In this analysis doesn't 465 kWh/month x $ .0633 /kWh x 12 months/yr = $353.21 saved per year not $29.43? Or am I missing something?
Peter Talmage Energy and Design Northfield, Mass. > To: [email protected] > Subject: > [RE-wrenches] Solar electric generation system seems to > make noeconomic > sense > > > > Dan, > > > > Residential Analysis > > On the residential > analysis, at best case ( NH > $6k rebate not being taxable) at $35k minus $6k > and -30% federal tax > credit you have $20,300. net cost today. At a 25 year > interest rate of > 3.25% (5.41% available today - 40% tax rate) the same > dollars placed in a 25 > year interest earning account would grow to $45,696. (That > is after taxes are > paid at 40%) > > My present > residential kWh rate (not business > rate) is .0633/kWh. Your 5kW system at 465 kWh > generated per month x > .0633/kWh = $29.43 saved per year. If the savings per > year earns a > compounded interest at 3.25% (after taxes) and the > kWh stays the same each > year, the compounded savings in the 25 yr. lifespan at > 3.25% (after taxes yield) > = $13,653. Now this assumes the $29.43 increases at a > rate of 3.25% > annually (increase in utility charge per > kWh) . > > So in 25 years (the > projected lifespan of the solar > system, if all goes according to the plan) the $20,300. > would grow to $45,696. > after taxes. > The savings each month > would grow too, at the same > rate as the money placed at 3.25% and that total in 25 yrs. > = > $13,653. > > In order to reach $45,696. > based on kWh savings, > even at an astounding 6% annual increase in the utility > rate for 25 years, the > savings the first month would have to be $66.18 (not $29.43 > which is today's > reality) and increasing from that number at an annual rate > of 6% compounded > monthly to equal the same $45,696. > > > I have ignored the $5.41 > monthly basic charge that > all rate-D (domestic use) customers have, which would add > to $2541. in 25 years > at 3.25% increase annually. I have ignored any > maintenance costs, failed > electronic components beyond warranty period, > and breakages on the > solar equipment in 25 years. > > I used www.bankrate.com loan calculators, savings goal calculators, and > savings calculators to > arrive at these numbers. > > > Business Analysis > > On the business analysis, > it is a disaster because > putting the kWh aside, the utility company will not reverse > the peak load > (called demand charge or distribution charge) per kW. > Today they charge > $4.44 per kW. We run about 32kW now and 2400 kWh > monthly. Even if we > generated 100% of the kWh we consumed per month (on a much > larger solar array) > the Demand Charge still hits us at about 40% of our > electric bill, and it will > never be reduced by the solar energy. Since the > reduction in our electric > bill will only be to a maximum of 60% reduction monthly, > the business side comes > out worse than residential. The utility company bases > the peak kW number > on ANY 15 minute period of time at anytime during the > billing cycle(a month) and > it can only ratchet upwards, never downward. > > The business rate G-2 is > 9.2 cents per kWh today > (not the 17 cents I previously assumed by dividing the > total monthly kWh into > the utility bill $ total.) Even at best possible rate > of $6. per watt, > which doesn't exist, At 465kWh monthly from 5000 watts, > we'd need to have a > 25.8kW solar array to satisfy 2400kWh monthly. $6. x > 25800 watts = > $154,800. for the system. That cost -30% = > $107,800. When placed in > an interest bearing account for 25 yrs. at 3.25% (after 40% > taxes on 5.41% APY) > that money grows to $242,664. > > Say we matched our > consumption in kWh with the > energy generated, so our supply cost drops to zero. > That still leaves our > $4.44 per kW which is unaffected by the solar electric > generation system. > At $142.08 per month (32kW x $4.44), each and every month, > with an assumed > increase of the kW rate at 3.25% it amounts to $65,950. in > demand charges. > > > On the kWh, at 9.2 cents > per kWh, 2400 kWh would > generate a bill of $220.80 monthly. Say we see an > annual increase of 3.25% > annually for 25 years. The potential savings is > $102,491. Say > we matched the kWh consumption with the solar system > 100%. That would > leave us with an outlay of $65,950. in demand > charges. Take the $102,491. > savings and subtract the $65,950 demand costs. That > leaves the business > with $36,541. compared to $74,223. left over if the utility > bills had just been > paid in full at an increase of 3.25% annually. > > In the business example, > note I am stretching the > cost of the installed system downward at $6. per > watt, > stretching the increase in > the cost per kWh to a > rate of 3.25% over a span of 25 years (perhaps it will not > increase at that > rate), > assuming no maintenance > nor repair, nor replacement > expenditures in 25 years operating the solar > system, > and overlooking the > monthly basic charge of $24.61 > which when increased 3.25% annually for 25 years amounts to > > $11,423. > > Interestingly enough, > aside from this analysis, I > have never read anything about the economic trap the > utility company Demand > Charge creates for the installation of a solar electric > system for small > business. > > The my competitor's > solar array at $400k - $226k VT > grant - 30% federal tax credit calculates out to $2.09 per > watt installed > cost. Do they pay a Demand Charge per kW > load?. > > Doesn't it make more > sense to wait until the > price per watt on solar electric generation makes > economic sense? > Correct me if I made any mistakes in my analysis > please. I would love to > justify the installation from an economic > standpoint. > > I contacted the NH PUC and > brought the issue of the > Demand Charge to their attention. I was told there is > nothing they can do > about it, it is up to the small business consumer to > uncover that little > gem. > Jim > > > Dan > Brown > President > Foxfire Energy Corp. > Renewable Energy > Systems > (802)-483-2564 > www.Foxfire-Energy.com > NABCEP > #092907-44 > > -----Inline Attachment Follows----- > > _______________________________________________ > List sponsored by Home Power magazine > > List Address: [email protected] > > Options & settings: > http://lists.re-wrenches.org/options.cgi/re-wrenches-re-wrenches.org > > List-Archive: > http://lists.re-wrenches.org/pipermail/re-wrenches-re-wrenches.org > > List rules & etiquette: > www.re-wrenches.org/etiquette.htm > > Check out participant bios: > www.members.re-wrenches.org > > _______________________________________________ List sponsored by Home Power magazine List Address: [email protected] Options & settings: http://lists.re-wrenches.org/options.cgi/re-wrenches-re-wrenches.org List-Archive: http://lists.re-wrenches.org/pipermail/re-wrenches-re-wrenches.org List rules & etiquette: www.re-wrenches.org/etiquette.htm Check out participant bios: www.members.re-wrenches.org
