The Economics of Solar Panels

by | Apr 30, 2024 | Energy, Finance, Technology | 89 comments

I’ve heard it said that “Solar panels don’t pay for themselves.” Let’s investigate this claim:

This is an expensive U.S.-made solar panel. It costs $435, is rated at 430W, and has a 25 year warranty:

https://backwoodssolar.com/product/made-in-the-usa-mission-430w-72c-pv-module/

Vermont is a really stupid place to produce photovoltaic power. I know because I do it. According to this web page the city of Burlington gets an average of 4.3 hours of sun a day:

https://www.turbinegenerator.org/solar/vermont/

Where I live the first 100kWH of residential electricity per month costs $0.11/kWH. Subsequent power is double that:

https://vermontelectric.coop/rates-and-tariffs

There will be math:

430 watts * 4.13 hours/day = 1.78 kWH/day

1.78 kWH/day * $0.11/kWH = $0.20/day

$435 / $0.20/day = 2175 days

2175 days / 365 days/year = 5.96 years

This is for an expensive panel in a poor location compared to cheap power.

Solar panels last a long time. My cabin’s array of eight panels were originally installed at a site like this one that ran from 1983 to 1994. This article’s featured image is of this site:

https://clui.org/ludb/site/original-carrizo-solar-power-plant-site

I bought the used panels in 1991. Since then two have failed. This Winter water got inside one, froze and expanded, and shattered the transparent protective plastic layer. The other panel was delivered with a missing power connector. I soldered a copper bolt to the trace foil to replace it and slathered epoxy all around to seal it. Corrosion got in anyway and last Fall, after 32 years, it fell off. I intend to replace it again this Summer. In the meantime my cabin is comfortable at 75% capacity.

About The Author

Richard

Richard

89 Comments

  1. Sensei

    Do you have battery storage? Some off grid people have had good luck with lead acid. If properly maintained and discharged getting close to 10 years on them with useful amounts of storage.

    • Richard

      My first set of expensive sealed gel cell batteries lasted 20 years. I was close to replacing them after 14 years but decided to try the snake oil technology of pulse desulfation:

      https://en.wikipedia.org/wiki/Battery_regenerator

      The initial result was that my battery bank seemed to get worse but then I realized that the capacity was increasing more than the PV could charge it. I got another six years out of that bank before I had to replace it.

      My current bank is AGM and nine years old and is due for replacement.

      • hayeksplosives

        Desulfation is not snake oil. You can definitely milk lead acid batteries for a few more years.

        An alternative to lead acid (for those who care) is to buy old EV batteries. You can salvage them in the original “sled” configurations complete with balancing resistors etc.

        Thomas Massie has some good YouTube vids on how to repurpose EV batts to serve as home backup.

      • Richard

        Desulfation was snake oil way back when when I decided to try it. Now it’s sort of my religion. Everyone to whom I’ve lent one of these, and I’ve bought lots, because I don’t get them back,, swears by them:

        https://www.northerntool.com/products/batteryminder-plus-battery-charger-trickle-charger-desulfator-12-volt-1-amp-model-12117tc-167981

        Of course I’ve looked into lithium for a new battery bank but the commonest technology needs an ideal charging voltage (14.4v) than my system can do. I’m just now looking into lithium-titanium technology which appears to work best at 13.3V.

      • Sensei

        If you have space for it people use lots of half dead lead acid automotive batteries.

        EV batteries run into issues especially lithium ion phosphate on taking a charge below freezing. You can discharge them and use that to warm them, but not where you want to spend energy if you can avoid it.

    • Gustave Lytton

      Current production lead acid is crap. We have constant problems it seems like. 10 years is pushing it now and will usually have at least one cell in a string fail well before that.

      Western Electric manufactured/contract manufactured some excellent round cell lead acid. Forty years or longer and still going strong.

  2. Richard

    I’m sorry for such a curt and technical article. It started out as a reply to a comment that I deemed necessary of a reply:

    https://xkcd.com/386/

    But I wanted to have more than two links and at that time TPBP were asking for articles. Alcohol may also have been involved.

    • Chafed

      Interesting article Richard. Are your figures actual electricity production or based on manufacturer projections?

    • R.J.

      Not on purpose. I do appreciate the article, I had explored solar in Texas to supplement my power grid, the problem is all the devastating hail storms yearly. I would have to be able to remove them at a moment’s notice. Wind power works well in Texas but no suburb would sign off on a windmill, not even a small one.
      Now I do have a lot of methane to recycle… Pull my finger and see.

      • Richard

        Modern PV mounting arrays move around to maximize the angle to get as many photons as possible. Here in North Nowhere Vermont they (Most of them, not mine.) go vertical at night and when there’s snow expected. PV panels are more resilient than the roofs of most houses. My cabin’s roof is due for replacement. Except for one panel my PV array is fine after 30 years.

  3. trshmnstr

    I’m solar curious. The local co-op just went to a peak consumption surcharge model, which we’ll get absolutely wrecked on if the car is charging at the same time the AC is running.

    I was under the impression that breakeven was closer to 15 years. At 5 years I’ll actually consider it.

    • Sensei

      Can you charge the car in the middle of the night?

      • Chafed

        Sure. You turn on your floodlights.

  4. Raven Nation

    How do they do with hail? I’m seeing more solar panels around here but we get hail usually once or twice a year. Most years it’s nothing bad, but about every 8-10 years, it’s enough to create a boom market for roofing companies.

  5. KK, Plump & Unfiltered

    This was super interesting! Thanks!

    I think for the RV, if there was some kind of stick-on flat & flexible solar panels, that may work. They do make RV solar panels, but they’re usually a bit bulky. But I haven’t really done much (maybe 10 minutes) research.

    • Richard

      I’ve done RV PV systems twice. Both times the RV owner mounted some generic PV panels where they would fit on the roof and then asked me to make them work. Both times they were delighted except that one of them them later sold their RV and I have no idea what the new owners think. It’s not rocket science and there are all-in-one black boxes (I can’t find a good link right now.) that take a PV array output and produce a limited amount of battery AC power. The important part is “limited”. I did a PV system for a neighbor’s camp and while the owner understood what was possible after he died his family didn’t, killed the battery bank by letting freeze while discharged, and then blamed me for it.

  6. DEG

    Vermont is a really stupid place to produce photovoltaic power. I know because I do it.

    I chuckled.

  7. Sensei

    Let me keep this electric themed.

    https://www.reddit.com/r/teslamotors/comments/1cgl283/elon_laying_off_rebecca_tinucci_sr_director_of_ev/

    https://www.reddit.com/r/teslamotors/comments/1ch34s5/tesla_still_plans_to_grow_the_supercharger/

    The one thing Tesla does head and shoulders above everybody else in the industry. From comments and other reading it reads like they weren’t trimming costs quick enough and he pitched a fit.

    My guess is they have run lots of math and an incremental build is going to have a much lower ROE. But if his existing network goes to shit because nobody knows it can take of it he loses a major competitive advantage.

  8. slumbrew

    Thanks, Richard super interesting. I imagine the math changes quite a bit if you’re not doing it yourself. My impression is that a rooftop solar array on this two unit condo, somehow wired to both units, would set us back quite a bit.

    • Chafed

      I asked my neighbors what they paid, all in, for their installations. This is for SFHs. They averaged a bit over $40,000.

  9. Timeloose

    Richard, did you include the inverter and batteries into your ROI?

    • Richard

      No. The comment that inspired this article, I vaguely recalling, was that PV panels themselves are not financially or energetically profitable. Inverters should last practically forever if not abused. Batteries can last a decade or more similarly. I don’t run an inverter but I’ve had to replaced my cabin’s PV charge controller once in 30 years, at the coast of about $120.

  10. Grumbletarian

    Thanks for this, Richard. I’ve been trying to talk my parents in southern NH to get solar on their roof. They have no trees nearby, and their usage is low, so they would likely create more electricity than they use.

  11. kinnath

    Solar panels are a great solution for off grid installations.

    A small number of panels, installed by the owner is a pretty decent deal.

    Large scale installations, done by a professional, at a home or business that has to tie back into the grid . . . . I don’t believe those are financially viable.

    • Richard

      It depends on whether the PV system owner wants to use the power or sell it. There used to be considerable incentives to sell PV power but those are fading away and may now even be negative! Using the power OTOH will always be financially viable, over a number of years, because the fuel is literally free. (Until States start charging a “solar shade fee” like they now do for rainwater roof discharge.)

      • Chafed

        California has drastically reduced what it pays for solar. I’m glad it is because it has seriously screwed up our electricity market.

  12. Aloysious

    Thanks, Richard.

    Do you mind if I ask if you have hydro or wind generation capabilities? If not, is it feasible?

    • Richard

      I live in at the bottom of a river valley so there’s no wind. I have a neighbor who lives in a cleared area way uphill and set up a small windmill but it never worked very well. Other neighbors have constantly-flowing streams going from up the valley down to the river and if I owned that land I’d be selling power 24/7 to the local utility but “How about you doing this for thousands of dollars of investment?” has never gotten much traction for some reason.

      Wind and/or hydro are very feasible if you’ve got wind and/or hydro potential. Much more productive than PV.

    • Stinky Wizzleteats

      What a POS sellout that guy is, an archetype of why Republicans are the perpetual fucking losers who conserve nothing.

      • Fourscore

        Can’t expect much from the next president. Read something today about bringing the deficit down but never any discussion of the debt.

        The Glibs that paid off their mortgages understand the importance of addressing the debt. The kids with a brand new credit card only see the charges, not the interest.

      • Stinky Wizzleteats

        Yeah, the deficits are nuts but Trump loves spending too so it won’t really matter on that front and any article that mentions deficits without mentioning the debt is lying by omission. I’m just going to vote for the LP candidate whoever that is, doesn’t matter in my state anyway-Trump’ll run away with it.

  13. JaimeRoberto (carnitas/spicy salsa)

    Do you actually get the full 430 W for 4 hours a day? The panels need to be well aligned to do so. My panels are only at peak output for a short time during the day. Mine probably do save me a few hundred bucks a year, which is nice, but not a huge saving.

    • Richard

      Gosh darn you to heck for pointing out the flaw in my calculation! Solar incidence angle is amazingly important for maximum power production. Modern PV mounts actually track the sun. My cabin’s fixed mount was aimed vaguely southward at the middle of the trees to the left and the trees to right. Since then the trees have grown a lot higher. I need to do something about those trees. DEATH TO TREES!

      • slumbrew

        alt.pave.the.earth

      • UnCivilServant

        If Jaime hadn’t asked, I was going to.

        What’s your actual average daily yield?

      • Richard

        I don’t know. Many moons ago, back when I was young and foolish[1], I bought two *very* expensive amp-hour meters to record power coming into the battery banks and power going out. I was going to keep the most anal-retentive[2] records of power production ever. But when I got the PV system all plumbed in the brand-new battery bank just wouldn’t hold a charge. Shortly I figured out that the amp-hour meters, with their always-on seven segment LED displays[3], were drawing a lot of power. They were advertised for hydro systems that usually have surplus power but I just assumed.

        So I disconneted them and ever since then I’ve been monitoring the battery bank charge by rest voltage.

        Footnotes:

        [1] I’m no longer young.

        [2] Does anal-retentive have a hyphen?

        [3] Have you calculated your clock’s power draw?

      • slumbrew

        [3]

        I will wager, yes, yes, he has

      • UnCivilServant

        Until the design is final, the numbers aren’t of much value.

      • UnCivilServant

        3: I haven’t gotten the clock working yet. So implementing the low-power options is still on the two-do list. At that point, I will find out how long it takes to drain this rechargable 250mAh battery. (I also have a 2000mAh battery, but I figure the test will run quicker with 1/8th the nominal charge to go through)

  14. ZWAK will kindle all of the dreams it took a lifetime to destroy

    Nice article, Richard. I have no interest in going solar on my house, for a variety of reasons, but I always keep the idea of a van or boat with a cabin in the back of my mind, and solar would be great on those, as per KK.

  15. Fourscore

    Thanks Richard.

    Here the cost of the electricity is fair but then the add ons add on. Hook up is $24 month. A delivery charge per Kw is substantial, plus sales tax plus the cost of the electrons

    The bill at the cabin runs $30 a month for just a yard light. Home bill is 175-200 but that includes the well pump so no water bill. Winter I heat with wood but fans on the wood furnace will run a lot in winter. Last summer we hardly used the AC but some years it’ll run for a couple months or more.

    I don’t complain much about the electric bill, we get a lot of work done for that couple hundred a month.

    • Richard

      Common well pumps are notoriously inefficient. My cabin’s well pump is a modern (as of 30 years ago) DC model that draws all of 60W. I installed it myself to the consternation of the well driller who expected a few thousand dollars more of my money. The problem is that hardly anyone with a working but power-hungry pump is going to pay the thousands of dollars it would take to put in an energy efficient pump.

    • pistoffnick (370HSSV)

      I will complain about the electricity bill. Electricity costs are cheap, but the governments get their licks in.

      SERVICE AVAILABILITY CHG: 48.00
      MN STATE SALES TAX 23.63
      ST. LOUIS COUNTY SALES TAX 8.69
      OPERATION ROUND-UP 0.04

      • Rat on a train

        Damn. I was taxed $3.12 on my last bill.

  16. Spudalicious

    I was told there would be no math.

  17. R C Dean

    Good start on the analysis. The missing link is storage. The other thing is scale – you can run a smallish, reasonably low-load house on it a lot easier than a bigger house, especially one that needs serious air conditioning. When I looked at doing something for our 3000 square foot house in Tucson, it was absurdly expensive something like $100K all in to get OTG capacity) and more like a 25 year payoff if everything went really well. We just have a bad scenario for it, even though there are few places anywhere with better insulation than Tucson.

    • R C Dean

      Insulation, not insulation.

      • R C Dean

        Fecking autocorrect. Insolation

      • kinnath

        I learned a new word today

      • Chafed

        Fecking?

      • slumbrew

        I imagine there is some Goldilock zone for insolation – enough to provide good PV power while not killing you with cooling demand.

      • kinnath

        Arizona at 6,000 ft instead of 1,000 ft above MSL.

      • Richard

        I knew the word you meant. My browser wants to correct “insolation” to “isolation”.

        The thesis of this article was that PV panels by themselves pay for themselves in both cost and (not stated but true) power production. It seems to me that systems go on a curve. Tiny places like my cabin are pure profit. Scaling up to a system capable of running a modern household may never amortize. But covering a few acres of otherwise worthless southern-facing hillside may be profitable again.

      • dbleagle

        I have PV in Hawaii and haven’t paid anything but the hook up fee since I put them in almost 8 years ago. Last fall I looked at adding storage but I couldn’t see a positive return on investment in 10 years absent the grid completely collapsing. I like the idea of having an EV battery repurposed since then I could probably get a good ROI.

        I am loath to make changes w/o knowing what will happen to my agreement with the power company. I was grandfathered in to the older good agreement with the higher rate. The newer agreements just had the terms changed to pay much less per KW unless you let the power company vampire off your battery storage during peak use hours.

      • slumbrew

        Hawaii has got to be near the top of the list of perfect locations for PV installations.

  18. kinnath
    • Aloysious

      A fine selection.

    • Spudalicious

      Superb.

  19. pistoffnick (370HSSV)

    I would like some solar panels just to offset some of my winter heating costs. While my main furnace is fuel oil, most of my other heat (garage, chicken coop) are electric. If it was grid-tied, I would hope to sell enough back to the co-op during the summer to make up for my winter needs. My winter electricity bills are ~$370/ month + fuel oil bills of $400/month.

  20. Evan from Evansville

    Thanks for enlightening me a bit. (I know…quite little.) Wind and especially solar make perfect sense where the weather is reliable for steady (enough) energy input. I don’t know enough, but I do think/know mass storage and transmission don’t make any sense at all. Mostly likely a “yet” on the end of that. Makes perfect sense to figure it out, and nuclear to get us there in the meantime. I do not think for a moment ICE for personal transportation will change in my lifetime. (Let’s give me 50 years. That would be, very appropriate.)

    I just hate the feelgoodyness my generation feels about it in cities, particularly US ones. Hard for me to keep mum.

  21. pistoffnick (370HSSV)

    Another Facederp score tonight: a Shelter-Logics 14’x 24′ garage frame for $150+ 2 hours drive time. It will become a temporary chicken run (along with several miles of chicken wire that came with the property when I bought it). After we build a more permanent chicken run, it will become a greenhouse (with the addition of some plastic sheeting). After that, I can buy a replacement cover and park a tractor under it.

    /don’t know if I’m clever or foolish.

    • Chafed

      Some of both?

  22. Brochettaward

    They are boondoggles.

    • Brochettaward

      THIS IS THE ONLY ACCEPTABLER LIBERTARIAN TAKE

      • Sean

        Mornin

    • Sean

      *waves*

    • rhywun

      *shudder*

    • Gender Traitor

      Good morning, Ted, U, Sean, rhy, and Stinky!

      Back to work today, this time for the “new” Big Boss Man (same as the old Big Boss Man.) 🙄 Let’s see how much he wants to shake things up…

      • Stinky Wizzleteats

        The new big boss always likes to make his mark. Will it be continuous improvement or will it be customer service? As long as it isn’t equity you should be golden.

      • Gender Traitor

        One thing I know he plans to do, which will certainly meet some resistance, is to start “encouraging” at least the other senior managers who’ve been working entirely remotely (he has not) to start working on site at least once a week. One such senior manager – who as far as I know lives closer to the office than anyone else here – has threatened to retire instead. My boss already knows who he’d put in that position, so I suspect his reaction will be, “Well…bye!”

  23. Stinky Wizzleteats

    After reading the sub thread yesterday on the Barrymore/Harris interview I decided to do a shallow dive on old Drew and I came across this gem: “entered rehab at age 13, after doing cocaine for the first time a year prior. She was hospitalized for 18 months and treated for drug and alcohol addiction beginning in 1988. Barrymore was then emancipated from her parents at the age of 15.”
    https://www.usmagazine.com/celebrity-news/pictures/drew-barrymore-through-the-years-from-child-star-to-hollywood-vet-w476344/

    No wonder the woman’s mixed up, don’t think I’d be taking political advice from her though.

  24. hayeksplosives

    KK (and others) might enjoy a product from Jackery.

    They have lightweight, simple foldout or rollout solar panels and a compact storage unit that has 120v outlets, USB ports, etc built in.

    No need for DYI; works out of the box.

    I had one in Nevada due to being in a small town meant exposure to power outages of several hours at a time, Jackery ran CPAPs overnight and more.

    Plus the soft solar panels have built in USB ports, so you could charge your phone portable nebulizer, etc with just the panel, no need to pack the Jackery storage unit.

    https://www.jackery.com/collections/portable-power-stations

    • Gender Traitor

      Good morning, HES! Feeling much better, I hope?

    • UnCivilServant

      The design of their website makes me dislike them. So many minor irritants baked into it. Components should not shift around as the page loads, things should not pop up to annoy the visitor trying to read information, permanant bands of uselessness should not be blocking off the edges of the page.

      • Stinky Wizzleteats

        You don’t want to enter your email to receive your free gift? You’re just no fun at all.

      • Suthenboy

        Email….no matter how I try my email fills up with useless shit. I abandoned my gmail years ago. It filled up with countless crap, none of which I ever bothered to read and deleting it was beyond a waste of my time.

      • Suthenboy

        You just described every page I have looked at in the last two years.
        I find the internet nearly unreadable these days.

  25. Not Adahn

    Something about solar panels paying for themselves makes me think that factories making solar panels should be able to be powered by solar panels and thus produce them for LESS than the cost of materials. This would also imply that there is no need for subsidies for them.

    • UnCivilServant

      By what math would you get below cost of materials even with free energy?