Tuesday, July 17, 2012

Why I went Solar

    I have been asked a few times why I decided to go solar.  I am not someone that has ever been considered an environmentalist.  I leave that to my sister.  However, I can say this decision was all about green.  As in money.
     A few years ago, we moved from Folsom, CA to Cameron Park, CA.  A distance of about 12 miles.  In Folsom, we had natural gas for heat, the clothes dryer, the stove, and the hot water heater.  In Cameron Park, we are 100% electric.  In Folsom, electricity was provided by SMUD, in Cameron park it is PG&E.  I never knew what a difference it makes.  Our combined gas and electric bills in Folsom rarely exceeded $200 a month, and were often half that.  My first power bill in Cameron Park exceeded $600.  Talk about sticker shock.
     We did what we could to reduce the electric bill.  I replaced the 15 year old AC unit with a brand new one.  I was promised 20% savings on electricity the first year.  It was more like 5%.  Not good enough.  Electricity prices kept increasing, and my monthly bill remained way too high.  I kept hearing ads for solar on the radio promising savings, but I didn't think it was real.
      I called a few companies, and had them come give the sales pitch to us.  I did the math, and the payback periods for buying the system were long.  I am an engineer, I put the data in spreadsheets, I ran projections.  Even with the government incentives, the numbers didn't pencil out.  I dropped it for a few years.   More ads came along, promising new pricing models.  I took a look again.
      This time, the numbers came out closer.  I could achieve $60-$70 a month in savings with no upfront costs.  This was better, but would require me to commit to a long term contract.  Another company came in, and the numbers were similar.  I was on the fence.  Then, Real Goods came back with a new promotion.  I could get the same pricing they had offered before, but the first year would be free.  Now, instead of saving $60-$70 a month, I would be saving over $200 a month the first year.  I finally pulled the trigger.
      Results so far have been in line with expectations.  One thing I learned is that PG&E net billing method calls for me to pay only some of the taxes each month, resulting in a bill of about $12.  At the end of a year (I assume after my February bill), PG&E will send a bill for the net cost of what I used.  This essentially means they are providing me with a free loan.  Another side benefit.
      The key thing I have found is to take a look at all the data the salesmen throw at you, and make sure to do your own analysis.  Your savings can vary quite a bit depending on the plan you pick and how much you invest.  Sometimes, investing a little more actually lowers your savings quite a bit.  Always run the numbers, and figure out where your break even point is.

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