Assessing a homeowners energy consumption and designing high-performance solar system installation and integrate it into a customers home in an aesthetic manner seems simple enough. But we are finding that homeowners who know a little about solar are sometimes the toughest customers to sell because they have been told by some solar sales persons that solar just does not pay. Here in N. Ca, with the CSI PG&E / SMUD rebates, and the 30% tax credit, and the reduction in panel prices since the silicon glut, solar pencils out for just about everybody.
Here’s how to do your own solar comparison.
1. Look at your PG&E or SMUD electricity bill, to find your monthly payment.
2. Look at the chart below to find what you will pay for the next 25 years of PG&E. While 40 years is the full life of a solar array (so far- the first ones from the 1970’s are still going) but after 25 years they will operate at about 80% of the original capacity. (Also, most solar loans are for 25 years.) So lets compare the cost of a solar system with the cost of just the next 25 years of PG&E, and consider the remaining life of the solar appliance as a bonus.
PG&E rates have risen over a period of 40 years 6.7%. More during crises like when we were extorted by Enron in 2000, and it’s gone up and down, but the long-term average has been 6.7%.
(Actually that PG&E inflation rate average is more likely to go even higher than 6.7% in the future for two reasons: Climate change is causing earlier snow melt, so our hydropower supplies (of snow melt) are available for a shorter portion of the year. This will require new sources to replace the hydropower we have had available previously. (New investments always will cost more than continuing to tap into old ones.)
In addition, mandated new investments in cleaner electricity also cost more to build from scratch – just like any new power stations would.)
But calculated at the previous average 6.7% rates rise
Chart: what you will pay over 25 years to PG&E if your bill now is:
$20 = $14,646
$40 = $29,292
$60 = $43,624
$80 = $58,166
$100 = $72,708
$200 = $145,416
$300 = $218,124
$400 = $290,832
$500 = $363,540
$600 = $436,248
$700 = $508,956
$800 = $585,833
This amount is your 25 year energy budget. You will spend this if you do nothing; but just keep paying your monthly utility electricity bills.
3. Now look at your monthly kwh usage on your bill: For example – here’s what it will cost to install 25 years worth of solar to zero out usage for the very tiniest bill and the very piggiest.
180 kwh a month (about a $20 PG&E bill) = 1.5 KW of solar (DC STC) will cost about $9,137
2,300 kwh a month (about a $800 PG&E bill) = 19.5 KW (DC STC) solar system at about $71,514
$20 a month bill now = $5,509 saved
$14,646 PG&E
-$9,137 solar
= $5,509 cheaper
$800 a month bill now = $504,931 saved
$585,833 PG&E
-$80,902 solar
= $504,931 cheaper
While the savings (and costs!) are much greater for someone with a higher bill, (and even more for bills higher than $800 monthly) than a lower, solar will always cost less than PG&E. If you use a second mortgage to finance your solar, you will initially pay interest on your loan, but the following year you deduct that interest from your taxes, so your net savings are still going to be between $5,000 and $500,000. (If you stay with PG&E; you cannot deduct the 6.7% annual increases!)
Even the tiniest bill can be converted to solar for less than the cost of doing nothing; just staying with PG&E. And that doesn’t even account for the peace of mind that comes from knowing you have done all you can to cut your own carbon footprint: Virtue is it’s own reward. But the financial reward is there too. Every state is different. Some are more solar friendly than here.
Written by Susan Kraemer