Sunday, May 21, 2023

Breaking Up with my Solar Panels

On the back of my house facing almost dead south is a roof mounted 7.36 KW solar array consisting of 32 Sharp 230 watt solar photovoltaic panels and 32 Enphase micro-inverters. My relationship with my solar panels has been somewhat disappointing. The experience of having a solar photo voltaic system on the roof has been far from trouble free. Now it looks as if we are breaking up.

I had imagined that solar panels without any moving parts would make free energy from the sun without any problems. However, starting in the second year of ownership I have had an ongoing series of failures of micro inverters, panels or wiring and a series of roof leaks. There has been a continual stream of problems that all come down to installation (the roof leaks), wiring and Enphase micro inverters. The micro inverters seem to fail with regularly. 

During the first five years of ownership, the original installer worked with me to honor his 5 year warranty. He paid for the repairs from a series of fledging installers, but I had no control over the process nor the solutions he chose to implement. The lack of reliability in what was the first generation of the Enphase micro inverters was very disappointing.

However, in 2019 Enphase offered all first generation purchasers a discount on newer generation Enphase Modules. In the four years after the installer’s warranty expired, I had paid $4,040 in labor alone to replace the failed Enphase modules which is was nearly what the value of the electricity the solar panels produced over those four years. After several conversations Enphase decided to simply give me 32 micro inverters and a new Envoy unit to tie it all together for free, which was really nice. They recommended a local installer with good references and over a decade of experience. I ended up paying NOVA Solar, $5,000 to install the replacement parts and clean the solar panels.

For the next several months and the first time in years I had all 32 solar panels reporting and functioning normally. A micro inverter then failed, but I took no action. My plan at that point was to keep the solar panels until my SRECs expired and then take them down and ground mount solar. It turned out that was the only micro inverter that failed over the next three years.

As troublesome as they’ve been, my solar panels still made financial sense. When I signed the contract to purchase my roof mounted solar system in late 2009 the cost per kilowatt for the Sharp panels I bought was about $6,700 plus permits and installation. However, back in 2009 I was able to obtain a state rebate of $12,000. I also used the 30% federal tax credit which was recently restored under the Inflation Reduction Act. The net cost of the solar system in 2010 after rebates and tax credits was $32,578. In addition, I obtained a property tax exemption in Prince William County that translated to a savings of $656.82 a year for 5 years.

The largest portion of the return on the solar panels is from something called a SREC, a solar renewable energy credit. A SREC is a credit for each megawatt hours of electricity that is produced but used elsewhere. SRECs have value only because some states have solar set asides from their Renewable Portfolio Standards, RPS, which require that a portion of energy produced by a utility be produced by renewable power. There are currently no RPS solar requirements in Virginia, thus no value to SRECs in Virginia today beyond the $10-$15 that a RPS credit is worth, though that may change under the new Clean Energy Virginia laws or other incentives.

When I installed my solar panels, my system was eligible to sell SRECs in Pennsylvania and Washington DC and I registered my system in both markets. The Pennsylvania market has since collapsed, but the District of Columbia passed a law in 2011 which made the SRECs quite valuable. The law prevents out-of-state systems from registering after January 31st 2011, but my system was grandfathered. DC is currently the only under-supplied SREC market in the nation.  There ae no large commercial solar farms, no large industrial installations within the District. Thanks to the Washington DC SREC market my solar panels have earned $41,313.26 (after fees but before taxes), dwarfing the $15,125 in free energy they have produced. Even with a total of $12,782 I have paid out of pocket in repairs, the system has paid for itself and I am more than $13,700 cash positive on the project with the cost of capital near zero until the last two years, it was an adequate return.

After the last big rainstorm I noticed a small stain in the ceiling. The two roofers that I consulted both say they cannot patch it and the roof is shot and needs to be replaced. As you can see it appears that the 25 year asphalt architectural shingles have worn away in under 18 years-possibly helped by the runoff flow from the solar panels. To replace the roof, I have to take down the solar panels. I called NOVA solar to ask for an estimate on taking down the solar panels and possibly ground mounting them.

The white spots are the backing of the shingle

NOVA Solar came back to me with: “To remove the system, then install a ground mounted system (using the same panels) the total cost would be $54,400. This costs includes:

  • Removal of current system
  • Permitting and Engineering costs for Permitting (This is notoriously expensive in Prince William County.)
  • Racking and Electrical Equipment for ground mounted system 
  • Trench to main service panel for electrical wiring
  • Labor"

Wow, I did not expect that. That is twice what the same company quoted me in 2019 when they were pricing my options for the replacement of the Enphase modules. That does not make any economic sense. The residual economic value of the solar panels is somewhere around $14,000 the SRECs might be worth around $7,000 if I could keep my facility number in ground mounting, zero otherwise. There is no return even if the system was new. A ten year CD from my bank is available for 4.25% and would yield over $23,000 over that period and I would get my principal back. So, they are coming down, I will never put solar panels on the roof again. I am tired of constantly dealing with leaks.  I will clean the panels and put them in storage to see if I can find some use for them. For now this is the end of my solar story, but if you have any ideas for using the solar panels drop me a comment.

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