California released new solar handbook

<div class='quotetop'>QUOTE(Godiva @ Dec 31 2006, 10:20 PM) [snapback]369145[/snapback]</div>

Thank you for the post. I've been wanting to hear the details of this.

This seems like classic California -- weird yet clever.

Am I reading this correctly -- they'll actually pay you for the first five years' worth of electricty that you generate? Not net metering -- not the amount you feed back into the grid -- but the entire output of the PV array? So not only do you not have to pay the utility for the electricty you generate, you actually get paid for the electricty that you generate and use? (Ie, as if you were the utility, and the Government was the electricity purchaser.) Or, for small systems, the expected value of 5 years' worth of electricty?

Then, total payments are capped, decline as capacity is installed, and those who get in early get the highest payments for the longest duration? Paying $2.50 per peak watt installed at the start of the program? And with up-front lump-sum payments to small buyers, presumably to cover a portion of the capital cost. Capping total reimbursable capacity to the amount you're likely to consume in your own home.

I think I have that right: install solar on your home right now, get $2.50 per peak watt, but wait till later, and get less. Holy moly, that's a serious incentive to get your act together right now. My guess is that that's about half the price of a system. For the first to adopt it.

So, in effect: The CA gov't will subsidize your home system. The size of the subsidy is phrased as if they were paying for the electricity you generate, but for most people, in fact it's a lump sum per installed peak watt (with adjustments for shade, orientation, etc.) So payment is more-or-less a proxy for the size of the system, with adjustments. The size of the subsidy falls as more people install. You can't install (or at least get paid for) more than you need to run your home. The first-year subsidy looks to me to be about half the price of a system or so. The earlier you get in, the more money you'll get. Later, less. Weird, yet clever.

Two comments;

One, I have to believe darelldd's going to be one busy guy for the next couple of years.

Two, it's an ill wind as blows no good. California's electricity deregulation was a fiasco, from the unbelievably ignorant rules (all purchases must be spot market -- what idiot thought that was a good idea?) to Enron's criminal dealings, to disrupted lives and lost output. Who would have thought, a few years later, one oblique outcome is that CA is prodding people to go solar. That's not too bad.

 

<div class='quotetop'>QUOTE(Godiva @ Jan 1 2007, 02:07 PM) [snapback]369282[/snapback]</div>

Your Home Depot stocks PV arrays? I never would have guessed -- nothing like that here.

I'm pretty sure darelldd sells these installations. He mentioned that in one of his posts. Wonder if he could chime in with a little guidance.

That 100 KW cutoff -- unless I'm misreading that, that's a big, big system. If I installed that, assuming the equivalent of an average of 4 peak hours per day, that'd generate about 15x the amount of total Kilowatt-hours that my house uses in a year. Yeah, that checks -- based on their formula, I'd qualify for a little over a 6 KW system maximum, (for my 10,000 KWH per year). That also sounds about right - peak output would be about 50 amps at 120 volts.

A few internet sources I'm looking at are based on 2.5 KW for a typical home. So, I'm not sure I'd want to put that much solar array up.

But if I decided to max it out, how would the economics of that work out, roughly? At that size, if I were first in line, I'd get a check for $15,000 ($2.50 x 6000). Once upon a time I figured I could get PV installed for maybe $5/watt, but cruising the internet now, I'd guess $6 or $7/watt would be a more realistic current price. Take the low number, and guess the system would cost $36,000 ($6/watt x 6000 watts), so the cost net of the CA incentive would be $21,000.

Shoot, even with that rebate, and ignoring the time value of money, my payback period would still be quite long. I pay about $1000/year for electricity. With net metering I'd owe rougly zero (? that's a guess, I've never looked at how net metering actually works). So I'd save $1000/year on the electric bill. It would take 21 years for the system to pay for itself.

I could also work it darelldd's way, which is to figure the monthly payment on the loan (net of tax advantages, assuming you itemize). If I paid off the $21,000 loan over 20 years, and figured a marginal tax rate of 0.33, interest rate of 6%, crank it through Excel and blah blah blah, the after-tax value of the loan payment would amount to about $99/month. Being in a higher combined state/federal tax bracket would make that more favorable. Compared to my electric bill of maybe $85/month. But after 20 years, I'd have free electricity, for as long as the system lasted. So, on net, in effect, I could go solar for $15/month, for the first 20 years, and then I'd have free electric for as long as the system lasted after that.

That's not too bad.

So, at Virginia rates ($0.10/kwh), at $6/watt installed, with the CA incentive, this would be pretty close to a wash for me, strictly in terms of out-of-pocket costs, assuming I'm willing to value it over the long run (20 years), and assuming stable electric rates, and so on.

Anyway, looking at the table, I can't tell how many people would qualify for the highest rate, but it looks like they expect 2/3rds of the $ to go to non-residential customers. Depends on how I read the chart, if the average system is 2.5 KW, and one one-third goes to residential customers, maybe 16,000 homes in the state will qualify for the highest rate.

 

<div class='quotetop'>QUOTE(chogan @ Jan 1 2007, 09:02 AM) [snapback]369248[/snapback]</div>

Probably true. Unfortunately, most of that "busy" stuff is going to be dedicated to figuring all this out. Believe me... we haven't got a handle on it yet, and soon I'll have customers asking me questions. EEEK!

If anybody wants to write an executive summary for me, I'll be your best friend.

As far as I can tell so far, the customer isn't going to do much if any better than he did, say, last year. And there are a few more hoops to jump through now that the rebates don't come from the CEC, but from the utility. NO clue. My head is spinning, and we haven't even really gotten started yet!

 

<div class='quotetop'>QUOTE(Godiva @ Jan 1 2007, 03:01 PM) [snapback]369341[/snapback]</div>

Godiva, Home Depot's subcontracted construction service have been, in every case I know of, much higher than a local licensed contractor (probably 7 or 8 cases I know of last year). Sometimes more than twice the cost for kitchen and bathroom renovations. They get people the same way Sears used to: by their name and their reputation for easy returns, low prices, etc. But on the construction side, its usually not a good deal.

I think the BP Solar site has a listing of independent dealers. I would make sure you get quotes from at least two other companies to compare the Home Depot price. And remember that the subcontractor is the one you will be dealing with, and not Home Depot, if there's a problem.

 

<div class='quotetop'>QUOTE(fshagan @ Jan 1 2007, 10:38 PM) [snapback]369438[/snapback]</div>

All great points. The company I work for has been able to beat HD prices EVERY time (without knowing their quote in advance). But then, we've beaten everybody's prices so far as well. I only work locally though, so don't consider this trying to sell you my wares!

As for pricing - all the name-brand stuff is good. Each contractor gets a better deal on different items, so it really is hard to compare. I tell customers that they have a choice - they can choose the components that they think they want, and we'll get a price. OR they can let us give them the best bang for the buck. To date, ever system I've done has been of the "best bang" variety. Everybody comes out ahead in that scenario. We simply get better prices on the products that we move more of. Nothing magic. That doesn't make "our" product better than other product. Just a better value.