The 2012 and 2013 Model Year Leases Make A Lot Of Sense

First, the Chevy Volt is an AMAZING VEHICLE.  I purchased a 2013 Volt just two weeks ago and I am saddened that I didn’t believe the marketing messaging over the past two years.

Extreme savings in fuel costs and Chevrolet is offering amazing leases!

Chevy Volt Annual Savings

Mileage By The Numbers:

The Volt (Electricity)

• 38 Miles of Electric Range, 98 MPGe by EPA
• 16.5 kWh lithium-ion battery (uses 65% or 10.8 kWh per charge)
• Battery charge efficiency 80%
• Electrical usage per charge 13.5 kWh
• Average cost of electricity $.11 per kWh
• Cost to fully charge 13.5 kWh x $.11 = $1.49
• 38 miles on electric per full charge
• 3.9 cents per mile on electricity!

Chevy Volt (Gasoline)

• 37 mpg combined city/highway
• National average price for premium gas $4.08
• 11 center per mile on gas.

Chevrolet Tahoe

• 17 mpg combined (15/21 city/highway)
• National average price for regular gas $3.83
• 22.5 cents per mile

12,000 Miles Per Year

• Volt (electric) $0.039 per mile x 12,000 miles = $468.95
• Tahoe (gas) $0.22 per mile x 12,000 miles = $2,703.53
• Annual Volt Savings Over Tahoe = $2,234.58 ($186.22 / month!)

Financing By The Numbers

• Chevrolet Volt National Lease Offers here, expires 9/4/12
• $279/month for 24 months!
•  $2,419 due at signing. Tax, title, license are extra.

The numbers are amazingly in favor of the Volt.  If you look at a lease costing $279 per month, with savings of $186 per month, it doesn’t cost much to go with the Volt.  The nay sayers will argue that $2,419 due at signing adds ~$200 per month, and that is true.  BUT, and this is a big BUT.  In the mileage example above, that Chevrolet Tahoe loan, lease or whatever is costing you as least $500 per month and that’s conservative.  The base Tahoe is $38,755 financed for 7 years at 5% interest costs $547.76 a month!

OK, so how do they do it?  The base Volt costs $39,145, the base Tahoe costs $38,755.  But, there is a $7,500 federal tax incentive available.  That’s a lot of cash up front which Chevrolet uses to lower the lease payment.  A savvy consumer can purchase the car and pocket that $7,500, but the risk of owning a first generation battery is just to high in my opinion.

Don’t overpay for solar power!

As consumers, it is our responsibility to be informed about what we are buying and how much is should cost.  However, very few of us work in the renewable energy industry.  I attended my son’s basketball season wrap party this past weekend and was surprised when none of the parents really understood solar power.  This is not an indictment on them, I think it highlights that the industry is 1) relatively new to consumers, and 2) more complex than anything they’ve purchased besides possibly a computer.

Referrals, referrals, referrals.  We live and die by referrals from neighbors and trusted friends.  However, just because your neighbor was sold on a solar system by company A doesn’t mean that he a) did any research, b) got a good deal, or c) bought great product from a great company.

The whole reason Evaluate Solar went into business is to make consumers aware!!  Use this website to check on technology, manufacturers, installers and pricing.

Solar Power Panel (Module) Pricing

There are two things you should know when looking at any proposal.  First, solar panel prices have fallen to less than half of what they were 2 years ago, and second, solar panels are only 35% of you total costs. Don’t over pay for panels, but be wary of anyone that charges higher prices for inverters, rack systems and installation labor.  Sometimes installers play the shell game; they lower the panel price because that the only component that you can easily compare prices.

A good resource is Solarbuzz, a solar market research and analysis group.  Monthly they release average pricing for Modules, Inverters and Solar Electricity.  The trend in solar module pricing has been downward and sometimes at a significant pace. In February 2012, U.S. Module Pricing averaged $2.30 per Watt peak, down 5% from the previous month.  That’s a 5% decrease in a single month.  Wow!  But, be careful with averages.  Solarbuzz does a good job of detailing how they arrive at their averages.  It’s important to note that with an average of $2.30, there were 302 solar module prices BELOW $2.0 per Watt!  My own proposal, which I review here, has solar modules priced at $1.67 per Watt.

Solarbuzz Module Price

Inverter Pricing

Inverter pricing continues to decrease due to manufacturing economies of scale and competition.  However, inverter technology is not changing anywhere near the pace of solar cell manufacturing.  Your solar power system will either have one or two inverters OR utilize micro-inverters pairing one to each solar panel.

Single inverters are more cost-effective, however they are not as efficient as micro-inverters. General Electric is working on promising new technology and packaging that would embed a micro-inverter in each panel.  Integrated technology is usually always less costly than separate systems AND micro-inverter installation costs will drop to zero.  Watch for exciting developments in micro-inverter systems.

Solarbuzz tracks pricing for power inverters which are currently at $.711 per Continuous Watt in the U.S.  Once again, this is an average and in my proposal here, the 6 kW inverter priced at $2,673 or $.44 per Continuous Watt (38% less than Solarbuzz’s average)!

Solarbuzz Inverter Pricing

 Installation Pricing

This is the big, black hole.  If a firm is making 30% – 50% reselling panels and inverters, they are making a whopping 100-400% profit on installation labor.  How much should installation cost?

Solar power installation IS more complicated than composite shingle roof installation.  However, don’t be oversold.  It’s not that much more complicated.  Let’s break it down.

Solar installation requires:

• Climbing on steep pitched roofs
• Strategic layout of the solar panels and critical placement of the rafter mounting points.  Envision chalk lines on your roof and realized that this system MUST be lag screwed into your rafters which are hidden below the roof shingle.  Screwing into the plywood sheeting will not be enough.
• Mechanical assembly of a nut-and-bolt rack system
• Rack mounts requiring flashing and lag screws
• Electrical connections which snap and plug together (non-electrician work)
• Installation of the Inverter
• Electrical work requiring a licensed electrician includes connecting the inverter to your electrical sub-panel.

How long does it take to install a typical residential solar power system?  Typically a few days.

Here’s how I break down the labor (consumer prices):

• Lead installer – 3 days @ $50/hr = $1,200
• Electrician – 1 day @ $75/hr = $600
• Mechanical Installation – 2 installers for 3 days @ $35/hr = $1,680
• Total Labor $3,480

For my system, labor was over $10,000 which leaves a lot of profit to cover nothing more than sales commission.

Send your proposal and we will review it, provide an analysis to you, and post a generic version of the proposal in the database.  Thanks.  Contact us with any questions.

I love the Internet.  At times I come across information that would not exist with out it.  Information that takes a lot of effort to compile, but is presented in an easy to use format.

DSIRE Solar – the Database of State Incentives for Renewables & Efficiency (DSIRE) is an ongoing project of the North Carolina Solar Center and the Interstate Renewable Energy Council (IREC). It is funded by the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE), primarily through the Office of Planning, Budget and Analysis (PBA). The site is administered by the National Renewable Energy Laboratory (NREL), which is operated for DOE by the Alliance for Sustainable Energy, LLC.

The DSIRE web site provides information about renewable energy and energy efficiency incentives and policies in the United States. Relevant incentives and policies established by the federal government, state governments, local governments, utilities and non-profit organizations are included in DSIRE.

Give this widget a quick spin and let me know what you think!

During  2011, the question of whether solar power makes sense has been answered due to the drastic decrease in the cost of solar equipment.  Yes!  Solar power makes sense for most people given the current federal and local rebates and credits.  Here’s what you need to know.

Residential solar power pays for itself over the lifetime of the equipment and is many situations can make money.  But, do not think that firms are giving away the equipment.  Each firm is in business to make as much money as possible.  In every proposal, it pays to know what you are getting and how much it is costing you.

It is critical to know whether the proposal you are considering is the best for you.

What you need to know:

1. Type of system, mainly the solar panel (PV) modules.
2. Manufacturer make and model numbers. Get the details!
3. Cost of entire system installed. Net net, what you will write a check for.
4. Federal and local incentives. Free money, spend the time to figure it out.
5. Cost of electricity charged by your utility.

These general answers should help you decide if solar and the proposed system are right for you.

Type of System

• Crystalline silicon / higher efficiency + slightly higher cost / Samsung, Suntech, Yingli Green Energy, Trina Solar.  Two main types, monocrystalline and polycrystalline.
• Thin-film / lower efficiency + lower cost / First Solar
• Inverters are quickly evolving.  Most residential installations utilize a single, high quality and high-efficiency inverter which acts as the single point to convert all DC power to AC.  Benefits of this system are cost, however the downside is power generation and flexibility.  Micro-inverters install an inverter on EACH PV module which is currently more expensive, however module manufacturers should gain a competitive advantage by manufacturing PV modules with integrated micro-inverters.

 Hint – Crystalline silicon (c-Si) and specifically monocrystalline silicon is the way to go due to its high-efficiency and quickly declining manufacturing cost.

Manufacturer make and model numbers

Stick with the major module manufacturers.  They have the volume to produce high quality and efficient panels.

• Samsung – a strong brand new to the solar module market.  Expect great products at aggressive prices as it begins its domination of this market.  It has formidable marketing clout and name recognition which will help it globally.
• Suntech, LDK,  Canadian, Trina and Yingli – stick with one of the top 5.  Don’t confuse the top 5 solar “cell” manufacturers with the “module” manufacturers.  You want the best at delivering the end product – the module.  Suntech, Trina and Yingli as tops in both cell and module production; a good bet for a high quality integrated product.

Hint – Samsung is delivering a phenomenal product.  Stick with the big boys and the names you know.  The Samsung LPC244SM is a monocrystalline high-efficiency PV module which delivers exceptional price/performance.

Cost of Entire System

Know up front how much you will be expected to write a check for.

• State and local rebates are not guaranteed by your installer or the agency providing them.  My energy company, Austin Energy, rebates $2.50 per watt-AC.  Solar panels produce DC current which is converted, with some loss (assume 23% loss), to AC.
• Federal tax credit is a delayed benefit realized when you file income tax papers for the year the system is installed. Currently the federal tax credit is 30% of your net cost which “should” be the amount of the check that you write.

Hint – Solar pays for itself today BUT ONLY with the local and federal rebates/credits and it takes a long time (15-25 years).  If you cannot write a check for the initial out-of-pocket expense, there are ways to finance that cost over the life of the equipment.

 Federal and Local Incentives

• Know all of your rebates offered by local, state and/or federal agencies.  You local utility is the best place to start and end, but their information may be difficult to read.  Search the web, some solar planning websites include local rebate information, but it is your responsibility to confirm it with your agency.
• Federal tax credit of 30% of final costs are available to most US taxpayers, but this program is currently set to expire in 2016.
• Tax Credit Details: 30% of the cost
  Expires:  December 31, 2016
  Details: Existing homes & new construction qualify. Must be your principal residence. Rentals and second homes do not qualify.

Cost of Electricity

Many Americans do not know how much they are being charged per kilowatt-hour (kWh).  Your utility bill gives you all the information you need, but note that rates vary greatly by location.  The US Energy Information Administration has provided a 2011 national “residential” average of 11.6¢ per kWh.

Hint – To compare the cost of you electric utility to the cost of your solar electricity, you need to divide the cost by the kWh produced over the equipment’s lifetime.  If the amount of your check is $10,000 and your system produces 7,500 kWh per year, the calculation is $10,000 divided by 7,000 (kWh) divided by 20 (years).  $10,000 / 7,000 kWh / 20 = 7.14¢ per kWh.

The U.S. Energy Information Administration, www.eia.gov, has analyzed electricity prices which vary by locality.

The average retail price of electricity in the United States in 2010 was 9.88 cents per kilowatt-hour (kWh). The average prices by type of utility customer were:

• Residential: 11.6¢ per kWh
• Transportation: 11.0¢ per kWh
• Commercial: 10.3¢ per kWh
• Industrial: 6.8¢ per kWh

The three States with the highest average price of electricity in 2010 were:

• Hawaii (25.12¢ per kWh)
• Connecticut (17.39¢ per kWh)
• New York (16.31¢ per kWh)

Those with the lowest average prices in 2010 were:

• Wyoming (6.20¢ per kWh)
• Idaho (6.54¢ per kWh)
• Kentucky (6.75¢ per kWh)

I enjoyed performing a full analysis, however it is time-consuming and requires a deeper understanding of the manufacturers (PV modules, inverters, rack mount systems and monitoring software) and a fair understanding of finance (IRR).  Feel free comment or contact me with any of your questions.

As reported by Trefis for MSN Money, there have been significant decreases in the price of polysilicon, “…prices for polysilicon fell from a record $475 per kilogram in 2008 to around $33 per kilogram in Q4 2011.”  Coupled with an increase in production estimated to double capacity within 3 years, it is obvious that there will be significant changes.

From a pure solar technology and manufacturing standpoint, production photovoltaic (PV) panels are made using either polycrystalline silicon (aka polysilicon, poly-Si or poly) or amorphous silicon (thin-film , thin cell using cadmium-telluride CdTe).  Thin film manufacturers, like First Solar, now have competitors that have an efficiency (polysilicon is higher efficiency) and an emerging pricing advantage due to higher volumes, lower manufacturing cost and lower material cost.

Trefis’ graph and data but note that First Solar's CEO recently made a statement claiming the company's ability to reach the $.70/watt with CdTe thin-film technology.

The net effect is lower prices for consumers as manufacturers are forced to retool to fit a quickly changing landscape.

Companies to watch:

• Suntech Power (NYSE: STP), Yingli Green Energy (NYSE: YGE), Trina Solar (NYSE: TSL) – polycrystalline manufacturing with size and scale advantages.
• First Solar – due to it’s US presence, dominance in thin-film, R&D and the risk that polysilicon prices may not trend lower.  First Solar recently claimed success reaching a world record for CdTe Solar PV “module” efficiency, reaching 14.4% total area efficiency. Press release here.  The company also noted that this achievement differs from their ability to reach 14.5-15% average efficiency for production modules.  The later is a goal set for the end of 2015.  First solar Says it used production manufacturing machinery.
• Q-Cells SE (ETR: QCE). Solibro GmbH, a subsidiary of Q-Cells SE, marked a record with its thin-film technology CIGS. Solibro’s thin-film Q.SMART module technology is now the first in the entire thin-film sector to achieve a solar module efficiency of 17.4% (aperture area).  Press release here.  Q-Cells says that the manufacturing process used can be scaled to mass production.  They also remind us that, “…a polycrystalline solar module from Q-Cells’ in-house research centre achieved a module efficiency of 18.1% related to the aperture area in July 2011.”

Q-Cells SE Wafer Wetbench

Below is a proposal from a local company for a 5.8kW PV system.

 Should I spend $26,850?  Here’s a look at a recent proposal I received.

Financial Proposal
Total System Price	$ 26,850
Local Government Rebates	($ 14,127)
Net Contracted Amount	$ 12,723
Less Federal Tax Credit (30%)	($ 3,816)
Net Investment	$ 8,906

Electrical Details
PV DC Power Rating (kW)	5,856
Estimated Monthly Power Production (kWh)	615
Local Cost $ per kWh	0.104
Expected Savings Per Month	$ 63.96
Payback in Years	11.6
Increased Home Value (cost of system)	$ 26,850

* Does not include cost of upgrading electrical panel ~$1,000.

 Analysis

1. Is this a standard proposal?  A. Yes
2. Is this a high quality proposal? A. No, some details are incorrect.  Taxes were omitted from Net Investment and solar radiation calculations are off, however the net “Energy Value” was calculated correct.
3. Cost effective?  A. Yes, especially considering the increase in home value.
4. Will I purchase this system today?  A. No.  Panel prices and options for PV panels and inverters are changing monthly.  More research is required before I can sign.  I also want to understand “why” these components were chosen by the company.

Proposed System Details

Solar Power System – Details of my proposed system at a price of $26,850:

• (24) Samsung LPC244SM 244-watt mono-crystalline PV panels

• (1) Power‐One’s Aurora Uno model PVI‐6000‐OUTD‐US power inverter
  • Dual inputs with independent MPP tracking for optimizing power from two sub-arrays
  • Flush mount roof racking system (manufacturer not specified)
  • Services for all installation labor, engineering, permit, and inspection.

Solar Power System Proposal Summary and Detail

It is simple to install, remotely monitored, utilizes a web-based user-to-system interface and provides information detail to the module level.

There are two key differentiators to Enphase’s solution. First, the ability to monitor and present graphically with module-level detail.  Second, the ability to graphically review historical power generation by module.  Information like this aids in the analysis and problem determination of module performance.  Ultimately, this will save you money by identifying persistent problems – a bad panel or a shade problem.

Hardware - Per the company’s website, installation is a simple four (4) step process.

1. Register
2. Install – PV modules and microinverters
3. Connect – Install Envoy communications gateway
4. Assign -  generate the module array.

Communication – Enphase’s Envoy Communication Gateway is a small 110 volt broadband router that connects via integrated wireless to the Enphase microinverters.  The Enlighten monitoring software accesses the module information via Envoy.

Pricing  – subscription-based service priced per module monitored.  Web prices fluctuate widely, but it appears at this time that a fair price is $2.65 per module per year.

This is the best residential solution I have reviewed, but it comes at a small, recurring, price.  See more about this solution at http://enphase.com/products/enlighten/

Energy independence is an exciting prospect, but getting there is finally becoming a reality for the masses.

Why all the confusion?  Solar power remains largely an immature industry.  Significant advances in technology at a frantic pace are changing what is available and cost effect.  This results in a tremendous amount of old, inefficient product.  The manufacturers try to sell what they already produced and installers push:

1. what they have in stock
2. what they can sell
3. what makes them the most money NOW
4. and what works today.

A similar situation happened to me last year when I was evaluating a new HVAC system.  I had decided on a Carrier system for many reasons. The salesman said, “Yes, we can sell Carrier, but I would like to also provide a quote for a Bryant system.”  He said, “Carrier and Bryant are the same systems, Carrier is just more expensive.”  I told him that it wasn’t a problem, as long as the systems were identical. He said, “Oh, well the Bryant system isn’t exactly the same, but I’ll quote it so you can compare.”  I never received a quote and never heard from the salesman or company again.  In the end, they could not sell me what I wanted and were pushing what they could rep, or what they had in the warehouse.

Let’s cut through the crap and figure this out together.  I am tired of writing a check to the electric company every month and I’m tired of being sold to.  I want to enable everyone to know which systems are the best and to demand nothing less!

Let me know what information would be helpful when you are evaluating solar power systems for your home.

John Holsinger, the Solar Scientist