Is Solar energy really viable?

By
Services for Real Estate Pros with Homes and Land of Lancaster County

As reports come in on another government subsidized solar company's bankruptcy, I wonder is solar and wind energy really viable today? I want to take a trip off my usual path for just one day. I have a brother-in-law who is extremely bright and a born entrepreneur. Back in the mid 70's he started his own solar business. It was mostly water heaters at that time. They were bulky, huge and really didn't make as much hot water as was needed by a family. It might have been viable for just 2 people in a household, but that wasn't the case of his first sale... his parents. They still had 4 children living there too. Bonnie has always laughed that her dad would shut off the hot water in the middle of her showers leaving her to finish in cold water. There just wasn't enough to finish and have some for others.

Today, the solar systems are much improved for sure. If I were constructing a new home, I'm sure I would include some solar panels into the mix. With all the tax credits and advertisement, we looked into solar and wind for ourselves in an existing home. Here's what we discovered.

Wind was totally out of the question. It takes very windy conditions to make that viable at all. We thought we had a good windy spot on top of our 66' TV antenna tower. But no good. Still not enough wind and then there is the generator motor rebuild every other year and the other yearly maintenance that made it un-affordable and good for nothing.

We do have lots of space for solar panels though. After getting all the estimates we sat down with the expert and started asking questions. The cost was really high and when pushed he finally told us that we would start breaking even sometime in year 17. That wasn't including any interest from that money over that 17 years either. So then we asked how long are these panels good for? He said about 20 years they think. Now I have Lifetime windows in place that some are in need of replacement after only 10 years. I also have 50 year caulking that I have to replace every 5 years... So I am skeptical that these things will last 20 years. So then I said what is the cost of replacing them in 20 years.... he said about the same as the cost of putting them in new with a small savings since the brackets are already there assuming there is no rusting taking place in them.

Now, why would I spend $80,000 of today's money to save $200 a month on our electric bill and not see the $80K repaid until year 17 and again assuming the panels last that long? That $80,000 was after the tax credit payment by the way. I really don't see other than new construction where it's part of original cost of building, that this is a viable energy source as of yet. I know there is some satisfaction in knowing we are reducing our carbon footprint and all but I believe I will do my part better when I stop breathing out.

I have one friend who found a loophole that makes it all work for him. He raises hogs for a company and they pay for his once enormous electric bill. He put thousands of panels on his hog barns to where the electric company actually pays him back most months plus the hog people pay his agreed amount for electricity every month. I'm wondering how long that contract will last with them knowingly paying for electric he's not using anymore. Time wil tell. Aw.. the price of good bacon! I hope it works out for him because of what it cost him to install all those panels, it was much more than $80,000... about 10x more.

The most viable option I believe available today is still ground source heating and hot water, but then again not for an existing home when you figure out the cost recovery time. So I ask again, is solar really that viable with today's techology?

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Show All Comments
Rainer
114,015
Brian Schulte
Allison James Estates & Homes - Sierra Vista, AZ
SFR, Sierra Vista, AZ

YES HERE IN Sierra Vista AZ.  Over 300 days of sun does help.

One of my past clients did get solar panels. He informed me with rebates and tax credits his break even point will be 4 years. Some of the discussion was about if we were totally off the grid how it would take way longer for ROI. He came to the conlcusion that all new homes here should include solar panels and I am inclined to believe that a great idea too.

Sunny Smiles!

April 04, 2012 06:49 AM #31
Rainmaker
175,582
Bob & Bonnie Horning
Homes and Land of Lancaster County - Mount Joy, PA

Rob, Finally someone has scratched my itch! I will never understand the premise of having to spend money to save money. My wife (actually a friend's wife) used to drive me crazy with her clothes shopping habit. She would exclaim "I just saved $220!" While holding a receipt that showed she just spent $300. So how does that work? Isn't that how our country got into the mess we're in right now? Thanks for your thoughts.

Pete, Love the nickname. Purple is the color of majesty and royalty. You should have enough sun where you are.

Jay, Thanks I'll check that out. I am with you... we need to start thinking things all the way through.

R & J, I like that approach. Like buying a car, I'll never buy new again and hope to get by with only 1 or 2 more car purchases for the rest of my life.

Eric, Mah Shlomcha? Wish I was there now! And our background shot is the Sea of Galilee at sunrise. Yes, in that climate it works very well. In our southern climates here we could do that. You need to get past local ordinances to put a huge water tank on your roof though. They use a lot of passive solar in deserts like that. We don't seem to like living in the desert here in America though.

Edward, What's the difference if I pay a bank or the IRS? We followed our CPA's advice for years and finally realized a few years ago... it's all a scam put forth by the IRS intended to keep us in debt! We used to buy new vehicles every other year... yes we got this incredible $25K deduction but we also had permanent car payments averaging $600 a month x2 that never went away. Debt free is real freedom... I'll pay the taxes thanks. I still spend less money living without loans in my life. BTW, we also have no credit cards and haven't for years. Some still can't imagine that! So I can't rent a car... big deal.

April 04, 2012 07:11 AM #32
Rainer
157,536
Anthony Daniels
Coldwell Banker - San Francisco, CA
SF Bay Area REO Specialist

Solar energy is TOTALLY viable, provided the Congressional chumps don't muck it up with the PRC.

Considering that the sun rises every single day, solar energy totally trumps wind energy, because not every day is windy.

Not to mention that it is easier to assemble, install and relocate solar panels than it is with behemoth wind turbines.

Now if we could just get more American made, better quality panels out there and crush those cheap ass PRC made pieces of garbage, we'd be in much better shape. 

Stay tuned...........

April 04, 2012 07:49 AM #33
Rainmaker
487,038
Lorraine or Loretta Kratz
Crescent Moon Realty, Inc. & Land N Sea Auctions. - San Marcos, CA
Certified Negotiation Consultants

Here in California energy efficient homes are the rage, and builders are implementing as many energy efficient features as possible, solar is one of them, no wind, and here in California we are big on electric cars, hybrids, etc, especially since gas has gone up considerably.

San Diego Gas & Electric is using more and more solar and wind farms to supply the needs of their residents that are using using electric.

April 04, 2012 07:49 AM #34
Rainmaker
175,582
Bob & Bonnie Horning
Homes and Land of Lancaster County - Mount Joy, PA

Russell, I'm only writing from my experience. I'm not an electrician, they told us we need all new panelboxes, we have 1- 200Amp and 2- 100 amp subpanels. By the end of the appointment and this was well over a year ago now, the salesman agreed that it wouldn't be viable for us and agreed that ground source heating/cooling would be the better path. We have about 6,200 sf. Our roof wouldn't support all the panels and we needed to expand into the yard, putting in concrete pylons and so forth. (The best use we found was for heating our water and pool, but still not worth the cost.) It was well over $100,000 by a company who has done more systems in our area than any other. Again, this is just our experience and I'm sure it's different than other areas with more than 50% sun days. I don't agree with your statement about what the government has given us with the expenditures..."Govt funds have help incubate countless initiatives that have blossomed into excellent opportunities  that have won wars, explored outer space and increased technology for the private sector and for consumers." WW2 excepted... I'm not buying that. The private sector is much better at picking winners and losers... excepting VHS... Beta was much better quality, and Windows... I'm a Mac man which I think is winning that battle now. I'm a people person, not big government... and it's our money not theirs. I'll give you the Interstate system but keep those cell phones away from me... truce?

April 04, 2012 07:56 AM #35
Rainmaker
175,582
Bob & Bonnie Horning
Homes and Land of Lancaster County - Mount Joy, PA

Anthony, What is PRC?

L&L, Why aren't there more natural gas vehicles on the road? That's what I can't figure out. Very low emissions, cheap fuel, plenty of it?? I know CA is leading the way so to speak... my sister has been a resident of CA for almost 40 years... she does tell me all the time just how expensive it is to live there though compared to PA.

April 04, 2012 08:19 AM #36
Rainmaker
668,926
Pamela Seley, REALTORĀ®
REALTY EXECUTIVES OTF - Temecula, CA
Menifee Lakes California Real Estate

Bob & Bonnie, it is not viable. All the mouthpieces for solar are speaking the new "green speak". It makes no financial sense whatsoever to install solar panels on existing homes. It's too costly, poor installation, and the government incentives go to line the pockets of solar installation co's. Let's be real, folks are losing their homes to foreclosure and short sale--they don't have the money to install solar panels. They're worreid about paying $5 gallon of gas to get to work and put food on the table.

If solar panels are included in new construction homes that may be something to consider. I concur, either technology is not at the level it needs to be, or it's all a scam for some to take advantage and ripoff homeowners. Thanks for your post today,

 

April 04, 2012 11:53 AM #37
Rainmaker
175,582
Bob & Bonnie Horning
Homes and Land of Lancaster County - Mount Joy, PA

Pamela, You seem to be of the minority opinion in your state. If I had to lean one way or the other it's definitely your way. Thanks for the thoughts.

April 04, 2012 12:07 PM #38
Rainer
77,858
Mike Morrison
Will & Will Real Estate Brokers, The Woodlands, Texas - Houston, TX

I didn't see anyone mention that China is kicking our butt when it comes to solar panel costs. If any of this 'alternative energy" had a buck to be made, don't we think the oil co.'s would have jumped all over the market? 

Why do these schemes have to be subsidized by out right cash give aways from  the feds? Remember Solindra ? How much did we loose on that one?

Want to know what we loaned to the solar industry in February 2012? Take a look, then tell me solar energy is not someones pipe dream? 

Just scroll down to the dept. of energy. http://www.treasury.gov/ffb/press_releases/2012/03-2012.shtml

 

 

April 04, 2012 12:22 PM #39
Rainmaker
175,582
Bob & Bonnie Horning
Homes and Land of Lancaster County - Mount Joy, PA

Mike, Thanks for the link. I'll check it out. Actually the solar people we had here is a new off shoot of a local oil dealer. Go figure.

April 04, 2012 12:49 PM #40
Rainmaker
353,982
Dale Terry
Yadkinville, NC

I think the question was answered in part by Jay.  If the Chinese continue to subsidize their industry, we will not have a viable one here.  Nor can the government continue to subsidize solar here.  So what you have is a product that everybody wants, that the two largest governments in the world subsidize to reduce its cost and it still is too expensive.   Either it won't work, or now is not the time.  Call me in 30 years.

April 04, 2012 04:43 PM #41
Rainmaker
573,698
Phil Leng
Keller Williams Eastside Market Center - Kirkland, WA
Phil Leng Team - Residential Real Estate Experts &

Hi Bob,

I believe solar panels and windmills will get cheaper and more abundant as more of us use them.

There is a very practical consideration of cost versus return.

An great example is electric cars. Mitsubishi now has an all electric car that costs $16000. Its not much of a car, but could pay for itself in 3 years if used to go to work and back.

Phil

April 05, 2012 03:56 AM #42
Rainmaker
175,582
Bob & Bonnie Horning
Homes and Land of Lancaster County - Mount Joy, PA

Dale, I do believe we need to do something about trade with China. They are not the only ones using basic slave labor though, many other countries export products like cocoa and such produced by what we frown upon... unless it's stuff we really want and then don't care.

Phil, You hit on the next thing I wanted to post about. I've been researching electric cars, more so conversions for gas powered cars. I wasn't aware that Mitsubishi had one that affordable. Now, if our government would do for EVs what they did for the Interstates... I'd prefer that the money given to people for solar would go to putting charging stations throughout the country... then we're really on to something. The one alarming fact that I was not aware of was the cost to charge an EV... $.01 a mile! What's it cost per mile to run an average car?? Between $.30 and $.40 depending on the size of it. That's a pretty amazing difference. I was hearing from naysayers that the electric costs were prohibitive. So basically you would add $.75 per day to your electric bill. That's $140 a year compared to minimally $4,200 for a gas powered car, based on average mileage per year. **Ah... just checked the iMiEV from Mitsubishi and they state the price is around $28,000 with a $7,500 tax credit. Also, my $.01 was based on the electric costs in MO.

April 05, 2012 07:12 AM #43
Rainmaker
1,256,067
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

Bob I am with you here.  It would be wonderful to be off the grid and pay no bill, but the technology is not here yet.  It may be someday.  In the iterim we need to use and get all the domestic fosil fuel we can.

April 28, 2012 08:54 PM #44
Anonymous
Anonymous
Jeff in Dallas

I think the price difference between Bob and Russell is based on the size and extent of the solar power system. 

 

The price quoted by Russell would buy a tiny system here in Dallas.  Seems a little low for even a 1,000 Watt system for a small home with gas appliances and very low energy consumption.   A system big enough for a 3,000 sq ft home in Dallas with electric heat and AC runs about $55,000.  That's based on 3500 kwh consumption per month.  My payment for the system (6% interest over 10 years) would have been $610/month.

 

 

August 05, 2012 07:02 PM #45
Rainmaker
302,092
Elise Harron
Dirt Road Real Estate - Kingman, AZ
Rural Vacant Land and Development Specialist

Bob and Bonnie,

It sounds to me like you had a "less than honest" contractor pushing way too much solar for your home.  The cost is significantly cheeper than it was even 3 years ago.  If we could get the federal government and thier baloney rebates and incentives OUT of the market, the industry will have a chance to balance out and become viable for everyone.  Right now the only way it pencils is for those few who qualify for additional incentives and of course the rest of us pay for the difference in higher costs. 

Your break even today should be between 9 - 12 years with the 30% federal incentive which is approved thru 2016 for every system installed.  To find out what your system SHOULD cost you - take your monthly power bill, multiply it by 12 months and then multiply it again by 15 years - This should be your out of pocket cost after the federal incentive.  The reason your breakeven is 9 - 12 years is because your power bill will (to quote the POTUS) neccessarily sky-rocket, so even thought you multiplied your current cost by 15 years, your payback WILL be MUCH MUCH less.

Call around and find a contractor who is reputable and have him give you and honest estimate - you might be suprised.

I LOVE to see SOLAR power generate conversations and excitement - even when it seems negative, at least the conversations are happening!

January 27, 2013 09:57 PM #46
Rainer
161,629
Edward Gilmartin
Boston Homes - Boston, MA

Not sure why the government put punitive tariffs on chinese solar panels...to protect higher cost US panelm makers who donated to his campaign...let china subsidize our energy independence efforts.

January 28, 2013 07:14 AM #47
Rainmaker
175,582
Bob & Bonnie Horning
Homes and Land of Lancaster County - Mount Joy, PA

Elise, I don't think I'd find anyone more reliable than the energy company I've been dealing with for the past 12 years. Our home is just too complicated to expect a cheap deal. This system was for enough power to bring us to break even on a monthly basis. As stated previously, we needed panels out in our pasture with concrete pilings and that would account for the extra. It was also encompassing heat for the inground pool as well. For all that was quoted, $80K didn't sound out of hand... what amazed me was that it would need replaced with only a few years of recovering the costs. If I ever build again which is probably doubtful, I would look for renewable resources. I think this technology is definitely in it's infantile stage and has far to go yet. Thanks for commenting.

Edward, You're way beyond my comprehension of how it all works. 

January 28, 2013 09:14 AM #48
Rainer
4,649
Kevin Vielbaum
Residential Solar Industry - San Mateo, CA
Kevin Vielbaum

Solar power is definitely viable depending on the state your in and your price of electricity. States like Hawaii, California, New Jersey, Arizona, Oregon, Colorado, Mass., and New York have expensive enough energy to make it economcially viable if your utility bills are high enough.

While purchasing a system may take 10 or more years to see ROI, a lot of homeowners are starting to choose a solar service provider to power their home and see instant ROI. The solar service company takes care of the permitting, installs the panels on the home for little or nothing down, maintains, monitors, insures, guarentees the power from the system, and the homeowner receives clean energy at a price that is cheaper than their traditional utility. Its a win-win.

February 03, 2013 09:43 PM #49
Rainmaker
175,582
Bob & Bonnie Horning
Homes and Land of Lancaster County - Mount Joy, PA

Thanks for your input Kevin, spoken like a solar salesman. It remains invalid for us. Maybe if I bought into the spending future money to maintain for today it would be. Like I stated, if I were to build new or be in the market, I'd probably look for something to help but for retrofitting, it still doesn't make cents. 

February 04, 2013 05:54 AM #50
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Rainmaker
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Bob & Bonnie Horning

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