Wednesday, 12 December 2012 16:00

Our Solar Costs Reviewed

off grid, living off grid, self sufficient, homestead, sustainableSolar costs have so many variables, it is difficult to put an exact number on the cost of solar power. It will vary greatly from household to household and state to state. There are currently federal tax credits to consider and some states also offer tax credits or deductions to install solar power.

Added to that, solar panels will last about 25 years, inverters 15 – 20 years and batteries anywhere from 10 – 15 years. The good news is that all three of those components are lasting longer all the time and the purchase cost is going down as more and more products flood the market and solar becomes more popular to consumers.

There are a lot of numbers out there in cost per kilowatt of every kind of power including solar. Many of the solar numbers being quoted are outdated so if you are doing your own research be careful of that. There is a general consensus that the costs are going down and will continue to do so.

Another problem you will run into is that the cost numbers that are published don’t include all of the costs. For example, Washington State has one of the lowest basic electrical rates in the country but by the time the state and local authorities get done tacking on their add-ons the price goes up considerably.

We decided to take a look at our own costs which we can identify now that we have been operating for two years, going on three.

Our system operates a modern 1500 SF house with attached garage, woodshed, and carport and a 1300 SF barn. We also have a well with a 240v pump. Our appliances are typical of most households.

Our initial cost installed was $22,000. The Federal Government offered a 30% full tax credit so we only had to pay $15,400 for the system.

I am going to assume the life expectancies of the main components per the following;

Panels – 25 years

Inverter – 20 years

Batteries 12 years

I’m using 20 years as my cost timeline because the panels and inverter will last that long. Maybe the inverter will be a couple of years short but the panels will last even longer so that would even out. It’s just an estimate and any one of these components could go over or under this valuation. Since the batteries only last 12 years give or take, I will prorate the next 8 years with todays replacement costs for a total of 20 years.

We also have to add the generator and fuel costs. We use our backup generator about 100 – 125 hours per year. To keep this article simple I’ve calculated that cost to be $538.00 per year.

Here is how the totals break down:

System cost for 20 years               $15,400

Battery Replacement 8 years          $ 4,200

Generator and Fuel                        $10,750

Grand Total for 20 Years                $30,350

That equals $1,517 per year or $126 per month or .68 per KWH (per what my system produces).

Where I came from we paid .20 per KWH for public power. Some areas of the country pay much more.

off grid, living off grid, self sufficient, homestead, sustainableAt this point it looks like I am paying a small fortune for solar power but the above information is not complete. If I am going to compare apples to apples I also have to include the cost of public power installation in our formula. It is stated above that I paid .20 per kWh for power where I used to live. That’s true. That is everything that is on the bill but the bill does NOT include costs to hook your power up to your house. The solar numbers quoted above do. Remember that my solar price included installation.

If you live in the city next to a power pole, you might pay anywhere from a few hundred dollars on up to have your power connected but if you build your house further away from the power lines it can cost anywhere from  $8.00 to $14.00 per foot to get connected to the power lines. In my case it would have cost $8,500 IFmy property were next to a road that had power lines on it. I just had an estimate done for a client that wants to build on 80 acres and his quotes ran from $17,000 to $25,000 to connect to the local power utility.

If we use the example above of paying $.20 per kWh and then add the power connection fee to it, that would compute to another $.14kwh bringing the total to $.34kwh and $.62kwh for my client. All of a sudden, solar power looks to be much more competitive.

We can draw several conclusions from this pricing exercise by looking at the numbers above. It is cost effective to have solar power if you live in a sunny climate and don’t have to use a generator much. It is cost effective to have solar power if you build too far away from the power grid (the rule of thumb is ¼ mile).

There is also one other factor to add to the equation. My price per KWh won’t go up for 20 years. I doubt you can say the same for those on public power. By that time my price of $.68 per KWh might be looking pretty good.

Ed and Laurie Essex live off grid in the Okanogan Highlands of Washington State where they operate their websites  and Off Grid Works.


Related items

  • Our Solar System – Part 2

    off grid, living off grid, self sufficient, homestead, sustainableIn Part 1 we looked at the different components of a solar power system and what their purpose is. In Part 2 we discuss the actual hands on management of those components.

    It sounds like the system operates by itself once it is set up, other than a little battery maintenance. That’s true but the system is not as efficient as it can be when it runs on “automatic”. What do I mean by efficiency?

    By managing a few things myself I can extend the life of my batteries and backup generator and keep the fuel costs for the generator down.

    The inverter is programmed to turn the generator on when the batteries go down to 60% capacity. That is fine for when we aren’t home but the rest of the time I choose to start the generator when my batteries are at 70%. I choose when to start the generator and when to turn it off. I choose the most opportune time to pump water which takes a lot of power. If the pump comes on automatically at night and I catch it on the monitor, I will go out to the panel and turn it off if I know it is going to be a sunny day tomorrow and can use the sun to pump rather than my reserve battery power.

    Whether the sun or your generator charges batteries the following will occur:

    1. Bulk charge – the batteries will accept the maximum charge possible

    2. Absorb charge – in this mode the batteries will only accept a partial charge. They do this to protect themselves for reasons over my head. It’s enough for me to understand that they need to do it. I think it is kind of like eating. You don’t eat your whole meal in one bite. You take many bites but end up the same – full.

    3. Float – a trickle charge to just maintain the batteries at 100%

    off grid, living off grid, self sufficient, homestead, sustainableIt is harmful to charge the batteries too fast or overcharge them. I am more efficient at generator use than the inverter. When my generator is charging it might be putting out as much as 140 amps. That is fine in bulk charge but when the inverter slows down the amperage to 60 amps (absorb mode) then the generator is still running at full capacity using fuel but not sending all of the amps to the batteries. That is inefficient. When they get into absorb mode I may choose to go hook up my smaller generator to charge with which only puts out about 45 amps.

    I also choose when to equalize my batteries. My monitor will tell me it’s time and I will hold off for a bright sunny day so I can use solar power to equalize. That is more efficient than using generator power and paying generator fuel costs.

    So in summary, I basically choose when to charge the batteries with a generator (when to start and stop the generator), when to pump water (my pump is 220V), when to equalize and whether to use the sun, batteries, or generator to pump water. By doing those few things I can prolong the battery life and minimize my generator fuel costs. Seems like a lot of benefit for very little effort. I can do all of those things with the push of a button.

    Besides that I just think it is a good idea to know what your system is doing at all times. Just by having some interaction with the system allows you to know if the system is working the way it should be – or not. You don’t have to become an expert. You just need to be familiar enough to know when all is well or not. By doing the things I do with my system, I can know at a glance that everything is working the way it should. Knowing all is well gives me a great peace of mind. I’m glad you can program these systems to be independent but I still want to know the programming is working. After all, we are on our own and striving to become more self sufficient. You can’t achieve that by programming alone.

    Ed and Laurie Essex live off grid in the Okanogan Highlands of Washington State where they operate their website  and Off Grid Works.

  • Our Solar Power Reviewed

    Solar Power has come a long way in the past decade or so. We are living proof of that. What do we know about solar power or even electricity for that matter? Yet here we are in our second full season, living off the grid with solar power.

    Systems today are so sophisticated they run by themselves and the only thing you really have to worry about is battery maintenance if you have a battery storage system as part of your package.

    While I am sitting here telling you that modern solar power systems are relatively hands free, I don’t recommend that you operate them that way. I believe you should get as involved in your system  as you can. For me, that meant there was a lot to learn and it has taken some time to do so.

    off grid, living off grid, self sufficient, homestead, sustainableMy system consists of 8 each 215 watt REC panels on a fixed position steel pole. The panels were recalled by REC, rebuilt and put back on the market at a discounted price. My inverter is a Xantrex XW 4024 with an automatic generator start control module. My charge controller is an Apollo T-80 HV. I also have 12 each Solar One 2Volt batteries for a 24 volt system. My backup generator is a 12,000 watt Kohler Residential outdoor unit. I bought this unit knowing Kohler wouldn’t warranty it for off grid use.

    The system capacities are as follows;

    Panels – 1720 Watts

    Inverter – 4000 watts

    Battery Storage – 1160 Amp Hours or 22 Kw Storage which means about 3 days for us because we don’t like our batteries to go below 60%. I actually don’t usually let them go below 70% discharge.

    Inside the house we have a Trimetric Reader that allows us to see at all times what our electrical usage is and what state our battery capacity is at. It also helps to track how long it has been since our batteries were charged to 100% and how long it has been since we equalized our batteries which for me has to occur once a month.

    Our system will run our house, barn and 220V water pump for two people easily. When the sun shines it produces more power than we need. The only reason we have the backup generator is because it doesn’t always sunshine. You could have as many panels or battery storage as you want. No sun, no power. We use our backup generator about 100 hours per year.

    Total cost of this system was about $22,000. The current Federal tax code allows for a 30% credit so we only ended up paying $15,400 for our system. Our panels are warranted for 25 years and the batteries should go at least 10 and up to 15 years.

    If there was an electrical source for power at the edge of our property it would have cost between $14,000 to $19,000 just to get the power from the road to our house and then you would have a monthly power bill on top of that.

    So in our situation it cost the same amount whether we brought in power or installed solar power and with solar, there will be no monthly bills. The decision to go solar was easy.

    off grid, living off grid, self sufficient, homestead, sustainableAs I mentioned earlier, these systems are almost hands free if you want it to be that way. You can program your inverter to “run” the operation with no input or help from you. The only thing you would have to do is maintain your batteries.

    In our case, with our preferences, the inverter would do the following:

    Allow the panels to charge the batteries to 100%. Once they reach 100% the inverter switches the charge controller off except for just enough power to keep the batteries tweaked at 100%. If there is no sun, the batteries will discharge to 60% capacity at which time the inverter will turn the generator on automatically, charge the batteries back up to 100% and then turn it off again.

    That’s the simplest explanation I can give you about how sophisticated this equipment is now. It could manage the whole charge/discharge/ charge process if you wanted it to without you ever lifting a finger.

    I don’t allow my system to do everything automatically. I keep my panels tilted in the most advantageous angle. I start and stop my generator by hand. By doing that and watching the weather reports pretty close I can squeeze a little more amps out of my system for less time on the generator. It also helps me to keep an eye on things like battery temperature, water levels and equalization. I also decide when my water pump goes on. It is set up on a float system and would pump automatically but if I see that we can reach 100% first and then pump water because we are going to have sun for a few days I may delay the pumping until it’s the perfect timing for my battery condition.

    As stated earlier my system totaled about $22,000. I had other quotes ranging from the same price with different equipment (different design), to $37,000 and $45,000.

    Ed and Laurie Essex live off grid in the Okanogan Highlands of Washington State where they operate their website  and Off Grid Works.