Cost and Net Present Value (NPV)

Before I get into cost, I need to make a point that I have lots of trees that shade my panels in the afternoon. My power generation is not great but my trees are! My solar production will go up over time. Several giant pine trees on HOA property were already cut down for a stream restoration project. My oak tree keeps my house cool in the summer and cutting it down would increase power consumption in the summer but my electric requirements would go up as well. Basically cancelling each other out in dollar value.

And The Numbers

Back in June of 2017 I put my $1,000 down with no idea how much the final cost was going to be but was hoping not to be over $50K. Even after the roof was installed, I didn’t have an exact dollar value because the final design was completed a couple weeks before the install started and they forgot to send the updates to my Tesla account. The final cost was $47,442.35 before the 26% federal tax credit. The big change they made at the end, and I am glad they did, was add 2.6 kw of solar panels. The extra solar was great and knowing what I know now, they could have added even more on the garage. I have done two cost analysis, my ballpark calculation to justify why I jumped into this maybe blindly, analysis 1, and a more in-depth estimate, analysis 2.

Analysis 1, Quick and Dirty

I have been asked what the payback is but really just like any home improvement like a kitchen remodel, is this something that you will enjoy and add value to your property. You can break down the equivalent cost of 3 separate, comparable, items to get a ballpark value. I came up with $50,000 of value:

Cost of a metal roof is $20,000.

Cost of 11.6 kw of solar panels is $20,000.

Cost of Battery Backup is $10,000.

Analysis 2, Net Present Value

Comparing the cost between the solar roof and a standard asphalt roof requires some assumptions and I tried to be as reasonable as possible. I had one estimate for a standard asphalt shingle roof in 2019 that was just under $8,000. The Powerwall is required with all solar roofs and the estimates I see is they cost around $10,000 which serves as backup when power goes out. A 7.5 kw generator cost was added to the asphalt shingle for equivalent backup estimate and will require maintenance similar to your car. For my analysis here are my assumptions:

• My current interest rate is 2.5% for 15-year loan fixed in 2021.
• Solar roof life is 50 years while the asphalt shingle roof life is 25 years.
• Power generation is 25 years.
• No maintenance cost but lifespan of panels are over 25 years. Any remaining panel life will cover maintenance.
• Inflation rate is 2%.
• The solar power reduction of .005%/year will offset the utility rate increases, i.e., net income/year from solar is constant at around $450/year.
• I didn’t add the increase cost of insurance but there all some potential energy savings I didn’t account for either by having a cooler attic.

More Reasoning

A few other important points, scrap value, and environmental cost. In 25 to 50 years from now, recycling will have changed substantially. Not sure what the negative environmental impacts would be to filling up landfills, asphalt shingles go directly to the landfill, but assume that the electronics and glass will be recyclable and the glass is definitely less toxic than asphalt shingles. Metal roofing is 100% recyclable at your local scrap yard.

Using power generation of $450/year over 25 years and could very well be longer, the net present value of the power generation is $8,290. In 25 years, the asphalt roof will need to be replaced but the solar roof will probably last for another 25 years. How do I account for the longer life? I am using the net present value of the solar roof of $8,000, because the inflation rate and my interest rate are about the same. The asphalt roof will be $0 in 25 years, the solar roof will still have another 25 years of life. Looking into several websites gave some insight on making this decision, see links below. While eventually the solar roof equipment will wear out and may have a maintenance cost, a 7.5 kW generator would cost about $2,000 and have maintenance cost as well as fuel, fuel stabilizer, oil changes...

Assuming that the PowerWall will have zero salvage value in the future, the net cost of the roof is about $8,000 more that of a standard but there are some intangible benefits and piece of mind. For example, when everyone was paying $5.00/gal for gas in the spring of 2022, not only was this not affecting me at all, I was actually creating enough energy for my car. It is nice to know that my energy needs are fixed and not dependent on economics or social issues. My power company, Duke Energy, did have some rebates but it was an extremely bad setup. I did apply but was rejected because my power-up day was about 7 days outside their window I applied in. This has to be the worst and most confusing rebate program out there. That was really annoying but at least I buy power and sell power back to them at the same rate.

Some references for cost comparisons

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