Credit: Cost of Solar

If Your New Year’s Resolution Is To Save Money, Here’s One Easy & High-Reward Option

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Originally published on Cost of Solar.

solar energy cost
Credit: Cost of Solar

I can’t believe another year is already starting. What a fast year 2013 was! I have to say that I don’t really care for the New Year’s Eve parties or the fireworks. However, I do love reflecting on the past year, reflecting on life, and thinking of ways to improve my life in the coming year.

I understand that a lot of people have trouble sticking to their New Year’s resolutions. So, I’ll just lend a hand here if yours is to save money. If you really want to save money this year, one of the most effective ways to do so is also one of the easiest — go solar.

If you already know this, then it’s high time you actually decide to go solar! Use the bringing in of the new year to finally make the move and do it.

If you’re new to this, though, I’ll share some quick stats with you. The cost of solar is about 100 times lower than it was a few decades ago, and even half the price it was a handful of years ago. Solar panels have gotten a lot more efficient and a lot cheaper. The question isn’t actually how much solar panels cost, but how much solar panels are going to save you. The answer varies from house to house. However, a study conducted in 2011 found the average savings to be just over $20,000 over the course of just 20 years for Americans who went solar then. Solar power has actually gotten cheaper since then, while electricity prices have risen, so the estimated savings should be even greater.

Also, it might not be common to consider savings over more than 20 years when thinking about investing, but solar panels actually last for decades. They degrade very, very slowly. So, the savings should be even much greater than $20,000 (on average), considering that all the electricity generated after that time would be “free.”

Of course, many matters are important for estimating your savings — the price of electricity in your area, how much electricity you use, your home’s solar potential, etc. We can give you a real quick estimate of your savings if you answer just a few questions, but for a detailed and very personalized estimate, we would then connect you to a solar installer in your area who can “take you all the way.”

The opportunity is genuinely amazing for a lot of people. Don’t miss out on these major financial savings this year!

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Zachary Shahan

Zach is tryin' to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director, chief editor, and CEO. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao. Zach has long-term investments in Tesla [TSLA], NIO [NIO], Xpeng [XPEV], Ford [F], ChargePoint [CHPT], Amazon [AMZN], Piedmont Lithium [PLL], Lithium Americas [LAC], Albemarle Corporation [ALB], Nouveau Monde Graphite [NMGRF], Talon Metals [TLOFF], Arclight Clean Transition Corp [ACTC], and Starbucks [SBUX]. But he does not offer (explicitly or implicitly) investment advice of any sort.

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21 thoughts on “If Your New Year’s Resolution Is To Save Money, Here’s One Easy & High-Reward Option

  • Is there a similar savings calculator for Canada?

  • That calculator doesn’t work for me in Canada. However, the last time I did the math, it didn’t quite make economic sense. You would expect your $30k 10kw system to generate roughly $25k worth of power over 20 years. Our meager 2 hour average insolation in Ontario makes it somewhat challenging to break even, combined with our relatively low off peak hydro rates. Another year or two of rising electricity rates and falling solar rates, and that could turn around though.

    • Going back and looking at it, my numbers are roughly right. It should be noted my simple analysis assumes off peak usage, cost of hydro is stable, and no financing costs. Looks like one assumption may be invalid though. The cost of off peak hydro has doubled in the last seven years. If that trend continues, roof top solar becomes a no brainer very shortly, even in sun starved Canada. Even now, if you assume a slightly longer panel life, it’ll pay for itself.

    • I’m betting here that you live in the more populous south of Ontario.

      According to the data I could find Toronto has 2024 hours of sunshine per year. It is at 43 degrees north. The Netherlands has an average of 1700 hours of sunshine and is at 52 degrees north. From these data, solar PV would have to yield much more around where you live (a WAG, since Ontario is rather large).

      For a South facing roof, we get an average of 1000 kWh per year for every kW of nominal system power, the equivalent of 1000 full load hours per year, 2.7 per day. I’m guessing you would get an average of 3 full load hours per day. Minimum. So I can’t really place your “2 hour average insolation”

      Can you give me a bit more details about how you got this number? Because at the face of it, you’re seemingly underestimating the yield of your system.

      I can’t argue about the low rates however. Residential rates here are close to $ 0.30/kWh and system prices are much, much lower. Solar PV here costs about half of what you are quoting. Yes, your 10k system can be installed for a mere $15k.

      • Those numbers aren’t off terribly from my location. Toronto is slightly more sunny than the rest of southern Ontario. My area is expected to produce about 1100 kWh/kw, so my system is expected to produce 11 000 kWh per year.

        The best price I can find for a 10 kW system is $30k installed. That does not include taxes.

        For electricity rates, off peak power which is where almost all my power consumption happens is 7.2c / kWh + delivery charges of 4.5c / kWh. There are some other fixed charges, which I am ignoring. I’m also ignoring a 10% credit that is currently being applied to all power bills in Ontario. Total cost then for off peak power is 11.7c / kWh.

        Therefore you would expect that over a year, my 10 kW system would produce $1287 of power per year, * 20 years = $25740.

        Now, I’m not sure how the net-metering rules work now that we have time of use pricing of power. If they credit me peak usage power during the summer, and then charge me off-peak my formula is just plain wrong. Somehow I doubt this however.

        • The high installation costs in North America are killing. In Europe. solar PV costs roughly half of what you pay.

          I think it is the mature solar PV installation sector and solid supply chain that accounts for much of the difference. All thanks to the incredible growth brought about by the German EEG.

          • Are we mixing currencies incorrectly? $1.50 / watt installed seems dirt cheap to me. Cheaper than even Germany is achieving, last I checked. I thought they were closer to $2 / watt installed. My prices are in Canadian dollars.

            For conversion, my $30k system is worth about $20k Euros.

            And my price for hydro would be 8 euro cents per kWh

          • Germany –

            November 2013 € 1,500
            December 2013 € 1,380

            prices are net prices (€ / kWp) for turnkey solar power systems up to 100 kWp


            $2.06 and $1.90 in US dollars.

            $2.17 and $2.00 in CAD.

          • Give Spain some love as well. They helped build the market that allowed panel prices to fall as fast as they did.

            Why we haven’t gotten our installed prices lower in the US is a mystery to me. We have a business culture that is all about volume sales and low margins. We’re now a country full of big box discounters and low priced fast food restaurants.

            I suspect that within a couple of years we will be seeing some changes. Emergence of larger scale installation companies should make a big difference. They will be able to advertise, spread those costs over lots of customers, and the information should drive demand.

            It’s looking like we may be getting our utility scale solar down closer to Europe’s prices.

          • So… Looking at this once more, I realize two things.

            1) Installation appears to be almost 1/3 of the cost of the array. That’s an awful lot! I can buy a 10 kW array with micro inverters of the type that I can install myself relatively easily for around $20k.

            2) My array I’m sizing is a fair bit larger than I need it to be with my present usage. I’d get an excess of power to sell back to the grid during the sumer, and would still nearly make ends meet in the winter.

            3) With a large enough array, I could cost effectively heat my house, my water, and charge my car, and effectively never have another utlity bill again. That seems fairly awesome.

    • If you’re in Toronto you’re probably part of Zone 5, an average of 4.2 solar-productive hours per day.

      Don’t forget, you’ve got some honkin’ long summer days when you get that far north.

      • I’m using the maps from the Government of Canada, which list the expected solar power return per year of a 1 kw solar power system, assuming a south facing roof with a tilt = latitude.,4240&SETS=1707,1708,1709,1710,1122&ViewRegion=-2508487%2C5404897%2C3080843%2C10464288&title_e=PV+potential+and+insolation&title_f=Potentiel+photovolta%C3%AFque+et+ensoleillement&lang=e

        Hopefully that link works…

        Also note that I am outside of Toronto, which seems to be slightly more sunny than the rest of southern Ontario for some reason.

          • Yes, my insolation figure was off (I think I was remembering the min value), but my numbers above were not based on that. They were based on the solar power resource map provided by the government of Canada.

          • Try using a LCOE calculator…

            Working from the top down:
            I used 20 yr, 5% financing

            3,000 for a kW of solar ($)

            21 capacity factor (Toronto avg 5.1hr/24 = 21.25%

            0 in the next four boxes

            11.7 present cost of electricity
            3% inflation

            Over 20 years grid power should cost 15.4 cents/kWh (inflation increases the cost)

            Power from panels should be fixed at 13.1

            3% financing drops the price to 10.9c/kWh

          • Based on a solar city report for my exact location, I have 4.2 hours of sun per day on average.

            However, based on the past 7 years of historical data for off peak hydro rates in Ontario, the price escalation is around 8%.

            With those revised figures, it works out to $.255 for cost of utility over 20 years, and $0.157 for solar….

            That’s eye opening… 😀

          • Then remember that 40 year old solar panels are still producing ~80% of their original power. In essence the electricity from that system is going to cost more like 8 cents.

            And that’s assuming the panels don’t continue to produce past 40 years. Could be that at 100 years they’ll be cranking out 50% of their original output. We simply don’t know how long panels last. Oldest in service are 40.

            Grid electricity inflating at 8% over the long run? I wouldn’t count on that.

          • Well, here in Ontario, they are kind of in trouble. We’ve scraped by with cheap hydro largely because of three things: Cheap coal plants, all of which have been closed down. Candu Nuclear plants that are aging and getting more expensive, and don’t load follow at all, and Niagara Falls which continues to provide something like 20% of Ontario’s hydro at dirt cheap rates.

            They are largely turning to natural gas turbines, wind and solar. All of these are significantly more expensive than the status quo, and require a lot of upgrades to an aging grid to support. While solar may have reached grid parity at the plug, it hasn’t yet met grid parity as a bulk power producer. These things are going to force the price of hydro to increase quickly. I imagine they will stabilize at some point, but I’d be willing to bet, that won’t be for a while.

            8% is actually conservative based on the history anyways. Based on the last 7 years historically, it should actually be closer to 15%.

            However, until the price of hydro hits the price of solar power right now, doesn’t it make sense to wait? In 2 years, with more expensive hydro, and cheaper solar, my payback will be shorter, with less capitol invested.

            I’m speaking from a purely economic perspective of course.

          • From a purely economical perspective it sounds like grid is still a bit cheaper than solar.

            Perhaps you should contact the solar companies and tell they you purchase once their cost drops to $x.

            Use the LCOE calculator to work out “x”, a purchase price that gives you equity at today’s grid price or a slight bit less.

            They might decide to install at a lower cost, especially if they have crew idled. Some profit is better than no profit.

          • I should give that a try.

            Ideally, I want to size the system such that I can power my home, charge my future electric cars, and also heat and cool my home through the use of an air source heat pump…

            Basically: Big system.

  • My calculation of my 2nd system that I installed this year.

    Total price: € 3000
    Interest rate: 1.6%
    Payback period: 20 years.
    Financing cost per year: € 176
    Expected yield: 2000 kWh/year
    Average rate: € 0.22/kWh
    Gross earnings per: € 440/year
    Net earnings: € 264/year
    Total savings over life: € 5280

    If my system survives 5 more years (more likely than not) it will pay me another € 2200,-

    All prices include VAT.

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