Hucksters Pitching Bad Solar Investments
Most people wouldn’t buy a magic elixir from a traveling pitchman, but they may be an easy mark for a PV rooftop solar installation, pitched over the Internet or by the media.
There’s an abundance of misinformation circulating on the net and in the media about PV rooftop solar. So much so, that everyone should be careful.
Many Internet sites have information on PV rooftop solar installations. Some offer to provide a free estimate of the savings people can achieve with a PV rooftop solar system, and some have an online calculator allowing the viewer to determine possible savings.
Just be careful, the calculator can distort the payback in at least two ways.
One calculator uses the amount of money required from an investment, such as a CD, as being comparable to the amount that will be saved from a PV rooftop solar system. (Note that the return from the investment may be taxable.)
The return from the investment is larger than the actual savings from the PV rooftop solar installation, and the calculator determines your payback based on this higher, misleading value.
In another ploy to inflate the value of the investment, the calculator adds the cost of the PV rooftop solar system to the value of your home when calculating the payback in years.
But a PV rooftop solar system is probably like a swimming pool. You rarely recover the cost when selling the home.
In addition, the calculator deducts the federal 30% tax credit from the investment, so the payback is determined using the net cost after the tax credit.
If PV rooftop systems are so good, why do the sellers of these systems have to distort their true value?
The answer is simple.
- In most locations, PV rooftop solar systems aren’t a good investment.
- They require a subsidy to make a bad investment appear good.
The online calculator also uses a variable to reflect your location. The variable is likely the insolation value for where you live.
Insolation values are determined for locations around the world, and show how much sunlight falls on the Earth at that location. It’s frequently expressed as kWh/square meter/day.
These values vary widely. For example:
- Central Australia = 5.89 kWh/m2/day
- Helsinki, Finland = 2.41 kWh/m2/day
And in the United States:
- Phoenix, Arizona = 5.38 kWh/m2/day
- Minneapolis, Minnesota = 3.68 kWh/m2/day
For insolation levels at other locations, go to http://sunintersolar.com/wp-content/uploads/2012/04/Insolation.pdf
But the calculators on the Internet may not take into consideration the number of cloudy days that occur at any location.
This can turn a payback of 12 years in Albany, New York, into a much longer payback.
The 12-year payback is abysmal, even if cloud cover is included in the calculation.
The payback assumes the PV rooftop solar panes face due south. If they face to the east or west, it requires an additional 2 or more years to recover the investment.
Paybacks at other locations could also be much longer than shown by a calculator on the Internet if cloud cover isn’t taken into consideration by the calculator.
Here are a sampling of paybacks periods as determined by the calculator:
- Atlanta, GA, 15 years
- Lincoln, NE, 17 years
- Pittsburgh, PA, 21 years
- Spokane, WA, 22 years
- Tampa, FL, 11 years
- Tucson, AZ, 10 years
It’s obvious there are few places in the United States where paybacks without subsidies are reasonable, say less than 5 years.
And PV rooftop solar panels are only expected to last 20 years, so in many locations the panels would be scrapped before they had paid for themselves.
Because of the question about cloud cover, anyone enticed into buying a PV rooftop solar system should insist on a warranty, where, if the savings over a year aren’t achieved, the company making the installation would rebate a proportionate portion of the installation cost.
For example, if the saving were 10% less than guaranteed, there would be a rebate equal to 10% of the installed cost.
This only makes good business sense.
The cost of PV rooftop solar will probably come down a little over the next decade. But even if they were 50% less, so the panels cost half of what they do today, PV rooftop solar would still be a bad investment throughout nearly all the United States.
PV rooftop solar is a bad investment for two reasons:
- The paybacks are abysmal.
- PV rooftop solar can destroy the grid. See, Rooftop Solar is Harmful, Part 1 and Part 2.
Beware of hucksters promoting PV rooftop solar.
PS: You can verify the paybacks by using the calculator at http://bit.ly/1IZyozw
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