Solar Economics

Hoping to learn exactly how much you can save by making the switch to solar? If you’re like the average homeowner, you use 500 kw-H of electricity per month—that is equal to burning a 1000 watt light bulb (1 kw) for 500 hours. If you purchase your energy from PG&E, you will be paying $0.40 x 500 = $200. That equates to about $0.26 for the actual cost of the electricity, with the remaining $0.14 accounting for delivery (transmission), d-commissioning costs for nuclear plants, costs of maintaining the grid, and so on and so forth. To calculate the true cost per kw-H, you take the electric part of your bill and divide the total cost charged for electric by the kw-H used. Peak rates are charged between 4PM and 9PM.

A 4KW solar array will produce 5,297 kw-H, according to Arcata airport historical data.

You can purchase a 4KW basic line-tie solar system for $17,985 (less 26% FITC = $13,309). Assuming you expect the house to be occupied for 30 more years the system will have generated 5,297 x 30 = 158,910 kw-H.

By making your own electricity for 30 years you will have averaged your cost per KW as $13,309 divided by the KW produced of 158,910 = $0.083/kw-H.

Compare this to the cost of buying electricity from PG&E at the current cost of $0.40/kw-H. Over a time frame of 30 years you will have saved:

158,910 x (0.40 – .08) = 158,910 x .32 = $50,851

Consider you have $13,300 in a safe deposit certificate paying 1%. It will take 100 years to double your money.

Consider taking those funds and investing them in your own solar to generate power. As shown above it will take only:

Y = 50,851/13,309 = 3.82 years to double your money. Expressed in interest rate using the RULE OF 72 ; divide 72 by the years it takes to double your money to arrive at the equivalent interest rate. In this example 72/3.82 = 18.8% interest on your investment

And even if you protect yourself from power outages with a more expensive battery system it is still over 10% interest on your investment with power outage insurance.

Don’t forget you will be on the right side of history by not adding to the climate change problem about 30 x 5,297 x .58 = 922,168# of CO2 whether you own the house or not.