Really: Solar Is Actually Cheaper than PG&E
3. Now look at your monthly kwh usage on your bill: For example - here’s what it will cost to install 25 years worth of solar to zero out usage for the very tiniest bill and the very piggiest.
180 kwh a month (about a $20 PG&E bill) = 1.5 KW of solar (DC STC) will cost about $9,137
2,300 kwh a month (about a $800 PG&E bill) = 19.5 KW (DC STC) solar system at about $71,514
$20 a month bill now = $5,509 saved
$14,646 PG&E
-$9,137 solar
= $5,509 cheaper
$800 a month bill now = $504,931 saved
$585,833 PG&E
-$80,902 solar
= $504,931 cheaper
While the savings (and costs!) are much greater for someone with a higher bill, (and even more for bills higher than $800 monthly) than a lower, solar will always cost less than PG&E. If you use a second mortgage to finance your solar, you will initially pay interest on your loan, but the following year you deduct that interest from your taxes, so your net savings are still going to be between $5,000 and $500,000. (If you stay with PG&E; you cannot deduct the 6.7% annual increases!)
Even the tiniest bill can be converted to solar for less than the cost of doing nothing; just staying with PG&E. And that doesn’t even account for the peace of mind that comes from knowing you have done all you can to cut your own carbon footprint: Virtue is it’s own reward. But the financial reward is there too. Every state is different. Some are more solar friendly than here.
But, if you want to put in solar, don’t let some salesperson tell you that it doesn’t pay!
Image via Tiny House Blog
Well done Susan!
While I fully support renewable energy, this article completely ignores the time value of money. One dollar 20 years from now does not equal one dollar today. Since there is a cost to using people’s money, you need to discount future cash flows at an appropriate rate. For example, using a 6.7% cost of capital, which is equal to the annual increase in PG+E’s rate, the $14,646 amount described by the author for a 20 year period is reduced to $6,000. This makes solar $3,137 MORE EXPENSIVE, not cheaper.
If the author wants to show that solar is cheaper than the utility rate, than she should incorporate the externalized costs (C02, coal ash, tailing ponds, etc.) to determine a “true cost”. This would be more effective. Using elementary and misleading financial information only further provides ammunition for renewable energy opponents.
Bringing in investment concepts like the “time value of money” clouds the fact that energy is not an investment; it is not optional like investing in stocks - you ARE going to HAVE to pay a utility (or a solar loan) to get your energy for the next 25 years.
And a set payment of $100 mth to a solar loan company for 25 years (to supply about 500 kwh mth) will still be $100 in year 25.
But a constantly increasing 6.7% rate for utility power that costs you $100 mth this year will be $480 mth in year 25.
Here’s your monthly PG&E from year 2 to year 25 with your utility rates rising 6.7% a year:
$100
$107
$114
$122
$130
$139
$148
$158
$169
$180
$192
$205
$219
$234
$250
$266
$284
$304
$324
$346
$369
$394
$421
$449
$480
As you see, by year 25, you are paying considerably more than the solar loan payment of $100 a month.
Most of the savings are in the later years, but in 25 years you’ll be older too, maybe entering your Walmart Greeter years, and will really appreciate a lower bill even more than now.
(And yes, I do agree that the real costs of dirty energy are completely overwhelming - but I find that everyone who gets an estimate is already factoring that in - but solar is cheaper dollar for dollar even without factoring those harder to quantify costs)
BTW - The reason I didn’t include the cost of capital (the interest you pay for your loan), is that you deduct the entire interest payment from your taxes each following year - assuming you use a second on your mortgage; in the US homeowners can deduct interest on a mortgage loan.
So the net cost excludes the cost of capital: interest payments.
(These estimates also are the final installed costs minus the California PG&E rebate amount at (depending on design)about $1,550 per KW installed, and the 30% Federal tax credit on the cost of a solar installation, passed this year)
Susan,
I like to hear from real people that actually went all the way to install a photovoltaic residential “power plant”.
One idea that might appeal to you and the readers is to go solar (or wind as the case may be) on a community scale. It is tough to organize but with a leadership and vision - the community will benefit.
See my page on community wind turbines in Canada to get the picture
http://www.solar-energy-for-home.com/community-wind-turbine.html
Best wishes, Jacob
One issue here in Los Angeles (LADWP) is that we can’t actually zero out our electricity bill. As I understand it, DWP insists on charging about $7.00 a month for electricity even if you use no power at all. AND they’ve been able to finagle out of annualized net metering…they only do net metering on a short term (weekly or monthly, not sure which) basis, which can’t help summer generation to balance out winter usage.
So for someone (like me) who already has a fairly low electricity bill, the economics make less sense.
But I’m looking at it anyway, from an environmental perspective. I want my daughter to live in a clean world.
This is encouraging, Susan, but I live in the woods - my home and property are in the shade most of the time, and my roof, to make it worse, faces east and west.
Even if I could be convinced that it would pay to cut down trees, many of those shading my roof are on others’ property (and I live in North Carolina). I’ve been waiting for the full-spectrum film to hit the market, but haven’t heard that it has.
Is solar power viable for me now?
Thank you for what you’re doing.
Fritzi - sadly, no.
I was originally looking for a picture of a house like yours, because, this actually is the one case where solar won’t pay.
Thank you, Susan.
And I’ve got good news: I can get a geothermal heat pump - I didn’t know they could be retrofitted! (found it at http://www.waterfurnace.com). I needed a new system anyway, and there’s the 30 percent federal tax credit (cap’s been removed), so this will cut my heating, water-heating & cooling costs massively for a comparatively small investment.
My remaining usage may well be manageable by solar once it becomes optimally efficient, since my roof does get some sun.
Another thing I googled & got nothing on: is it possible to make the existing driveway white (I heard DOE Secretary Tsui say we should have white pavement and roofs to reflect back the sun - the amount of CO2 he said would be eliminated if it were done everywhere was astonishing.
If there’s a cost-efficient way to do it to the roof prior to roof replacement, I’d do that (but I’d be surprised). But I did come upon a couple of vague references to painting driveways white, just no further info. (what paint holds up under walking, wildlife, weather and driving?)
It’s exciting, this is really happening.
peace,
Fritzi
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