In this post, I’ll cover how electricity from a new Texas residential solar system is already cheaper than grid electricity costs. I previously wrote an article about which solar system to use, where I compared Tesla versus SunPower for the better system, and I’ll also follow that up with the decision I made and why I made it.
On Tuesday, March 8, 2022, our residential solar system from SunPower was installed. Following that, on March 29, our bi-directional meter was installed by our utility, allowing us to track electricity consumed from the grid, track electricity generation from our new solar system, and track how much we sent back to the grid. I’ll have more to say on our SunPower panels in a subsequent post.
Texas rooftop solar is cheaper than grid electricity today
Here’s my estimate of the solar panel costs if we had them together since last March. I have capped the production from the panels at 50 kWh per day, since that’s the max I have seen them produce over the last month. The red bars represent the total electric cost divided by total consumption. You’ll note there has been a rising trend in grid electricity costs since November. The cost in March 2022 was 15 cents per kWh, a rise of 22.81% year over year. For the solar panels, our cost is fixed at $108.63 per month, which is the financing cost of the panels. The solar panel blue line cost curve is inverted, leading to higher costs in winter and lower costs in summer. This is because natural gas is our big cost for heating, less sun is available in the winter for the solar panels, and more electricity is used in summer for cooling. During the summer, our solar cost drops to 7 to 8 cents a kWh, a big savings.
For the last year, our overall average grid electricity cost was 13 cents a kWh. 15,359 kWh were consumed for a cost of $1,936.17. I estimate our panels can produce 13,260 kWh over the coming year, with a total fixed cost of $1,303.56. This gives us an estimated average cost of 10 cents a kWh. Yes, we’ll have to cover the excess electricity in the summer time, and I estimate that will cost us $264.60. Already, in our first month of owning solar panels, you can see we will be below the grid electricity cost. That’s a big deal!
I estimate we’ll save $368.01 over our first year by using solar panels, for an estimated first year return of 28.23% on investment. That’s terrific. I will be posting followup articles on how much was produced by our panels, how much our consumption went down, and how much we saved. We are simply substituting the leaky, unreliable, non-winterized Texas electric grid with locally produced electricity for a cheaper, fixed cost. No one expects the grid prices to stay the same, and if the last few months are prologue, the increases will be coming at a fast pace.
Attacking high natural gas prices with solar
Over the last year, we have consumed 1,016 CCF of natural gas. The cost was $1,145, about 1/3 of our total energy cost. This gives us a cost of $1.13 per unit. While electricity increases were bad, natural gas increases were even worse. The latest month is 40.22% higher than last March. The majority of natural gas usage is running our natural gas space heaters in the attic.
My next plan is increasing the number of panels we have, generating more electricity in the winter months, lowering the thermostat by a few degrees, and running room heaters where we commonly stay. If it was prudent, I would switch our tankless water heaters to electric heat pump water heaters, as mentioned by Joe Wachunas in his great comparison piece. That is phase 3. Since grid electricity is cheaper than natural gas, and homegrown solar electricity is cheaper than grid electricity, the only real upfront cost is the one-time expense for good room heaters.
What happens to any extra electricity that is produced and not consumed?
Our local utility does have net metering. First, anything produced by the panels is consumed by our house. The biggest consistent use of electricity is charging our Tesla Model 3. This consumes 60 kWh every week. If there is more production than consumption by the house (and car), the extra is sent back to the grid. The utility credits us with the residential retail rate for every kWh sent back to the grid, not the wholesale rate, which is generous. Third, if we need to use more electricity than available, we use the grid. Anything produced by the solar system is netted out against what is consumed over each month. If anything extra is produced, as seems likely in April, it goes to the grid, for free. That’s not great, and it’s one reason in Texas it’s hard to match 100% of your electric needs using only solar in a way that makes sense.
Until I find a better way to consume all the electricity each month (no Bitcoin mining!), I’m okay with that. At scale, it means less reason to call the natural gas and coal generators for generation, leaving them fewer opportunities to make money during the day, lowering their revenue potential. The extra daytime supply lowers the cost of electricity, which is a win for everyone except the fossil fuel industry. Just think, if another 1000 houses switched to residential solar in each town, the extra production would make it harder for fossil fuels to take share. That leaves them early morning, late evenings, and night as the only places to make money. Wind, batteries, hydropower, and pumped storage can work at night. Floating solar can augment hydropower during the day. There’s no reason with the technology we have to keep fossil fuel power plants as costly standby generators. Their time is gone.
Better home design leads to better solar utilization
Texans where I live prefer their modern homes to have punctuated rooflines, turrets, and complex shapes. The higher the complexity, the better chance to sell. Such roofs are bad for increasing residential solar production. Solar system utilization could be increased by slanting roofs at the right angle, minimizing peaks and valleys in the roof, moving chimneys to the edge, having the roofs face south in the Northern Hemisphere, and extending roofs at the same angle from one side of the house to the other. Houses could take advantage of first principles design with solar and 100% electricity, including bi-directional meters, higher amperage circuit breakers, and electric vehicle charging. Much can be done to improve solar energy generation with current technology. It’s a failure of imagination, knowledge, and design by home builders to maximize living space, reduce energy cost, capture more solar energy, and increase comfort.
Readers, what do you prefer? Suffering the slings and arrows of capricious, unreliable fate using grid electricity, or generating clean electricity on your roof with a fixed cost every month? Let us know in the comments!
Here’s all the data I collected, plus more charts!
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