Got my bill this month from TXU Energy. I used 696 kWh for the month. Last year this time, we used 1,178 kWh. That’s a 41% reduction in my usage with the solar panel. Woohoo!
A bit about me, I tend to know more than most about the energy space because I work in the industry. So, yes I know solar is inefficient, it’s expensive as a result, and the pay-off is long. However, someone came up with something called the solar lease and the game was changed.
The Obstacles
One of the biggest hurdles for solar adoption and ownership was the high upfront costs. Even with tax breaks and rebates, cutting the cost down by as much as 45 – 50%, a homeowner still has to pay around five figures for the pleasure of owning a solar panel and deal with 15 year payback after rebates. Solar leasing provided me the opportunity to own a solar panel for a fraction. This was the opportunity that was presented to me when SolarCity came to Texas.
You might think that Texas is a natural location for solar given the amount of sun the state receives each year. However, the Texas solar market has challenges that are not unique to its market. For one, home prices in Texas are low. An investment of $30,000 in a solar panel on a $150,000 represents a much more significant amount of the home’s overall value than a $30,000 panel on a $500,000 home in California of the same size. That makes the benefit of home value improvement from solar panels harder to believe. Secondly, Texas deregulation means that prices for electricity are much less than in regulated markets like California and New Jersey. That makes the payback longer in Texas if you only look at the potential savings on your electricity bill. So why invest in solar panels at all? The answer is in an innovation that has is not technology-related but financing focused instead; the solar lease.
Solar Leases versus Purchase
So why solar lease versus just buying a panel outright?
I wanted to make sure I was getting the best deal and shopped around a bit. SolarCity offered me the best price and I figure with a reputable company like SolarCity, I don’t have to worry about the company going under in the middle of my lease.
So we called SolarCity and the agent pulled up my address on his computer and was able to tell me how big of a system I could get, 5 kW, and how much production I would be able to get from it. He sent me a powerpoint with the proposal and a form to fill out. In short, my system was going to be 5 kW, sit on the front roof of my house, and cost me $3600 up front if I choose to prepay the lease, or no-money-down with $50 payments for the life of the lease. Actually, I don’t remember the monthly payment amount because I was so fixated on the upfront costs. They were able to make this happen because of the rebate Oncor was offering for homeowners.
Decision Revisited
I took another look at my decision now the rebate is no longer available. My conclusion is that solar is still a very good deal and thanks to the Chinese and their enormous investment into solar manufacturing. It’s resulted in an oversupply of solar panel just as demand is starting to slow. Without the rebate, you can’t get the 4 year payback I’ve got with my system. But the payback at 8-10 years for a 20 year lease means you’ll earn a 100% return over the life of the lease. Further, if you factor in the attractiveness of your home in this slow real estate market when you sell, it’s an even better deal. I also get a kick of watching my electricity bill go down each day and month. For technology geek like me, this is the ultimate toy.
This week my employer laid off my mgr and my director in a restructuring move. I am still grieving for them. A good friend of mine gave me some good advice, saying
it is not your burden to bear.
. I can’t shake the feeling of why not me and are they going to be ok? This flood of worries came to me again when I was looking at the Xmas stuff at sam’s club. If anyone needs a great director or mgr with STRONG project management experience and deep green energy experience let me know.
My solar panel has produced over 2 mWh (2000 kWh) in just over 2 months. That’s about 1.5 months of free electricity.
Today I attended the solar power international conference. I learned a lot and found some cool things I want to buy. Maybe I’ll get a new pool pump when I sell my condo.
Oh and someone put in a bid for the Austin condo yesterday. I can’t wait to get rid of it.
So in the last few months, Ethan’s gotten to be so much fun. He’s much more interactive and is prone to laughter. He likes to play on the swings and he started walking while holding onto our hands.
