Tell me why PV systems are not a scam

[Coppersmith]

I am not a solar PV system expert at all. I have very limited knowledge in the area. But I am concerned that people are being scammed by installers of roof mounted residential solar power systems. Please correct me if I am wrong.

I say this because people are paying many thousands of dollars for systems that can't possibly produce that much power. Even if somebody else is subsidizing the system like the Gov't or the utility, they don't make economic sense for the individual and even less sense for the taxpayer or ratepayer.

It's my understanding that solar panels produce the most power when they are directly facing the sun (exactly 90 degrees). The amount of power produced falls off greatly as the angle changes from 90. The best systems track the sun keeping the panels in proper alignment as much as possible. Cheaper ground based systems don't move, but are at least aimed to maximize the potential sun input. Then there are residential systems that are built on people's roofs (usually flat to the roof). The roof could be way out of alignment with the sun and a solar contractor will put panels there anyway.

It's also my understanding that if any portion of any panel in a string of panels becomes shaded, this significantly reduces the output of the entire string, yet I see panels installed near chimneys, antennas, trees, and other things that throw shade at some point during the day.

In my travels I have seen many PV systems installed at my clients homes. The vast majority of them are backfed to the panel on a 2 pole 30 amp breaker. This must mean that the PV system produces less than 30 amp at its peak. Since the peak is only a few minutes each day, I suspect that most of the rest of time it's producing far less: 15 amps?, 10 amps?, 5 amps? And of course, the system produces zero amps at night.

A thirty amp breaker is probably what the system manufacturer requires, but since most systems are not installed to maximize solar input as I mentioned above, they are probably producing far less.

Is 15 amps of solar power for a couple of hours each day worth $10-20K in expense? And what if the roof needs replacing and all the panels have to be removed and reinstalled? And what if an inverter craps out and you have to replace it? I hear many clients talking like they are going to power their entire house off the system and sell gobs of power back to POCO. Then they wonder why it's not working. Were they oversold?

If homeowners want to create an aura of "greenness" around themselves, then fine. Otherwise, in my humble opinion, it doesn't make sense. I'll stick to recycling and bringing my own bags to the grocery store.

 

[hbiss]

I'm with you. There are so many "business models" and slick salespeople that even to me it's extremely confusing. I suppose that if all you focus on is free power, lower electric bills and the government pays for the installation you don't worry about the other stuff.

The guy who lives next door to me and the gal down the street both had solar installed. Two different companies and arrangements. Neither are very tech savvy. When I questioned them about how it's works for them, the gal says her deal is that she pays something to the solar company every month in addition to the utility company. The guy next door was adamant about not wanting to pay anything for the solar so with his company he only pays the utility.

Beyond that neither has any idea of numbers that compare actual usage vs solar generation per month with the prices per Kwh. Ask them "are they saving any money over what they were paying?" That's where I get "I only paid $$$ last month".

Now, I did see a commercial installation that has a touch screen LCD monitor on the wall that displays real time and historical data. I wasn't overly impressed with the numbers I saw for the size of the roof and number of panels.

-Hal

 

[ron]

I have a 6kW system of PV solar on my roof. It is more than 6kW worth of panels (6kW inverter). It only produces 6kW on few occasions.

It has been there for about 4 years.

Based on past projections and comparing them to actual production, the projections have been almost dead nuts on target. BTW, I used http://pvwatts.nrel.gov/ to make the projections 5 years ago.

I have a 20 year guarantee of production that is based on the projection with a age degradation factor every year. The guarantee includes labor and materials and is provided by a large company that has been responsive each of the two times I contacted them (actually they contacted me because they saw a reduction in production remotely and didn't want it to affect the end of year results, so they came out proactively to make the repair).

The production projections and my estimated cost of electricity in my area result in payback in approximately 10 years. That includes the tax incentives and all that.

10 year payback is not a great investment, but I like it and I feel good about it. It was a good educational thing for me and my kids.

 

[electrofelon]

I am not a solar PV system expert at all. I have very limited knowledge in the area. But I am concerned that people are being scammed by installers of roof mounted residential solar power systems. Please correct me if I am wrong.

I say this because people are paying many thousands of dollars for systems that can't possibly produce that much power. Even if somebody else is subsidizing the system like the Gov't or the utility, they don't make economic sense for the individual and even less sense for the taxpayer or ratepayer.

It's my understanding that solar panels produce the most power when they are directly facing the sun (exactly 90 degrees). The amount of power produced falls off greatly as the angle changes from 90. The best systems track the sun keeping the panels in proper alignment as much as possible. Cheaper ground based systems don't move, but are at least aimed to maximize the potential sun input. Then there are residential systems that are built on people's roofs (usually flat to the roof). The roof could be way out of alignment with the sun and a solar contractor will put panels there anyway.

It's also my understanding that if any portion of any panel in a string of panels becomes shaded, this significantly reduces the output of the entire string, yet I see panels installed near chimneys, antennas, trees, and other things that throw shade at some point during the day.

In my travels I have seen many PV systems installed at my clients homes. The vast majority of them are backfed to the panel on a 2 pole 30 amp breaker. This must mean that the PV system produces less than 30 amp at its peak. Since the peak is only a few minutes each day, I suspect that most of the rest of time it's producing far less: 15 amps?, 10 amps?, 5 amps? And of course, the system produces zero amps at night.

A thirty amp breaker is probably what the system manufacturer requires, but since most systems are not installed to maximize solar input as I mentioned above, they are probably producing far less.

Is 15 amps of solar power for a couple of hours each day worth $10-20K in expense? And what if the roof needs replacing and all the panels have to be removed and reinstalled? And what if an inverter craps out and you have to replace it? I hear many clients talking like they are going to power their entire house off the system and sell gobs of power back to POCO. Then they wonder why it's not working. Were they oversold?

If homeowners want to create an aura of "greenness" around themselves, then fine. Otherwise, in my humble opinion, it doesn't make sense. I'll stick to recycling and bringing my own bags to the grocery store.

I would say you are off on your production assumptions. As Ron said, one can use pv watts to get an accurate production figure. They come out very close.

That said I do think there is quite a bit of dishonesty in most payback figures. It seems that most companies:

1. Dont account for the interest / cost of the invested money, and that it could be invested elsewhere

2. Assume the system will be maintenance free.

3. Assume the client will be able to take the full tax credit

Those are probably the big three

Now that being said, how is it different than any other type of thing someone sells? Do you think the car salesman or guy at the cellphone store has your best interests in mind?

 

[gar]

180117-1356 EST

In my town one has to pay personal property taxes on a home. A solar system adds to the assessed value. My rough calculation is that the increased tax approximately equals the cost of buying the equivalent energy from the power company. On this basis it would actually be a loss to install solar.

If the solar was on wheels, then it would not be part of the home.

Tax credits distort the true cost. Further a power company can not truly buy power from you at the same price they sell power to you. This only occurs because states have written rules to require this. The actually cost of the energy to a power company is only about 1/3 of the price they charge you. The other 2/3 is distribution, and overhead.

In my area my cost of electrical energy is about $0.16 per kWH. My natural gas cost is about 1/5 of that for the same energy.

If I ran an engine generator from natural gas what overall efficiency could I get? If 80% and I could make effective use of the waste thermal (exhaust gas) energy could I overall beat 0.16 per kWH?

If I had a thermal solar array could I save any money?

.

.

 

[electrofelon]

180117-1356 EST


Tax credits distort the true cost.

.

But "true cost" is a can of worms. What is the true cost of eletricity. What is the cost of all the mercury pollution (one shouldn't eat tuna more than a few times a week)? CO2, if/ when that bite s us? It's not sustainable......

What's an investment? We've spent 9 trillion on nuclear weapons. Is that an investment?

 

[hbiss]

But "true cost" is a can of worms. What is the true cost of eletricity. What is the cost of all the mercury pollution (one shouldn't eat tuna more than a few times a week)? CO2, if/ when that bite s us? It's not sustainable......

What's an investment? We've spent 9 trillion on nuclear weapons. Is that an investment?

What's any of that got to do with me and offsetting my electric costs with solar??

-Hal

 

[gadfly56]

There are two elements that serve to distort the economics of PV. When I say PV, I'm talking about your typical suburban home that may host a 2,500 - 5,000 watt (nameplate) system. Other sorts of installations may have very different economics.

The two elements are feed-in tariffs (FIT's) and renewable energy targets,(RET's). The feed-in tariff defines what the POCO will pay you for the energy you produce. Most frequently, the political body will require that the POCO pay you at some percentage of the cost of marginal generation for peak demand under the magical thinking that peak solar is always produced during peak system demand. Since firing up the 50 megawatt jet engines or the antique oil-fired boilers may generate costs of up to $1.00/kW-hr or more, you may get $0.75 per kW-hr for your production. You may also be paid at the FIT rate to satisfy state-mandated renewables targets, where NJ, say, tells the POCO's they must supply X% of renewable energy per quarter, month, or annually. Bills pending in the legislature will require that number to be 100% by 2050. So, even if the POCO has really cheap hydro available from Quebec, if they need to meet the RET, they'll buy your expensive solar. The final nail comes when the state says the POCO must buy all available renewables produced in their service area, no matter what the actual demand. So the consumer will pay for the $0.75/kW-hr electricity even if the POCO has to pay someone else to take it. If people want to sell power to the POCO, let them compete on the same basis as any other provider. I guarantee that in a completely free market that price won't be any higher than the price bid by the lowest cost provider. Probably less than $0.10/kW-hr.

 

[electrofelon]

Perhaps we should get back to just the strict economics, and keep the politics and our opinions of FIT, tax credits, environmentalism, etc, out of it.

Generally, iI think most resi systems have a payback of 6-10 years, ignoring the cost to borrow the money or make another investment.

Just like every other thing, there are people who don't do a good job and are not honest.

Keep in mind not all people have solar installed from a strict financial standpoint.

 

[gadfly56]

Perhaps we should get back to just the strict economics, and keep the politics and our opinions of FIT, tax credits, environmentalism, etc, out of it.

Generally, iI think most resi systems have a payback of 6-10 years, ignoring the cost to borrow the money or make another investment.

Just like every other thing, there are people who don't do a good job and are not honest.

Keep in mind not all people have solar installed from a strict financial standpoint.

Politics, RET and FIT are at the heart of current PV economics. You can't keep them out, they are already in.

Let's skip "think" and how about you rough out the back-of-the-envelope cost/revenue model you think generates this 6-10 year pay back. And you cannot ignore the cost of borrowing, that would be another distortion.

 

[Fulthrotl]

What's any of that got to do with me and offsetting my electric costs with solar??

-Hal

well, the flash will max out the PV array, and may also render the other metrics immaterial?

 

[electrofelon]

Politics, RET and FIT are at the heart of current PV economics. You can't keep them out, they are already in.

Let's skip "think" and how about you rough out the back-of-the-envelope cost/revenue model you think generates this 6-10 year pay back. And you cannot ignore the cost of borrowing, that would be another distortion.

They may be but that's political. Let's just talk about what our experiences are with payback figures, ROI, etc. I don't see that it is productive or allowed here to debate tax credits, net metering etc.

Right now a partner and I are working on a low cost ground mount system. We went through and looked at were the costs we and figured out how to reduce them. Racking and proprietary hardware is a big one. We have things down to a 6 year payback, not counting cost of borrowing , so yes this has all beem carefully and honestly figured and isn't just something I "think".

Btw, yes of course cost of borrowing should be included in the analysis, but it's pointless for me to try to do some "wealth management analysis" and come with a figure. I tell the client to come up with that.

 

[ggunn]

There are unscrupulous operators in the PV business, the same as there are in every business. The economics of every system is different. PV systems can be economically viable if all the variables are taken into account, including the cost of capital.

We had a potential customer who did a deep dive into the numbers and concluded that the system that was being pitched to him by our sales guy would lose money. The sales guy came to me with the numbers, and when I looked them over I found that he was planning on borrowing the money to pay for it on a 20 year note with a fairly high interest rate. Well, duh. You are giving all your savings to the bank.

 

[Coppersmith]

there are residential systems that are built on people's roofs (usually flat to the roof). The roof could be way out of alignment with the sun and a solar contractor will put panels there anyway.

I very rarely see panels tilted away from the roof line, so it seems the vast majority of solar contractors are doing this.

... system produces less than 30 amp at its peak. Since the peak is only a few minutes each day, I suspect that most of the rest of time it's producing far less: 15 amps?, 10 amps?, 5 amps?

Anybody care to comment on these two assertions? Am I wrong?

 

[romex jockey]

Perhaps we should get back to just the strict economics, and keep the politics and our opinions of FIT, tax credits, environmentalism, etc, out of it.

Sure, as an EC i'll never compete with sorts that have zero certification, zero bureaucratic oversight, wouldn't know ART690 from Rt66 , and are further granted every form of government sponsored rebate under God's sun

 

[MAC702]

I won't get political, so you can make your own inferences based on your own convictions.

Nevada changed their laws, and immediately, 96% of the PV contractors closed up and left.

I tested and got my PV installers license, but I knew that wasn't enough to actually know anything, and I chose not to even bother to get into the field.

 

[jaggedben]

I am not a solar PV system expert at all. I have very limited knowledge in the area. But I am concerned that people are being scammed by installers of roof mounted residential solar power systems. Please correct me if I am wrong.

No doubt there are scammers and unscrupulous sales people out there. However, you would be wrong if you think all solar systems are a scam.

I say this because people are paying many thousands of dollars for systems that can't possibly produce that much power. Even if somebody else is subsidizing the system like the Gov't or the utility, they don't make economic sense for the individual and even less sense for the taxpayer or ratepayer.

That's highly vague and falsely generalizing. The economic sense depends, of course, on the price being paid to the utility for the electricity, and the state regulations that govern backfeeding the grid. Where you are, in FL, the payback on solar may be sufficiently long-term so as not to make economic - as opposed to environmental - sense. Note there are other motivations besides money to go solar.

It's my understanding that solar panels produce the most power when they are directly facing the sun (exactly 90 degrees). The amount of power produced falls off greatly as the angle changes from 90. ... The best systems track the sun keeping the panels in proper alignment as much as possible.

This is misleading, especially your use of the word 'exactly'. Power falls off roughly as a cosine function. So, for example, angles within 45 degrees of perpendicular would still get roughly 70percent of the power. Because of this, the maintenance of trackers has turned out to usually cost more than the extra energy is worth. That's become more true as solar module prices have fallen.

It's also my understanding that if any portion of any panel in a string of panels becomes shaded, this significantly reduces the output of the entire string, yet I see panels installed near chimneys, antennas, trees, and other things that throw shade at some point during the day.

With the advent of micro-inverters and optimizers - aka Module Level Power Electronics (MLPE) - which maximize production from individual panels, that comment is a few years out of date.

Is 15 amps of solar power for a couple of hours each day worth $10-20K in expense?

Yes, in the right market. Well, you're not really asking the question the right way. The question to ask is 'what is the levelized cost of electricity from solar', i.e. cents/kWh, and the answer, for residential in the US, is about 8cents per kWh, give or take depending on the house details and shade. (For commercial and utility scale solar it's much lower.)

BTW, I bet if you measure the amp draw randomly on different houses, you'll find 15A is not far off from average. Well, at least here in California.

And what if the roof needs replacing and all the panels have to be removed and reinstalled?

It's a good idea to make sure the roof will last the life of the solar system. Many roof systems do last a lot longer. In some cases the cost of removing and re-installing is paid for by the savings.

And what if an inverter craps out and you have to replace it?

You replace it. This is not a humongous percentage of the overall cost, especially on larger systems.

... It seems that most companies:

1. Dont account for the interest / cost of the invested money, and that it could be invested elsewhere

As stated elsewhere, markets vary, a lot. But looking at California, your investing up front on a 25 year timescale in which you'll make a 200%-300% return. Add in the tax credit and it's more like 400%. And it's very low risk. That's a fairly competitive investment.

 

[ggunn]

I very rarely see panels tilted away from the roof line, so it seems the vast majority of solar contractors are doing this.



Anybody care to comment on these two assertions? Am I wrong?

You can see for yourself what the effect is on production by changing the azimuth and tilt of an array with PVWatts at http://pvwatts.nrel.gov. You may be surprised at how little effect on yearly production that fairly large changes in orientation make. Residential rooftop PV arrays usually are mounted flush to the roof; to do otherwise introduces wind loading effects that are hard to quantify and require more balance of system equipment that drives up the cost of the system.

The daily production curve for a typical PV system is a bell shaped curve. The peak is instantaneous, but the dropoff either side of it is pretty gradual. Systems typically stay within 10% of peak output for three or four hours if shading isn't an issue.

 

[Besoeker]

I am not a solar PV system expert at all. I have very limited knowledge in the area. But I am concerned that people are being scammed by installers of roof mounted residential solar power systems. Please correct me if I am wrong.

I say this because people are paying many thousands of dollars for systems that can't possibly produce that much power. Even if somebody else is subsidizing the system like the Gov't or the utility, they don't make economic sense for the individual and even less sense for the taxpayer or ratepayer.

It's my understanding that solar panels produce the most power when they are directly facing the sun (exactly 90 degrees). The amount of power produced falls off greatly as the angle changes from 90. The best systems track the sun keeping the panels in proper alignment as much as possible. Cheaper ground based systems don't move, but are at least aimed to maximize the potential sun input. Then there are residential systems that are built on people's roofs (usually flat to the roof). The roof could be way out of alignment with the sun and a solar contractor will put panels there anyway.

It's also my understanding that if any portion of any panel in a string of panels becomes shaded, this significantly reduces the output of the entire string, yet I see panels installed near chimneys, antennas, trees, and other things that throw shade at some point during the day.

In my travels I have seen many PV systems installed at my clients homes. The vast majority of them are backfed to the panel on a 2 pole 30 amp breaker. This must mean that the PV system produces less than 30 amp at its peak. Since the peak is only a few minutes each day, I suspect that most of the rest of time it's producing far less: 15 amps?, 10 amps?, 5 amps? And of course, the system produces zero amps at night.

A thirty amp breaker is probably what the system manufacturer requires, but since most systems are not installed to maximize solar input as I mentioned above, they are probably producing far less.

Is 15 amps of solar power for a couple of hours each day worth $10-20K in expense? And what if the roof needs replacing and all the panels have to be removed and reinstalled? And what if an inverter craps out and you have to replace it? I hear many clients talking like they are going to power their entire house off the system and sell gobs of power back to POCO. Then they wonder why it's not working. Were they oversold?

If homeowners want to create an aura of "greenness" around themselves, then fine. Otherwise, in my humble opinion, it doesn't make sense. I'll stick to recycling and bringing my own bags to the grocery store.

I'm inclined to agree. Without subsidies, they probably wouldn't fly.

 

[jumper]

I'm inclined to agree. Without subsidies, they probably wouldn't fly.

You do know that, unlike you Brits, we get more than 3 days of sunshine a year.