My rooftop solar payback model

Now that I have rooftop solar and a battery, how long until it pays for itself?

Independence Day is on Thursday this week in the US. Happy 4th to all of those celebrating! Residential rooftop solar is a technology that embodies American individualism. Generate your electricity, maintain your system, and control your destiny, right? That’s exactly the plunge that I took last month. Now that I’m a full month into using a rooftop solar array to power my home, I have learned a ton about my consumption habits, what the payback period will look like, and where there are open opportunities for an entrepreneur to improve the process for everyone. Let’s dig in.

When will I get my money back?

Fair warning: in this section, I will be showing my work! I purchased a 9.2kW DC array made up of 23 Qcells solar modules and a Tesla Powerwall 2. It is expected to produce around 13,700 kWh annually. The total cost (including lawyer fees to overcome HOA hurdles) was $46,673, which is around the cost of a Tesla Model Y before EV incentives. 

On the other side of the ledger are the incentives.

• $3,312 from Solarize the Triangle - paid immediately post-installation

• $7,801 from Duke Energy PowerPair - paid 3 months post-installation

• $13,258 from Residential Clean Energy Tax Credit - applied to 2024 taxes

Within a year, this will bring the cost of the system down to $22,302.

The standard residential rate for electricity in Raleigh is $0.11 per kWh, so if I self-consume all 13,700 estimated kWh the array produces, I will have avoided $1,507 in electricity costs for the year. In my June bill cycle, I pulled 749 kWh from the grid and sent back 284 kWh, good for a net of 465 kWh used from the grid. I self-consumed 844 kWh from solar and battery production. Notably, my air conditioning is on a separate circuit from the rest of the house and cannot be powered directly by the solar and battery system. 

Duke Energy PowerPair requires me to use the Net Metering Bridge Rider, so I am incentivized to self-consume as much as possible. Any excess electricity produced on a monthly basis will be paid for at a rate of $0.034 per kWh, less than half the retail rate. I won’t credit any savings resulting from switching to a time-of-use rate to this project because excess electricity provided to the grid is paid at the same rate no matter what. This is an area that Duke Energy should consider updating policy. Enrolling in Duke Energy EnergyWise provides another $276 annually in bill credits, and I am in this process now. This will allow them to control the battery 30-36 times per year.

In the best-case scenario where I consume all of the energy I produce, I will be able to avoid $1,783 in costs annually with this array. That means I’m looking at a 12.5-year payback period with static electricity rates. The current incentive is to not expand the array, but rather electrify more parts of my life to ensure I am able to self-consume all of the energy I produce. There’s plenty of room to do that as I currently drive one gas-powered vehicle and have a gas water heater, stove, and furnace. Once each of these is electrified, it could make sense to expand the array if there is additional consistent demand or if the price to expand drops close to the $0.034 per kWh rate that Duke Energy currently pays for excess energy.

What is using all of this juice?

The air conditioner and EV charging are the only big needle movers in my house. When they come on, they use 10x more than any other appliance. During the month of June, my air conditioner has run between 8 and 10 hours most days, which dominates the 749 kWh that I pulled from the grid. EV charging isn’t as much but when it starts, the impact is intense:

EV Charging is intense and short bursts. Solar needs a battery to supplement.

I experimented throughout the month with leaving lights, TVs, computers, and fans running. There was no noticeable impact visible on the Tesla app. I was surprised to also discover that the dryer and dishwasher don’t seem to make a difference either. The fridge cycles are clearly visible, but the one I didn’t expect to see was a dehumidifier I have in my sealed crawlspace to keep down the mold. Throughout the day, you can see the baseline electricity consumption increase, then it falls off overnight as the temperature drops in the crawlspace.

Baseline load is raised during sunlight hours by the dehumidifier

Open problems worth solving

EV charging is a challenge worth pursuing in this space based on my experience. I'd prefer not to drain the Powerwall to charge my Chevy Bolt and it's too much cognitive load to think about if it's cloudy or too close to sunset to complete the charge before the battery has to take up a significant load. It’s also true that my array is too small to fully power the L2 charger, so the battery is currently acting as supplemental power while charging occurs. If I didn’t have a battery, this would still be drawing from the grid and that’s not ideal. I currently use the OEM charger plugged into a 240V outlet, so there may be products on the market that I can purchase to solve this problem. Tesla has a solution, but it’s unclear if there is a solution or a Chevy Bolt. Recommendations from readers are most welcome!

I believe there is also an opportunity for solar installers to pick up some of the slack in applying for rebates and all of these incentive programs. While my solar installer has been helpful in staying in touch about these programs even after completing the installation, they are operating with one hand tied down. Ideally, they could knock the incentives off the upfront cost immediately and be directly paid for them once the installation is complete. It looks like this should be possible with the elective pay and transferability provisions from the Inflation Reduction Act. Car sellers are currently able to function this way, so it would be great if solar installers could catch up similarly. The upfront investment is significant, so reducing the barrier to entry in this way would be great for adoption.

So far, I’m happy with the choice to invest in this for our home. There are clear equity issues with pushing for rooftop solar exclusively, and there is plenty of room to improve these systems. I am pleased with the added resilience and am lucky enough to be able to tolerate the payback period. It’s also just neat to know more about how electricity is consumed in a modern single-family home. Maybe I will be more forgiving the next time a light is left on in the closet. Maybe.