Solar power installation

[jark87]

So initial estimates are $44k - $60k. Our past 12 months of electricity bills are $3600, so the estimates are well over a 10 year payback, and that’s assuming the electric bill goes to $0. It wasn’t clear whether the government subsidy was factored into the pricing, but even with the subsidy, I’d be either right at or over a 10 year ROI. I’ll have to wait until prices come down.

 

[JoyfulNoise]

So initial estimates are $44k - $60k. Our past 12 months of electricity bills are $3600, so the estimates are well over a 10 year payback, and that’s assuming the electric bill goes to $0. It wasn’t clear whether the government subsidy was factored into the pricing, but even with the subsidy, I’d be either right at or over a 10 year ROI. I’ll have to wait until prices come down.

Funny how it always seems that system installation costs almost always put people at a 10 year ROI … . Makes you wonder if the game isn’t rigged ….

“Hey Bill, we gotta get that guy his estimate, he keeps emailing me …”

“What was his annual energy costs again Joe?”

“Uhhhhh {shuffles papers} … here it is … $3600 last year …”

“Hmmmm … {Bill multiplies 3600 by 10 and adds 20% and bumps the prices up to recover the subsidy} …. $53,200!!! But tell the customer if he signs up in the next 7 days we’ll give him a 5% discount …”


Just sayin’ …

 

[jeffchap]

Keep in mind energy costs are likely to increase.

 

[JamesW]

Makes you wonder if the game isn’t rigged ….

Say it ain't so.

 

[JamesW]

You get a loan for $70,000.00 at 10% for 30 years, which means a monthly payment of $592.12 every month for 30 years.

The loan company is independent from the solar company, so they don't care if the system works or not.

And, they have a lien on your home, so if you miss a payment, they foreclose and force the sale of your house so they can collect the entire amount.

Your total payments are $213,164.49 for a system that probably cost the company $20,000.00 and labor that cost about $1,000.00 from minimum wage day labor from a temp agency.

 

[JoyfulNoise]

Say it ain't so.

Yup. Those videos are all so disturbing and true. The solar power industry is chock full of scam artists.

My neighbor is a GC and he just started up a home painting business but was, as of a year ago, a solar power installer. He got out of the solar business because he just couldn’t stand competing with all liars and con-artists out there. He would do reasonable estimating work and inform customers about how to get loans if they wanted to go that route. But he would immediately be followed up by some scammer promising the potential customer the Moon and the stars and then have to compete to bring his prices down even though he knew what they were promising was total BS. He just couldn’t stand it anymore. His advice to me was that if I ever wanted to do solar was to buy the panels myself and he’d be happy to give the names of subcontractors he trusted to do the roof work and the electrical. He even offered to help me with the permitting process and the utility company paperwork. He said it’s a very easy owner-build process as long as you know how to navigate some of the details. I asked him if he had any other companies he would trust and he said no, they’re all con-artists and they all inflate their costs.

 

[JoyfulNoise]

For what it's worth, I'm not against solar power, it's the right direction to go. But, unfortunately, the way the market is structured, it's designed to obfuscate the economic reality that, for the vast majority of people and homeowners out there, it makes no economic sense to install solar panels. Realistically speaking, when you buy and install a solar system, all you're doing is transferring the costs and payments from one area of your finances to another. Think about -

Let's say my electric utility costs are $4,000 per year and I can find a installer to do the complete job for $40,000. And let's assume that the system is designed to supply 100% of all my energy needs (a totally bad and unrealistic assumption but it makes the math really simple). When I turn that system on, all I have really done, in effect, is pre-purchase all of my energy needs for 10 years. That's it - I've transferred the monthly cost of utility payments to a lump sum cost. We can over complicate the scenario by making statements about how power costs will increase and blah, blah, blah, but, at then end of the day, all you're doing is transferring your costs.

So the question then becomes - where did the $40,000 come from? Maybe you purchased the system outright from a savings account you set up years ago, that's probably the best way to do it. Or maybe, back in the housing market boom of the last few years, you did cash-out refi of your home that lowered your interest rate and pulled $40,000 worth of equity out to do an improvement. Fabulous, that's a decent scenario too. Or maybe you did a HELOC or a 2nd mortgage based on the equity ... ok, not the greatest choice since you'll have to spread those costs out over a very long term and with interest. And finally, the worst of all worlds, you pulled a private loan at a high interest rate.

Any way you slice it, you've simply transferred the monthly utility bill to some lump payment. And while the loan scenarios are bad, even the savings account expenditure is not that great. Ask yourself this question - if I had taken that $40,000 out of my savings account and, instead of spending it on silicon solar panels, I instead invested it in a basket of exchange traded fund (ETFs or index mutual funds), how much interest (opportunity) would I be costing myself over that same period of time?? That's an opportunity cost worth looking at.

Put simply - NOTHING in life is free and anyone telling you otherwise is someone you should run away from ... quickly ....

 

[jeffchap]

This is true until the system is paid for. But once it is, it becomes money in your pocket. My system is warrantied for 85% production at 25 years. It will be paid for long before that.

 

[JamesW]

My system is warrantied for 85% production at 25 years.

The company will be gone in 5 years, so good luck actually getting any warranty coverage.

They go bankrupt and cash out and then open under a new name to wipe out all liabilities.

Rinse and repeat.

It's like the "Eagle Eyes" sunglasses with a "lifetime" warranty.

I doubt that when you're 85, the company is going to take your call and send you a new pair of glasses.

 

[JoyfulNoise]

This is true until the system is paid for. But once it is, it becomes money in your pocket. My system is warrantied for 85% production at 25 years. It will be paid for long before that.

Yes, under some scenarios this is absolutely true. But there are a lot of little costs along the way that will add up and extend the ROI timeframe. There's also the variability in net-metering rates and future issues where utilities will start charging you additional fees for those solar panels on your roof (the discussions and policies are already being promulgated in some areas of the country). Also, net-metering means that your system only covers you as long as the power is on. When there's a power outage, your solar system doesn't provide you any power because they are not designed as cross-over systems. So you are in the same boat as your neighbor ... when the lights go out for them, they go out for you as well.

The economic reality is that a lot of people don't live in homes for a long enough period of time for the benefit to accrue to them. Whether it's because work or family circumstances change, or a person can no longer afford to live in a certain area, we are generally a much more mobile society than our parents generation. If where a person is at is going to be their forever-home and they'll be buried in the backyard along side Fido, Fido-2.0, and Fido-XL (and that annoying cat that just hissed at everyone), then there are workable solutions for solar power. But I would say that too many people get snookered with all the shiny-stuff thrown at them and don't think about the financial implications of what they are doing. If people did do their homework and the industry was honest, then none of those videos @JamesW posted would exist ....

 

[jark87]

I’m not quite as cynical to believe that everyone in the solar business is out to fleece me, but careful enough to know when to walk away. If the installation is properly done, and system is configured well, I’m ok with an up-front investment, but I need a realistic ROI under 10 years. And I’d do that with the bet being that after initial costs are recouped, it’s gravy. And under no circumstances would I finance the system. I was able to retire at 55 by avoiding debt as much as I could. My wife and I drove older cars (still do) and we bought a house that we knew we could pay off in 15 years. We’ve avoided big “gotta have that” purchases (although I almost bought an RV a couple of times). If I can’t pay cash, I don’t buy, simple as that.

 

[JoyfulNoise]

(although I almost bought an RV a couple of times).

OMG, that and a boat are quite possibly the worst "investments" anyone could ever make ... you'd be better off just piling the money up and burning it.

I know a guy that works for a big RV seller in this area. He does their accounting. When I asked about RV ownership (he does NOT own one) he just looked at me and very dryly said, "I like you Matt, so here's my advice - rent one, don't EVER buy ...."

 

[JamesW]

You also have to coordinate the solar installation with a new roof.

If you need to replace the roof, the panels need to be removed and reinstalled, which significantly increases the cost of replacing the roof.

And this all assumes that the installation is done correctly.

The people sent out to do the installation are not always qualified to do the work and they can cause damage and leave you with leaks, fire hazards and no power.

The companies might have a trade license and a qualified tradesperson, but the actual workers are going to be sketchy drifters and day labor from the parking lot of Home Depot who get a 20 minute crash course in installation, which makes them “Certified” Installers.

 

[JamesW]

OMG, that and a boat are quite possibly the worst "investments" anyone could ever make ... you'd be better off just piling the money up and burning it.

Invest in timeshare rental properties, that's where the real value is.

 

[jark87]

You also have to coordinate the solar installation with a new roof.

That’s what started my process - need to replace the roof and if I was going to install solar, I wanted both done at the same time.

OMG, that and a boat are quite possibly the worst "investments" anyone could ever make ... you'd be better off just piling the money up and burning it.

Yeah, I know. I did enough research to know to find a used trailer with high resale value (Airstream) vs a motor home. But it was still predicated on spending months on the road, which didn’t line up with my wife’s desires. We’ve found a happy middle ground by finding great places to stay inside National Parks. Definitely save me $$$ and even better, avoided strife.

 

[SJPoe]

If you look at it strictly from a financial point of view, it is a long-term investment which makes sense for some people, but I think the technologies and market still need to mature some more before it's 'mainstream'. If you want to be a bit 'greener' (and I'm not going to get into all the dog whistles about panel chemicals and so on...) then there is an intangible value that is attached to that. Frankly, the $300/mo I spend on electricity is not a major cost driver for the household. I took the kids out to a diner last week and it was over $100...and it wasn't even that great.

We looked into it and got a couple of estimates, and it would take close to 15 years for it to start 'paying off' for us - lots of assumptions, but I highly doubt we'll be in this place in 15 years (the wife would be 80+, I'd be amazed if I last another 15 for various reasons!!). If my electric was 3 times the price (like it is for one of my overseas buddies) then it would be a different calculation.

Does switching to solar to save $250/mo in 15 years time alter my standard of living today - not really. Does it make sense to use 'free' energy rather than burning dinosaur farts? Probably. It probably even makes long-term sense to reduce reliance on central generation and adopt a more distributed generation system overall. Are there a million parties all trying to get their hands in your wallet....not all of whom are perfectly honest ? Always. As with everything, it's your money, spend it how you want - for us it just doesn't seem to make enough of a financial case for us to drop that significant of a chunk of change.

To be honest, I think it should start to be discussed in relation to building-codes. Start requiring NEW, commercially built houses have solar built in from day one. Maybe not right now, but in say 10 years time - give the market time to develop the technologies to meet the demand that is coming. Implement some proper regulations around the industry to stop the scam-artists and fly-by-nighters, and so on. We started almost a million new home builds in June...new solar installs were around 515,000...for ALL of 2021. Plan it, prepare for it, implement it, support it.

Then again, having looked at the standard of build of a couple of the 'new' houses nearby, I'm not sure having those companies be anywhere near high-powered electric systems is a good idea.

 

[JamesW]

California Will Require Solar Power for New Homes (Published 2018)

The state mandate, to take effect in 2020, is the first in the country and is expected to add $8,000 to $12,000 to the cost of a house.

www.nytimes.com

https://www.energy.ca.gov/sites/default/files/2020-06/Title24_2019_Standards_detailed_faq_ada.pdf

 

[JoyfulNoise]

Just like water softener service loops in household plumbing, I would much rather see building codes that address construction of homes to be "solar ready" (common standards for roof top anchoring and appropriate electrical hardware) rather than forcing homes to be built with solar panels. Let the consumer decide if they want the panels up front or leave it as an option for the next guy.

In my home, there was a plumbing service loop in the garage for a water softener installation. I am the third owner of this home and I was the one that installed a softener. Clearly the first two owners did not see the need for or want to install a softener. But I am surely glad that the "first guy" put up the extra $1000 it costs for plumbers to do a garage based service loop. The first owners may not have wanted it but I surely did after the pool was built!!

 

[JoyfulNoise]

So initial estimates are $44k - $60k. Our past 12 months of electricity bills are $3600, so the estimates are well over a 10 year payback, and that’s assuming the electric bill goes to $0. It wasn’t clear whether the government subsidy was factored into the pricing, but even with the subsidy, I’d be either right at or over a 10 year ROI. I’ll have to wait until prices come down.

You're a savvy guy, so I don't have to tell you this but I'd just like to make this point based on what you posted - the government subsidy is useless. All of the installers know how to calculate whatever subsidies are available in a given area as well as the tax deduction (only if you itemize) or tax credit available to the homeowner. They simply take that number and roll it up into the "cost of the system" ... so, in effect, they are getting those tax dollars one way or another. This is why the whole scheme of government based tax policy on solar PV is such a scam - it artificially distorts market prices and installation costs and does nothing to actually offset the costs to the homeowner. But yeah, a homeowner definitely needs to figure out how to get that money back in any scenario because the upfront prices were inflated by it to begin with.

If you are hungry for a candy bar and your friend has $10 in his wallet and has promised to help you pay for whatever you want and I, the candy shop owner, know that, then you can be darn sure I'm going to start my Snicker Bar prices off at $15 each but, because I'm kind-hearted and aware of your hunger, I'm going to be a champ and cut you a deal down to $10 ... (even though I paid 10 cents a piece for them at wholesale) ...

 

[JamesW]

So initial estimates are $44k - $60k.

Those are inflated prices from Bozos like Pink Energy (aka Power Home Solar).

They have over 1,000 complaints.

Watch the videos I posted earlier.

According to the Solar Energy Industries Association, the price of a residential solar panel system has dropped by an annual average of more than 60% over the past decade — from upwards of $50,000 for a 6-kilowatt-hour (KWh) system in 2011 to between $16,000 and $21,000 in 2021.

How Much Do Solar Panels Cost? (2024)

How much do solar panels cost in 2024? See how much you can expect to pay and if solar is worth it for you.

www.marketwatch.com

Solar panels cost, on average, about $16,000, or between $3,500 to $35,000 depending on the type and model. While solar panels can help save you money on energy costs, it’s important to know the overall startup solar panel costs so you can plan a budget.

How Much Do Solar Panels Cost? A Full-Breakdown of Associated Costs and Factors in 2025

Get expert advice on improvements to your home, including design tips, how much you'd expect to pay for a pro and what to ask when hiring experts.

www.forbes.com

https://gopink.com/locations/texas/