PV as an investment [RE-wrenches]

Tue Sep 18 14:29:42 PDT 2001

Dear Joel,

Thank you for taking the time and effort to acquire and post this 
information regarding solar performance and payback here in Los Angeles.

Lately I have been very busy installing grid connected systems in the 
San Fernando valley.  When potential customers ask what the monetary 
payback of installing solar power is, I inform them that no body can 
give an honest answer.  The future cost of energy is uncertain.  My sold 
customers don’t care about payback times; they care about having a green 
powered home.  Lessening guilt for people who care about our planet is 
their payback.  With that said, most of my customers live in large homes 
and drive SUV's.  They have worked hard for their money and they do not 
want to decease their lifestyle.  The payback on their refrigerator is 
not having to drive and pick up bags of ice daily and the payback on the 
SUV is added safety for occupants as well as increased cargo capacity.  
I do not approach potential customers as a "green avenger" only as a 
capable solar contractor who will install a high quality system.

At this time, the true payback for installing solar is that it makes 
people feel good.  Most of my customers work in the entertainment 
industry and are willing to make an investment in a growing and maturing 
solar industry. They fully understand that they are helping themselves, 
our environment and enabling solar to become available to the average 
homeowner at a lower cost in the future.  There will come a day when the 
bean counters exploring solar options see green in their wallets as well 
as in our environment.  When they eventually feel good about installing 
solar power we can rejoice, and hopefully the manufacturers are able to 
keep up.

Just a few thoughts,

Graham Owen
GO Solar Company

Joel Davidson wrote:
> Dear Jerry and Everyone,
> 
> You are right that temperature will affect energy production. A 1 kW PTC
> AC PV system with battery backup at Los Angeles International Airport 
> will
> produce 1500 kWh/year (smog, fog, clouds, cool temperatures). The same
> system 50 miles inland will produce 1650 kWh/year (smog, more sun, about
> 15 degrees F warmer ambient). A 1kW batteryless PV system will produce
> 1650 kWh and 1825 kWh respectively.
> 
> The bad news is my math is wrong. I asked Tom Hoff, author of the
> wonderful Clean Power Estimator
> http://www.consumerenergycenter.org/renewable/estimator/index.html
> http://www.clean-power.com/
> to check my math. Tom came up with a 1% return on investment.
> 
> The good news is we shared some great responses to prospect objections 
> to
> PV's long paypack. I guess we will just have to keep on selling PV until
> the economics look better :-)
> 
> Best regards,
> Joel Davidson
> 
> Jerry Caldwell wrote:
> 
> > Joel,
> >
> > Your numbers don't look right to me.  I don't see any
> > figures for system inefficiency.  Unless you have an
> > inverter that operates at %100 and an array that
> > always operates at 77 degrees F, you will never see
> > that kind of output on the system below.
> >
> > Jerry Caldwell
> >
> >  no one has commented about
> > > the math I used to come up with the return on
> > > investment. Are my numbers right?
> > >
> > > 1kW AC PV system
> > > 5 sun hours per day
> > > 1,825 kWh/year PV production
> > > $0.12/kWh utility rate
> > > $219 value of PV
> > > $10,000 PV system cost before rebate
> > > $5,500 PV system cost after California $4.50/W
> > > rebate
> > > 3.9% return on PV system as an investment
> > > ($216/0.039 = $5500)
> > > 35% income tax rate
> > > 3.9% is equal to a 5.2% untaxed return on investment
> > >
> > > If interest rates and stock returns were not so low
> > > and there were no PV rebates, I
> > > wouldn't even bother with this problem, but 5.2% is
> > > better than CDs and most stocks
> > > lately.
> > >
> > >
> > >
> > > jay peltz wrote:
> > >
> > > > Hi All,
> > > >
> > > > Heres my question.  Sure I give the customer many
> > > angles to make the system cost
> > > > effective, but how many people run into problems
> > > when you suggest:
> > > >
> > > > "Well its cheaper to reduce than produce.  We need
> > > to get you a new refer, washer,
> > > > lights etc etc.  "
> > > >
> > > > Then I show them the math, and its like major
> > > blank time.
> > > >
> > > > Just wondering what you all have run into.
> > > >
> > > > jay
> > > >
> > > > peltz power
> > > >
> > > > Smitty wrote:
> > > >
> > > > > Howdy all. Reading all these wonderful posts
> > > about the payback wall people
> > > > > have built around themselves before contacting
> > > us, something occurred to me,
> > > > > and that is this. I don't know how old all of
> > > you are, but I suspect most of
> > > > > us are middle aged. After WW II, a lot of lads
> > > came home to a booming economy,
> > > > > and badda bing, badda boom, the baby boom was
> > > on. Young couples in the
> > > > > strongest economy on earth, out achieving the
> > > American dream for decades. He
> > > > > is where we come in. A generation watching our
> > > parents getting houses, new and
> > > > > better appliances of all kinds, cars with fins,
> > > and the marketing boob tube
> > > > > teaching us new, bigger and better.
> > > > >
> > > > > Many of the customers we deal with nationwide
> > > are of this generation. Our
> > > > > company roots are in solar thermal, but we to,
> > > still hear the "P" word and one
> > > > > of my other dreaded words, "efficiency".
> > > > >
> > > > > Since some of these baby boomers are now
> > > yuppies, I find they look at things
> > > > > they don't understand as an investment, as
> > > opposed to a Ford Expedition. ME
> > > > > WANT. I'll spare you the whole spiel, but it is
> > > quite simple to explain the
> > > > > economics of solar thermal vs a furnace or water
> > > heater in terms of an
> > > > > investment. About this time the Mrs. pops up,
> > > "It will make our house look
> > > > > ugly.". And so it goes. Sometimes the wall comes
> > > down (sometimes on my head).
> > > > >
> > > > > One last point. I find it is much easier to sell
> > > solar to our BB brethren,
> > > > > after they have already made a luxury purchase,
> > > i.e. a remote hunting cabin,
> > > > > RV or a cold swimming pool.
> > > > >
> > > > > Smitty
> > > > >
> > > > > "Bill Loesch, Saint Louis Solar" wrote:
> > > > >
> > > > > > My compliments Jeff for the creative thinking.
> > > Anyone else have an
> > > > > > effective reply to utility comparisons?
> > > > > >
> > > > > > Bill Loesch
> > > > > >
> > > > > > RE-wrenches said:
> > > > > > >When asked either "what's the  payback", or
> > > "how does this compare to the
> > > > > > utility co.", I simply
> > > > > > >said  "It's the cheapest clean power you can
> > > buy."
> > > > > >
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