An Interview with recent solar power purchaser, Andrew Kin – March 10, 2010

When contemplating a significant purchase—a car or a computer, for instance—it’s  helpful to speak with people who have gone through the same process to get their insight and learn from their experiences.  With that in mind, Residential Solar 101 sent blogger Alexis C. Jolly to interview Andrew Kin—a management consultant in his 30’s, who recently had a solar photovoltaic system installed on his Los Angeles home.

Residential Solar 101: So we’re standing here on your townhouse’s rooftop on a beautiful Los Angeles day.

Andrew Kin: Yeah, and today was actually pretty good output.  In fact, it was the highest ever.

RS: Really? It’s like the system knew it was going to be interviewed today!

AK: Exactly!

RS: So why don’t we start from the beginning, with what prompted you to have the system installed?

AK: Well I was doing a remodel, and during that time I wanted to do something to make the condo a little greener.  And we had actually almost finished the remodel by the time I contacted the installer.   After a series of conversations with them, it was a no-brainer.

RS: Why is that?

AK: It wasn’t expensive compared to everything else that you do in a remodel, and the installers made everything so easy for me.  It was turnkey [i.e. installed in a ready-to-use condition], as compared to the rest of the remodel—which was a labor of love!  The installers took care of everything.

RS: So how did it work with them?

AK: I knew of them already through my friend Ben, so I just contacted them, and they put together a quote. They told me everything was turnkey—they would apply for the rebates, they would do the installation, they came to my house, checked it out, sent me everything over email in .pdf., so it was easy for me to read and understand.

RS: Can you tell me a little bit about the finances of the process?

AK: Sure.  Well, to start, the installer did a break-even analysis for me, telling me when I’d make my money back on the installation with electricity costs I’d saved.

RS: So basically when the system would end up paying for itself?

AK: Exactly.  In my case, before any sort of rebates, the system was about $23,500.  And then I got a rebate from the utility, which knocked off about half the price.  And then I get a 30% federal tax credit on top of that.  So with building permit fees, it came down to about $9500 out of pocket.

RS: Okay.  And based on that figure, how do you calculate that break-even point?

AK:  The money I’m getting back this year works out to about $40 a month based on the amount of electricity I’m generating from solar.  So you’re talking about $500 or so per year, which would take about 20 years to hit the break even point if electricity rates stayed flat.  Of course, historically rates always rise, so with some conservative estimates, it’ll take about 10-15 years.

RS: So in terms of a return on investment?

AK: I can expect about an 8% return on the system.  Compare that to bonds, which are 4%,… stocks, which are incredibly uncertain, and money markets, which are almost nothing.. it’s a pretty good return! [Ed.: Los Angeles Department of Water and Power rates may raise between 8 and 28% within the next year for those who use the most power… which will dramatically decrease the amount of time to break even, and increase Andrew’s return on his investment.]

RS: How did you come to that $40 a month figure of how much you’d be generating?

AK: So this is a 2.7kW system.  The installer gave me a graph that showed, based on data collected on how much sun hit this area, weather variation, and so on, how much I could expect the system to generate over the course of the year.

RS: And how did you decide on the size of the system?

AK: The installer looked at my electricity usage, then came up with a number about 20% under that, which in my case was a 2.7kW system.

RS: Why do they go under your previous usage?

AK: This is a grid-tied system, meaning the utility essentially acts as a giant battery for my generation.  When I generate extra electricity during the day I don’t need, it gets fed into the grid and I get credits.  Then when I need the electricity at night or on a cloudy day, I “redeem” those credits to get my electricity.  The system is installed a little lower than my historical maximum generation levels, so I’m not actually generating more energy than I’ll need over the course of the year.

RS: Can you give me any more specifics on the system itself?

AK: Sure.  As you can see, this is thin-film technology on the panels.  Meaning that while the efficiency per cell is not as high on some of the thicker panels you see on other installations, the cost is a little less.

RS: And basically you don’t need that higher level of efficiency since you get so much sun here.

AK: Exactly.

RS: What was the installation process like?

AK: I didn’t do much, to tell you the truth.  They came out, took some specs, then sent me an email of what it’d look like on the roof.  Then when installation day came around, they just came right up here.  I didn’t even have to be on-site since the work is all done outside.  It took them about two and a half days.

RS: That’s pretty quick.

AK: Compared to everything else I’d been through in the remodel, it was incredible!  For this to happen, really turnkey, in about three days was amazing.  They knew what they were doing, and were very professional.  I felt they were much more knowledgeable at their trade than a lot of the contractors I worked with during my remodel.

RS: And once the installation was finished?

AK: The next step was to connect to the net meter.  That took three months, because it took the utility a while to send a guy out to connect it because of the number of people getting solar installed on their homes. But once he came, it just took a couple hours to hook it up.

RS: How long do you expect the system to last?

AK: The panels are under warranty for 25 years, but should last 30 or more years.  They’re guaranteed to produce 90% of original solar output for first 10 years and 80% of original solar output for the remaining 15.  The inverter is under warranty for 10 years, but it’s safe to assume it’ll last the life of the panels.

RS: Did those figures factor into your decision?

AK: Not really, but in a good way.  Because the lifetimes were so long—probably longer than I intend to keep the house—they didn’t really factor much into the decision other than piece of mind.

RS: And how do you think the system will impact the resale value of the house?

AK: Definitely in a positive way.  It should raise the value of the property, so I can recoup a big chunk of the cost when I sell.

RS: How much maintenance is involved, now that it’s all installed?

AK: Basically none.  I dust the panels every once in a while, and that’s it!

RS: So now we’re off the roof, standing beside the digital meter on the side of the house.  Can you talk to me about some of the cool things about the system?

AK: The installer gave me a little router, that communicates with the inverter, so I can track on the website of how much output I’m getting. And they keep track of it over time, so I can go back and see “week,” “month,” “years,” and follow how much I’m generating over time.

RS: And what’s going on with the meter here?

AK: So you can see, we have the one meter here, showing how many kilowatt hours the system’s generated in total since it was installed.  Then this one here is from the utility, beside my neighbor’s, who is on the traditional grid.  And you can see the difference.   Mine is digital, and it updates every couple seconds, and it will count backwards throughout the day.  So today, this started at 985kWh, and now it’s down to 979kWh, and at night it will go forward again as we draw from the grid.

RS: There’s quite a difference between yours and your neighbor’s meter.

AK: Yeah, we’re right below 980 and they’re at 4300.  And these meters were installed at the same time during the remodel!

RS: Wow. Any others benefits?

AK: The other, kind of unexpected thing that happens is we began to monitor how much electricity we were using through these real-time updates in a way we didn’t when we were just getting monthly bills.  And as a result we’ve been using a lot less electricity, driving our bills down even further.

RS: Really?

AK: It’s gone down about 20% percent.

RS: How did you accomplish that?

AK: Simple things, really.  Turning off lights when we weren’t using them… Energy efficient light bulbs….

RS: Wow.  So at this point, what percent of your electricity usage is provided by your system?

AK: About 65%.  By next month or the month after, as we get more sun, our power should be almost completely from solar.

RS: We’ve talked a lot about the finances.  What about the environmental factors?

AK: I was able to get my electricity footprint down to almost zero, which is something that’s important to me.  You can see from a calculation based on the system’s output that I’ve saved over a thousand pounds of C02 emissions.

RS: So what would you say to people who are considering getting a system?

AK: I would say it makes a lot of sense to have someone else handle running down the rebates, applying for the permits, getting the net meter.  There was a good amount of paperwork that I didn’t have to deal with, I just had to sign.  And make sure you have a certified installer, because otherwise the utility may find some excuse not to give you a net meter.  I have a friend who installed his own solar panels, and when he came over and looked at mine he told me he wished he’d had them installed professionally!

RS: So do you think getting a system makes sense?

AK: Right now with the federal tax credit, the state credits, the rebates, and the rising electricity rates, it makes a lot of sense.  I get a lot of satisfaction out of every cent I save.  Plus everyone at work is so interested in it.

RS: Really?

AK: Yeah.  Everyone wants to know what’s it like, what’s the payback—because we’re all consultants.  Some of them make fun of me because the payback is spread out over those 10 to 15 years… but then I ask them where they put their money!

RS: Have you inspired any of your friends or co-workers to get a home PV system?

AK: I’ve definitely inspired some to think about it. As the current generations start owning homes, I think it will become more and more common.

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