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<DIV><FONT size=2 face=Arial>Wrenches,</FONT></DIV>
<DIV><FONT size=2 face=Arial></FONT> </DIV>
<DIV><FONT size=2 face=Arial>Matt is right to point out that <FONT
color=#0000ff>the biggest underlying factors are the assumed Service Life of the
System in Years and the O&M costs during that period. </FONT><FONT
color=#000000>Solar subsidies and to whom they go (utility industry or end user)
and the value that society puts on pollution and clean energy are important, but
that's another story.</FONT></FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2 face=Arial>Let's use Matt's formulas for my system plus
a little history. </FONT><FONT size=2 face=Arial>In March
1998, California became the first state to have residential,
grid-connected, rebate subsidized, PV systems. In 1998, about 30 systems
per month were installed. About 25% of the early grid-tied systems had
reliable, battery-based SW-series inverters, but many had other brands.
A lot of early grid-tied systems were installed by
do-it-yourselfers that included experienced PV designers and
contractors but also included people with no electrical installation experience.
It wasn't until May 2001, when the incentive went from $3/W to $4.50/W that
the California PV boom started, the number of skilled installers and inverter
choices began to grow. There is no record of the number
of systems that are still in operation or have had modules and/or inverters
replaced. The verdict is out how long systems (not modules) will last and what
O&M costs will be. It looks like well-designed and properly installed
grid-tie systems will last more than 20 years, but inverters and batteries will
require replacement during that period. It may make economic sense to upgrade
from an SW-series inverter to a non-battery inverter or to donate an old system
to a charity.</FONT></DIV>
<DIV><FONT size=2 face=Arial></FONT> </DIV>
<DIV><FONT size=2 face=Arial>My net-metered system was installed June 1998 and
has been operating continuously for 103,000 hours. The 32 Siemens M70
modules and Trace SW4048 are still performing like-new. I replaced the
operational Trace C40 charge controller with an Outback MX60 to squeeze more
power out of the array (no improvement, waste of time and $450). The 4 Johnson
Control 86 AH Dynasty batteries lasted 90 months and had to be replaced
November 2006. The new batteries are 3-year old Dynasty UPS12-475s that I got
for free. I spend less than 1 hour per year on maintenance to visually inspect
the system monthly when I record meter readings manually and hose off the array
2 or 3 times in the summer.</FONT></DIV>
<DIV><FONT size=2 face=Arial></FONT> </DIV>
<DIV><FONT size=2 face=Arial>I paid $22,450 retail for my system - $5,835
solar rebate - $4,153 state and federal tax credits = $12,462 total
system price ($5.563/W DC) divided by 30,000 kWh (2,500 kWh/year x 12
years) = $0.415/kWh and counting. </FONT><FONT size=2 face=Arial>Electric
savings at $0.18/kWh x = $5,400 and counting.</FONT></DIV>
<DIV><FONT size=2 face=Arial></FONT> </DIV>
<DIV><FONT size=2 face=Arial>Using Matt's 25-year formulas, my system
cost $0.199/kWh. If 2,500 kWh/year production x $0.18/kWh = $450 x 20
(American Appraisal Institute multiplier) = $9,000 added property value,
then my system's net value is $0.124/kWh.</FONT></DIV>
<DIV><FONT size=2 face=Arial></FONT> </DIV>
<DIV><FONT size=2 face=Arial>If your net-metered system has been in operation
for over 10 years, please share your economic analysis. Thanks in
advance.</FONT></DIV>
<DIV><FONT size=2 face=Arial></FONT> </DIV>
<DIV><FONT size=2 face=Arial>Joel Davidson</FONT></DIV>
<DIV><FONT size=2 face=Arial></FONT><FONT size=2 face=Arial></FONT> </DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 2px solid; PADDING-LEFT: 5px; PADDING-RIGHT: 0px; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV
style="FONT: 10pt arial; BACKGROUND: #e4e4e4; font-color: black"><B>From:</B>
<A title=gilligan06@gmail.com href="mailto:gilligan06@gmail.com">Matt
Lafferty</A> </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A
title=re-wrenches@lists.re-wrenches.org
href="mailto:re-wrenches@lists.re-wrenches.org">'RE-wrenches'</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Saturday, March 06, 2010 4:28
PM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> Re: [RE-wrenches] Cost per
kWh</DIV>
<DIV><BR></DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial>Holt says: <FONT color=#000000 size=3
face="Times New Roman">Can't put my hands on the equation for determining cost
per kWh of a system</FONT></FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial>Holt,</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial>Are you looking to calculate Cost or Value of the system?
Both calculations are important.</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial>The simple $/kWh COST </FONT></SPAN><SPAN
class=906522620-06032010><FONT color=#0000ff size=2 face=Arial>for a
residential PV System is calculated as follows:</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial>Lifetime $/kWh Cost = (Purchase $ after
incentives + Finance Charge $ + Lifetime O&M $) / Lifetime kWh
Generated</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial>Example: A system that has a capital cost of $20,000
including finance charges generates 150,000 kWh over its 25 year life. The
O&M costs over the same period total $5,000, for a Total Cost of $25,000.
The Lifetime Cost of the electricity generated = $25,000/150,000 kWh =
$0.1667/kWh.</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial>The Net $/kWh VALUE for a PV System includes some
other factors, which will vary on a system-by-system basis. The driving
element here is the $/kWh of the Offset Utility Energy. This is, after all,
the comparative value of the energy in the first place. I also believe
that the net-change in value of the property is valid to consider.
</FONT></SPAN><SPAN class=906522620-06032010><FONT color=#0000ff size=2
face=Arial>I don't like all the BS mumbo jumbo about NPVs and wild-ass
guesstimates about the cost of money at arbitrary points in the future and
whether or not the inflation rates of electric rates will be higher or
lower than $ deflation rates in a given time period and only if the customer
turns 65 during the life of the system and due to divorce in Year 11 the
customer's effective tax rate changes and...... </FONT></SPAN><SPAN
class=906522620-06032010><FONT color=#0000ff size=2 face=Arial>Screw that. My
crystal ball ain't that good. It is what it is. </FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial>Calculate the VALUE of the PV System in $/kWh as
follows:</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial>Net $/kWh Value = ((Offset Utility Energy $ + Net
Change Property Value $) - Total Cost) / Lifetime kWh
Generated</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial>Example: A system generates 150,000 kWh over its 25 year
life. The Offset Utility Energy $ is $27,000 and the Net Change in Property
Value is $10,000. The system has a Total Cost of $25,000. </FONT></SPAN><SPAN
class=906522620-06032010><FONT color=#0000ff size=2 face=Arial>The Net Value
of the electricity generated = (($27,000 + $10,000) - $25,000) =
$12,000. The </FONT></SPAN><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial>The Net $/kWh Value = $12,000 / 150,000 kWh =
$0.08/kWh.</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial>Two of the biggest underlying factors are the assumed
Service Life of the System in Years and the O&M costs during that period.
Like I said, my crystal ball ain't that good. I can share
that </FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010></SPAN><SPAN
class=906522620-06032010><FONT color=#0000ff size=2
face=Arial></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial>Hope this is helpful,</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial>Matt Lafferty</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=906522620-06032010><FONT color=#0000ff
size=2 face=Arial></FONT></SPAN> </DIV>
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