Casting Sunshine on Solar Costs for the Average Homeowner

We’d heard so much great publicity about the new affordability of solar power we got a solar installer to give us an estimate during August this year.  Arizona’s sunshine seemed just too abundant to let go to waste.  Our house is roughly 3,000 sq feet, including a small, unfinished basement, so it’s a very typical, average sized residence.

The estimate for solarizing our house was $60,000.   We had to rub our eyes before reading  it again;  sixty thousand dollars and the word, “affordable,” didn’t naturally go together.    Plus, because of trees next to the house, we would need to set aside a piece of ground on the property the equivalent of the footprint of an ample  guest house to place the solar array.    Neighboring houses of the equivalent square footage have been on the market for $120,000, still unsold for two years, down from initial offers of over $200,000, $250,000 and $300,000.   How can anyone justify an outlay of $60,000 for house that might eventually sell for $110 – 100,000 or even LESS, when houses aren’t selling, and jobs are disappearing?

To further expose the problem, even with “sell-back electricity” sugar plum assurances, it’ll take far more than a decade to recover the cost thru “savings” – about the time the aged batteries will need to be completely replaced and well-advanced towards the end of the useful life of the solar panels, and the entire battery-panel combo also will have additional costs to be maintained and serviced, plus a weekly added chore to be kept clean of DUST – which in our Arizona region is pervasive.    And APS still will bill a fee because once on the grid, one stays on the grid, even if one isn’t using it.

If it was truly cost-effective, people would already be solarized without being forced to.  If it BECOMES truly cost-effective, not falsely thru subsidies, which don’t make anything cheaper, just shift costs around, people would be lined up to convert right over to it.   But it’s not, and it won’t be anytime soon.

How about a partial conversion?
$8,000 up front to solarize JUST the WATER HEATER.

What’s going to happen when people living hand-to-mouth in $120,000 homes are hit with higher electrical bills because they DO NOT HAVE THE MONEY to shell out $60 GRAND to convert their homes?   Or as the hopeful installer said, “It ends up to be only about $25,000 after tax rebates.” What? “Only?”

No one gets the tax rebate until the money’s been paid out.  Who is going to be able to get any energy loan approved when they can hardly meet their current obligations of mortgage, utilities and other monthly expenses, like … food?  Who is going to dare to stretch their shaky finances to take on more debt?   Scofflaws do it all the time, but more people who are more responsible than that will not add debt they think they cannot repay.

Solar rebates are ultimately funded through taxes, today’s reality is a shrinking tax base as people lose their jobs, so the government demands MORE money through higher taxes, a vicious cycle of increasing debt burdens on a public increasingly unable to pay.  Callously, the government, to force inefficient solar, is pushing punitive higher energy costs that the utility companies pass on to the consumer – people will be punished on both sides of the energy equation.   The sunny rhetoric for “sustainability” is eclipsed by unsustainable real-life costs.


Comments

  1. Well, when it’s paid off it’s paid off and then the energy is free, right? The panels have a useful life of over 30 years. So you really should spread that cost over that time period.

    Think of it like a car payment, you pay for four or five years but then you own it outright.

    In other words, Berkshire Hathaway shares are a great investment, but they are certainly not cheap.

  2. Most solar grid-tie systems do not use batteries but rather use the grid as a “battery”. This avoids a lot of the costs you were quoted.

    A typical 5kW system (the max that SRP will rebate) costs about $30,000 and will save you about $1000/yr at today’s electricity rates. Thus, if rates stay the same (which they won’t) it would take 30 years to pay for itself (just over the 25-yr solar module warranty). More realistically it will take 15-20 years unsubsidized.

    With utility incentives and tax credits, the net cost will be about $10,000 (less then most people spend on a new car). At current electricity rates it would take 10 years to pay for itself. As rates go up it will probably take only 7 or 8 years.

    Another way of looking at it is that it provides an initial tax-free ROI of 10% increasing every year. How does that compare to most IRAs and 401(k)s these days?

  3. 3000 sq ft with a basement is not an average sized residence.

  4. The panels do not have a thirty year life, the BATTERIES have less than ten years, and BATTERIES are what powers the house at NIGHT or on cloudy days. No sun, no juice.
    So, there is no ZERO cost, EVER. Arrays cost, batteries cost, servicing costs, grid fees cost, all sorts of unexpected expenses! It’s an eye-opening process, like learning that power tools and certain motors (air conditioners) need an initial sort of spikey-jolt to get started, so you need more amps than just palin old light-bulbs, which means more panels and certain sizes of batteries to make the whole thing work. “Affordable” for the Middle Class is not true.

    And 3,000 sq ft which includes a tiny unfinished basement, effectively making it less than 3,000 sq feet or about 2,500 sq ft of living space is solidly mid-range, and there are plenty of equivalent houses around, which means it would cost THEM the same magnitude of install price. It is a reasonable guide to what scores and scores of homeowners around us, and millions more would have to pay to solarize THEIR homes, but they don’t have the money now, they will not have the money later, so they will be hit with higher PUNITIVE electric costs which they can’t afford.
    The wealthy will be able to invest in solar. The wealthy will also be able to shelter their assets from taxation.

    We actually went into this with no preconceptions, totally awed at the enthusiasm that everyone was telling us that solar prices have dropped so much they’re affordable. The solar guy was the nicest fellow and he really wanted to make it work, but the bottom line ruled the day. $60,000 up front.
    We consume $150 – $300 a month depending on A/C usage, so averaging about $200-$250 over the 12 months. So, let’s pick $200 a month. At $60,000 investment, it’d take 25 years to recoup the cost – years past additional costs for replacement batteries (at least twice if not more) and panels. Get a loan? Then one has more debt plus interest expense to add to the monthly bill.

    Net costs and tax credits are worthless trivia if people cannot afford the UPFRONT costs.
    SO the government plans to abuse people into going solar by artificially raising rates far beyond the actual cost of the electricity. But that additional monthly expense will bankrupt more people on the edge, and absolutely make it more difficult for other people to set some upfront money aside to go solar, because more of their monthly income will be taken away by punitive electrical rate hikes. A vicious cycle.
    It’s a great plan for wrecking middle class and lower middle class homeownership and even renters on fixed incomes.
    Oh, but the government can give assistance! But with what money? More people out of work, more bankrupcies etc, means less tax revenues with more demands for welfare and unemployment support.

    Solar talk is cheap. The solar reality is unsustainable.

  5. Panels have a 25 year warranty, some 20, and that means a thirty to thirty five year life. If you are doing something with batteries, you are hallucinating, it’s just idiotic.

  6. You guys are talking about two different systems. The deal that the City of Phoenix just brokered with Solar City, National Bank of Arizona, and APS has no up-front costs with a 15-year lease for the equipment. You’re fully connected to the grid, basically selling power to APS when it’s sunny and buying it back at night, with no batteries for storage. Energy savings are guaranteed to be more than the lease payments. It makes complete fiscal sense.

    Wanumba and Snickers are both right, a completely self-contained system with battery storage AND a connection to the grid makes no economic sense whatsoever. Don’t do it!

  7. Solar panels are a terrific way to lower your electric bills every month. At least with those you will be using the planets’ natural resources.
    Nice site by the way, a lot of nice content.
    Cheers

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