Rate of Return
Rate of Return
(OP)
I have a Solar Panel installation project. The initial cost of the system is $19,000. About 2 months after that, I will receive a credit from the power company for $12,500. About 8 months after that, I will receive $5,700 federal tax credit. Then every month for the next 20 years I will receive payment from the power company averaging about $50/ month.
I would think my rate of return would be (12500+5700+(50*12*20))-19000/19000 = 58%.
Are my calculations correct? I keep thinking it should be more complicated.
I would think my rate of return would be (12500+5700+(50*12*20))-19000/19000 = 58%.
Are my calculations correct? I keep thinking it should be more complicated.





RE: Rate of Return
It is: http://en.wikipedia.org/wiki/Time_value_of_money
RE: Rate of Return
Where do I sign up??
RE: Rate of Return
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RE: Rate of Return
Basically DTE (detroit edison energy) paid me $2.40 / watt installed.
I have a 5060 watt system installed - so I got paid by them $12,144 and an upfront renewal energy credit. This is a renewal energy credit and not considered income by DTE - NO 1098 issued. Basically this is as opposed to paying me $0.30 / kWh generated (see 2 paragraphs down).
Federal tax credit of 30% of system cost = $5,700.
Then DTE pays me $0.11 / kWh I generate. On average I'll generate 6200 kWh's / year ~ $600/year in credits. This is also not considered income and is not taxable. At least by DTE's interpretation today.
The $0.11 never changes over 20 years, per my contract.
RE: Rate of Return
I get paid for what I generate $0.11/kWh even if I use it!
I also get a credit on my bill for electricity that I generate that I don't use.
On months I use more electricity that I produce, I either eat from my $ credit or Power Credit Balance.
RE: Rate of Return
Pick your applicable interest rate
Add 2 months carrying costs on the $19k ($250-ish?)
Subtract the $12,500
Add 8 months carrying costs on the new balance ($500-ish?)
Subtract the $5,700
Left with net investment (at that point in time)
About $1.5k ? (YMMV)
Returns $50/month
About 35% ROI (ballpark, varies with assumptions)
You should also consider risk of delays and how that might impact the return. But from here, it seems like a no-brainer.
Also, presumably the $50/month doesn't wait. It would start immediately upon installation, right? That helps.
RE: Rate of Return
I generate 600 kWh this month. = .11 * 600 = $66
I use 600 kWh = 0 from DTE = $-66.00 bill from DTE.
Example 2:
I generate 600 kwh = $66.00
I use 700 kWh = 700-600 = 100 kWh net = 100 * .13 (cost per DTE kWh) = $ 13.00
Net Bill = $66 - $13 = $-53.00
Example 3:
I generate 600 = $66
I use 400 = 600-400 = 200 kWh banked for next month.
Bill = $-66 and also credit for 200 kWh to be used the next time I use more than I generate. The banked power is used up before the $ credits.
RE: Rate of Return
Hmmm... x100:
Mortgage your house ($150k), slowly build-up to 100 systems (clawing back the rebates and credits along the way), and ultimately make about $5k a month doing nothing but dusting solar panels.
How much land do you have?
RE: Rate of Return
My roof is about maxed out. I'm considering adding 8 more panels to what I have now.
http://img809.imageshack.us/i/october201051.jpg/
RE: Rate of Return
Dan - Owner

http://www.Hi-TecDesigns.com
RE: Rate of Return
RE: Rate of Return
I am thinking of putting a panel farm on my barn roof, but here in MA I had 3' of snow on the roof for a couple of months this year!
www.MaguffinMicrowave.com
Maguffin Microwave wireless design consulting
RE: Rate of Return
Keith Cress
kcress - http://www.flaminsystems.com
RE: Rate of Return
TTFN
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RE: Rate of Return
23.621 KWH August
20.194 KWH September
18.704 KWH October
15.281 KWH November
6.40 KWH December
6.90 KWH January
15.906 KWH February
March will be my highest average month to date. Over the last 5 days, I've averaged over 30 kWh's each day. I'll probably average 28 kWh's this month.
so you can see the effect of snow on the panels in Michigan. We had a lot of snow this year compared to years past. There is a program you can 'google' called PV Watts. It basically lets you chose your region (over the USA) and then select the size of system you want, the azimuth bearing, and the angle (tilt) of the panels. It will estimate how much electricity you will produce. I've out produced the PV Watts estimate every month except January.
http://
RE: Rate of Return
These are KWH per day averages for the month?
RE: Rate of Return