patrick.net

don’t have them. but friend installed panels, we did work together wasn’t bad at all, saved a lot of money. just paid 500 for design. because of very low cost of self install with friends help he is saving money according to him after 4 years.

he isn’t disconnected, no battery, just panels pushing to grid. some cheap chinese panels.

hope this helps.

Eman says

Cost is $17.4K after tax incentives. It would cover my monthly electricity bill of $230/mo on average. Add in a powerwall will increase the cost by $8k. Without the powerwall, it’s about 15% ROI. What am I missing?

ROI works if your capital remains intact. That is, if you put that $17.4k in the bank and got $230/mo, that would be 15% ROI. In the case of solar panels, that $17.4k is a sunk cost and you must include a payback period to calculate a return. You are 6 years before you make a dime, and that is if the solar panels wipe out your entire electric bill for that time.

How did you calculate it?

I think the right way to model a decision like this is to make sure you account for cost of capital, and the calculations should use compound interest math, including expectations of future electric prices. I usually code my own calculators (which I wont share, as it would disclose my identity), but here's a calc that's on the web and can be shoehorned into working decently for this type of solar calculation.

solar cost = 24K + tax - 6600k rebate = about $19k capital outlay
monthly savings is usually your current bill minus about $10 minimum fee = $220

The idea is to model 2 scenarios:

#1 no solar, no $19k solar capital outlay, you will still pay $220 electric bill every month (w/ a 3% / yr bill increase), but you buy 19k of stocks or some other investment that will grant 7% CAGR (or whatever rate you feel is realistic).
#2 you buy solar instead of stocks, no more electric bill.

1 https://financialmentor.com/calculator/compound-interest-calculator?principal=100000&annualInterest=7&compoundingInterval=360&growType=2&yearsToGrow=20&additionFrequency=30&additionalAmount=-220&increaseContributionsBy=3&annualInflationRate=0&compute=1&source=patrick.net

2 https://financialmentor.com/calculator/compound-interest-calculator?principal=81000&annualInterest=7&compoundingInterval=360&growType=2&yearsToGrow=20&additionFrequency=30&additionalAmount=0&increaseContributionsBy=3&annualInflationRate=0&compute=1&source=patrick.net

The trick is to enter a sufficiently large starting account balance number to avoid going negative during the sim due to 20yrs of monthly electric bills. It doesnt matter what number you choose is, as long as you use the same figure for both calculations minus the 19k in #2. I used 100k and 81k. The reason the number doesnt matter is because we compare the ending figures to arrive at our desired final figure, which tells you how much better scenario 1 was vs 2.

I used 20 years since that's a typical solar system lifespan. I also set inflation to 0% because we account for inflation via the "Increase yearly contributions by" field, and assume the 7% CAGR for stocks is already inflation adjusted. So using the "average annual inflation rate" field would double adjust.

in 20 yrs, scenario #1 leaves you with $245,609 and #2 leaves you with $313,444

313,444 - 245,609 = $67,835

So in this case, scenario 2 was better by 67k, meaning solar offered gains above and beyond stocks by a good margin. It worked out to about 13% CAGR. Of course everyone needs to enter their own variables though.

Breakeven, where solar overtook stocks, occurred at about yr 9.