Not cheap though. About $8000 per kw, so says the FAQ. But I have no idea if that's normal. I'm wishing MI had a decent incentive program for residential solar.

If Google put these ones up for 1.6 MW it would have cost them $12.8 million.

That's great news! Solar is growing so fast (in volume) and improving steadily... We'll be surprised to see how big that industry is in a few years. That's the nature of exponential growth.

Current (Oct 2006) pricing for "standard" panels is approx. $5.50/watt at the retail level. Installation will run you another 4 to 5 $/watt for a combined installed cost of approx $9.50 per watt.

These new panels are coming in at $8/watt, so they are definitely higher in upfront cost than the current crop. If their efficiency is 40 per cent better (or so), the equipment costs are about a wash (higher price per panel but fewer panels). There may be lower labor costs, though, since there are less panels to install.

As always, larger purchases will lower both components of the equation.

Up-to-date pricing for solar panels is available at www.SolarBuzz.com

-Andre'

Not cheap though. About $8000 per kw, so says the FAQ.

No, the FAQ says " Our installer partners will provide a quote for designing and installing an entire solar system. System costs begin at $8,000 per kilowatt, but a federal tax credit and state government rebates can reduce your cost by 25 to 50 percent, depending on your state."

That means that their specifc system options (not just the panels) start at that price, installed by their partners before any tax credit.

Panels themselves are averaging about $5.46 per peak watt.

http://www.solarbuzz.com/Moduleprices.htm

The average insolation in Lansing, Michigan is 4.2 hours per day for a fixed panel and 5.5 hours for ones that are mounted on a 2-axis tracking mechanism.

http://rredc.nrel.gov/solar/old_data/nsrdb/redbook/sum2/14836.txt

Average cost of residential electricity in Michigan is 10.54 cents per kWh - slightly less than the US average. Commercial users in Michigan pay an average of 8.9 cents per kWh, by comparison.

http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html

Assume 3.3 percent inflation (rule of thumb historical average for the US) and electricity consumption of 600 kWh per month (US avg is about 1,000 kWh/mo for a given household, but much of that is aircon use in the south and southwest). Ignore taxes, connection fees, etc on your utility bill for this example, though those can be substantial themselves. Also assume you're intertied with the grid, so you don't have to have a huge battery bank to balance demand with supply. Finally, assume fixed, not tracking, panels.

To generate 600 kWh per month on average, with an insolation value of 4.2, you need 4,760 Watts of panels. At $5.46 per watt, that comes to about $26,000.

Forget about any tax credits, and just assume you can lump that money into a 30 year mortgage, which goes for 5.93% today. Also ignore the upfront financing costs, as you'd be taking the loan anyway. Assume a 28% marginal federal income tax rate for purposes of calculating the value of writing off the interest on the loan.

$26K @ 5.93% / 30yr comes to $154.72 per month. Obviously, thirty years from now, the value of that much money isn't nearly what it is today.

Under that scenario, you're only going to see positive cash flow 27 years out.

So, no, if you're just intertying from a normal home in a non-remote and not getting any tax breaks, it's pretty certain you won't be paying less for solar.

For Google, however, there's very large tax breaks in California ($2.50 per watt, I believe), though I'm not certain what the limits are on that for commercial users. Google will also be doing a large scale project, meaning they'll be paying far less for the equipment than some homeowner would. The system component costs are also going to be smaller, relatively speaking, since they'll be generating so much power. So they're probably going to do okay on the financial side of things with a solar purchase.

Thanks anonymous!

So basically about $8000 per KW, which I said. I could not find their lifetime on the website though.

So basically about $8000 per KW, which I said.

No, what you were quoting was the installed cost of a small system. Nothing in their FAQ referred to the cost of their new panels.

I could not find their lifetime on the website though.

Rule of thumb is 30 years, though it could obviously last much longer than that.

These new panels are coming in at $8/watt, so they are definitely higher in upfront cost than the current crop. If their efficiency is 40 per cent better (or so), the equipment costs are about a wash (higher price per panel but fewer panels).

The efficiency doesn't change the total end cost of the panels. If something is $8.00/watt it is more expensive than $5.50/watt.

You are right, though, that the installation costs would be lower. And not everyone has an infinite amount of space to place panels, so that's a consideration, too (especially in dense and/or expensive real estate markets).

>$26K @ 5.93% / 30yr comes to $154.72 per month.

Call me dim, but doesn't this fail to take into account the cost savings on your electricity bill?

"Rule of thumb is 30 years, though it could obviously last much longer than that."

That's one of the things that people forget about solar. Yeah, it's expensive at first, but how much are you going to pay for power over the next 30-40 years? How much is it worth to you to be independent from coal plants and such?

Seems like a pretty good deal to me, especially since prices keep dropping while fossil fuel prices keep climbing.

A couple of other things to keep in mind about Google v. some house in Michigan -- commercial electricity rates average 16.18 cents per kWh in California (2nd only to Hawaii), and Mountain View gets about 7% more insolation than East Lansing, MI (which isn't as big a difference as one would guess).

Both of those factors - especially the cost of grid power - are going to make the financial model vastly different than the one for a residence in Michigan.

I'm failing to see your distinction. Yes installed cost, I'm not going to do it myself. Thanks for breaking it down though. But either way too much at current prices. I really do hope this come down in price.

I think the point is that some people will do the math for $/kw based on the cost of the panels alone, and others do $/kw for installed systems, which have the panels + inverters + batteries + installation.

Just to avoid some confusion, I was not comparing Google to residential solar. That was just tangent information.

On a totally different note, are there single axis active roof racks available? So you could mount to your roof, but each panel would pivot on one axis to follow the daily sun. Seems totally feasible to me, but I cannot find anything out there.

There is definitely a huge difference between (cost of panels) and (cost of panels and inverters and installation, and batteries if you want to be off the grid) to be taken in consideration when running the numbers.

Increased efficiency and lower required surface area are two factors in the entire decision-making process in each unique project.

So let me get this straight. I purchase some solar panels now with about $8K, and just when I've paid their worth off and gotten a little bit of free electricity from them past the payoff point, the company that made them either folds, merges in with another, or discontinues this "inefficient" model. So if enough of these get cracked or burnt out, and I decide to replace them, I'm out another $8K again.

No, I think the technology needs to continue to improve until its growth starts to slow down again. At that point, the cost benefit may start to increase, making it worth my while.

As well, the thing that scares me are some solar panel batteries that get overcharged because the regulator isn't working, they catch fire, and the whole house goes "solar" at that point. Then I'll /really/ be out of cash.

Nothing more tiresome than phony objections by people who don't care.

Just to avoid some confusion, I was not comparing Google to residential solar. That was just tangent information.

Well, of course you were comparing them, asserting that they are analogous by simply multiplying the cost for a small residential system by the relative size of Google's system to that.

But, since the two situations have huge differences, the number you put out was off by a factor of more than 4. Google's panels should run about $3 million, not $12.8 million. If they borrow the money to finance the project, they'll be in the black the moment they switch the panels on.

Well gee, I'm glad you think you are so smart you know what I'm thinking. I'm glad you pull numbers out of thin air too. I'm sure the 12 million mark is off by a lot. So what. It's a lot of money. But it seems small scale solar is too cost prohibitive for normal people.

Well gee, I'm glad you think you are so smart you know what I'm thinking.

I'm not describing what you're thinking, I'm describing what you did.

I'm glad you pull numbers out of thin air too.

Uh, no, I spent quite a bit of time putting together a spreadsheet to do the comparison calculations. I saved you the details, since you obviously don't understand them, nor care about them, as evidenced by your response to my longer post.

Most of the assumptions necessary for the calculations have already been laid out. The only one I added was a cost of capital assumption of 4% for Google, which is a conservative figure.

One could add opportunity cost of capital assumptions to the model, but then one could also add goodwill, employee retention, and other assumptions, too. The model I'm using is a standard real rate of return model.

. I'm sure the 12 million mark is off by a lot.

You said $12.8 million, and the cost of the panels is likely to be a shade under $3 million. You inflated the price by over 400%. Yes, that is a lot.

But it seems small scale solar is too cost prohibitive for normal people.

If that's what you want to believe, then I'm sure you're satisfied with that notion. In reality, even for a grid-connected system without subsidies, your first month cost premium is around $50 -- or about $1.70 per day. It gets progressively cheaper from that point on.

We all have our priorities. Perhaps you like premium cable that goes for $70/mo. Or a sooped-up car.

The numbers are only going to say what they can say. They can't make value judgments for you, nor can they cover all specific possibilities with one model.

I'm glad you pull numbers out of thin air too.

Here's the assumptions (most restated from before):

Consumer electricity rate, California avg = $0.1618 per kWh

Cost of capital to Google, 30 year fixed loan = 4.00%

California state incentive per watt = $2.50

Cost per watt, national average = $5.46

Retail markup = 25%

Marginal corporate tax rate for Google (fed & state combined) = 40%

Avg insolation, fixed panel, Mountain View, CA = 4.5

Size of system = 1.6 Megawatts

Inflation = 3.3%

=====

According to my calculations, that comes to $2,988,800.00 for the panels and the present value of the 30 years of cash flow is $4,985,274.31.

I didn't factor in additional system costs, but I also didn't figure in the cost of a non-solar backup power system, which I assume is part of the reason they're doing it (as a sustained power outage for them is likely to be extremely costly).

I also didn't factor in that they can probably amortize the cost of the system itself. The only deductions factored in were for interest on the loan and the cost of the electricity if they were to continue sourcing those 1.6 Megawatts from the grid.

Perhaps you can run the numbers based on those assumptions and see if I'm incorrect.

So if we can expect additional dramatic improvements in the next two years, does it not behoove one to wait to make such a purchase? The problem is that once you buy in, you are stuck with the investment and the debt notwithstanding near-term anticipated improvements. As with plasma TV and computers, some patience may well pay off long-term. Admittedly you have to make the leap sometime if you want solar, but the current price is still a bit high.

If you live in Tennessee this can be a great thing for you, in my home, I have limited south facing roof space, and we use about 2200 kWh a month. I can't get enough 160 watt panels on the roof to make all of that power, but at 315 watts, I can do a grid tie in, and the state will pay me $0.15 kWh that I generate. Power from the utility cost $0.086 during peak hours. So if I feed all my power into the grid, then buy back from the grid, I can get nearly twice the power back out that I put in without paying anything. My average electric bill is about $220 a month, that means that even at $30,000 for a system, I can break even in 11 years and have 19 years of no electric bills, saving me $50,160 before rate increases.

Wow, this is a nice web page, I would like to go Solar, and this page is an eye opener. I guess the people who have written here must of missed an article I read about 6 months ago. Sony in Japan is putting together a factory to mass produce solar cells, they will be sold only in Japan until they meet all their needs there. I'm sure they will be the best and won't be cheap, but like anything that comes out of Japan, it will be a market leader. I haven't read any more on this, but I've been keeping my eyes open for it. Japan stated roughtly 5 years ago that in 10yrs they will be self sustainable for energy,,they now have to import everything. They are moving as a country to get it done..I wish our government would make energy change a prioity.Steve

okay. can someone help me? i was hoping to get solar panels installed on the roof of a restaurant, and the electricity bill is $680 a month... How much money would we save? and how long will it take to pay itself back? Im in Southern California and ive been diligently searching but i cant find any website that will tell me anything useful! =/ help!

-Thanks!
DanER