Solar Photovoltaic (PV) panels produce DC electricity when sunlight strikes a chemically-coated silicone cell. The amount of power produced fluctuates with the intensity of the sun. The DC current moves though wires to an inverter, where it is converted into AC current, the type of electricity that runs our households and businesses.
A solar PV panel needs to operate for about four years to generate enough electricity to theoretically make up for the energy used to manufacture and install the panel. Once in place and generating electricity, the panel does not produce carbon or other greenhouse gases. The fuel source is free, and the panels create a positive environmental impact with every watt of electricity produced.
Almost all Solar PV systems being installed these days fall under the New Hampshire Net-Metering Program. Under this State-sponsored program, a household-level electricity generator is given privilege to sell small amounts of renewable electricity into the grid.
These systems run independently of a house’s electrical panel. All the electricity goes directly into the grid; should the grid lose power, the house will also be without electricity.
With a net-metering PV system in place, additional equipment will be required to keep the power on during a daytime outage. Adding batteries so the electricity can be stored and used at night is possible, but this kind of system comes with increased cost and complexity.
Pricing of Power
New Hampshire Electric Cooperative (NHEC), Andover’s electric supplier, is required by state law to purchase a pre-set amount of electricity from renewable sources. The amount the utilities pay electricity producers for household solar PV electricity is set by the legislature and thus is subject to politics and change in the future.
Currently under the net metering program, NHEC pays a household generator the same rate as all residential users pay for electricity – this is where the “net metering” name comes from. The rates NHEC pays to commercial renewable electricity providers are market-based and about half that paid to household generators under the net-metering program.
The general trend around the world is for legislatively-set rates to decline downward to market rates over time. If this were to happen in New Hampshire, it would have a direct and adverse effect on the break-even point, sometimes called pay-back, of a net metering Solar PV installation.
Financing Solar PV
The time it takes to break-even on the purchase of a Solar PV system varies depending on the upfront cost incurred; the amount of electricity produced over its life; the rate at which the electricity is purchased over that lifetime; and the on-going maintenance and repair cost. Some think Solar PV systems are a way to immediately save money on electricity, but in reality there will not be a financial saving for quite a while (the so-called “break-even” point).
While the owner of a net metering system will see their electric bill drop, what is happening, if financing was used for the purchase, is a transfer of payments from the electric company to a finance company until such time as a true break-even is achieved.
Most manufacturers warranty their panels for 25 years. While there are no moving parts in a Solar PV system, they are exposed to UV rays and temperature extremes that will wear out the components over time – not unlike how a TV picture will degrade over the years.
An important PV system component life expectancy issue is with the inverter (both “string” and “micro” types). Inverters are the weak link in Solar PV systems and have a documented history of failing before the panels do.
The inverters may have a shorter warranty than the panels, as they typically come from a different manufacture. While the inverter may be covered by a manufacturer’s warranty, the replacement may not be in the later years of a systems life.
When the panels do finally wear out, they will need to be disposed of as electronic waste. Firm estimates on the price for decommissioning are hard to find at this time, but disposal will be an additional cost (currently not included in break-even calculations) when the panel wears out.