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RE: [hreg] A different way to look at PV investment... cost vs. value

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  • Tyra Rankin
    Very well said, Kevin. Tyra _____ From: hreg@yahoogroups.com [mailto:hreg@yahoogroups.com] On Behalf Of Kevin Conlin Sent: Sunday, August 02, 2009 7:12 PM To:
    Message 1 of 29 , Aug 3, 2009
    • 0 Attachment

      Very well said, Kevin. 

      Tyra


      From: hreg@yahoogroups.com [mailto: hreg@yahoogroups.com ] On Behalf Of Kevin Conlin
      Sent: Sunday, August 02, 2009 7:12 PM
      To: hreg@yahoogroups.com
      Subject: [hreg] A different way to look at PV investment... cost vs. value

       

       

      Yes, I can't argue against a realistic financial perspective, but I also think that distorts the true value of the investment.  We seldom apply those rules to most of the other major purchases in our lives.

       

      We never think about the return on a set of golf clubs, a beautiful home, a sleek car or a granite countertop, but those investments make for a more fulfilling life, and we personally justify the extra expense by the satisfaction and enjoyment we get from using those items. How many people reading this bought their car because it was the cheapest and most economical one you could find?  It more likely came down to personal choice and preference.

       

      If climate change, dwindling resources, environmental degradation, threatened wildlife, future generations, a sustainable society and lifestyle or any other issues are close to your heart, then you can make the right decision without regard for ROI, payback, cost of opportunity, etc...and feel real good about it.

       

      How many people use life cycle costing when buying a big screen TV, a stainless steel refrigerator, BBQ grill or new furniture?  Then why do we always insist on imposing those rules on solar?

       

      If we only made decisions based on economics, this would be one empty, desolate planet....and we would do many things for the very wrong reasons.

       

      Value is so much more than just cost.....and I admire the people who make the right decisions for the "wrong" reasons.

       

       

       

      Kevin Conlin

      Heliosolar Design, Inc.

      13534 Quetzal Lane

      Houston, TX 77083

      C:  (281) 202-9629

      H:  (281) 530-7501

      F:  (281) 530-7501

      kevin@heliosolardes ign.com

       

       

       

       


      From: hreg@yahoogroups. com [mailto: hreg@ yahoogroups. com ] On Behalf Of Robert Johnston
      Sent: Sunday, August 02, 2009 5:40 PM
      To: hreg@yahoogroups. com
      Subject: RE: [hreg] A different way to look at PV investment.. .

       

      I see you posted while I was composing my last post.  Just a quick comment…

      Your last paragraph is the key one—for some people, the intangibles make it worth it.  That’s fine, so long as the true financial cost isn’t obscured.  Using the example of an electric vehicle just creates a mental image of something green and neat—free transportation fuel!  But from a financial perspective, one would want to do the comparison on the basis of the cost of metered electricity from the grid vs. the cost of electricity from PV—regardless of whether it is used for an electric car or for anything else you wanted it for.  In that case, the calculation must still factor in cost of capital etc. as I argued.  i.e., regardless of the use, one should just make the calculation on the basis of cost per kwh.

      Robert

      From: hreg@yahoogroups. com [mailto: hreg@ yahoogroups. com ] On Behalf Of Kevin Conlin
      Sent: Sunday, August 02, 2009 5:13 PM
      To: hreg@yahoogroups. com
      Subject: [hreg] A different way to look at PV investment.. .

       

      Good points all.

      At the Solar 2009 conference a few months ago I heard a very interesting
      analogy made. The premise was that if you invested in a 1.5 kw PV system and
      drove an electric vehicle for the next 30 years, you would essentially have
      paid for 30 years worth of fuel with the PV system. I don't remember all the
      specific assumptions, but it assumed a useful life of 30 years for the pv.

      1.5KW @ $10,000 x .7 Federal Tax Credit = $7,000/30 years = $233/year.
      Compared to a 25 mpg vehicle, current gasoline costs would be at least
      $800/year, and aren't likely to decline over 30 years time, but you could
      also assume mileage improvements would be par with rising fuel costs.

      I know you can take the example apart because of the assumptions and
      simplified math, but the point was by investing in pv/ev you were displacing
      foreign oil payments and reducing the trade deficit, spending the money
      domestically and stimulating a growing industry, reducing CO2 and other
      climate changing emissions, encouraging distributed energy on the grid as
      well as saving money personally, over $15,000.

      As Kim alluded, the benefits aren't just financial; intangibles such as the
      personal pride, enjoyment and fulfillment that come from ownership have
      different values to different people.

      Kevin Conlin
      Heliosolar Design, Inc.
      13534 Quetzal Lane
      Houston , TX 77083
      C: (281) 202-9629
      H: (281) 530-7501
      F: (281) 530-7501
      kevin@heliosolardes ign.com



      -----Original Message-----
      From: hreg@yahoogroups. com [mailto:hreg@yahoogroups. com] On Behalf Of Garth
      & Kim Travis
      Sent: Sunday, August 02, 2009 3:40 PM
      To: hreg@yahoogroups. com
      Subject: Re: [hreg] Cost of solar PV installed.

      Greetings,

      Why would you factor 100% financing? Even mortgages require at least 5 or 10
      percent down. Also, a 25 year term for a mere $38,500? That is paying less
      than $2,000 a year in capital. Any financial adviser worth their salt would
      tell you that is a bit silly, a 15 year period would be pretty maximum. How
      many times over do you wish to pay for the system?

      If you are going to include all of the joys of ownership, you should also
      include the adjustments for the rising cost of electric, and the final value
      of the system when it is paid for. Especially since when you pay the grid,
      at the end of it all, you have nothing. It is like renting a home vs owning
      a home. Initially it costs more to own, but in the long run, it is soooooo
      much cheaper.

      Bright Blessings,
      Kim

      Robert Johnston wrote:

      >
      >
      > This doesn't factor in (1) the cost of capital or (2) increased
      > property insurance rates.
      >
      > (1) If you assume 100% financing at mortgage rates of 5.25% for 25
      > years, the monthly payment for a $38,500 system (10kW) would be
      > $230.71. Using Chris' estimated output for a 10kW system of 1000
      > kW/mo, that increases the cost to $0.23/kwh.
      >
      > (2) I was recently quoted $10 annually per $1000 coverage on
      w:st="on">Texas
      > Windstorm (possibly Houston is a bit less;
      I live in Lake Jackson ,
      > nearer the coast). Federal flood insurance currently runs me $2.61 per
      > $1000 coverage. Homeowners insurance costs me $3.73 per $1000 of
      > coverage. Thus, for all 3 coverages, a total of $16.34 per $1000 of
      > coverage. Now, I don't know what exactly solar panels and controls add
      > compared to the cost of the rest of the house itself, but if we
      > conservatively assume that it incrementally increases insurance costs
      > only at 75% of the rate of the rest of the house, that is $12.26 per
      > $1000, or for a $38,500 installation (assuming we only insure for the
      > net cost to us after federal subsidies, not the replacement cost of
      > the system), then that is an extra $472 per year, or $0.039/kwh. If
      > insured at replacement cost, it will be correspondingly higher (I
      > suspect you will be required by your insurance company to cover at
      > replacement cost since that is what they are promising to do for you,
      > and no federal subsidy will help them replace your system after a
      > fire, hurricane, etc.). If rates are lower in your area, or you don't
      > carry flood coverage, then rates would be somewhat lower.
      >
      >
      > With the cost of financing and the cost of insurance factored in, the
      > cost would be approximately $0.27/kwh for a 10 kW system. Whereas
      > $0.128/kwh is similar to current REP rates, $0.27/kwh is not.
      >
      > Robert Johnston
      >
      > *From:* hreg@yahoogroups. com
      [mailto:hreg@yahoogroups. com] *On Behalf
      > Of *Chris Boyer
      > *Sent:* Saturday, August 01, 2009 10:27 PM
      > *To:* HREG
      > *Subject:* [hreg] Cost of solar PV installed.
      >
      > Here is a simple calculation showing examples of the current economics
      > for Solar PV in Houston .
      I mentioned this is the HREG meeting last
      > Sunday, so here are the numbers. What it shows is the "Price" of
      > installing a system of three sizes on a building (the upfront cash
      > layout), from 100 kW, to 10 kW and 1 kW; then the Federal Tax Credit
      > (which is now a rebate for commercial systems); and the Net cost of
      > the solar installation for each size. The next line is typical energy
      > production (kWh) that the system would produce over the life of the
      > system (25 years warranty). Dividing the Net cost by energy produced
      > gives the Cost of electricity with a solar PV system on a building:
      > less than 12 cents/kWh for larger systems and nearly 15 cents/kWh for
      > very small systems.
      >
      > Size
      >
      >
      >
      > 100 kW
      >
      >
      >
      > 10 kW
      >
      >
      >
      > 1 kW
      >
      > Price
      >
      >
      >
      > $500,000.00
      >
      >
      >
      > $55,000.00
      >
      >
      >
      > $6,500.00
      >
      > Fed
      >
      >
      >
      > $150,000.00
      >
      >
      >
      > $16,500.00
      >
      >
      >
      > $1,950.00
      >
      > Net
      >
      >
      >
      > $350,000.00
      >
      >
      >
      > $38,500.00
      >
      >
      >
      > $4,550.00
      >
      > Production
      >
      >
      >
      >
      >
      > kWh/25yr
      >
      >
      >
      > 3,000,000
      >
      >
      >
      > 300,000
      >
      >
      >
      > 30,000
      >
      > Electricity
      >
      >
      >
      >
      >
      > Cost
      >
      >
      >
      > $ 0.117
      >
      >
      >
      > $ 0.128
      >
      >
      >
      > $ 0.152
      >
      >
      >
      >

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    • Kevin Conlin
      Robert, Yes I am talking about the intangibles, but it s the intangibles in our lives that make and define us, not tangible assets. It s not the car, the bank
      Message 2 of 29 , Aug 3, 2009
      • 0 Attachment
        Robert, Yes I am talking about the intangibles, but it's the intangibles in our lives that make and define us, not tangible assets.  It's not the car, the bank account or the house..
         
        The most important decisions in our lives are about intangibles; love of friends and family, our social conscience, our life partner, our religion, our fear of death,  belief in an afterlife, how we conduct our daily lives.........the things that make us happy and fulfilled.
         
        My point is you unfairly discount the very things that mean the most to us because they don't have a $ sign.
         
        Silas Marner was not a happy camper.
         
        I promise this is my last post on this topic......
         
        Kevin Conlin
        Heliosolar Design, Inc.
        13534 Quetzal Lane
        Houston, TX 77083
        C:  (281) 202-9629
        H:  (281) 530-7501
        F:  (281) 530-7501
         
         
         


        From: hreg@yahoogroups.com [mailto:hreg@yahoogroups.com] On Behalf Of Robert Johnston
        Sent: Sunday, August 02, 2009 7:44 PM
        To: hreg@yahoogroups.com
        Subject: RE: [hreg] A different way to look at PV investment... cost vs. value

         

        Yes, but you are pointing to the intangibles.  How many people purchase PV because it is fun or sexy or anything like that?  A few enthusiasts do.  But most people are interested simply in getting electrical power; they don’t care how.  As for the environment, climate change, etc.—remember that this is all available “on the grid” through renewable sources (windpower etc.).  So it isn’t a choice between PV and climate change etc.  The question is whether distributed power in the form of residential PV is cost competitive with renewable power distributed over the grid.  The answer, I believe the analysis shows (if you factor in cost of capital), is “no”.  Again, that doesn’t mean folks who get a thrill watching electrons chase holes in their PV panels won’t enjoy having them.


        Robert

        From: hreg@yahoogroups. com [mailto:hreg@ yahoogroups. com] On Behalf Of Kevin Conlin
        Sent: Sunday, August 02, 2009 7:12 PM
        To: hreg@yahoogroups. com
        Subject: [hreg] A different way to look at PV investment.. . cost vs. value

         

        Yes, I can't argue against a realistic financial perspective, but I also think that distorts the true value of the investment.  We seldom apply those rules to most of the other major purchases in our lives.

        We never think about the return on a set of golf clubs, a beautiful home, a sleek car or a granite countertop, but those investments make for a more fulfilling life, and we personally justify the extra expense by the satisfaction and enjoyment we get from using those items. How many people reading this bought their car because it was the cheapest and most economical one you could find?  It more likely came down to personal choice and preference.

        If climate change, dwindling resources, environmental degradation, threatened wildlife, future generations, a sustainable society and lifestyle or any other issues are close to your heart, then you can make the right decision without regard for ROI, payback, cost of opportunity, etc...and feel real good about it.

        How many people use life cycle costing when buying a big screen TV, a stainless steel refrigerator, BBQ grill or new furniture?  Then why do we always insist on imposing those rules on solar?

        If we only made decisions based on economics, this would be one empty, desolate planet....and we would do many things for the very wrong reasons.

        Value is so much more than just cost.....and I admire the people who make the right decisions for the "wrong" reasons.

        Kevin Conlin

        Heliosolar Design, Inc.

        13534 Quetzal Lane

        Houston, TX 77083

        C:  (281) 202-9629

        H:  (281) 530-7501

        F:  (281) 530-7501

        kevin@heliosolardes ign.com


        From: hreg@yahoogroups. com [mailto:hreg@ yahoogroups. com] On Behalf Of Robert Johnston
        Sent: Sunday, August 02, 2009 5:40 PM
        To: hreg@yahoogroups. com
        Subject: RE: [hreg] A different way to look at PV investment.. .

         

        I see you posted while I was composing my last post.  Just a quick comment…

        Your last paragraph is the key one—for some people, the intangibles make it worth it.  That’s fine, so long as the true financial cost isn’t obscured.  Using the example of an electric vehicle just creates a mental image of something green and neat—free transportation fuel!  But from a financial perspective, one would want to do the comparison on the basis of the cost of metered electricity from the grid vs. the cost of electricity from PV—regardless of whether it is used for an electric car or for anything else you wanted it for.  In that case, the calculation must still factor in cost of capital etc. as I argued.  i.e., regardless of the use, one should just make the calculation on the basis of cost per kwh.

        Robert

        From: hreg@yahoogroups. com [mailto:hreg@ yahoogroups. com] On Behalf Of Kevin Conlin
        Sent: Sunday, August 02, 2009 5:13 PM
        To: hreg@yahoogroups. com
        Subject: [hreg] A different way to look at PV investment.. .

         

        Good points all.

        At the Solar 2009 conference a few months ago I heard a very interesting
        analogy made. The premise was that if you invested in a 1.5 kw PV system and
        drove an electric vehicle for the next 30 years, you would essentially have
        paid for 30 years worth of fuel with the PV system. I don't remember all the
        specific assumptions, but it assumed a useful life of 30 years for the pv.

        1.5KW @ $10,000 x .7 Federal Tax Credit = $7,000/30 years = $233/year.
        Compared to a 25 mpg vehicle, current gasoline costs would be at least
        $800/year, and aren't likely to decline over 30 years time, but you could
        also assume mileage improvements would be par with rising fuel costs.

        I know you can take the example apart because of the assumptions and
        simplified math, but the point was by investing in pv/ev you were displacing
        foreign oil payments and reducing the trade deficit, spending the money
        domestically and stimulating a growing industry, reducing CO2 and other
        climate changing emissions, encouraging distributed energy on the grid as
        well as saving money personally, over $15,000.

        As Kim alluded, the benefits aren't just financial; intangibles such as the
        personal pride, enjoyment and fulfillment that come from ownership have
        different values to different people.

        Kevin Conlin
        Heliosolar Design, Inc.
        13534 Quetzal Lane
        Houston, TX 77083
        C: (281) 202-9629
        H: (281) 530-7501
        F: (281) 530-7501
        kevin@heliosolardes ign.com



        -----Original Message-----
        From: hreg@yahoogroups. com [mailto:hreg@yahoogroups. com] On Behalf Of Garth
        & Kim Travis
        Sent: Sunday, August 02, 2009 3:40 PM
        To: hreg@yahoogroups. com
        Subject: Re: [hreg] Cost of solar PV installed.

        Greetings,

        Why would you factor 100% financing? Even mortgages require at least 5 or 10
        percent down. Also, a 25 year term for a mere $38,500? That is paying less
        than $2,000 a year in capital. Any financial adviser worth their salt would
        tell you that is a bit silly, a 15 year period would be pretty maximum. How
        many times over do you wish to pay for the system?

        If you are going to include all of the joys of ownership, you should also
        include the adjustments for the rising cost of electric, and the final value
        of the system when it is paid for. Especially since when you pay the grid,
        at the end of it all, you have nothing. It is like renting a home vs owning
        a home. Initially it costs more to own, but in the long run, it is soooooo
        much cheaper.

        Bright Blessings,
        Kim

        Robert Johnston wrote:

        >
        >
        > This
        doesn't factor in (1) the cost of capital or (2) increased
        > property
        insurance rates.
        >
        > (1) If you assume 100% financing at mortgage
        rates of 5.25% for 25
        > years, the monthly payment for a $38,500 system
        (10kW) would be
        > $230.71. Using Chris' estimated output for a 10kW
        system of 1000
        > kW/mo, that increases the cost to
        $0.23/kwh.
        >
        > (2) I was recently quoted $10 annually per $1000
        coverage on Texas
        > Windstorm (possibly Houston is a bit less; I live in
        Lake Jackson,
        > nearer the coast). Federal flood insurance currently runs
        me $2.61 per
        > $1000 coverage. Homeowners insurance costs me $3.73 per
        $1000 of
        > coverage. Thus, for all 3 coverages, a total of $16.34 per
        $1000 of
        > coverage. Now, I don't know what exactly solar panels and
        controls add
        > compared to the cost of the rest of the house itself, but
        if we
        > conservatively assume that it incrementally increases insurance
        costs
        > only at 75% of the rate of the rest of the house, that is $12.26
        per
        > $1000, or for a $38,500 installation (assuming we only insure for
        the
        > net cost to us after federal subsidies, not the replacement cost of
        > the system), then that is an extra $472 per year, or $0.039/kwh. If
        > insured at replacement cost, it will be correspondingly higher (I
        > suspect you will be required by your insurance company to cover at
        > replacement cost since that is what they are promising to do for you,
        > and no federal subsidy will help them replace your system after a
        > fire, hurricane, etc.). If rates are lower in your area, or you don't
        > carry flood coverage, then rates would be somewhat
        lower.
        >
        >
        > With the cost of financing and the cost of
        insurance factored in, the
        > cost would be approximately $0.27/kwh for a
        10 kW system. Whereas
        > $0.128/kwh is similar to current REP rates,
        $0.27/kwh is not.
        >
        > Robert Johnston
        >
        > *From:*
        href="mailto:hreg%40yahoogroups.com">hreg@yahoogroups. com [mailto:hreg@yahoogroups. com] *On Behalf
        > Of *Chris Boyer
        > *Sent:* Saturday, August 01, 2009 10:27
        PM
        > *To:* HREG
        > *Subject:* [hreg] Cost of solar PV
        installed.
        >
        > Here is a simple calculation showing examples of the
        current economics
        > for Solar PV in Houston. I mentioned this is the HREG
        meeting last
        > Sunday, so here are the numbers. What it shows is the
        "Price" of
        > installing a system of three sizes on a building (the
        upfront cash
        > layout), from 100 kW, to 10 kW and 1 kW; then the Federal
        Tax Credit
        > (which is now a rebate for commercial systems); and the Net
        cost of
        > the solar installation for each size. The next line is typical
        energy
        > production (kWh) that the system would produce over the life of
        the
        > system (25 years warranty). Dividing the Net cost by energy
        produced
        > gives the Cost of electricity with a solar PV system on a
        building:
        > less than 12 cents/kWh for larger systems and nearly 15
        cents/kWh for
        > very small systems.
        >
        > Size
        >
        >
        >
        > 100 kW
        >
        >
        >
        > 10 kW
        >
        >
        >
        > 1 kW
        >
        > Price
        >
        >
        >
        >
        $500,000.00
        >
        >
        >
        > $55,000.00
        >
        >
        >
        > $6,500.00
        >
        > Fed
        >
        >
        >
        >
        $150,000.00
        >
        >
        >
        > $16,500.00
        >
        >
        >
        > $1,950.00
        >
        > Net
        >
        >
        >
        >
        $350,000.00
        >
        >
        >
        > $38,500.00
        >
        >
        >
        > $4,550.00
        >
        > Production
        >
        >
        >
        >
        >
        > kWh/25yr
        >
        >
        >
        >
        3,000,000
        >
        >
        >
        > 300,000
        >
        >
        >
        > 30,000
        >
        > Electricity
        >
        >
        >
        >
        >
        > Cost
        >
        >
        >
        > $
        0.117
        >
        >
        >
        > $ 0.128
        >
        >
        >
        >
        $ 0.152
        >
        >
        >
        >

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      • Garth & Kim Travis
        Greetings, Once again, urban vs rural and this list does serve surrounding areas. In the rural areas, you pay to get hooked up to the grid, depending on how
        Message 3 of 29 , Aug 3, 2009
        • 0 Attachment
          Greetings,

          Once again, urban vs rural and this list does serve surrounding areas.
          In the rural areas, you pay to get hooked up to the grid, depending on
          how far they need to run the lines, it can be thousands.

          I use the words 'home ownership' to mean actually owning a home. Not in
          the process of buying one, which is what having a mortgage is. When I
          teach finances, I point out how many times over you are going to pay for
          that house if you run your mortgage out, at least 3 or 4 times. Home
          ownership is great if you pay the place off ASAP, then life's little
          disasters aren't so bad to live with. Many people don't understand that
          they are renting when they opt for a mortgage of the type that just pays
          the interest. They will never own the place. And yes, buying at the
          top of the market hurts, you can wind up owing more than the house is worth.

          But with all things, the costs depend on circumstances. I know many
          people that are off grid since it was cheaper than having the grid
          connected. I use PV in my out buildings for the same reason, it is
          cheaper.

          Your comments about: " For me personally, PV should be a trouble-free
          system with costs equal to renewable energy purchased on the grid with
          the full support of professionalcrews/maintenance included." Are
          funny. I wish the grid was that dependable. We purchased our first
          large inverter [powered by our tractor running on waste veggie oil] to
          be able to power the freezers and fridges when the grid is down.
          Renewable energy grid is not an option here.

          Self Sufficiency will cut costs of everything, if you are willing to do
          the work. Maybe this is why some of us find PV affordable and others do not.

          Bright Blessings,
          Kim



          Robert Johnston wrote:
          > Kim, you've raised some interesting points. I'll try to address each below.
          >
          >
          >
          >
          >
        • Russell Warren
          Thanks Bill, That is less than I would have assumed they use. Russ ... From: hreg@yahoogroups.com [mailto:hreg@yahoogroups.com]On Behalf Of Bill or Dorothy
          Message 4 of 29 , Aug 3, 2009
          • 0 Attachment
            Thanks Bill,
            That is less than I would have assumed they use.
             
            Russ
             
            -----Original Message-----
            From: hreg@yahoogroups.com [mailto:hreg@yahoogroups.com]On Behalf Of Bill or Dorothy Swann
            Sent: Monday, August 03, 2009 9:19 AM
            To: hreg@yahoogroups.com
            Subject: Re: [hreg] A different way to look at PV investment...

             

                Here is the electric vehicle math. My small EV consumes 200 watt hours per mile. With 1.5 kWatt of panels, you can harvest 2376 kWatt-hr per year or 6.5 kWatt-hr per day. 6500/200 = 32 miles per day.
                The source of energy harvested per year is <http://rredc. nrel.gov/ solar/codes_ algs/PVWATTS/ version1/ US/> Choose Texas, click on Houston, and enter the data. I have used tracking solar arrays.
             
            Thanks,Bill S
            Ph 832-338-3080
            www.promotingevs. com



            From: Russell Warren <rrwarren@earthlink. net>
            To: hreg@yahoogroups. com
            Sent: Monday, August 3, 2009 7:53:18 AM
            Subject: RE: [hreg] A different way to look at PV investment.. .

             

            I think this is a nice example except for the fact that there is a huge assumption being made in that a 1.5 kW solar system could power an electric vehicle for the same amount of miles as the gas listed in the explanation.
            Needless to say I have my doubts that you could run a vehicle on even 20 kWh a day.
             
             
             
            -----Original Message-----
            From: hreg@yahoogroups. com [mailto:hreg@ yahoogroups. com]On Behalf Of Kevin Conlin
            Sent: Sunday, August 02, 2009 5:13 PM
            To: hreg@yahoogroups. com
            Subject: [hreg] A different way to look at PV investment.. .

             

            Good points all.

            At the Solar 2009 conference a few months ago I heard a very interesting
            analogy made. The premise was that if you invested in a 1.5 kw PV system and
            drove an electric vehicle for the next 30 years, you would essentially have
            paid for 30 years worth of fuel with the PV system. I don't remember all the
            specific assumptions, but it assumed a useful life of 30 years for the pv.

            1.5KW @ $10,000 x .7 Federal Tax Credit = $7,000/30 years = $233/year.
            Compared to a 25 mpg vehicle, current gasoline costs would be at least
            $800/year, and aren't likely to decline over 30 years time, but you could
            also assume mileage improvements would be par with rising fuel costs.

            I know you can take the example apart because of the assumptions and
            simplified math, but the point was by investing in pv/ev you were displacing
            foreign oil payments and reducing the trade deficit, spending the money
            domestically and stimulating a growing industry, reducing CO2 and other
            climate changing emissions, encouraging distributed energy on the grid as
            well as saving money personally, over $15,000.

            As Kim alluded, the benefits aren't just financial; intangibles such as the
            personal pride, enjoyment and fulfillment that come from ownership have
            different values to different people.

            Kevin Conlin
            Heliosolar Design, Inc.
            13534 Quetzal Lane
            Houston, TX 77083
            C: (281) 202-9629
            H: (281) 530-7501
            F: (281) 530-7501
            kevin@heliosolardes ign.com



            -----Original Message-----
            From: hreg@yahoogroups. com [mailto:hreg@yahoogroups. com] On Behalf Of Garth
            & Kim Travis
            Sent: Sunday, August 02, 2009 3:40 PM
            To: hreg@yahoogroups. com
            Subject: Re: [hreg] Cost of solar PV installed.

            Greetings,

            Why would you factor 100% financing? Even mortgages require at least 5 or 10
            percent down. Also, a 25 year term for a mere $38,500? That is paying less
            than $2,000 a year in capital. Any financial adviser worth their salt would
            tell you that is a bit silly, a 15 year period would be pretty maximum. How
            many times over do you wish to pay for the system?

            If you are going to include all of the joys of ownership, you should also
            include the adjustments for the rising cost of electric, and the final value
            of the system when it is paid for. Especially since when you pay the grid,
            at the end of it all, you have nothing. It is like renting a home vs owning
            a home. Initially it costs more to own, but in the long run, it is soooooo
            much cheaper.

            Bright Blessings,
            Kim

            Robert Johnston wrote:
            >
            >
            > This doesn't factor in (1) the cost of capital or (2) increased
            > property insurance rates.
            >
            > (1) If you assume 100% financing at mortgage rates of 5.25% for 25
            > years, the monthly payment for a $38,500 system (10kW) would be
            > $230.71. Using Chris' estimated output for a 10kW system of 1000
            > kW/mo, that increases the cost to $0.23/kwh.
            >
            > (2) I was recently quoted $10 annually per $1000 coverage on Texas
            > Windstorm (possibly Houston is a bit less; I live in Lake Jackson,
            > nearer the coast). Federal flood insurance currently runs me $2.61 per
            > $1000 coverage. Homeowners insurance costs me $3.73 per $1000 of
            > coverage. Thus, for all 3 coverages, a total of $16.34 per $1000 of
            > coverage. Now, I don't know what exactly solar panels and controls add
            > compared to the cost of the rest of the house itself, but if we
            > conservatively assume that it incrementally increases insurance costs
            > only at 75% of the rate of the rest of the house, that is $12.26 per
            > $1000, or for a $38,500 installation (assuming we only insure for the
            > net cost to us after federal subsidies, not the replacement cost of
            > the system), then that is an extra $472 per year, or $0.039/kwh. If
            > insured at replacement cost, it will be correspondingly higher (I
            > suspect you will be required by your insurance company to cover at
            > replacement cost since that is what they are promising to do for you,
            > and no federal subsidy will help them replace your system after a
            > fire, hurricane, etc.). If rates are lower in your area, or you don't
            > carry flood coverage, then rates would be somewhat lower.
            >
            >
            > With the cost of financing and the cost of insurance factored in, the
            > cost would be approximately $0.27/kwh for a 10 kW system. Whereas
            > $0.128/kwh is similar to current REP rates, $0.27/kwh is not.
            >
            > Robert Johnston
            >
            > *From:* hreg@yahoogroups. com [mailto:hreg@yahoogroups. com] *On Behalf
            > Of *Chris Boyer
            > *Sent:* Saturday, August 01, 2009 10:27 PM
            > *To:* HREG
            > *Subject:* [hreg] Cost of solar PV installed.
            >
            > Here is a simple calculation showing examples of the current economics
            > for Solar PV in Houston. I mentioned this is the HREG meeting last
            > Sunday, so here are the numbers. What it shows is the "Price" of
            > installing a system of three sizes on a building (the upfront cash
            > layout), from 100 kW, to 10 kW and 1 kW; then the Federal Tax Credit
            > (which is now a rebate for commercial systems); and the Net cost of
            > the solar installation for each size. The next line is typical energy
            > production (kWh) that the system would produce over the life of the
            > system (25 years warranty). Dividing the Net cost by energy produced
            > gives the Cost of electricity with a solar PV system on a building:
            > less than 12 cents/kWh for larger systems and nearly 15 cents/kWh for
            > very small systems.
            >
            > Size
            >
            >
            >
            > 100 kW
            >
            >
            >
            > 10 kW
            >
            >
            >
            > 1 kW
            >
            > Price
            >
            >
            >
            > $500,000.00
            >
            >
            >
            > $55,000.00
            >
            >
            >
            > $6,500.00
            >
            > Fed
            >
            >
            >
            > $150,000.00
            >
            >
            >
            > $16,500.00
            >
            >
            >
            > $1,950.00
            >
            > Net
            >
            >
            >
            > $350,000.00
            >
            >
            >
            > $38,500.00
            >
            >
            >
            > $4,550.00
            >
            > Production
            >
            >
            >
            >
            >
            > kWh/25yr
            >
            >
            >
            > 3,000,000
            >
            >
            >
            > 300,000
            >
            >
            >
            > 30,000
            >
            > Electricity
            >
            >
            >
            >
            >
            > Cost
            >
            >
            >
            > $ 0.117
            >
            >
            >
            > $ 0.128
            >
            >
            >
            > $ 0.152
            >
            >
            >
            >

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