Posted by Josepi on April 7, 2010, 4:13 am
With so many factors involved that are "best guessed" the whole thing
becomes a guess to support any side of the argument you wish...LOL
I, also, consider the whole thing a cool hobby and will never expect a
payback, or even a break even point. I only run 1600W of PV and a 10' wind
turbine, that needs to be put back into service, now I have my net metering
in place (and inspection after 10 years...LOL)
TOU metering is coming and that excites me. Lots of fun to play with more
Yes, I mentioned that possibility. I wrote: "That said, it must "save" more
the cost of capital or the time for payback approaches infinity" As it
out, I own a small PV system myself that makes no economic sense. I
part hobby and part of my hurricane preparations.
One thing that we can safely assume about the maintenance cost is that it
not be zero. We know about how long most consumer electronics lasts, and we
estimate the hazard due to storm damage etc. So just as you assumed a
reasonable cost of capital (5%), you can also assume a reasonable allowance
maintenance and include it in your calculations. Keep in mind that a
roof-mounted PV system will probably need to be re-installed at least once
its lifetime due to normal re-roofing.
There are financial programs built into business calculators and
(Net Present Value & Internal Rate of Return) that can help you calculate
cash flows so you can make a more informed buying decision, or you can
model the whole project by building your own multi-year spreadsheet and
in your own best estimates of future energy costs, future power production
the system, future interest rates, and future expenses of the system. Drag
out for as many years as you wish!
Posted by vaughn on April 7, 2010, 5:22 pm
Actually, a "best guess" tends to be far better than no guess at all, especially
when your "guess" is based on some kind of past experience, historical trends or
other solid information. Like I said, you know that maintenance cost is
unlikely to be zero, so any guess you make is likely better than assuming zero
maintenance cost. Interest rates are near historical lows, so assuming that
today's interest rates will continue for decades to come is probably a bad ides.
Likewise, as the title of this thread implies, power rates are unlikely to
remain at today's levels, so any rational model would include some energy price
Because some of your "best guesses" are likely to be high of the mark while
others may err in the other direction, these models tend to "average out" to a
pretty damn good guess! The more relevant factors you include, the better the
guess. (At least, that's what they taught me in Business school).
Posted by Morris Dovey on April 7, 2010, 6:29 pm
On 4/7/2010 12:22 PM, vaughn wrote:
I don't know if either of you are right, but I'll allow the possibility
that neither of you are wrong. :)
I'll admit to being a bit wary of B-school teachings, since they were
what led to the thinking that ARMs would remove essentially all
cost-of-funds risk for lenders - and that by relocating production to
low labor cost areas prices could be reduced and profits increased when
the cheaper goods were purchased by the (newly unemployed) consumers.
The danger is not that the models are so much flawed as that they're
incomplete and those who teach either aren't aware of that or don't
impart that to their students...
DeSoto, Iowa USA
Posted by Bob F on April 7, 2010, 8:18 pm
Do you have "shutters" or some such device to protect the panels from storm
damage? It would seem that otherwise the major damage in a hurricane might be
Posted by vaughn on April 7, 2010, 9:32 pm
That's a fair question. First, my system is not so large that I couldn't remove
all three panels in under an hour if I decided that a storm were sufficiently
threatening. That said, the two oldest panels have rode out 3 hurricanes
without the slightest hint of damage. (I recently added a third)
Second, I have my panels firmly mounted FLAT on the south-facing roof of a
fairly sturdy outbuilding. I could get another 10% out of the panels if I
tilted them more to the south, but they are much safer from wind loads and
flying debris where they are. The potential for hurricane damage (and for
collateral damage to the roof of my house) is one reason why I don't have a
full-blown solar system.