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Old 08-19-12, 02:47 AM   #1
bluefoxicy
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ROI on solar systems is now like 1 year?

So I'm looking at these:

http://www.dudadiesel.com/solar.php

And this:

http://www.dsireusa.org/incentives/i...D55F&re=0&ee=0

Now, let's look at these systems.
  • The 150L system would generate about 2.9SREC; the 300L might generate over 5 (maximum)
  • Federal 30% rebate, state 20% rebate, taxable, gives about a 35% total savings on these systems.
  • I'd spend around $500/year normally on water heating (I spend $40/mo on gas and that's basically all I use it for)

SREC in MD float around $190-$280 on the market. Without a SREC, businesses have to pay 40 cents per kWh for energy in certain conditions, so the value of a SREC is less than $400. Basically the hot water system generates about 2.9MWh per year, and I can sell that offset. A bigger system generates more, but the state caps residential installations at 5SREC from solar hot water.

If I did put in a big system, I'd also put in radiator heating. I'd run a plate exchanger to the radiator boiler tank, supplementing gas. I'd put an expansion tank on the boiler, but also have an extra thermal switch to shut off the loop going to the boiler (there's already one on the solar hot water system, it's required or it overheats the tank). A bigger system has additional tubes for more collection; in the winter there is less sun, but I would offset some of my house heating costs (I usually space heat, but this would give me an incentive to switch).

Finally, a $1000 tankless heater driven by natural gas could be used. Solar hot water tank has a gas backup; disable that. Run the solar hot water output to a thermostatic mixing valve--this is standard, it mixes cold water in to regulate temperature, so if your hot water is over 140F it brings it down. Set the valve to 140F or lower; set the tankless heater to that value as well (they max at 140F generally). Run the hot water output from the thermostatic mixing valve into the cold water input of the tankless heater. You'll never burn gas when you run the tank down, never burn gas when the sun isn't out and the tank cools, EXCEPT if you actually turn on the hot tap while the tank's cool. The cooler the tank, the more gas you burn; if the tank's 120F and your hot water is 140F, you only have to raise it 20 degrees rather than (say) 88 or so.

All in all, the ROI on a solar water heating system would basically be 1 year? Then I'd make about $700/year just for having it. It'd be about 2 years if I tacked on a tankless heater, but I'd have absolute hot water stability (the tank losing temperature isn't going to cool my hot water) and wouldn't burn gas just to idle the tank if there's not enough sunlight.



On top of that, photovoltaic 3kW array is like $10,000? SRECs aren't capped for PV in MD. You only get SREC if you have a synchronous inverter: any extra capacity you don't use goes back on the grid. MD credits you for raising the available solar energy, which you can consume yourself in lieu of grid energy OR put back on the grid for others to consume.

a 3kW array at 10 hours of sunlight per day (16 in the summer down to like 8 in the winter, it's a crude guess) would generate some 10-11 megawatt hours per year, 10-11 SREC. You'd get like $2000-$3000 based on market forces. So like, 4 years to pay off a solar array?



In the end you'd be making over $5000/year and saving nearly as much in utility costs.

Seriously? When the hell did this happen?
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Old 08-19-12, 03:54 AM   #2
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I approve of this product or service.
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Old 08-19-12, 05:39 AM   #3
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Heh I dunno. 1 year is an insane ROI, nothing's usually that fast. It's boosted by a government subsidy that I'm not entirely sure of; on the other hand, the SRECs are a business thing and a method of taxation I quite approve of, that being a tax designed to exert pressure on a certain undesired behavior but not to the point that it can't be bought away. Businesses can pay $400 for the equivalent of 1SREC, or they can buy an offset on the market for less (never more, or they'll just pay the government the tax).

Essentially this is on the base a gentle tax incentive: it determines a social or economic need and enacts a tax on something that hinders that (i.e. that prevents adoption or that damages potential). In this case the need is air quality, independence from foreign oil, etc, in the form of solar or wind energy; we have a tax that targets use of energy, and SREC are purchased from solar energy suppliers such that those purchases essentially buy quantities of solar energy. This encourages the use of less energy resources on the whole, since there's always an additional cost.

The incentive is extended to produces by redirecting the tax. A water heater producing 1SREC uses solar rather than enough gas for a power plant to produce 1MWh of electricity, thus that quantity of emissions is avoided, so buying that SREC pays for a unit of non-fossil-fuel power generation to do useful work. This effectively subsidizes solar producers (and WRECs for Wind) based directly on demand. If there's not enough demand, SREC values go down, reducing the tendency of the market to manically build out on a cash cow (bubble). If SRECs are cheap, demand goes up until price increases cull it or scarcity is reached and encourages greater capacity. If companies decide to ignore the SREC market (say SREC are $380 each and it's cheaper and easier to just pay $400 tax per 1MWh), then the government gets money directly that it can use on related efforts (tax breaks etc).



On the other hand, I don't like the subsidy on water heating systems itself. 50% total, but it's taxed so 35%. Still, businesses selling them are quick to remind you of the 30% the Federal Government will give you, and make their systems that much more expensive--that $1500 system is really a $1000 system that they realized you'd pay $700 for in the end, so they priced it at $1500 and tell you the government will give you back $450 so it's $1050. You'd buy a $1000 system anyway, this is a $1000 system. Local suppliers would know about the additional subsidy given by the state, so here it'd be a $2000 system. With the subsidy being taxed as income, I'd pay a good few hundred more for the same system; ordering online, they just grab the federal subsidy.

That means it's never cheaper for the consumer. It's a high-margin product thanks to a government subsidy for the suppliers. It's given to the consumer as a "tax break" but the market sees this and factors it in (tax incentives for buying houses also make houses more expensive--consumers who took the $8000 tax credit on average lost $15000 in the deal, for example, since it just pushed house prices up and they paid more for the house, plus more in interest).



My numbers for solar PV SREC are off by probably half. Online stuff says a 5KW array might produce 8000kWh (8SREC) anually. So about 5SREC from a 3kW array, half as much as I figured. That makes the ROI about 9 years between electricity costs and SREC sales against a $14000 array. The array gets a 30% tax credit from the Federal Government, giving a good $4200 leaving $9800. That leaves a 6 year ROI. Of course all this ignores that the government taxes all that stuff as income, so probably more 8-9 year anyway.


Still not a bad turn around I guess. The ROI is definitely there for solar water heat, not as much for PV except maybe for resale value of the house.
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Old 08-19-12, 10:53 AM   #4
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I don't use enough electricity for it to be worthwhile putting in a solar system. My combined electric and gas bill averages about $60 a month.
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Old 08-19-12, 01:41 PM   #5
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tl;dr
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Old 08-19-12, 02:01 PM   #6
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black box. black hose. water cold. make water hot. save money. money good.
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Old 08-19-12, 03:40 PM   #7
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black box. black hose. water cold. make water hot. save money. money good.
Makes cents.
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Old 08-20-12, 01:15 PM   #8
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I don't know, any time I see a 1 year ROI, alarm bells go off in my head for a scam I don't know all the details of. 1 year ROI is the sort of thing Ponzi schemers sell you, not a real thing.
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Old 08-20-12, 01:46 PM   #9
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black box. black hose. water cold. make water hot. save money. money good.
No money is evil.

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