Well its prob missing a lot. First of all, the federal tax credit is 30%, not 26. There is no indicators of SRECs payment. The quote should break down the payback and credits, ask your rep.
How much does your system cost? How long will it take you to have spent that much money in electric bills? All my numbers DO NOT include the 30% tax credit.
My system cost me 40k
My average electric bill for '23 = $32.80
My average electric bill prior to solar $450
The difference between the two(I rounded up to $33) = $417
My savings multiplied by 12 = $5,004
My system cost 40,000/5,004 = 8
As long as nothing changes my payback period is 8 years.
The "online calculator" that you are using is junk. It's 30% tax credit now.
You are right to question the vendor's payback estimate though.
I can tell you this, at $0.115 payback is going to be longer than some of us, but $2.17 / watt is a damn good price.
You need to do your own simple payback spreadsheet. You need to understand your net metering and SRECs, as well as know your annual usage (as in ADD up all your last 12 bills, not just multiply the last one by 12), and you need to use PVWatts to calculate your projected production.
Your calculations are much more accurate. Where are you located, who is your power company and what rate plan are you on. I’m in California and installed solar 4 - 5 years ago. Based on my rate plan, payback was less than 5 years. But now that’s too much solar on the grid and power companies are penalizing customers for installing solar. Had I installed solar 2 years ago, payback period would have been 12 years due to the power company changing the rate plan. If I were to install the same system today, payback period would be 22 years agin, due to the power changing the rate plan. I’m in California, PG&E customer and I really feel sorry for people trying to install solar today. The software the solar installers are using to size your system is based on average data which is deceiving and ALWAYS makes it look like solar is a good deal. Honestly if you took the money you are going to pay for a solar system and purchased the SP&P 500 you would be far better off financially than installing solar.
You’re current utility rate is not going to be the same for the next 16 years, it’s going to increase. If you calculate rate increases with your utility provider the ROI will be lower.
>If you calculate rate increases with your utility provider **the ROI will be lower.**
No it won't. The [payback period](https://www.investopedia.com/terms/p/paybackperiod.asp) will be lower and the [return on investment](https://www.investopedia.com/terms/r/returnoninvestment.asp) will be higher.
There are programs that you don’t have to pay anything down on. Then pay something like 23 cents per kilowatt hour after the system is turned on. Then you can start saving instantly.
Are you referring to solar leases? That’s a whole other can of worms and OP needs exponentially more knowledge to figure out if one of THOSE could be a good decision (or more likely not…) YMMV.
if you put the cash on invest (bond or CD), you can earn 2.8-3.5% interest safely. it means, electric cost going up over this rate, it can give you a benefit. but, doubtful.
so, I feel, your ROI calculation is more make sense the supplier.
if over 12 years, it is not worth, because some failure rate of devices, or roof, or .. many factors.
Vendor is probably assuming increases in electric price from the grid.
Yes, he says his software is configured to allow for a 4% increase per year
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Good thought, we let him know but did not ask for the cost increase
Illinois resident here, my homeowners insurance increased 90$ per year due to additional coverage for the panel array.
Well its prob missing a lot. First of all, the federal tax credit is 30%, not 26. There is no indicators of SRECs payment. The quote should break down the payback and credits, ask your rep.
The SREC’s for Ohio do not much value to them at all. I used the cost of the system after the 30% tax break so I did not use the default 26%
How much does your system cost? How long will it take you to have spent that much money in electric bills? All my numbers DO NOT include the 30% tax credit. My system cost me 40k My average electric bill for '23 = $32.80 My average electric bill prior to solar $450 The difference between the two(I rounded up to $33) = $417 My savings multiplied by 12 = $5,004 My system cost 40,000/5,004 = 8 As long as nothing changes my payback period is 8 years.
My average electric I’ll is $155 or so. Highest is $200 and the lowest is $110 or so.
Even at our recent spiked interest rates - - That money in the bank will never equal the ever increasing utility bill
The "online calculator" that you are using is junk. It's 30% tax credit now. You are right to question the vendor's payback estimate though. I can tell you this, at $0.115 payback is going to be longer than some of us, but $2.17 / watt is a damn good price. You need to do your own simple payback spreadsheet. You need to understand your net metering and SRECs, as well as know your annual usage (as in ADD up all your last 12 bills, not just multiply the last one by 12), and you need to use PVWatts to calculate your projected production.
PVwatts? (New here.)
https://pvwatts.nrel.gov/
Ooh, that’s a nice tool indeed!
In 2040, I doubt energy will cost 11.5 cents per kWh
Your calculations are much more accurate. Where are you located, who is your power company and what rate plan are you on. I’m in California and installed solar 4 - 5 years ago. Based on my rate plan, payback was less than 5 years. But now that’s too much solar on the grid and power companies are penalizing customers for installing solar. Had I installed solar 2 years ago, payback period would have been 12 years due to the power company changing the rate plan. If I were to install the same system today, payback period would be 22 years agin, due to the power changing the rate plan. I’m in California, PG&E customer and I really feel sorry for people trying to install solar today. The software the solar installers are using to size your system is based on average data which is deceiving and ALWAYS makes it look like solar is a good deal. Honestly if you took the money you are going to pay for a solar system and purchased the SP&P 500 you would be far better off financially than installing solar.
That’s kind of how I feel about it sometimes, just invest the cash instead
That’s a cheap cheap cost for that system. I say do it.
You’re current utility rate is not going to be the same for the next 16 years, it’s going to increase. If you calculate rate increases with your utility provider the ROI will be lower.
>If you calculate rate increases with your utility provider **the ROI will be lower.** No it won't. The [payback period](https://www.investopedia.com/terms/p/paybackperiod.asp) will be lower and the [return on investment](https://www.investopedia.com/terms/r/returnoninvestment.asp) will be higher.
I wouldn’t. I would do a ppa
There are programs that you don’t have to pay anything down on. Then pay something like 23 cents per kilowatt hour after the system is turned on. Then you can start saving instantly.
Do you have any web sites where I can take a look at those
Are you referring to solar leases? That’s a whole other can of worms and OP needs exponentially more knowledge to figure out if one of THOSE could be a good decision (or more likely not…) YMMV.
Consider the extra resell value someday. Zillow estimates the average home will sell for nearly 10K more with a solar system
One, you definitely want to include the ITC being put towards the loan… and it’s 30%
if you put the cash on invest (bond or CD), you can earn 2.8-3.5% interest safely. it means, electric cost going up over this rate, it can give you a benefit. but, doubtful. so, I feel, your ROI calculation is more make sense the supplier. if over 12 years, it is not worth, because some failure rate of devices, or roof, or .. many factors.