Attitude At the Gas Pump

I installed a 2.6KW system on my roof back in about 2000. At the time, my investment type neighbor explained to me that it was a really poor investment. The up front cost was about $20,000, and about $12,000 after all rebates. My investment savvy neighbor had about the same $12,000 in high tech stock, which he assured me would go up at least 8% per year. Well, the high tech stock market tanked in about 2001, and his $12,000 became more like $7,000 (he is an active investor - buy & hold would have cost even more). He also purchased a $15,000 BMW motorcycle about that time.

My financial skills are not up to the kind of calculations done above, but I think my solar panels turned out to be the best dollar return on investment of the three. Stocks are a far more risky investment than solar, so they should provide a higher upside. But they do have a downside from time to time. Solar is more like a savings account at a bank - not very exciting but a very safe investment. As for the BMW motorcycle, it may be fun, but as an investment throwing half your money on the street would be more profitable.

 

FWIW, I don't believe it's cost effective here in Northern Virginia. Just in the narrow dollars-and-sense terms, not in terms of the value of the environmental benefit. That's why I haven't done it. I'd go so far as to say that if it were, you'd see a lot more of it here.

My 10,000 KWH annually costs me about $1000 at regular rates (now $1500 paying the wind power preium). There's no peak load pricing or anything like that. It's pretty much a dime a KWH.

How much installed capacity would I need to replace the entire average electic use? I come up with a little under 8KW when I do the calculation by hand, and that's also what this DOE calculator tells me (for fixed-mount panels) - when I plug in 10c / kwh, I get my annual bill.

http://rredc.nrel.gov/solar/calculators/PVWATTS/

Before I do the rest of the calc, I want to point out that: 1) the number of peak solar hours varies a lot across the country, as you can see from this map showing variation in peak solar hours (although this map below shows the annual lows, not annual averages), and 2) any type of daily or seasonal peak pricing in your electricity probably makes solar much more cost effective, as the pricing peaks would tend to be when the sun is out. So if you're in a high solar area with peak load pricing, your situation is lot different from mine. Lower sunshine and flat cheap rates are not the best conditions for making PV cost effective.

http://www.solar4power.com/map2-global-solar-power.html

If the panels cost $8K/kw, that's $64K installation cost. Even if I assume some government subsidy picks up one-quarter of the cost, that $48K after subsidy.

So, I have to compare $48K up front, against $1000 per year for 30 years. I think the simple math tells me almost everything I need to know -- $1K for 30 year is $30K, which is less than $47K.

I can modify that for other assumptions but I don't think I can come out ahead under any realistic scenario. I'd pay the $48K out of my after-tax dollars, so I don't think there's a tax angle here that I can play. If I expect utility bills to rise, I can always wait and install PV when they do -- no need to incur current losses against future gains, just wait and incur only the future gains. Resale value out to reflect the same underlying calculation -- if there's N years of life left when I sell, I've avoided 30-N years of utility bills, the next guy avoids N years, we just split the cost savings, he pays me accordingly. I will say that if the real after-tax rate of return on paper assets turns sharply negative (a possibility in my opinion), then in that case I would regret owning paper assets intead of something real like a PV array.

My calculation is OK, I think, but my behavior is not quite rational. What I actually pay (15c per kwh for wind power) is about a wash with estimated PV cost above. I was willing to pay the premium year by year, just not all at once. I usually make fun of people who do that. I guess I really just didn't want to commit to todays tech at today's prices, when I could just get clean power from a commercial producer year-to-year. If Nanosolar actually succeeds in printing cheap solar cells in large quantities, that'll change the whole ballgame. At which point I'll reassess.

 

Actually, when I pull up I tend to think that the owners must hate these small cars because it means that they sell less fuel to the consumer

Seriously, though, I do wish more people drove hybrids, as opposed to the larger cars and trucks that you see on the road today.

 

<div class='quotetop'>QUOTE(chogan @ May 8 2007, 06:04 AM) [snapback]437411[/snapback]</div>

 

<div class='quotetop'>QUOTE(mootsman @ May 2 2007, 06:34 AM) [snapback]433874[/snapback]</div>

That is true, but I think that tons of folks are driving an SUV just because it is fashionable. If you need one, then fine perhaps you go skiing all winter long or need them for business. But for those that get them just because everyone else has them, they are a huge part of the rise in gas prices. You ride down the freeway just like the rest of us, can you honestly believe that the huge numbers of SUV all around you are necessary? Cadillac SUV, Porsche SUV BMW SUV, geez give us a break.

 

If someone can afford an $80k suv, then instead they could buy a fuel efficient car and a cheaper SUV to use on weekends et cetera. I think people are making excuses, they just don't want to change. I don't have a hybrid yet, but my next vehicle will be (I'm hoping for plug-in by the time I buy). I only drive 5000 miles per year (it's mostly city driving though), so I want to get some more use out of my 2003 Subaru Impreza before I pay the new car premium again. Prii and Smart cars are so common in Vancouver, I haven't really seen people giving attitude at the pumps.