May 25, 2020
[Update 7/19/2020]
Tesla Solar recently announced on June 19, 2020 a 20% price reduction (The Lowest Price for Home Solar) and they also now use the 340 watt panels (up from the 315 watt panels that I have). Use my referral code to order and get a $100 award (currently) when your system is activated. This will cover the $99 down, making it zero out of pocket initial cost when financed.

See my current results: My Tesla Solar Performance 2020

Shortly after taking delivery of my wife’s Tesla Model 3 Long Range Dual Motor (My Tesla Journey), I got a text message from Tesla with a little incentive for their solar program. If I ordered solar for my home within 90 days, they would give me a free Wall Connector (charger). This was enticing, but I needed to do some research and get up to speed on the current solar costs and systems. Living in Arizona, solar is something that I continually look at every year or so. In fact, when I moved to Phoenix in 2008 and bought a DR Horton home, I asked them if they had a solar option as I would have much rather ‘baked’ the cost into my mortgage. Sadly, they said I was the first person to ask.

Fast forward to 2019 – even though our electric rates (per kWh) are decent compared to other parts of the country, that hasn’t stopped our corrupt electric company (APS) from finding ways to raise rates by buying seats in the AZ Corporation Commission. A few years ago they shifted ‘peak’ hours from 12 PM to 7 PM to 3 PM to 8 PM (guess when solar production starts dropping off), and they introduced a crazy ‘demand’ charge that is calculated on your single highest hour of peak time for the billing cycle. This was the first stop – understanding my current usage and my electric bill. As I started to look at my bill in detail, I was pretty shocked at all of the different charges (which is a great way to burry things that you don’t want to make so obvious).

This bill cycle was from April 26, to May 28, 2019 and actually the temperatures were not that bad (especially compared to this year where we already had several days over 100 in April and May). There was one charge that accounted for almost 38% of the bill – the ‘Demand charge for on-peak – generation’ was $104.82. My ‘billed on-peak demand in kW’ for this cycle was 7.8. This number (based on my rate plan) is multiplied by $13.438 to come up with the ‘demand’ charge. My only guess that could have caused this was maybe that both AC units had kicked on while the cook top and/or oven was in use for dinner (talk about an expensive dinner). Now there are some things that can be controlled and I immediately set the downstairs AC to never kick on between 3 PM and 8 PM.

The other thing I wanted to look at was my total consumption. For 2018, my yearly electricity consumption ended up being 23,814 kWh (3587 peak/20227 off-peak) for a total cost of $3014.34 (average of $251.19 per month). Great! I know what my usage and cost is for my electricity. But, how much is my wife’s electric car going to add to my yearly consumption??? This is something that I really want to factor in if I want to get as close to net-zero as possible. So, I decided to place an order for the largest 16 kW system and 2 Powerwalls on June 26, 2019 for $99 down.

Once you do this, they make you take several pictures of your meter, your electrical box, AC units, garage, place where some of the equipment will go, etc. Then they go off for a little while and come up with a proposed design. They use satellite based imagery to come up with a solar layout on your roof. The first proposal based on this information came back with a 8.19 kW system (26 panels). The estimated annual production was going to be around 14,000 kWh per year. Wait – this isn’t going to get me close to net-zero. And is this even big enough to charge up two Powerwalls during the day and power the house? Likely not. I called in and requested an onsite survey and it was scheduled after we returned from vacation (it was approaching the end of July).

After returning from vacation and the site survey was complete, they were able to magically fit another 13 panels (bringing the total up to 39 panels). However, my wife and I decided that we wanted to move in 6 years and return on investment calculations started entering into the equation. As an engineer, I always make my big purchases without letting emotions influence the decision. Do I want solar – absolutely! It is great for the environment, the technology has amazed me since I was a kid, more and more neighbors are getting it installed, but is it right for us given our recent decision to try and move?

My original sales advisor could not answer any of my questions regarding the amount of solar production, how much and how long the Powerwalls would take to charge, what kind of time of use offset I would be able to get with the Powerwalls and many other questions I had. I eventually escalated when he basically stopped responding and got a more senior advisor that was able to help me make my decisions. I also contacted SunRun to get a comparative quote on a similar sized system. At the time, it was going to be about $6K more than Tesla Solar (even with the Costco member discount).

The system I decided to go with was the 39 panel, 12.285 kW system that has an estimated annual production of 21,017 kWh (and no Powerwalls) and on September 3, 2019 I submitted all of the signed documents to confirm my order.

With a $0.00 down 10-year loan at 3.99% APR, this would make monthly payment $232.49 (with pre-payment). The way the tax credits work is that you actually need to meet your tax burden before you get money back. Only if you overpay on your taxes will you get the full amount back, so don’t just assume the federal government is going to cut you a check for that amount – that’s not how it works. Now – you are probably thinking that is great and all but what about ROI? Here are some of the variables that ultimately influenced my decision:

• Provided I can get as close to net-zero this should be a win-win. $232.49/month is less than my $251.19/monthly average electric bill from 2018.
• Electric rates can go up over time.
• Zillow did a study and found that homes with solar panels sell for 4.1% more than homes without. This means that if I do have a balance left, it will more than likely be covered by my house price increase. I will have an advantage against similar houses without solar. Also being able to sell the house as net-zero means that a buyer can now spend $251/month more on a larger mortgage (or other stuff).
• Offset from not buying gas. My wife averaged about 16K miles per year on the Odyssey. I approximated that we spent about $3K/year or $250/month on gas (16,000 miles/17.5 mile/gallon * $3.25/gallon = $2971.43). Now that the house was going to be powering the car, this amount alone could justify the cost of solar (although the car is only going to consume a fraction of what the solar system will produce).

Therefore, even though the system will not be fully paid off in 6 years, all of these variables factored into my decision (in which helped me convince my wife that it was a sound financial decision). I think of this like one of my other investments based on the fact that it increases the value of my home (if I continued to pay the electric company, it is a sunk cost with zero benefit after 6 years).

However, during this whole time my wife was starting to get a bit fed up with me constantly stealing her new Model 3 (as I didn’t realize how much fun it would be). That’s when I started getting thoughts of a Model 3 Performance for myself. To be continued…

If you are planning on ordering a Tesla or Solar, feel free to use my referral link for some free Supercharger miles or cash award for Solar.

If you have any questions, feel free to leave me a comment or you can also find me on Twitter @miketerrill.

Originally posted on https://miketerrill.net/