Tag: SREC

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TDSF Power Plant: Year 5 report

At the end of year five the meter reading was 98767, meaning we have produced about 1240 KWh more than we consumed over the past 5 years. The first three years we were slightly in the hole, as the meter read 00387, so the gain has come in the last two years. At the end of year four it was 99602 so we came out ahead by 835 KWh this year.

What is surprising about this is that this was our lowest year of production yet, producing a rounding error less than 9 MWh, whereas the first four years we did a little better than 9 MWh. We generated our 46th MWh on March 20.

Is this because the panels are losing their production capacity? Probably a little bit. They are guaranteed not to lose more than 1/2% per year after the first year. However, weather probably plays a factor as well. This past summer we were impacted by smoke from Canadian wildfires. This past February we had two back-to-back snows with freezing temperatures, so the panels produced no power for about 10 days. Just adding what would have been 80 kilowatt hours over that period back into our totals would be enough to get back over the 9 MWh mark.

We had built up enough surplus over the summer and fall that I was sure we would cover the winter deficit. We did cover through January, but the 10 day February shortfall used up the surplus and left us with a small bill (about $22) for that month. Fortunately, we are back in surplus again in March.

As a review, the way our billing works, the March/April bills produce a large surplus (days are longer, sun is higher, no AC) but this gets zeroed out at the end of the April billing period and we get a check in May for the supplier portion of this surplus. The utility keeps the delivery portion.

(Incidentally, the delivery portion has roughly doubled recently, from 2.5 cents to about 5 cents per KWh so electricity now costs about 16 cents per KWh – it was about 10.7 cents early in our journey).

This means we resume building a surplus to carry us through the winter (October – February) starting in May.

I sometimes get asked about the ‘payoff date.’ This is the amount of time until the savings from not paying an electric bill equals the cost of the system. Honestly, I don’t know when that will be as one factor is the current cost of electricity. As that increases, now up about 50% from when we went operational, that date shrinks.

I have rather focused on what the cost of electricity will be for us over the 25 year guaranteed life of the panels. By the way, they keep producing electricity in year 26!

Assuming our panels generate at least 200 MWh over the 25 year period (which seems conservative, as they have generated 46 MWh in the first five years) and assuming the SREC market supports a price of $50/MWh (this is not guaranteed at all – it is currently about $4/SREC in Ohio and over $300 in New Jersey and DC), and that our March/April surplus averages about $60/year, the total cost of the power our panels will generate will have cost us about 2-4 cents per KWh. That is a good deal.

Of course we will have to pay market rates for anything we consume above what the panels generate, but that is to be expected. As of now though, our electricity use continues to decline, as evidenced by the meter continuing to run backward, compared to the same month of the prior year. Should we get an EV sometime in the future, or convert our heat and hot water to electricity this will of course change.

Whether solar panels are a good deal are very much dependent on site location, federal and local $$ help with the project and whether there is something like an SREC market. For this project specifically, it seems to be a great deal.

Here is the comparative overview of the past 5 years on a monthly basis:

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TDSF Power Plant Part 9: 6 Month Update

Making the electric meter spin backwards!

We went live on March 26, 2019. Just got our latest electric bill for the period ending September 25th:

Six months in: no bill and a surplus of 599 KWh to date (months 2-6) – see next image below.

Over the summer, for the two months prior, our air conditioning usage caused us to use more than we produced, but barely. With this most current bill we made up for it and are back to generating all of our own electricity and supplying a little bit to our neighbors – not that they can tell of course.

Actual surplus is 599 + 446 – already paid for the 446.

We received a check for the 446 surplus generated our first month already, so that zeroed out the account. Adding the 599 for months 2-6 to month 1’s 446 means we have generated a surplus of 1045 KWh (just over 1 MegaWatt Hour) since we went live.

A few more numbers for readers who are so inclined. On Aug 29 we got our first check for our generation of 3 SRECs. SRECs, you may recall from earlier postings are Solar Renewable Energy Credits – one SREC = 1 MWh of electricity generated. This check was for the second quarter (April-June). It was $131.85.

On Sep 28 we just hit 7 MWh generated to date. For the 3rd quarter (July-September). This means we will get a deposit around the end of November for whatever price 4 SRECs are going for. The site srectrade tracks the daily prices, currently around $62 per SREC. Note that the broker gets $5 per SREC for their troubles and the price will undoubtedly change between today and when the transaction occurs, so it is hard to predict how much we will receive.

Our 6th month savings to date then is something like this:

BGE Payment for Month 1: $ 39.20
SREC Payment for Q2: $131.85
6 months of avoided billing: $800.00*

Total earned and saved: $971.05

*Avoided billing is an estimate based on amount of electricity generated (a little under 7 MWh) minus the surplus we generated (a little over 1 MWh). This means we used a little less than 6 MWh during this time, at a cost of about $135 per MWh (13.5 cents per kilowatt hour). We hit the 7 MWh mark Sep. 28th, 2 days after the 6th month billing period.

6*$135 = $810, so I rounded to $800.

The SREC payments will always be 1 quarter behind, so I will include the Q3 payment in another posting.

As we enter the darker days of fall and winter, our power generation will decrease, but so will our usage, so hopefully we will continue generating extra power. I am hoping that for the second half of our first year (Sep 26, 2019 – March 25, 2020) we are able to generate another 5 MWh, but it is not exactly under my control!

A shout-out to my salesman Daren Weatherby: we walked my site together and he pointed out the trees that would be an issue. The one he focused on was south and east of my roof and a decent distance away, but tall and with a wide spread of branches at the top.

I am an observer of how the sun moves over my house throughout the day and found it hard to believe this tree would matter much. How could this guy who was just seeing this for the first time, but with some years of experience selling solar systems know more than I, a 25 year owner of this property? Well, to some degree we were both right.

In the summer it does not have a great affect, as the sun rises quicker and more directly over my house. Now that we are in the fall though, the angle of the sun is lower in the sky and yes, that tree is filtering a significant amount of sunlight out for a longer period of the morning.

Hopefully over the next month or so these leaves will fall and the branches, being thinner up at the top of the tree, will have less impact. Still, props to Daren, as he knew what he was talking about!

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TDSF Power Plant Part 8: Lesson Learned – RTFP (also some updates)

If you work in the IT or Engineering fields you are probably well aware of the expression RTFM – Read the Fine Manual (google it for the more vernacular translation).

I am coining a similar term: RTFP – Read the Fine Print. No vernacular needed.

Truth is, I got this expression from my wife – the next three paragraphs are a (meant-to-be) humorous explanation of how this occurred.

In the Jewish tradition, a marriage has a legal document called the Ketubah, which is the document given by the groom to the bride that lists his obligations. It is written in Aramaic, my understanding of which is a bit rusty.

The Ketubah often comes up in those memorable discussions a married couple have whereby my wife explains to me that I will end up doing something she wants because, you guessed it, I didn’t read the fine print.

As in ‘Why am I the one who always has to take out the garbage?’ “It’s in the Ketubah,” she tells me. Apparently I didn’t RTFP.

Back to our main topic.

In previous posts I had mentioned that Anne Arundel County offers a $2500 property tax credit for installing solar panels. My salesman did ask me if I am paying that much in property taxes (which I am – but here comes RTFP).

I received the following letter from the county:

RTFP: taxes levied on the building, not the land,,,

In case you have not seen an AA County tax bill, it looks something like this:

Homestead Credit and Land value reduced the solar tax credit.

The portion of the bill attributed to my county tax starts at $3859. This first gets reduced by my homestead credit by $1465, leaving $2394. (The homestead credit limits increases in property taxes for primary residents, to avoid forcing owners from having to sell due to higher taxes – very beneficial to retirees on a fixed income.)

As the letter states, the tax is only on the building, meaning it is not on the land. Our house holds just over 59% of the value of our property. So the math looks something like this:

Initial Property Tax: $3859
Subtract Homestead Credit $1465
$3859 – 1465 = $2394 — remaining property tax
Calculate Building to Total ratio: 243,600/412,800 = 0.59 rounded.
$2394 * 0.59 = $1412 — the value of our solar credit

As the letter states, this is a one-time credit – no carry over into next year. So that is it. Because of the fine print, our county property tax solar credit is $1412, instead of $2500.

In other words, the price we will end up paying after incentives will be about $1088 higher than the roughly $15,400 we projected, or closer to $16,500.

Note that we did not lose anything here – this was always how the tax credit was going to work. The only change is in my less-than-perfect break even calculations. That number is a best guess anyway, and will only be revealed as we take this journey. The information on how this tax credit works was probably available from the county. My calculations are only off because I did not RTFP.

Two updates regarding previous posts:

  1. The web site where you can track SREC values is here. The price has varied a bit in the last few months, rising as high as $67.50 for a couple of days, but settling in around $50 as I write this. It will be a few months before we receive our first check.
  2. The July bill came in. We almost broke even this month, consuming 11 KWh more than we produced. This was subtracted from our roughly 1/2 MWh surplus to date:
AC is expensive: first month we used more than we produced – but barely

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TDSF Power Plant Part 2: Show me the money!

Actual electric bill spending

In Part 1 I explained the mechanics of how solar panels work, and how they connect to both your house and the power grid. In Part 2 I’ll explain how solar panels can save you money on your monthly electricity bill, and even generate some income (depending on your local rules).

Let’s start by defining some terms you’ll need to understand, and then we’ll  use those terms to talk about how solar panels can save you money.

What’s a kilowatt hour?

Watt – a basic unit of electricity that plugged in items consume. The typical incandescent light bulb that we all grew up with used 40 – 100 watts per hour.

Kilowatt – 1000 watts

Kilowatt Hour (KWh) – What your electric meter measures. If a 100 watt bulb burned for 10 hours that was 1 kilowatt hour (10 * 100 = 1000).

A few other examples of 1 kilowatt hour:

  • If you have 10 lights, each with a 100 watt bulb, on for one hour
  • If you have 25 lights, each with a 40 watt bulb, on for one hour
  • Using a 1000 watt hair dryer for one hour
  • Using a 1000 watt microwave for one hour

Megawatt Hour (MWh) – 1000 Kilowatt hours

So, how many KWh does a typical household use?  Well, I can’t speak for every household, but here’s our recent usage:

TDSF household electicity usage based on due dates

Note 1: The cost of the meter is rolled into the electric bill calculation. The real spend for determining our payback is about $100 less per year, as I will get an $8.26 charge per month for the meter, even if net consumption is 0.  So, as of now, I think about our annual spend as about $1433. 

Note 2: We used a lot more electricity in January and February of 2018 than in 2019 because of extra work in taking care of a senior pet. I believe the rolling 12 month number (10,560 KWh/year) is more indicative of our annual usage, which is still decreasing from month to month compared to last year.

Pause here to deep dive into an electric bill. If you are able to, please get one of your bills to see how this deep dive applies to you. Here is the electric usage details portion of our last bill before we went solar:

Last bill before going solar!

First, note the meter readings – there are two of them – the last conventional reading, at 625 KWh used and the first reading from the new meter at 12 KWh, for a total usage of 637 KWh for this billing cycle. 

On Monday, March 25th about 7:30 AM a guy from our electric utility knocked on our door to let us know he was replacing our meter with the newer two-way net-meter. I asked if I could throw the switch to turn on the panels, but he explained that they still had to do the paperwork back at the office to get me on the new billing system. The new net-meter started at 00000.  So by the time they closed out the last bill and started me on the new billing period, we had used 12 KWh. 

As you can see, our electric bill is divided into 3 parts:

  • Supply – About .09 per KWh these days (price can vary)
  • Delivery – About .04 per KWh (plus the meter charge of $7.90).
  • Taxes (AKA, the government’s share) – a little over .01 per KWh

Unlike pizza, there is no option to pick up the electricity, we have to pay the delivery fee.  This supports the infrastructure that connects us to the power grid.

The government gets a piece of almost every transaction – check out your phone bill, internet bill and/or cable bill and you will see taxes and fees there as well.

Except for the 2 meter readings, your bill should look something like mine.

How much will we save on our monthly electric bill?

First the simple answer: if our system produces enough electricity each month to equal or exceed the production we’ve seen so far, and we hold at current consumption levels, we’ll save $1433 per year. 

But life is not that simple.

Each month that we produce more KWh than we consume, the extra is retained by the utility company as a credit, just like the old cell phone plans with rollover minutes (except these are rollover kilowatt-hours). If we accumulate a surplus one month, and then have a deficit (meaning, we use more electricity than the panels produce) the next month, the utility company applies our “rollover KWh”  to our bill.  We only pay for electricity if we’ve used more KWh than we produced, AND we’ve used up all of our credits from previous months. 

Because the billing calculations are done monthly, we can still end up owing money to the utility company some months, if we use more electricity than we’ve produced that month (and didn’t have any “rollover credits”). If that happens, it would subtract from our annual savings, even if annually, the total amount of electricity our panels produced is more than the annual amount of electricity our household used.

Wait. What happens at the end of the year if you still have extra “rollover credits”? Do they roll into the next billing year? Unfortunately, no. At the end of every billing year (every April), the utility company cashes out our extra credits. I don’t know how much they’ll pay for them (yet), but my understanding is that they’ll pay a wholesale rate. When this payout happens, we start our next billing year at 0 credits.

Because our electricity company buys electricity wholesale and sells to us at retail, I am expecting that they will pay us perhaps .05 per KWh or $50 per MWh. They only compensate us for the energy supply portion of the bill, not the delivery or taxes and fees portions.

One last factor:  SRECs – these are Solar Renewal Energy Certificates – we earn these for each MWh our system produces. The price will vary over time. For the purpose of this exercise we will use $20 per MWh.

If our solar panels produce 12 MWh per year, we would earn $240 cash for these SRECs. 

Putting this together, our projected annual savings is the sum of:

Electricity generated (and therefore not billed), plus electricity sold back, plus SRECs. For example, if we consume 10.5 MWh and produce 12 MWh this works out to:

$1433 – amount we would have spent on electricity

+ $75 – payout at .05 per KWh for the extra 1.5 MWh generated.

+ $240 12 MWh * $20 per SREC

= $1748 per year.  $315 of this is cash returned each year.

I will use this number in my next post when I discuss the economics of going solar.

Will it really be that precise or clean? Probably not. Some factors that could complicate these calculations:

  • If the price of electricity goes up, the amount avoided gets larger and our savings goes up.
  • If we use our credits during a low producing month and owe the electric company a small amount.
  • If we produce less than 12 MWh we do not earn as much in payback credits at the end of the year, or as much in SRECS.
  • If the value of SRECs go down.
  • If our electricity consumption goes down, the amount of extra electricity we can sell back to the utility company is higher.

The solar panel installer expects us to produce about 11 MWh per year, but they admit that they purposefully underestimate by 10%.  They want to under-promise and over-deliver.

In Part 3 I’ll discuss the economics of going solar – what it really costs and perhaps some guidelines as to whether this decision is right for any one specific home.