Outrun Change

We need to learn quickly to keep up with the massive change around us so we don't get run over. We need to outrun change.

Going off-grid. Would merely triple what I pay for electricity.

One of the most fun things about blogging is learning as you go. If you like watching an uninformed person slowly get informed, get a fresh cup of coffee, sit back, and enjoy.

I previously discussed Battery storage for the home. Extremely expensive, but available. Update: merely double my costs.

(My math was off. Read to the end for my new calculation.)

Also More followup on the Tesla Powerwall home battery.

To analyze the concept of home batteries and solar power, I’m looking at the concept from the perspective of going off-grid.

I found a few websites that provided some info on the solar array needed. I won’t list the specific sites to avoid causing any unexpected problems, like, oh, exposing commercial businesses to unwanted ridicule.

One site gave helpful tools to calculate how many panels are needed. To go off-grid and cover our actual electricity use last August would call for a 7Kw system. That would involve $18,000 of their panels plus $1,500 or $2,000 for an inverter. Installation and permits are extra.

Oh, the fine print says that wintertime can reduce energy by 25% to 50%. I’ll assume merely 20% for SoCal. On the other hand, we don’t run the a/c in the winter so that drop in solar power would be offset by not needing the a/c and thus wouldn’t require extra panels.

So that is around $19K or $20K for the equipment.

Found another website that says equipment is around 47% of the total cost for a 4Kw to 8Kw system. I’ll assume 50%.

That would bring the total system up to:

  • $18K – panels
  • $2K – inverter
  • $1.6K – sales tax
  • $21.6K – installation, permits and sundry etceteras, assuming equip is 50%
  • $43K – rounded before you subsidize my electricity
  • $13K – 30% subsidy (rounded) from readers of this blog, i.e. taxpayers. Thanks for being so willing to give me $13 grand cash.
  • $30K – my wild guess on cost of solar array large enough to go off-grid

From about one minute of reading the fine print of a large solar installer’s website, I learned that if you lease a system from them, you sign a contract for 20 years. I guess that means the system will likely last that long. I’ll assume a 20 year life and then round down to 15.

I severely doubt it will last 20, and probably not even 15, but will make that assumption. Well before that time is up, I think the equipment will be either physically or technologically or economically obsolete.

That brings the subsidized cost down to $2,000 a year ($30K / 15 yr), which is more than I paid last year for electricity.

Batteries

So back to the batteries.

Previously calculated I’d need 6 batteries at 7 kWh to go off grid. That was before I learned you can’t completely drain a battery or it will cause damage. A minute or two of reading showed the common assumption is a 70% draw down to maintain battery life.

Only 4.7 kWh per battery means I’d need about 8 batteries to run a full day in the summer. I’ll throw in only one more battery to allow for not quite fulldraw down in the peak of summer on the assumption that the solar captured would get ahead of the drain in middle of day. That makes 7 batteries.

All-in cost including installation is $5,000, per my previous post. That makes a $35,000 upfront cost to go off grid, just for batteries.

Upfront and amortized costs (my wild guesses)

Looks like this for upfront costs:

  • $30K – solar array including installation, net of your gracious subsidy
  • $35K – batteries
  • $65K – total up front

I won’t even bring into the discussion that there would be another $35K in about year 11 when the batteries wear out. Would have to buy another set of batteries to get the remaining 5 years use out of the panels!

Amortized costs:

  • $2.0K – amortized solar array of $30K over 15 years
  • $3.5K – batteries amortized over 10 years
  • $5.5K – my wild guess of annual cost to go off-grid

Notice that the batteries are almost twice as much as the solar array? Wow.

How much did I spend for electricity in the last two years? (Don’t want to make this look even more horrible than necessary, so I’ll ignore that a large portion of the cost is transmission, not generation.)

  • $1,684 in 2014.
  • $1,750 in 2013.

So if my long string of assumptions is on track, a solar array large enough to power my home would cost 119% of what I paid last year for electricity and batteries would cost 208% of last year’s bills.

That means my costs would be 327% of last year.

Going off-grid would triple my costs.

Remember, batteries would be a majority of the cost.

Tripling costs for a huge upfront payment is an staggeringly horrible rate of return.

Let me rephrase how astoundingly expensive that would be

Let me put it another way – If I could somehow prepay the next 38.6 years worth of electricity, I wouldn’t have another bill for electricity in the next 10 years, at which time I’d have to buy another batch of batteries.

I wouldn’t gain anything. I’d be 28 years behind in the first month!

I can explain the waste yet one more way. Fifteen years of electricity (I won’t count more batteries in year 10) at $1,700 would be $25,500. The present value at 2% discount rate is $21,844. That means the waste on the $65K upfront costs is somewhere between $39K and 43K.

How ’bout borrowing the money?

What’s that?

I hear you thinking “but you could borrow the money and not have that upfront cost.

Okay. Let’s consider that.

Borrowing $65,000 at 3% for 15 years would call for monthly payments of $448.88. Over 15 years that would involve $15,798 of interest. First year interest would be $1,902.35. That is more in interest that we paid last year for electricity.

The total interest of $15,798 would average out at $1,053 per year, which is 64% of last year’s electricity cost. So borrowing the upfront money means our electricity would cost an amortized, averaged $6.5K per year, which is 390% of last year’s cost. So borrowing the money to install all the equipment for this fiasco would increase my electricity costs to about 4 times what we actually paid last year.

Would the panels fit my roof?

The provider’s solution described above would need 30 panels, each of which is 65” by 39” and weights 43 pounds.

I’ll assume two-inch clearance around panels, which makes them 67” by 41”, or 19.1 square feet.

Thus 30 panels would cover 573 square feet and weight 1,290 pounds exclusive of brackets. Someone brighter than me will have to tell me if a typical roof will hold that much weight.

I don’t think any house in my immediate neighborhood will hold nearly 600 square feet of solar panels. Largest number I recall counting is about 18, and that filled essentially all the south-facing space on the roof.

Question in the back of my mind is whether I could even fit that many panels on my roof (even ignoring that the roof line runs north and south so there isn’t a south-facing surface.)

This post has already run too long. Don’t have enough pixels left in my daily blogging budget to start pondering how I could get rid of all those toxic rare earth metals sitting on my roof when in 15 years or so the panels wear out.

Or how much cost and effort it would take to wash the panels when dirt and dust and leaves accumulate on them. (Remember how messy your car windows were a week ago when we got a light drizzle? Wonder what that does to efficiency of solar panels.)  I don’t particularly like the idea of climbing up on the roof a few times a year.

What do you think? I’m sure there are conceptual flaws in my analysis. Where did I mess up the calculations?

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