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Community and Q&A

Solar in upstate NY?

user-1028860 | Posted in Energy Efficiency and Durability on


I’m a home owner in Northern Westchester County NY (30 miles north of NYC) and have been looking in to solar for my home. I currently use about 9500kwh/year. I was using an ESCO (Ambit) until a few days ago when I discovered they were now charging far more than my local electricity provider (NYSEG). I’m now signed up with the local provider. I have not yet received my first NYSEG bill, but checking my neighbor’s bill last month, NYSEG appears to charge about $0.105/kwh plus a $15 fixed monthly fee. Using that figure and projecting opportunity cost of money, time value of money, panel degradation, estimated utility rate increase rate, guaranteed solar PPA rate increases, rebates/credits, output projections, output guarantees, VERY rough estimate of residual value of panels at year 20, etc. I’m having a hard time justifying installation of solar PPA or purchase from various solar companies. In almost all projections, the local electric utility is more affordable than solar. Only a few solar companies are attempting to work with me. Most of the ones I initially contacted bowed out quickly when they heard I will use NYSEG.
I have not seriously looked at doing the installation myself. My very rough estimates for self-install using local connections don’t look much better than the commercial installs.

Has anyone found that solar is winning in NY when utility pricing appears to be $0.105/kwh + $15 ? If so, what might I be overlooking? Is the $0.105 figure an unreasonable figure to use?


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  1. charlie_sullivan | | #1

    Where are your quotes coming in for $/W? It does sound hard to justify vs. $0.105/kWh, unless you care about global warming and want to reduce your emissions even if it costs more to do so.

  2. user-1028860 | | #2

    I have a $0.109/kwh PPA offer with 2.9% yearly increase. And I have a 9750kwh/year (9250kwh/year guaranteed) for possibly as low as $19k (after rebates+credits). As new paperwork comes in, bid details sometimes seem to quietly change, so the numbers above are merely ballpark for the sake of discussion.

  3. Expert Member
    Dana Dorsett | | #3

    In most of NY power is 1.5-2x that much. 9500 kwh/year is about 790 kwh/month, so that $15 connection fee adds another ~ 2 cents/kwh, which would make the full retail price about 12.5 cents. Is the average monthly bill really only ($0.125/kwh x 790kwh=)$99?

    The average residential retail price of electricity in NY is about 19 cents:

    I suspect the $0.105/kwh is just the energy cost, and that there is another 3-8 cents in delivery charges to pay for the grid infrastructure, on top of that $15/month connection fee. While the $15/month seems high for just a connection fee, it's nowhere near enough to cover the cost of grid maintenance, etc.

    On page 3 the basic residential rate shows a 3.33 cent deliver charge per kwh, with various other per kwh charges being variable:

    It sounds like you're trying to figure out if a $0.109/kwh PPA offer with 2.9% yearly increase is a better deal than the 20 year net-present-value of an investment of $19K that delivers 9500 kwh per year, net metered, with no connection charges?

    You might find this online calculator useful:

    Zero out the maintenance costs & heat rate, etc. In Westchester you'll get a capacity factor of about 13% so use that. At a 13% capacity factor averaged over 8760 hours in a year it takes an 8.6kw array, so if your cost is $19,000, that's about $2200 per kilowatt, so fill that slot in the calculator with $2200.

    Then it comes down to the cost of money. Using a 5% discount rate the 20 year levelized cost of electricity (LCOE) for that investment is 15.4 cents,kwh. But at a 4% discount rate the 20 year LCOE is 14.3 cents.

    Using PPA deal of $0.109 and a 2.9% cost escalator in the "utility cost" boxes shows a levelized cost of 14.5 cents/kwh. That's not such a big difference, however....

    IIRC SolarCity began offering 30 year financing at 4% (and a 30 year maintenance & warranty) in NY this year. Assuming the installed cost is the same $2200/kw, on a 30 year analysis the PPA comes out at 18.0 cents/kwh, and a 4% discount rate the purchase deal comes in at 9.8 cents, which is quite a big difference! Anything with a percentage annual cost escalator eventually mushrooms, (the "magic of compounding"), so what may appear to be small or inconsequential changes in the near term can actually be quite large in 20 years- you have to do the financial math. The term length, cost escalators, and the cost of money makes or breaks it, as does any large monthly fixed-fee.

    But I'd be surprised if your actual electricity rates are as low as described. Take the whole bill, divide by the kwh use, and what do you end up with?

  4. user-1028860 | | #4

    Thanks Dana.

    The 10.5cents/kwh is what I'd _expect_ to see with NYSEG. That's based on my neighbor's bill. I have another friend a bit further north that is also with NYSEG and hers is even a bit lower. This figure includes both delivery and energy, but not the fixed $15. (The energy charges I've seen from neighbors are ($0.069/kwh for flat rate and $0.048/kwh for off peak and $0.085/kwh for peak) + $deliveryrate/kwh + $15)

    Right, that $15 does take a pretty big bite. $15 is approximate it seems since the neighbor and friends' bills seem to not show exactly the same amount. But they are all in the $15-$16 range. Of note, NYSEG does say that they'll charge at every month this even if I go with solar and never use a kwh of their energy in a given month or net over the year. They say it's simply a cost of being hooked up to the grid.

    I am guessing that the average for NY state (of 19cents/kwh) is influenced heavily by NYC which uses ConEd which is notoriously expensive.

    Thanks for that link. I'll make sure that I'm not overlooking anything that it's including.

    Yes. The discount rate is a very influential factor in the buying option. I've found that in my own analysis as well. A 1% change can vastly change the value of owning.

    A "whole bill" price/kwh should be about $0125/kwh right now with NYSEG. But because that $15 charge apparently will be made regardless of if I chose PPA, own or pure utility I am removing that from the analysis and focusing my analysis on the rest of the bill.


  5. user-1028860 | | #5

    I will add, that I've not done much analysis beyond year 20 because I suspect my roof will need replacement shortly after that and I'm just not quite sure how to do that analysis beyond that time. There seem to be too many unknowns with roof replacement and maintenance. I do attempt to credit some residual value to the panels though at year 20 but that is very rough.

  6. Expert Member
    Dana Dorsett | | #6

    If your roof is being shaded by solar panels, it's going to last a lot longer than 20 years. Even if you had to pull the panels to do a roof repair, the current state of racking & wiring systems make that pretty easy to do.

  7. thomasj112 | | #7

    When I looked into solar for myself I couldn't get the equation to make sense in favor of solar either.

  8. user-1028860 | | #8

    I did find an incentive that I overlooked that appears to be giving the $109/kwh PPA option an edge. I'm still trying to find other mistakes and opportunities.

  9. charlie_sullivan | | #9

    I wonder how much it matters that there is a 5% difference in cost. If I was deciding between two new cars, and the cost difference was 5%, I don't think I'd always get the cheaper one, or even the lower total cost of ownership one. I'd consider all kinds of ridiculous things like which one came in a color I liked. It's OK to like solar even if it costs 5% more.

  10. Expert Member
    Dana Dorsett | | #10

    With the solar option you have certainty on the levelized cost of that power for the next 20 years.

    Going with the local utility you're at the mercy of both the market and the regulators.

    If you have any anxiety about the long term potential for rate inflation, buying solar at a 5% higher rate than today's price might be a very smart hedge. While there's potential for energy cost to either rise or fall under NY's Reforming Energy Vision, there is bound to be some volatility as it sorts itself out. My personal guess is that both power rates and the installed price of solar will be falling over then next 10 years, but I'm far more certain of solar becoming ever cheaper than the residential power from the grid becoming cheaper.

    Buying in right now would not be insane, and you'd be grandfathered into any net metering. In five years even though the PV may cost less up front, the net metering deal will almost certainly be different.

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