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Company Offering Free Solar Panels


               
2011 Oct 19, 8:32am   4,805 views  17 comments

by HousingWatcher   follow (0)  

So what does everyone think of this? The company, Vivint Solar, is offering free solar panels. The catch is that you have to agree to buy the electric that the panels produce for 20 years at 13 cents a killowhat hour. My current power company charges 18 cents a killowhat: 12 cents for each killowhat, and 6 cents for delivery. Are there any drawbacks to this? After how many years would it be more economical to buy your own solar panels?

http://www.vivintsolar.com/

http://blogs.wsj.com/privateequity/2011/10/19/pe-backed-vivint-bets-that-the-sun-will-still-shine-on-solar/

Also, according to the website, it says the 13 cent charge is locked in for the whole 20 year period. What does everyone think will happen with the price of electric? Will it go up? Down? Stay flat? If it goes up, then going solar is a good idea since the savings increase.

A downside, although not one that affects me personally, is that if you sell your house, the buyer is bound by the 20 year contract. So obvivoulsy this is something that would have to be disclosed.

#energy

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1   uomo_senza_nome   2011 Oct 19, 8:56am  

HousingWatcher says

My current power company charges 18 cents a killowhat: 12 cents for each killowhat, and 6 cents for delivery.

that's pretty expensive. I calculated mine and it comes to about $0.114 per kwH.

In the months when electricity is not in great demand (where I live), it is only $0.088 a month.

HousingWatcher says

After how many years would it be more economical to buy your own solar panels?

It depends. You'll have to do the math, but usually it's like 10 to 15 yr pay off.

HousingWatcher says

What does everyone think will happen with the price of electric? Will it go up? Down? Stay flat? If it goes up, then going solar is a good idea since the savings increase.

Inflation in things we need and deflation in things we don't need. which means it is likely to head higher, but not higher than people's ability to pay.

I don't know, i'm quite uncertain about this.

HousingWatcher says

A downside, although not one that affects me personally, is that if you sell your house, the buyer is bound by the 20 year contract. So obvivoulsy this is something that would have to be disclosed.

It's not always a downside, it could be a selling feature if it works out economically.

2   Huntington Moneyworth III, Esq   2011 Oct 19, 9:45am  

I prefer to power my estates with whale oil.

3   EBGuy   2011 Oct 19, 10:07am  

I prefer to power my estates with whale oil.
Who needs biodiesel from algae? You're running on plankton power!

4   corntrollio   2011 Oct 19, 10:24am  

HousingWatcher says

My current power company charges 18 cents a killowhat: 12 cents for each killowhat, and 6 cents for delivery. Are there any drawbacks to this? After how many years would it be more economical to buy your own solar panels?

The 12 cents/kwh sounds like PG&E, but I'm pretty sure PG&E doesn't charge 6 cents/kwh for delivery. I actually monitor my power usage a few times a month because the SmartMeters are so awesome, and I'm pretty sure last month's bill was a lot lower than that for delivery. PG&E does pass some transmission costs along, but their electricity rates themselves are tiered:

if you are within baseline, the rate right now is 12.2 cents/kwh or so
if you use 101-130% of baseline, there's another (higher) rate
maybe 130-200% is another (higher) rate
etc.

The rate was 11.xxx not long ago, so it seems like the baseline price has gone up (could be seasonal too).

Does PG&E have a green power program like LADWP does? LAWDP estimated that bills would be about 5% higher if you did their green power program, although my estimate was more like 3%. How this works is that you'd pay the rates for what it'd cost for them to supply all renewable power to you. Obviously, LADWP can't direct power from a windmill directly to your house, but the idea is to keep the overall power mix cleaner.

HousingWatcher says

The company, Vivint Solar, is offering free solar panels. The catch is that you have to agree to buy the electric that the panels produce

So essentially they are trying to lease your roof space from you for 5 cents/kwh? Interesting business model. What do you do when you need to replace your shingles? Presumably the solar panels would actually make your shingles last longer.

5   bob2356   2011 Oct 19, 11:28am  

Gee that all sounds great. I'm paying 50 cents a kilowatt overseas. We don't use the dryer much.

6   elliemae   2011 Oct 19, 11:34am  

I have trouble making a two year commitment for a cell phone...

7   HousingWatcher   2011 Oct 19, 12:43pm  

I'm in NJ, so I have PSE&G. And yes, I checked and double checked, and I really am paying 18 cents a killowhat.

8   HousingWatcher   2011 Oct 19, 12:49pm  

One thing I found puzzling on the company's website is that it says "In the event of a black out your system is designed to turn off automatically as a safety precaution so utility company technicians can repair electrical lines."

Why would the solar panels shut off? I would much rather they remain on so that I can still have electric during a power outage. I don't see how the panels would affect the exterior power lines since all the power stays within my house...

9   HousingWatcher   2011 Oct 19, 1:04pm  

Well, the new owner is going to pay a bill regardless since either way there will be an electric bill.

10   uomo_senza_nome   2011 Oct 19, 3:08pm  

HousingWatcher says

Why would the solar panels shut off?

I think their system is tied to the grid. So in a sense, you can think of the panels that you have produce electricity that flows into the grid. Say you consume 1000 kwH and the panel produced 500 kwH, effectively you consumed only 500 kwH from the grid.

Because of the grid connection, there's the flexibility that if the panels are not functional, then you can fully consume from the grid. However the disadvantage is that because the panels are also tied to the grid, the panels will get shut off in an outage to ensure they can resolve the problems in the grid in isolation.

11   Vicente   2011 Oct 19, 4:13pm  

Right. With grid-tie systems, you are typically still out during an outage. There's nothing unique here, generators have the same issue. The panels MUST be decoupled for utility worker safety, and the inspection after install will ensure that you have this set up.

You can work around this with more elaborate transfer switch setups, but for most people the costs outweigh the benefits. Say you live somewhere that a 6+hour outage is quite rare (5 years) then the cost of simply emptying your freezer and buying new food is cheaper than generator or batteries and maintenance.

Personally I picked up at a salvage sale an old datacenter UPS only cost $20. Smart-UPS 700XL, dinged and scuffed, and a sidecar battery add-on pack, with old batteries some were stickered 2001, but worked OK if not "like new" lifespan. I stuck it out in the garage to power my U-Verse router and WiFi point, so that's maybe 10-15 Watts total and it can power that for 6+ hours. Otherwise I'm good, we have flashlights if it's evening time or we can just go to bed. Would I spend $500+ on something more complex for a power outage? Not right now, just don't see the benefit.

12   TechGromit   2011 Oct 20, 1:52am  

I looked the website, but it's not clear what happens to the panels at the end of the 20 year agreement. If you get to keep all the equipment after 20 years, it makes the deal a lot more attractive. Most panels are rated for 25 year life span, but many panels installed more than 40 years ago still are putting out 80% of there rated load. Solar new panels typically lose about 1/2 percent of output per year.

Also I wouldn't consider such a contract without putting in a new roof. You don't want to have to deal with removing the panels and reinstalled them if you need a new roof in 10 years. What if you break one of them? Who pay for that?

Also it would be nice to know what the terms of the agreement are. Say after 10 years they come out with 2nd generation solar panels that produce way more electricity than the older panels. Naturally you would want to be able to get out of the contract, even it if costs you 10k to do so.

Vicente says

Say you live somewhere that a 6+hour outage is quite rare (5 years) then the cost of simply emptying your freezer and buying new food is cheaper than generator or batteries and maintenance.

You can pick up a generator at Harbor Freight for about $100. Worked great when I used it during the last hurricane and we lost power. It can easily run a refrigerator, I used to to run a light and the TV for several hours. Even though we lost power, we never lost cable... strange.

13   corntrollio   2011 Oct 20, 8:32am  

Vicente says

Personally I picked up at a salvage sale an old datacenter UPS only cost $20. Smart-UPS 700XL, dinged and scuffed, and a sidecar battery add-on pack, with old batteries some were stickered 2001, but worked OK if not "like new" lifespan. I stuck it out in the garage to power my U-Verse router and WiFi point, so that's maybe 10-15 Watts total and it can power that for 6+ hours. Otherwise I'm good, we have flashlights if it's evening time or we can just go to bed. Would I spend $500+ on something more complex for a power outage? Not right now, just don't see the benefit.

That's a great idea. Think I might do that myself...
HousingWatcher says

I don't see how the panels would affect the exterior power lines since all the power stays within my house...

As other people mentioned, not all the power has to stay at your house. Power follows the wires. That's why electricity companies will essentially pay you for the power you produce (the meter would run backwards). PG&E allows this, although I think they make you switch to a time of day-based rate system if you do a new installation. This could be advantageous if you don't consume much at peak hours, however, you probably typically provide the most solar energy to the grid off-peak (peak is usually early evening after the sun goes down).

14   HousingWatcher   2011 Oct 20, 9:12am  

At the end of the lease, you likely have to return the panels. But I don't see that as a disadvantage because in 20 years from now, they will be obsolete and worthy of being displayed in a museum. In the future, there will be newer products on the market that produce more power and cost less. If you buy panels, your stuck with them when they are obsolete. But if newer products hit the market and cost much less, you could return your leased panels at the end of the lase, and buy the new ones.

15   HousingWatcher   2011 Oct 20, 9:16am  

Is it even ecoomical to buy solar panels if you live in a cold weather region like NJ and get lots of snow and cloudy days? First you have to buy the panels. Then you have to pay for labor. And then, about 10 years from now, you will have to spend about $2,000 for a new inverter. Plus your panels are never going to work at 100% capacity since, chances are, you have taller structures and trees reducing your sunlight exposure.

16   EBGuy   2011 Oct 20, 9:54am  

A couple of points... VCs are throwing money at solar leasing companies like SolarCity and Sunrun. They get various state/federal incentives plus, they can depreciate the panels (which is an added advantage that homeowners don't have). That said, solar pretty easily pencils out for users who are above baseline rates. These leasing programs should only be used by folks without ANY access to capital. Otherwise, you're just handing money to the VCs, instead of putting it in your own pocket.

17   mdovell   2011 Oct 20, 11:33am  

HousingWatcher says

One thing I found puzzling on the company's website is that it says "In the event of a black out your system is designed to turn off automatically as a safety precaution so utility company technicians can repair electrical lines."

Why would the solar panels shut off? I would much rather they remain on so that I can still have electric during a power outage. I don't see how the panels would affect the exterior power lines since all the power stays within my house...

sounds like some of the tax agreements I think in MN. Basically if you take the tax credit for solar you agree to subsidize the grid in case of a outage.

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