I thought about calling this post Solar Economics for Dummies. Now that my solar panels have been in operation for a full day, I can finally begin to understand, and explain, their financial impact.
I installed the system for spiritual as well as financial reasons. It felt like the right thing to do as my wife and I moved into our smaller (downsized) home, where we expect to remain indefinitely, and we had cash available from the sale of my business. I never did a detailed financial analysis, so I couldn’t answer the many questions I got from friends about the size of the system and what it’s impact would be.
I could tell people that it’s a 9.12 kilowatt system expected to produce 971 kilowatt hours a month, but what does that mean in the real word? We had no history of electric bills because we had recently moved in to a home that had been vacant. And who knows what the weather will be like? There are so many variables involved that all our contractor could say with confidence was that the size of the system we installed should supply more than half of our future electric use.
We had chosen our home in part because it had good potential for both passive and active solar energy, and the only non-electric appliances are a propane gas range and fireplace. Climate control comes from an electric heat pump.
The big moment came shortly after 11 a.m. yesterday. The 32 panels were in place on the roof. The inverter was installed in the basement, ready to change the incoming electricity from direct to alternating current. The county had approved the system, and the utility had installed the net-flow meter, which would keep track of how much electricity we were using and how much we were producing. The numbers on the meter run backwards when we use more than we produce, and they run forward when we produce more than we use.
It was time to turn the system on. Now I would begin to understand it better. And I’d call the first day a big success.
We live in Hamilton, Virginia, where the weather has been overcast and rainy, with temperatures in the 50’s and 60’s Fahrenheit. Even with the solid cloud cover, though, the system began producing at around 75% of capacity, and the net-flow meter ran backwards. We were producing more electricity than we were using.
Where we live, the sun has this habit of setting every night, so the production eventually dropped to zero, overnight the heat kicked on a few times, and the morning was once again overcast and rainy. I was delighted, though, when the rain stopped and I checked the net-flow meter shortly after 11 a.m. today. After a full 24 hours, we had used a net 2 kilowatt hours. That’s about 24 cents’ worth of electricity, or less than a tenth of what our average use had been in the one full month for which we do have a comparable bill.
Put another way, we had used about 20 kilowatt hours and had produced 18 of them ourselves.
But wait! There’s more!
The net-flow meter was running backward and an hour later we were back to zero. It will head next into negative numbers, where it was during the daylight hours yesterday. And the sun has not yet emerged from the clouds.
So without a single spreadsheet, I can now explain the financial impact of my solar system for dummies like me. When the weather is mild and the sun is out, we’ll produce more electricity than we need and get credit for more severe conditions. When the weather is mild and it’s cloudy or rainy, we and the utility will be about even.
I’m sure we’ll more than use up our credits when the heat or air-conditioning is going full-blast, especially when our solar panels are covered in snow, but overall my back-of-the-envelope calculation tells me that our electric bill for the year will be a couple hundred dollars rather than a couple thousand.
The all-in cost was about $30,000, before the $9,000 tax credit we’ll get, and before the additional revenue from the clean-energy certificates we’ll earn and sell. We did not include battery backup, which we’ll consider adding as the cost for that declines.
In the meantime, though, what’s most important is living out our beliefs. For me, that means doing the right thing rather than shouting at others for doing the wrong thing.
— Mel Pine (Urgyen Jigme)
Copyright 2016 © Mel Harkrader Pine