Solar Electric for Home, does it save money?  Introducing the Solar Electric Business Case Calculator.

I’ve always wanted solar power at my house, and always been infatuated by the idea of making my own power directly from the sun.  Once more I’ve spent countless hours as part of a renewable energy non-profit I worked with speaking with members of the public and private business about the possibility of systems they can build.

Coming out of those conversations there were always 3 immediate questions:

  1. What type of system should I build?
  2. How much will it cost to put in place?
  3. Is it cost effective (i.e. “what’s my ROI”)?

Unfortunately the excitement tends to get tempered quickly as actually building a solar system is still a custom process requiring expertise to ensure the system is sized best to meet a given set of requirements and cost basis.  At the end of the day the answer to these questions is still is a very big “it depends”.

Abe put together a good post recently on the types of systems available (#1), and we’re planning at a future date to go into more detail about how to select and cost components for a system (#2).  The purpose of this article is to share a model/calculator I’ve developed to evaluate the total cost of ownership (TCO) and the easy ability to compare against current costs so I could quickly estimate a return (ROI, #3).

I’m releasing this calculator as open source with the hopes that it will help you in your own evaluation, you can download it here:
Solar Home Business Case Calculator 1.0

Instructions for use

The calculator is an Excel workbook, when you first open it you should see the “Inputs and Summary” worksheet (aka “tab”) which, if you’re only looking to make a quick evaluation is the only worksheet you need work from.  Note that this calculator is built to show the case month by month up to year 20 (my line of thinking is that beyond this you’ll likely end up having to do a new round of replacement or maintenance anyway, so no need to go further in the analysis).

In order to fill this out you’re going to need to gather a number of details, some of these you can get from your current electric bill whereas others are beyond the scope of this article.  All the fields in green need to be filled in:

Solar Business Case Inputs – Oregon Example

After you’ve filled in the detail you’ll see a summary after 20 years of the baseline (i.e. “do nothing”) costs versus the total costs of your new system, plus the % difference (i.e. “ROI”).  I’ve also included a graph that shows where you are month-by-month:

Solar Business Case Summary – Oregon Example

Note: if you would like to explore this further and need help filling out the details you can contact us at info@freelearner.how and ask – for a fee, we’ve got a few members on our team that can help consult with you to determine what the right size is and to evaluate your case in further detail.

Some Final Thoughts

Cases very (wildly) based on local variables such as your cost of electricity, incentives (i.e. tax incentives), how much you consume, and how much your system is expected to produce.  Personally, the case at my house is not a positive one (from a purely financial ROI perspective):

Solar Business Case – Erik’s House

The reason for this is actually quite simple when you get into the details:

  • Electricity here in Southwest Washington state is inexpensive (I live near the Columbia River in SW Washington – the Columbia River basin produces over 38,000 MW of power so we’re in the fortunate position to have abundant renewable hydroelectric power).
  • I consume large amounts of electricity (living in the country, heating/cooling/pumping water, family size, etc.) and would therefore require an expensive system (I put together a detail install estimate which came to over $64,000).
  • Washington State and my local Clark County do not have as large incentives as some other locales – as you’ll see when you start playing with the detail incentives can often make or break the case.

For me personally, I’m hoping the cost of the system will come down in the near future – if I can get the total cost around $40,000 then it starts to look much better.

Hope you find this helpful and be sure to post any comments/questions you have!

Erik

Leave a Reply

avatar
  Subscribe  
Notify of