Hello everyone! I hope you are doing wonderful today. Another year is in the books and the solar panel economics keeps rolling. We are well on our way to making our money back, we love not having a monthly electricity bill anymore, we are doing amazing things for the environment, but one thing did change pretty drastically in 2017!
Oh, I almost forgot…remember the total solar eclipse back on August 21, 2017? Well keep reading to see the fascinating impact on my panels!
It has been a while since I updated everyone on my solar panels so a bit of background info is in order. I bought my panels back in 2015. They were hooked up and running in late November so on a full year comparison basis I have 2016 and 2017.
Energy generation is straight cash, homey! I’m loving the sunny days all the more and the gloomy days less and less. But month over month the solar generation has remained fairly steady.
This chart clearly shows that the summer months are for peak generation, but let me share a few fun facts. First, and probably most obvious, is that the panels generate more energy when the days are longer and there is more sunlight.
But I have two slight nuances to share.
First, is that the summer months also benefit from the sun being more directly overhead. This demonstrates the importance of living further south and closer to the equator. Slightly detracting from that benefit is the efficiency of the panels though. And that’s the second nuance, the panels are most efficient in the moderate Fall and Spring temperatures. The panels don’t convert as much sun to energy in strong heat.
That’s why there isn’t as much of a difference as I would have expected from March through October. But there is a much more clearly defined drop-off in November through February!
Sunlight = Money
Energy is cheap in North Carolina which actually makes the return on investment profile less significant. Think about it, if you live in the Northeast where it may cost 20 cents or more per kWh, the benefit of solar provides a bigger opportunity for cost savings. The same kWh is “stretched” further.
So unfortunately North Carolina has some of the cheapest electricity in the country at approximately 10 cents per kWh. This makes the math simple though. In 2016 I generated 6,043 kWH and 5,898 in 2017 which equates to roughly $604.30 and $589.80, respectively.
My panels cost upfront about $18,816. Huge investment huh?! Well thankfully I didn’t actually drop that much…I had the benefit of the generous State and Federal tax credits which picked up all but about $8K!
My return on investment could be calculated to be ~7.5% using round numbers (~$600 / $8,000). But I think that is actually conservative because the value of the panels in terms of resale (if/when I sell the house) will be more in line with the $18K upfront cost (resale value of solar panels is extensively documented via comparable sales).
How about the behavioral change that solar panels has brought on? I should point out that North Carolina doesn’t allow for credits to carry over from one month to another indefinitely. They do carryover, but every year on May 31 the utility company resets any carryover balance to 0. This keeps folks from putting far too many panels on their roof than they actually need and therefore you can’t send your utility company a bill for the extra power generated and put onto their grid! J
We knew the May 31 cutoff was coming in 2016, but we didn’t fully appreciate how much energy we were generating in April and May that we wouldn’t be using and therefore at risk of losing. That first year we got burned pretty good, losing around 900 kWh of energy which would be valued at approximately $90. Ouch!
In 2017 we got smart! We’re done getting bent over by the energy company so we made sure to use plenty of energy before the cutoff (let’s just say the house was at a comfortable temperature…). Can you tell by our energy usage chart below? No kWh credits lost in 2017!
A Total Eclipse
Last, but not least, I thought it would be fun to touch on the solar eclipse! We live in Charlotte which was almost directly along the path across the US that the eclipse was running. We had 98% coverage of the sun at 2:41 PM on August 21, 2017. This date is actually easy for me to remember as that is when I started my new gig…
The nice things about my SunPower solar panels is the sweet app it comes with which allows me to check on my panels in real-time. Yes, by the minute energy generation if I am so inclined! So take a look at what happened during the eclipse…but for safety wear the special solar eclipse glasses..:) Crazy huh?!
Green and More Green
Sorry, did I say the eclipse was the last thing I was going to cover. Well how could I forget about the environmental impact of solar panels?! I’m saving green and more green! Since installation in late November 2015, I have certainly made a pretty good impact on reducing my carbon footprint. The lifetime savings in the chart below are BIG and it has only been just over two years! Just think the good these panels will bring over the 50+ year life! It’s a good feeling to make a solid financial investment in solar panels, but also an investment in the environment!
You’re thinking “seriously, I thought the eclipse was the last thing…”!! Well the final word today goes to a recent headline I saw on how North Carolina residential electricity rates will be going up 6.2% this year (just like every other year…). This equates to over $60 for the average household annual utility expense! So glad I don’t have to worry about it…!! Solar for the win! And that’s the final word.
Thanks for taking a look!
The Green Swan