Why are solar companies going out of business

[nwdiver]

I am in zip 32082, have at it

So at $3/w you WOULD want solar?

 

[kort677]

So at $3/w you WOULD want solar?

1. it won't be possible
2. more than likely not because I thinking about downsizing and splitting my time between FLA and NYC

 

[Skotty]

So at $3/w you WOULD want solar?

$3/w before or after federal tax credit? I think you mean before, because if I did my math right, that's roughly how it works out for my installer.

 

[broncobilly]

Maybe someone (NWdiver) can help me understand why this is happening. I would have thought that now that solar panels are less expensive and more people are installing them companies could still be competitive and also make a profit.

My friend, who is a researcher, confirms that it is the Chinese that undercut the solar companies, HOWEVER, he feels that the companies aer fighting back. How successful they will be, only time will tell.

I can say that I have had solar on my house for about 10 years. With the solar credits, the cost was about 50% for me. In part, however, that was then. Not sure if the incentives are still available. I would be curious how long they will be available AND if the new adminstration will continue to support it.

 

[Skotty]

My friend, who is a researcher, confirms that it is the Chinese that undercut the solar companies, HOWEVER, he feels that the companies aer fighting back. How successful they will be, only time will tell.

I can say that I have had solar on my house for about 10 years. With the solar credits, the cost was about 50% for me. In part, however, that was then. Not sure if the incentives are still available. I would be curious how long they will be available AND if the new adminstration will continue to support it.

The federal tax credit was extended a year or two ago. It's 30% through 2019, drops to 26% in 2020, 22% in 2021, and goes away for residential customers (but remains 10% for commercial) after that.

Why the Solar Tax Credit Extension is a Big Deal in 2017 | EnergySage

From the research I've done, so far no one is concerned about this particular tax credit being attacked. At least for the moment, this tax benefit is not in jeapardy. However, I wouldn't hold out much hope for further extensions.

 

[nwdiver]

1. it won't be possible

Obviously it is... yes; BEFORE the FTC

$3/w before or after federal tax credit? I think you mean before, because if I did my math right, that's roughly how it works out for my installer.

I've purchased entire systems for $0.80/w. Assuming an average 8kW system that leaves $17600 for a project that requires ~20 man-hours to complete... I know A LOT of people that would be willing to work for ~$800/hr.

There's a lot of crooks out there charging more.... A LOT more. A friend in Idaho recently got a quote for $6.75/w.... it's criminal

 

[Racerx22b]

is the cost of the replacement of functioning A/C units and ducts included in the 45k?
regardless, you are saving a bit over $2k a year in energy costs, my fuzzy math says that you have a 20 year break even point.

do you think the value of the home has been enhanced by the solar array?

maybe you're ok with the whole scenario, but it makes little sense to many people to pour money into the home with low to no payout.

The AC units were separate from the Solar install. That needed to be done regardless of the solar situation so it's a non factor in this equation.

$45k - 30% rebate = $31,500

Increase in home value = $10k. Some say it's more some say it's less but for the sake of the argument let's go with this.

Now we are at $21,500. Assuming we make about $180/month of electric and the cost of electric never goes up (doubtful) we'll break even in just under 10yrs. Then every month after that we'll be profiting at least (probably more) $180.

Now let's say we were given a "friend of the installer" invoice for $60k.

$45k - 30% rebate from $60k invoice = $27,000

Increase in home value = $10k. See above comment.

Now we are at $17,000. Break even is just under 8yrs.

I am okay with all of this. We had this cash laying around and we max out nearly all of our traditional investment options. It just makes sense for my household. It may not make sense for others. It is an individual decision for all. If you have to stretch your finances to make it work (or finance it) I would probably advise against it unless you are really passionate about the environmental angle of the whole thing. I suppose we could've bought stocks or started looking into real estate options but that was not something we were interested in.

We plan to be in this house long term (20yrs) so this investment is a guaranteed win unless we die or the house gets blown away.

 

[MikeInFL]

I actually work for one of the national branded solar companies that just recently started operations in FL (SunRun). It's definitely a tough sell to tell a customer that's financing for 12 years that their solar loan will be a little higher than their current electric bill. A lot of people do not see the big picture and want to see instant savings. But after that 12 years (or if the loan is paid off early) the ROI is huge. It also does not help that rates in the Tampa market are roughly .10 per kWh.

 

[nwdiver]

I actually work for one of the national branded solar companies that just recently started operations in FL (SunRun). It's definitely a tough sell to tell a customer that's financing for 12 years that their solar loan will be a little higher than their current electric bill. A lot of people do not see the big picture and want to see instant savings. But after that 12 years (or if the loan is paid off early) the ROI is huge. It also does not help that rates in the Tampa market are roughly .10 per kWh.

That's certainly how I'm trying to pitch Solar PV. As an investment. As a form of diversification.

I've always thought a 401k loan is a really good way.
- You pay the interest to yourself
- The loan is protected from market volatility (diversification)
- The 'interest' rates are usually very low ~4% (and as mentioned about it's paid to YOUR 401k)

At the end of the day it's a win... but there's this instinctual hesitation to spend money from a retirement account and it can be difficult to convince people that it's an investment not an expense....

 

[kort677]

I actually work for one of the national branded solar companies that just recently started operations in FL (SunRun). It's definitely a tough sell to tell a customer that's financing for 12 years that their solar loan will be a little higher than their current electric bill. A lot of people do not see the big picture and want to see instant savings. But after that 12 years (or if the loan is paid off early) the ROI is huge. It also does not help that rates in the Tampa market are roughly .10 per kWh.

a little dose of reality, other than the save the world at any cost group spending all that money up front, having no energy cost savings and then not even seeing a payback such a long period of time is just a poor financial decision. couple that with the reality that people are very mobile these days, moving to a new home sooner than any savings could be realized, and the fact that the solar install will not add value to their home is what makes the decision to go solar a no go for many people.

 

[kort677]

That's certainly how I'm trying to pitch Solar PV. As an investment. As a form of diversification.

I've always thought a 401k loan is a really good way.
- You pay the interest to yourself
- The loan is protected from market volatility (diversification)
- The 'interest' rates are usually very low ~4% (and as mentioned about it's paid to YOUR 401k)

At the end of the day it's a win... but there's this instinctual hesitation to spend money from a retirement account and it can be difficult to convince people that it's an investment not an expense....

there is no payout, the payoff is decades away. does that sales pitch actually work?

 

[kort677]

The AC units were separate from the Solar install. That needed to be done regardless of the solar situation so it's a non factor in this equation.

you said the units you replaced were functional, which is it? did they need replacing or not? if not how did you justify the cost of replacing the working units, how much of an annual savings do the new units get you? how many years is the payout on that "investment"

Increase in home value = $10k. Some say it's more some say it's less but for the sake of the argument let's go with this.

Maybe in your part of the world solar panels add value to a home, that certainly is not true in my part of the world.

 

[nwdiver]

there is no payout, the payoff is decades away. does that sales pitch actually work?

??? With a 401k loan you're even on day 1. Save ~$150/mo pay; ~$140 back to yourself.

 

[kort677]

??? With a 401k loan you're even on day 1. Save ~$150/mo pay; ~$140 back to yourself.

quite frankly I am clueless about this part of the financial scheme, I never had or will have a 401k. maybe that sort of financial advice works for some, I don't think buying an asset that has zero growth potential and for me a dubious payout stream is not something I'd take money out of my investments to invest in.
Face it, I cannot be convinced with these sort of schemes. I had two salespeople in here and for me it is a very poor financial choice.

 

[nwdiver]

quite frankly I am clueless about this part of the financial scheme, I never had or will have a 401k. maybe that sort of financial advice works for some, I don't think buying an asset that has zero growth potential and for me a dubious payout stream is not something I'd take money out of my investments to invest in.

LOL... 1st time I've heard of a 401k as a 'scheme'.

A 8kW system cost ~$17k after the FTC and will return $1300/yr (in FL) for 30+ years.

An investment with the same level of risk like an annuity or CD MIGHT return $700/yr. Which is the bigger number? $1300 or $700?

Face it, I cannot be convinced with these sort of schemes. I had two salespeople in here and for me it is a very poor financial choice.

No doubt... there's people that believe the Earth is flat or 6k years old... I'm sure there's some like you that reject simple Math....

 

[Chopr147]

I actually work for one of the national branded solar companies that just recently started operations in FL (SunRun). It's definitely a tough sell to tell a customer that's financing for 12 years that their solar loan will be a little higher than their current electric bill. A lot of people do not see the big picture and want to see instant savings. But after that 12 years (or if the loan is paid off early) the ROI is huge. It also does not help that rates in the Tampa market are roughly .10 per kWh.

12 years? Too much time for me. I had a 10kwh system installed in 2012 and my payoff point was 2016. ABout 4 1/2 years. If it was 12 I never would have done it. Of course this is only due to tax credits and power co. credits. I ended up paying 35% of the total cost.
So yes , subsidies is the only way it was cost effective. Solar really needs to come down in price even more before it is sufficient.
I looked into solar last year on my lakehouse. Had a Solarcity and a local solar estimate, forget the name. With tax credits depleted, the cost would have been 11 years for me to re-coup. I didn't bother

 

[Park2670]

Been wanting solar for five or more years. Hasn't really been a good idea until I owned my own home instead of a townhouse. Found installers here in Utah quoting $3.80 to $3.60 per watt installed. Worked with a local company that has been around for a decade and negotiated down to $2.80 before incentives. I have heard there is a company here charging around $5.00 per watt. Found that installing it myself I can get all of the equipment for $1.60 per watt and then still get both a federal and state rebate. Looking at 4 or 5 year break even point, and then from that point forward I am generating free power.

This is all with the hopes that Rocky Mountain Power doesn't completely get rid of net metering. We don't get paid anything for excess credits, but can use the grid to pull power back out of that we over generated.

 

[nwdiver]

12 years? Too much time for me.

Depends on how important diversification is to you and the level of financial risk you want... for most portfolios having ~$20k in a low risk pool is a relatively small percentage. Over 12 years you can gain ~$20k from Solar or ~$8k from CDs....

Found that installing it myself I can get all of the equipment for $1.60 per watt and then still get both a federal and state rebate.

Materials shouldn't be >$1/w these days. Try sun electronics for low cost panels.

 

[kort677]

LOL... 1st time I've heard of a 401k as a 'scheme'.

I see you are a poor linguistic as well:
scheme
skēm/
noun

1. 1.
   a large-scale systematic plan or arrangement for attaining some particular object or putting a particular idea into effect.
   "a clever marketing scheme"
   synonyms: plan, project, plan of action, program, strategy, stratagem, tactic, game plan, course/line of action; More

A 8kW system cost ~$17k after the FTC and will return $1300/yr (in FL) for 30+ years.

An investment with the same level of risk like an annuity or CD MIGHT return $700/yr. Which is the bigger number? $1300 or $700?

1. an 8k system wouldn't even cover .25% of my needs.
2. a cd? really? you're not very sophisticated with your investments and I won't even start with annuities!



No doubt... there's people that believe the Earth is flat or 6k years old... I'm sure there's some like you that reject simple Math.... [/QUOTE]
if you can get people to buy with your sales pitch more power to you. but devolving to insulting those who shoot holes in your 'rap' isn't going to help your sales any.

 

[nwdiver]

1. an 8k system wouldn't even cover .25% of my needs.

Did you misplace a decimal or do you use 5.2GWh/yr? 25% is 25%. You're spending $1 to save $3 long-term; what does it matter if your bill goes to $0?

if you can get people to buy with your sales pitch more power to you. but devolving to insulting those who shoot holes in your 'rap' isn't going to help your sales any.

Still trying to perfect the art of conveying the absurdity of a position without appearing smug or insulting... it's incredibly difficulty... tips?