Why Solar Installations Cost More in the U.S. than in Germany

Going off on a tangent, I lived in New Mexico (5.5 on that table). A friend bought German solar panels for his house. He then had to get an upgraded transformer, because it put out too much power for the stock German one to handle.

I suspect what you see on their website is just to grab customers. They don't try to snow anyone, at least IME. They will give you sheets that show exactly what they estimate and are willing to guarantee a year, and show exactly how all the numbers are derived.

5 of my friends (all engineers, actually) are doing PPA's as well.

A few things:

1. Sadly, a lot of folks try to compare generation charges vs what solar city is asking you to pay.

For example, in my area, Pepco's generation charge is 8.9 cents, and my PPA with solar city is 6.5 cents. Not so great, right?

However, when you include pepco's distribution charges, various tariffs and taxes that i don't have to pay solar city, etc, the actual pepco cost is closer to 14 cents a kwh (i'm going by my actual power usage divided by actual utility bill cost).

I am probably a weird case, but i have saved plenty this year. Since i'm on a PPA, as long as the PPA rate stays below pepco's rate, i will always save money.

2. The PPA numbers they guaranteed me vs actual generation amount is pretty spot on. They are very good at calculating the actual power generation of the panels. They do not overpromise and underdeliver (and as i'll get to, they guarantee this by contract). For this year, I was guaranteed 10400kwh of power at 6.5 cents, and so far, i've generated ~10320kwh with 4 days left.

For example, I know they calculate historical cloud coverage using real data (google earth, et al)

The PPA contracts have two sets of performance guarantees: Under and over:

First, for every kwh they guarantee but do not deliver, you get exactly the right amount of money back. IE i was promised 10400kwh this year, and paid 6.5 cents per kwh for it. If i do not generate that much, they pay me exactly 10400-actual generation * 6.5 cents. So you always at least get your money back (though yes, this is effectively giving them a loan). In some PPA's they do the refund price is greater than the actual price, so that there are teeth to them not meeting the guarantee.

The other underperformance guarantee is that if they are under performing by more than 10%, they are required to do whatever is necessary to ensure this does not happen the next year, or they are in breach of contract (and there are plenty of penalties on their side for this). I know of cases where they've installed tracking systems, etc, in order to make this happen.

They also have overperformance guarantees. If my system overgenerates (which for me, is profitable, as i'll get to), I pay 6.5 cents per kwh, up to 20% of the yearly number guarantee. Over 20%, I don't pay them unless i am able to sell the power myself.

So you do have upper/lower bounds on the numbers, set by contract, though historically solar city installs are within a very small percentage of the guaranteed numbers

3. At least for me, overgeneration is profitable. Maryland is a net energy state, and pepco is required to pay me the residential generation rate. It comes in the form of net energy credits that carry over month to month, and any remaining excess is paid out in real money at the end of each year.

So if i were to generate 100000 kwh on my panels (let's assume this is under the 20% number i gave above), but only use 10000kwh a year, i would owe solar city 90000kwh6.5 cents. Pepco would then be required to pay me 90000kwh8.9 cents.

So you can actually make money on the deal if solar city messed up the numbers.

4. Because it's a PPA, i am not responsible for anything but giving them access to my roof. They are also willing to guarantee all roof penetrations, and any repairs needed because the panels are there. If the panels explode, break, etc it isn't my problem. Any defects/failures that are in the panels does not suspend their performance guarantee.

Note that I am also a prepay PPA, so my PPA rate never increases. If you can float the money, and will stay in the house for a long time, you should always be able to make your money back, unless your local utility suddenly decides to start charging people a lot less.

The real case it doesn't make sense is if you are going to need to break the lease.

Rereading the above, I realize it sounds a bit like a commercial, but it's really not. Other than the lease length issue, it's often a pretty good deal. The funny thing is, i'm moving, so I will end up transferring the PPA when I sell the house. Even though i prepaid, it looks like i'll still make the money back that I spent in increased home value. (People value homes in funny ways)