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Exercise: solar panels on your house? You are considering purchasing an 11.6KW solar system for your house to be installed on January 1. This involves
Exercise: solar panels on your house?
You are considering purchasing an 11.6KW solar system for your house to be installed on January 1. This involves a large expenditure today but promises lower electricity bills in the future. The question is: what is the highest "sticker price" you are willing to pay for the solar panels?
Assumptions:
- The panels will last for 30 years, then stop working and have no resale value.
- Find the average electricity rate paid from the data pasted at the bottom of this page, and assume this rate will increase 2.5% per year indefinitely.
- You pay your entire electricity bill at the beginning of the year.
- Get rough estimates for solar output here (Links to an external site.). Output results are further below(second table)
- You receive a 30% tax credit for the cost of the panels and installation (so you only pay 70%).
- Use an annual interest rate of 10%.
- Installing the panels gives you an immediate $5000 benefit from knowing you did something environmentally friendly.
KwH | Bill | |
December | 1653 | $ 213.55 |
November | 1538 | $ 189.01 |
October | 1907 | $ 242.41 |
September | 2359 | $ 311.42 |
August | 2732 | $ 365.40 |
July | 2808 | $ 376.40 |
June | 2851 | $ 382.62 |
May | 2526 | $ 326.92 |
April | 1901 | $ 238.61 |
March | 1805 | $ 225.05 |
February | 1424 | $ 176.38 |
January | 1389 | $ 171.20 |
Solar Radiation | AC Energy | ||
( kWh / m2 / day ) | ( kWh ) | Value ($) | |
January | 4.9 | 465 | 60 |
February | 5.11 | 436 | 57 |
March | 6.11 | 568 | 74 |
April | 6.63 | 584 | 76 |
May | 6.53 | 593 | 77 |
June | 5.83 | 505 | 66 |
July | 5.83 | 519 | 68 |
August | 5.65 | 506 | 66 |
September | 5.47 | 476 | 62 |
October | 5.42 | 498 | 65 |
November | 5 | 456 | 59 |
December | 4.45 | 420 | 55 |
Annual | 5.58 | 6026 | 785 |
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