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Jack_in_VA
Premium
join:2007-11-26
North, VA
kudos:1
Reviews:
·Millenicom
reply to dogma

Re: I've gone and done it ... solar install

said by dogma:

said by Jack_in_VA:

A 7000 kWh/year system...

I think this is our issue and how each of us arrives at the final savings amount. I'm getting more power from his system (9011kWh) based on my experience and the number of panels and production. However, using the 7000kWh is 23% less production, which should equate to $82.60 x .77 = $$ he would otherwise have to pay the utility = $63.60/Month in savings = $63.60/Mo. in his pocket (IRR). I am not seeing how you get $21/Mo.

If he shells out $13K upfront, he gets $63.60/Mo. Where does the $43 come from?

ke4pym See Profile, did your Solar company give you a detailed breakdown of cost vs. current expenses?

From your earlier post:

quote:
OP correct me if I am wrong) has a electricity cost of about $144/Month on average, your model [$13,000 / 300 = $43.33 per month in cost]
Spread out like you posted it would be $43/mo. Upfront it would just take that long for the ROI on initial investment. Assuming his rates stay the same it will take him 300 months to start realizing the full $63.60 reduction of his $143/mo Duke Power bill.


dogma
XYZ
Premium
join:2002-08-15
Boulder City, NV
kudos:1
said by Jack_in_VA:

Spread out like you posted it would be $43/mo. Upfront it would just take that long for the ROI on initial investment. Assuming his rates stay the same it will take him 300 months to start realizing the full $63.60 reduction of his $143/mo Duke Power bill.

I see. Okay, take the ROI one of two ways, but not both.

A.) ke4pym See Profile makes the up front $13K investment. Since the panels have a 25 year (300 Months) lifespan, it would take him the $43/Month to recoup the initial investment over that period. The investment itself performs. However, the asset also depreciates down to zero over 25 years. So his principle investment of $13K goes to $0 over 25 years. A performing asset that depreciates.

If it produces $64/Month, it pays for itself in ($13,000/$64) 203 Months or 16.9 years. The balance of the 25 years is 97 Months x $64 = $6,208.00. Of course if it's expressed your way, it's $6.2K profit/300 = $21 per Month. You are indeed correct in that respect.

[caution, the following is me thinking aloud/rambling]
This is very interesting however in that a "cash" investment depreciates over time as well due to inflation. But never down to zero. I would first need to determine what a fair discount rate (rate is the return that could be earned on an investment in the financial markets with similar risk) is. The discount would be equivalent to a 10-year CD earning a 2.3% yield.

IOW, if ke4pym See Profile took his $13K and put it into this CD. In 10 years, the CD would be worth $16,358. $3,358 in earned interest - or $28/Month. So if ke4pym See Profile put his $13K into this CD, and in 10 years he cashes out, takes the profit as an offset for his previous 10 years electricity cost, and comes out $9/Month ahead for an extra sum of $1080. And he still has his entire principal balance, whereas his Solar system would have depreciated down to about $8,000.

But that CD just keeps up with inflation (2.7% over the past 10 years), as $16.3K in 2022 would buy exactly what $13K does today. Conversely, if we apply an inflationary rate to energy based on the previous 10 years, that rate has gone up 44%! (see: »metricmash.com/inflation.aspx?code=SEHF )

B.) This means in 10 years, assuming present trends, ke4pym See Profile's electric rate will be .1584¢/kWh and the new calculation would be:
7,000 x 16¢ (kWh) = $1120/year or $93.33/Month - not $63.00/Month - which in turn accelerates his ROI.

It's late and I can't do the calculus for this ongoing rate increase model over the 25 life of the system. But off hand I'd say somewhere around the 8 year mark would pay off the initial $13K, and the remaining 17 years could be close to $15,000 in overall savings vs. the ROI on a 10 year CD.

I will try to find or build a calculator that takes all of this into consideration.

itguy05

join:2005-06-17
Carlisle, PA
quote:
A.) ke4pym See Profile makes the up front $13K investment. Since the panels have a 25 year (300 Months) lifespan, it would take him the $43/Month to recoup the initial investment over that period. The investment itself performs. However, the
You should leave the depreciation scam out of it. After 25 years, the panels will not magically stop working. Nor will they automatically be replaced, and also will have some (albeit small) value left. They may be worth $0 in the "accounting sense" but in the real world they wills till have some value.


cowboyro
Premium
join:2000-10-11
Shelton, CT
said by itguy05:

quote:
A.) ke4pym See Profile makes the up front $13K investment. Since the panels have a 25 year (300 Months) lifespan, it would take him the $43/Month to recoup the initial investment over that period. The investment itself performs. However, the
You should leave the depreciation scam out of it. After 25 years, the panels will not magically stop working. Nor will they automatically be replaced, and also will have some (albeit small) value left. They may be worth $0 in the "accounting sense" but in the real world they wills till have some value.

However things will fail. Panels will have to be replaced, inverters will have to be replaced. The warranty is worth nothing if the company is out of business. Realistically, how many electronic devices have you seen to last 25 years in harsh environments?

ke4pym
Premium
join:2004-07-24
Charlotte, NC
Reviews:
·VOIPO
·ooma
·Verizon Broadban..
·Northland Cable ..
·Time Warner Cable
said by cowboyro:

However things will fail. Panels will have to be replaced, inverters will have to be replaced. The warranty is worth nothing if the company is out of business. Realistically, how many electronic devices have you seen to last 25 years in harsh environments?

I'll get back to you in 24 years, 6 months.


Jack_in_VA
Premium
join:2007-11-26
North, VA
kudos:1
Reviews:
·Millenicom
said by ke4pym:

said by cowboyro:

However things will fail. Panels will have to be replaced, inverters will have to be replaced. The warranty is worth nothing if the company is out of business. Realistically, how many electronic devices have you seen to last 25 years in harsh environments?

I'll get back to you in 24 years, 6 months.

It will be sooner than that. Your roof will need replacing before then and the panels will have to be removed. 25 years is a stretch for a shingled roof.

ke4pym
Premium
join:2004-07-24
Charlotte, NC
Reviews:
·VOIPO
·ooma
·Verizon Broadban..
·Northland Cable ..
·Time Warner Cable
said by Jack_in_VA:

It will be sooner than that. Your roof will need replacing before then and the panels will have to be removed. 25 years is a stretch for a shingled roof.

Just put a brand new, 30 year roof on last Tuesday. See you in 24 years, 6 months

The shingles under the panels outta last a WHOLE lot longer since the sun will never shine on them.


Jack_in_VA
Premium
join:2007-11-26
North, VA
kudos:1
Reviews:
·Millenicom
said by ke4pym:

said by Jack_in_VA:

It will be sooner than that. Your roof will need replacing before then and the panels will have to be removed. 25 years is a stretch for a shingled roof.

Just put a brand new, 30 year roof on last Tuesday. See you in 24 years, 6 months

The shingles under the panels outta last a WHOLE lot longer since the sun will never shine on them.

It's the ones around the cells you will have to address. Are you planning on just replacing those and leaving the shingles under the cells? Even if it is touted as being a 30 year roof we all know how that works out.

ke4pym
Premium
join:2004-07-24
Charlotte, NC
Reviews:
·VOIPO
·ooma
·Verizon Broadban..
·Northland Cable ..
·Time Warner Cable
said by Jack_in_VA:

It's the ones around the cells you will have to address. Are you planning on just replacing those and leaving the shingles under the cells? Even if it is touted as being a 30 year roof we all know how that works out.

On the main back roof of the house, no shingles will be (should be) exposed. The garage/bonus room, well, that's another story. The north facing roof will have no panels on it. If money were no object, I'd put them there, though. Just to honk off my HOA - cause they can't do anything about it and stuff.


pike
Premium,MVM
join:2001-02-01
Washington, DC
kudos:3
reply to cowboyro
said by cowboyro:

Realistically, how many electronic devices have you seen to last 25 years in harsh environments?

Would you consider civil aircraft and urban transit vehicles harsh environments? I do, and I've personally seen a significant number of 25+ year old electronic assemblies perform flawlessly and continue to operate at their original specification.

A better question would be, is anything built in the last 10-15 years realistically going to last that long? Ha!