Solar Cost Video
| Published in Solar
In a commitment to advancing the solar renewable energy movement, SRoeCo Solar created the “Solar Electric Cost Commercial” to promote the benefits of solar electric systems through creative marketing and advertising.
Calculations behind the “Solar Electric Cost Commercial” after the break.
See the “Solar Car Commercial” for an explanation of system rebates and net cost calculations.
A California resident spending an average of $200 per month on electricity bills to Southern California Edison (SCE), will spend $2,400 over the course of a year. Since 1980, the annual electric rates for SCE have increased an average of 2.91% and can reasonably be assumed to continue to rise at least that much over the next 25 years.
I calculate the cost and savings over 25 years because this is the guaranteed warranty for most solar panels. Therefore, $2,400/yr at a 5% annual increase will total $114,707 over 25 years.
The net cost after rebates of a 4 kW solar electric system for an SCE customer is $16,700. To view the specifics of this calculation use my SCE solar cost calculator and type in “5940″ as the kWh/year usage. You will see that I have conservatively rounded up from $16,690.80.
Using NREL’s PVWatts calculator, a 4 kW solar electric system located in Long Beach, CA at the default setting will produce 5,795 kWh of electricity. A similar system in Orange, CA will produce 6,123 kWh of electricity according to the CSI-EPBB calculator. For my savings calculations, I have conservatively used 5,700 kWh as the expected output.
Based on SCE’s 5 tier residential rate schedule of $0.12, $0.14, $0.24, $0.28, and $0.32 tiers, a customer would consume 11,750 kWh/year to average a monthly bill of $200. Using this rate schedule and consumption pattern, a 4 kW solar electric system producing 5,700 kWh/year would save $1,533/year in electricity costs. The annual savings being counted against the net cost of $16,700 would result in a system payback of 8.91 years, meaning that every every dollar saved after 8.91 years is money in the pocket.
Including the cost of replacing the inverter for $4,000 in year 15, the payback chart for this example 4 kW solar electric system would be as follows:
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