mknox
Well-Known Member
Right. I was just mentioning this to someone the other day. With no ICE under the hood generating heat, I have found even driving in slow traffic during a snowfall that it can start to pile up.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Right. I was just mentioning this to someone the other day. With no ICE under the hood generating heat, I have found even driving in slow traffic during a snowfall that it can start to pile up.
You should have been steam heated - doesn't Bruce have tons of excess steam? If I remember correctly they set up an industrial park for heavy users of steam, including green houses to grow veggies.
I know that there is replacement across the province but I am willing to bet that those three plants that I mention keep running no matter what the demand is for their electrical power.
Speaking of the days when the majority of cars are electric - then we will need randomizers so that the cars start to charge at random times. You don't want everyone's chargers to kick in at 5am. That will kill my current algorithm of end-charging for 7am so that the battery is as warm as possible.
And you also will need those devices that prevent the chargers from kicking on as soon as power returns after outages.
I know that there is replacement across the province but I am willing to bet that those three plants that I mention keep running no matter what the demand is for their electrical power.
Speaking of the days when the majority of cars are electric - then we will need randomizers so that the cars start to charge at random times. You don't want everyone's chargers to kick in at 5am. That will kill my current algorithm of end-charging for 7am so that the battery is as warm as possible.
And you also will need those devices that prevent the chargers from kicking on as soon as power returns after outages.
sakimano
Active Member
After 7 years you have earned 0% on your solar program. In fact it has cost you money because you gave up opportunity cost. I don't think it makes sense to assign a value to your money of 0%. Don't you have a retirement fund? People with poor timing who bought the S&P500 at its pre-crisis peak in May 2007 , then got crushed in the financial crisis, then recovered, then just this week watched the dow give up 2500 points are still up 100% over that weaker than normal period. If you normally bury your money in a hole in the yard, yes, your payback period is 7 years. Reality though is that you can't assign a value of 0% to your money in order to justify the solar program.
sakimano
Active Member
'
can someone explain camper mode to me? I imagine it's more than just running the heat while your car is parked?
mknox
Well-Known Member
I was working for the local distributor in the area at the time and one of Bruce Power's emergency response offices was in our basement. I was on the municipal emergency planning committee for a time and as part of that got a real insider's tour of the plant, fuel storage areas and such. Had to go through a whole vetting process with CSIS before I could get in. What I was told at the time was that they used to have greenhouses but that they were actually heated via surplus electricity and not waste heat from the plant. It had been closed down by the time I was there in the early 2000's.
Yes, I've been working with a couple of groups and committees on this exact problem. One interesting learning that has come up is this: even if charging is randomized and managed through load sharing devices, there is the problem of everyone wanting to pre-heat their cars in the morning on shore power before heading out... all roughly at the same time. Similar to your "cold load pickup" after a power outage scenario that you mention. Pre-heating can use the same amount of power (kW) as charging and so presents the same concurrent loading problems on the local distribution system. Intelligent chargers may shut off after the car is charged and not allow pre-heating when an owner may want to... which could be a problem.
I am pushing for "opt-in" type solutions that would potentially reward users with lower rates, incentives or similar in exchange for controlling their EVSE and hopefully the offer would be attractive enough that owners would be okay pre-heating on battery power alone in these situations. For most of us Tesla guys, that would be okay, but for shorter range EVs like the Leaf or Smart ED, they may need the advantage of shore power heating just to get the range they need.
mknox
Well-Known Member
It is sort of an "insider term". For quite some time, users wanted to camp in their cars and leave the heat or a/c on all night while they slept in the back. Problem was, the HVAC would shut off after 30 minutes. All kinds of "Rube Goldberg" solutions were created. Then Tesla added the function to leave your HVAC on indefinitely and this affectionately became known as "camper mode". All it involves is keeping the HVAC on... nothing more.
You are misunderstanding this - with microFIT you have a 20 year contract with the Govt of Ontario - for me (and I think falkirk) we get $0.384/kWh. My 10kW solar panels cost about $31000 and I should earn about $4500 per year in revenue as I should produce about 11.7MWh per year. (My actuals so far - 2016 12.9MWH, 2017 11.2MWh)
So in seven years the asset has paid for itself but then you have an asset that is producing about $4500 in cash flow for 13 more years. And at the end of those 13 years (20 years in total) the revenue will end but then you can switch to net metering and save on your electrical bill. So even if I give no value to the panels at the end of 20 years the IRR is 14.8% (assuming 1% degradation in the panels per year and pre-tax). In my books that is an excellent investment. The main risk is that there is less sunshine so the revenue is a bit lower, or you sell your house and the buyer doesn't place any value on the panels.
And if electrical rates skyrocket and electricity sells for more than $0.384 then I can opt out of my contract with the Govt and switch to net metering.
So in seven years the asset has paid for itself but then you have an asset that is producing about $4500 in cash flow for 13 more years. And at the end of those 13 years (20 years in total) the revenue will end but then you can switch to net metering and save on your electrical bill. So even if I give no value to the panels at the end of 20 years the IRR is 14.8% (assuming 1% degradation in the panels per year and pre-tax). In my books that is an excellent investment. The main risk is that there is less sunshine so the revenue is a bit lower, or you sell your house and the buyer doesn't place any value on the panels.
And if electrical rates skyrocket and electricity sells for more than $0.384 then I can opt out of my contract with the Govt and switch to net metering.
sakimano
Active Member
I definitely understand.
How do you come up with $4500/year turning into a 14% IRR at year 20. After 20 years you've given the contractor $31,500, have received $90,000 in cash flow and are in a net benefit position of $58,500 and you now have a 20 year old solar panel system. To achieve a 14% return on your $31,500 you'd need to have $430,000 after 20 years.
Here's some numbers. Show me where I'm wrong.
Investment = $31,500 invested, 5% rate of return, 25% tax rate on return (capital gains) taxed each year (assume 100% turnover which is ludicrous)
Solar = $31,500 invested, $4500/cash flow paid each year. Assumed 0% tax but I have a feeling it's worse than that...still, let's pretend it's tax free. I also assumed 0 maintenance, $0 insurance , $0 premium on the costs to fix your roof. Let's give solar a shot.
Solar doesn't catch up until Year 25. From 25 to 37 it grows its lead to $12,000, then that lead shrinks as compounding in the investment takes over. By year 49, the investment is back in the lead.
....... ....... ....... ....... Investment ....... Solar
After Day 1 ......... 31,500.00 ......... (31,500.00)
After Year 1 ............ 32,681.25 ....... (27,000.00)
After Year 2 ....... 33,906.80 ....... (22,500.00)
After Year 3 ....... 35,178.30 ....... (18,000.00)
After Year 4 ....... 36,497.49 ....... (13,500.00)
After Year 5 ....... 37,866.14 ....... (9,000.00)
After Year 6 ....... 39,286.12 ....... (4,500.00)
After Year 7 ....... 40,759.35 ....... -
After Year 8 ....... 42,287.83....... 4,500.00
After Year 9 ....... 43,873.62 ....... 9,000.00
After Year 10 ....... 45,518.88 ....... 13,500.00
After Year 11 ....... 47,225.84 ....... 18,000.00
After Year 12 ....... 48,996.81 ....... 22,500.00
After Year 13 ....... 50,834.19 ....... 27,000.00
After Year 14 ....... 52,740.47 ....... 31,500.00
After Year 15 ....... 54,718.24 ....... 36,000.00
After Year 16 ....... 56,770.18 ....... 40,500.00
After Year 17 ....... 58,899.06 ....... 45,000.00
After Year 18 ....... 61,107.77 ....... 49,500.00
After Year 19 ....... 63,399.31 ....... 54,000.00
After Year 20 ....... 65,776.79 ....... 58,500.00
After Year 21 ....... 68,243.42 ....... 63,000.00
After Year 22 ....... 70,802.55 ....... 67,500.00
After Year 23 ....... 73,457.64 ....... 72,000.00
After Year 24 ....... 76,212.30 ....... 76,500.00
After Year 25 ....... 79,070.26 ....... 81,000.00
After Year 26 ....... 82,035.40 ....... 85,500.00
After Year 27 ....... 85,111.73 ....... 90,000.00
After Year 28 ....... 88,303.42 ....... 94,500.00
After Year 29 ....... 91,614.79 ....... 99,000.00
After Year 30 ....... 95,050.35 ....... 103,500.00
After Year 31 ....... 98,614.74 ....... 108,000.00
After Year 32 ....... 102,312.79 ....... 112,500.00
After Year 33 ....... 106,149.52 ....... 117,000.00
After Year 34 ....... 110,130.13 ....... 121,500.00
After Year 35 ....... 114,260.01 ....... 126,000.00
After Year 36 ....... 118,544.76 ....... 130,500.00
After Year 37 ....... 122,990.18 ....... 135,000.00
After Year 38 ....... 127,602.32 ....... 139,500.00
After Year 39 ....... 132,387.40 ....... 144,000.00
After Year 40 ....... 137,351.93 ....... 148,500.00
After Year 41 ....... 142,502.63 ....... 153,000.00
After Year 42 ....... 147,846.48 ....... 157,500.00
After Year 43 ....... 153,390.72 ....... 162,000.00
After Year 44 ....... 159,142.87 ....... 166,500.00
After Year 45 ....... 165,110.73 ....... 171,000.00
After Year 46 ....... 171,302.38 ....... 175,500.00
After Year 47 ....... 177,726.22 ....... 180,000.00
After Year 48 ....... 184,390.95 ....... 184,500.00
After Year 49 ....... 191,305.62 ....... 189,000.00
After Year 50 ....... 198,479.58 ....... 193,500.00
After Year 51 ....... 205,922.56 ....... 198,000.00
After Year 52 ....... 213,644.66 ....... 202,500.00
After Year 53 ....... 221,656.33 ....... 207,000.00
After Year 54 ....... 229,968.44 ....... 211,500.00
After Year 55 ....... 238,592.26 ....... 216,000.00
After Year 56 ....... 247,539.47 ....... 220,500.00
After Year 57 ....... 256,822.20 ....... 225,000.00
Last edited:
Struja
“Frost”
BrokerDon
Active Member
Why not use an Intro-Tech Automotive Windshield Snow Shade ? They're only $39.99 USD and roll up perfectly in the trunk between the wheel wheels right behind our rear seats.
These are specifically made for snow & ice. I use our "snow shade" as an exterior sun shade on our 2015 P85D+ and it works MUCH better than interior shades since it reflects the UV before it gets inside the windshield.
Just a thought...
These are specifically made for snow & ice. I use our "snow shade" as an exterior sun shade on our 2015 P85D+ and it works MUCH better than interior shades since it reflects the UV before it gets inside the windshield.
Just a thought...
No, when the car is in PARK, you click on AUTO on the bottom of the main screen and there is an option on the screen to leave the climate control on. Click that, and it stays on until you take the car out of park (or turn it off using the app), so long as the battery has at least 20%.
Come to think of it, though, it is effectively the same thing now when you turn on the climate control through the app, because it no longer times out at 30 minutes as it used to; so, either way, the system stays on indefinitely, until you shut it off or until the battery SOC drops below 20%.
The IRR is from Excel - you have a cash flow of -$27k in year 1 and +4.5k in years 2 through 20. Plug that into Excel and use the IRR function and you get 14%.
But in terms of where you are wrong - buying an investment for $31.5k, be it a stock, bond, real estate investment, etc, is a cash flow of -31.5k in that year, just like buying solar panels for $31.5k. You are not accounting for that.
The taxes on the income earned on solar panels will be taxed at your top marginal rate. However, you can depreciate the panels using a CCA rate of 50%. And you can't allow CCA to bring you into a loss. This means that the revenue that you earn will be tax free until you have fully depreciated the panels which will be the same 7-8 years that it took you to get to break even. After that you will be taxed at your top marginal rate - which in Ontario is 53.53% if you make more than $200k.
You also appear to be reinvesting the revenue from your investment but not reinvesting the revenue from the solar panels. That $4500 per year could then be reinvested into the same 5% return investment that you are using.
I will post an annual cashflow later on. But it gets tricky depending on the taxation rate which depends on the turnover as you noted.
mknox
Well-Known Member
Yes. The "Leave HVAC On" functionality and elimination of the 30 minute timeout occurred at the same time. Likely it is the same software routine which now can either be called remotely from the app or inside the car via the new toggle in the HVAC controls.
Personally, I wish there was a setting to allow you to set your own limit, or at least to maintain the 30 minute limit when not plugged in. If you set your HVAC on and then change your mind about going out to the car, you could seriously run your battery down accidentally.
sakimano
Active Member
sounds like you have an error in your math.
It's not a negative in this instance as you bought a liquid investment that you can have back and access with 2 days settlement. It's not an annuity where you trade your investment for simply cash flow. If the passive investment example were an annuity you'd be right. But it's not.
$220,000 but who's counting.
will adjust
Good point, I missed that.
When you tax the solar cash flows, and reinvest all solar cash flows in line with the passive investment and ignore solar panel degradation of 1% of original output per year:
Solar doesn't 'break even' until year 26 ($82,035.40 for passive, $83,165.63 for solar)
At year 40, which is when solar is theoretically needing full replacement - $137,351.93 passive; $161,325.00 for solar...gain for solar of $24,000 approximately. Again this ignores degradation of the panel.
If we knock that 1% per year degradation out: solar never catches up with the passive investment
After 7 years Passive ahead by $38,219
After 20 years Passive ahead by $17,014
After 37 years Passive ahead by $2,380 (this is the closest solar ever gets)
After 50 years Passive ahead by $16,565
Anyone still think Solar 'breaks even' after 7 years or makes sense financially?
Last edited:
Being an investment professional - these types of discussions are often futile.
There are so many factors to consider that it is never a cut and dry situation. There is taxation (which is individualized and complex - especially with the CCA factor), HST rebates (you can have your HST rebated on solar panel purchases under the MicroFit program), linear application of return rates and countless other assumptions.
I will say this about the Ont gov't solar program - it can be part of a properly diversified portfolio. While potentially not as good as equities, the cash flow provided (consistent, stable) is a much better alternative to government bonds/GICs (at least at present). It can be a wonderful low risk option for investing. There are going to be people who already have significant equity holdings and prefer an alternative - and in that front it isn't a bad option.
Fact is that everyone's situation is different and unique - from financials to goals and risk tolerances. In the above listed example, there are a lot of people who would prefer the stability of solar relative to equities based on the above listed projections - especially in times like these.
My point is arguing is futile as there is no correct answer - the benefits/paybacks/returns are only correct when applied against an individuals unique circumstances.
Falkirk
Member
I can only speak for myself but I never looked at solar for the financial benefits only. That helped to sell it to my wife but it's just trying to do my part and loving the idea that the sun will drive my car going forward. I see it as only a positive and having my young kids now thinking about solar, electric cars and growing up with this will have great influence down the road, can't put a dollar value on that.
BrokerDon
Active Member
One of the things I learned selling industrial buildings to real estate investors the past 36 years is they all have their "own" R.O.I. assumptions and calculations. Some of the most successful ones used very simple "back of a napkin" calculations... while the bigger "corporate" investors used multiple discounted R.O.I. and I.R.R. calculations, again different from company to company.
Bottom line is people make investment decisions like Tesla and solar purchases using their own factors & assumptions. Sure you can learn from others' calculations but understand they may not fit your situation.
Bottom line is people make investment decisions like Tesla and solar purchases using their own factors & assumptions. Sure you can learn from others' calculations but understand they may not fit your situation.
Buying a bond, stock, GIC, etc is a negative cash flow in year 0 as you are taking cash that you can use for any other purposes. That is the case even if it is a very liquid investment like a GOC T-Bill. You have cash going out of your account and in return you get a financial asset - like a bond or a T-Bill. That is no different than buying solar panels. If the investment is liquid then you may be able to get your cash back in a day or two but there may be financial penalties, bid-ask spreads, and MTM risk that you take as well. But you do get that cash back as a positive cashflow when the bond (or whatever) matures or is sold. So if you buy a five year bond that pays 5% interest then your annual cash flows for years 0-5 are: -1000,50,50,50,50,1050 which gives an IRR of 5%. With solar panels, unlike most financial investments, you don't get the return of principal at the end - although the panels may have some residual value.
I won't continue the discussion here as we have gotten off topic. But I am convinced that the pre-tax IRR of paying $31,500 in year 0 and receiving $4500 for years 1-20 is 14.8%, allowing for a 1%p.a. decay in panels - plug those numbers into Excel and tell me what you get. That is a trivial calculation in a spreadsheet. Doing the calculation after-tax is trickier as is doing the calculation if you borrow money to finance the panels.
sakimano
Active Member
No, the math is pretty straight forward.
We factored all of that in if you read through.
We're not arguing. We are presenting arguments. Very different. What's wrong with that? It's a discussion board.
We are discussing the financial effectiveness vs an investment. Someone made the claim that these panels are paid for after 7 years. I think that's unrealistic and doesn't tell the whole story.
Can you show us the work that shows a solar panel as a 'guaranteed' investment is a good option ? Being an investment professional that should be easy to do. Looking forward to it.
Similar threads
