# Simple Solar PV math

First: assumptions:

1. Price of grid electricity. In MA, it can be kinda expensive. And let’s assume you are doing GREEN UP or NEW ENGLAND WIND FUND to make you 100% renewables. Let’s guesstimate \$0.20. That might be low, but whatever. It will also increase at rate of inflation. say 3%.

2. Price of solar panels installed. I think it might be even cheaper than this now, but let’s say it’s \$4000/KW peak (what the panels are rated)

3. Output of said panels in an average year. I believe in New England, assuming maybe 90% sun (maybe w/ microinverters) and roughly S facing, you can assume 1200 KWh/KW peak. So if you install 1KW of panels, you will get 1200 KWh/year.

4. Borrowing money at 5% for 30 years.

5. Panels will pretty much work with no maintenance (maybe a new inverter) for 30 years. They have a warranty nearly that long. And likely for many more. But we can ignore that.

Second: Calculation:

\$4000 at 5% fixed 30 years is \$258/year
… EXCEL: = 12 * PMT(5/1200,30*12,4000)

And so that is

\$258 / 1200 KW = \$0.215/KWh for that electricity in year one

Thirdly: what does that mean exactly?

We are basically at “GRID PARITY” pricing with PVs here in New England from day zero and year one, and…
1. Even assuming NO TAX BREAKS, which there actually are.
2. And things will just keep getting better and better as inflation happens. Even assuming you get costs of living increases at your job which help you keep pace with the equally increasing fossil fuel prices, with the solar, you are locked in to 2013 prices for 30 (or more) years!

Forthly: Comments and Conclusion

One complication is that people move every 7 years I think I’ve heard. So the problem there is that the buyer of your solarized home will not understand all of this wonderful stuff, and solar PVs will be even cheaper 7 years from now, so when you sell, you won’t be able to sell the house for much more with the panels. Maybe a tiny bit. Maybe. And you will still have your extra 5% loan for the PVs to pay off.

Which is why I still think it might be most conservative to do GREEN UP (or similar) or NEW ENGLAND WIND FUND and get your 100% renewables that way.

And buy a Prius when it is time to buy a new car. And eat less meat. These 2 have been shown (calculations again!) to contribute as much to reducing CO2 as solar panels do. And for many situations they also cost less! And they aren’t attached to the house, so they can come with you when you move.

On the other hand, there are many reasons to do things in life besides money. Most of us live in houses, buy cars, and build kitchens… all far fancier than we NEED. So then… so WHAT if you add some fancy solar panels to the house. If you can afford it, then go for it. They are cool. And the kids will learn a lot from it.