linuxluver

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#1669775 12-Nov-2016 21:23

I'm not really fussed about payback or being cheaper. I want to reduce my carbon footprint.

As over 80% of NZ's electricity is from renewable sources, I thought switching to an electric car would be the biggest single change I could make to reduce emissions.

So I did.

That leads to the wider issue of using solar to support some or all of my own power use partly for the purpose of removing my demand from the grid to allow the grid to use less non-renewable electricity, one house at a time. At the very least, it would also help delay (in a very small way!) the need for new generation. In short, I see value in 'owning' (being responsible for) some or all of my electricity demand.

My problem there is that my current house is well-shaded by large trees on a neighbour's property and while this doesn't much matter in the Summer....it's about 30% of the daylight hours in Winter. I'd rather shift to a better location before investing in solar.

I appreciate that being motivated by wider public good (and I am part of that wider public) makes me unusual......but if we want this planet to remain livable, more of us need to see things this way and act accordingly.

Promoting action on climate change would build awareness of the value of a solar solution.

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networkn

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#1669777 12-Nov-2016 21:27

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.

PhantomNVD

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#1669779 12-Nov-2016 21:31

And then on the basis of an EV car like linuxlover's BEING your overnight batteries... the cost recovery becomes more feasible too?

Dynamic

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#1669832 12-Nov-2016 22:58

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.

Have you looked at solar hot water at least? A big part of any solar power system is the storage in batteries. At least with solar hot water, you already have the storage system, and your electricity bill is reduced by a more than worthwhile amount IMHO.

Note I have no personal experience with this.

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#1669840 12-Nov-2016 23:32

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

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.

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