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Going Solar

04 Mar 2011

We installed a solar photovoltaic array on our home in the spring of 2011 (went live 14-Apr-2011). Many people have asked about the array and how I chose among the various options. Here is my attempt to distill the information:

The system we built is a 7kW array with micro-inverters installed on the roof. Our house was designed for this – the slope of the roof and its facing is aligned correctly for solar exposure in our region. This system should generate roughly 10,000 kWH per year in our region.

Our house uses roughly 1,400 kWH per month, so this system will cover about 60% of the house’s power needs (roughly the cost of heating & cooling). Our average monthly electricity bill is $150 for a 2600 sq. ft. passive-solar residence.

On a perfect day, we generate 43 kWH, which is the predicted output from a 7kW system operating in this region (so yes, the solar calculators work!).

The turn-key system cost was ~$45,000, minus federal tax credits ($13,500), and state tax credits ($10,500). Leaving $21,000 out-of-pocket. By adjusting our tax withholdings we are able to begin paying down this up-front cost immediately instead of waiting for our tax returns next year and ultimately reducing the interest payment.

Generic electricity can be sold to our electric utility (Duke Power) for ~5.4 cents per kWH.

Additionally, if you generate electricity using renewable energy technology, you have a legal right to the “renewable-ness” of that energy, called a Renewable Energy Credit (1 REC = 1000 kWH). This is like a piece of stock in a company, it can be sold and traded on the market. Solar RECs tend to be more valuable and command a higher price in the market.

We signed a 5-year contract with NC Green Power for $150 per REC, (ie: 15 cents per kWH) generated. Sale of the generic electricity, combined with the sale of RECs over the contract period ($0.054 + $0.15 * 10,000 kWH * 5 years ~ $10,000) leaves us with a final out-of-pocket cost of $11,000. Another way to view this is payback period, which would be $21000 / $2000 = 10.5 years, but this assumes we continue to receive $150 per solar REC. I prefer the prior viewpoint (ie: the system costs us about as much as a used car).

The operating costs of the system are an $8/mo meter fee from Duke (about $100/yr total). The system is expected to maintain 80%+ output after 25 years, and has an indefinite lifespan. Assuming solar RECs continue to receive good premiums (10 to 20 cents per kWH), it should continue to pay us $1900/yr indefinitely, or if REC prices drop the system can be converted to reduce our electricity bills by half or more.

We have enough roof space for an additional 6kW of future expansion. One of the benefits of micro-inverters is the ability to expand piecemeal like this. An additional benefit is the extremely long life of micro-inverters (MTBF >300 years) vs standard inverters (15 years). Which can reduce the maintenance cost of the system over the long run.

NC Green Power:

SREC Trade

Duke Power Customer Generation Rate Options (sell the generic electricity):

Strata Solar:

TAG: solar, house