Photovoltaic ROI

In the previous two posts, we studied the electrical production from our 26 module, 8.58 kW array from 2020 to 2023 and compared it against our electrical consumption for the 2020 solar year.

The actual monetary savings of our photovoltaic array over the first three years averaged $1,257 per year, which is slightly more than we expected. At this rate, we are on track to make our $10,047 investment on the array back by year eight.

Looking to the future, if this savings rate continues, the array will have also paid for most of the $31,971.04 roof project investment (the cornice repair, parapet repairs, and reroofing) by year 25.

Slicing and dicing the savings

Our solar installer, Lisa Albrecht from All Bright Solar, shared an Excel spreadsheet with me that allowed me to take a detailed look at our savings. I input the various charges from our electrical bill plus the electricity we pulled from the grid, the electricity we fed back into the grid, and our monthly rollover credits, and it shows me what I would have paid without our solar array versus what we actually paid.

Our savings per solar year (April 1st through to March 31) were as follows:

2020 solar year$1,175.76
2021 solar year$1,232.94
2022 solar year$1,361.86
Three year total$3,770.56

Our savings follow closely the Return on Investment (ROI) calculations that Lisa shared with us when planning the installation of our solar array.

Our out of pocket investment into the solar array was $10,047 after the various rebates. Subtracting the first year’s savings reduced our liability from $10,047 to $8,888 (prediction), or $8,871 (actual). In other words, our ROI for the first year exceeded the prediction by $17.

Subtracting the second year’s savings from the net gain/loss of the first year reduced our liability to $7,697 (prediction), or $7,638 (actual), with the ROI exceeding the prediction by $59 – and so on…

As I mentioned in a previous post, the state incentive we received is based on how much kilowatt hours our 8.58 kW photovoltaic array is predicted to produce over the first 15 years.

10% of that incentive is withheld until year 15 and released as long as we meet the predicted production target. Because our production is exceeding the prediction, it would be safe to assume that we can add another $1,160 incentive payout to year 15 in our ROI calculation.

So far we are on track to make our money back on our $10,047 investment by year eight, giving us an ROI of 12.5%. After that, we can pocket all the savings from our 8.58 kW photovoltaic array. If Lisa’s predictions hold true, we would also have saved around $31,838 on our electrical bills for our 4,500 sf building with its three apartments by year 25.

That $31,838 would cover 99.5% of the cost for our roof project (the reroofing, cornice repair, and parapet repairs).

That all said, I don’t expect to exactly meet these ROI targets, because the numbers don’t account for maintenance and repair costs we may face over the next 25 years. But we hope to get close to them.

At this point I feel I need to clarify again that the savings are not just because we bought into a renewable energy system and slapped a photovoltaic array onto our roof. These savings were made possible because our deep energy retrofit significantly reduced the overall energy load of our building first, which then was followed by a renewable energy investment.

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Photovoltaic production vs. electricity used

We looked at the monitoring data from our inverter for our 26 module, 8.58 kW array in the previous post. To understand how the solar array production offsets our energy used, I compared it to our monthly usage data from our electrical bill for the solar year 2020 (April 1st, 2020 till March 31, 2021).

Solar year 2020Our building
(kWh)
One household in our building
(kWh)
Illinois household
average (kWh)
Based on 2021 EIA data
Electricity used13,4284,4768,736
Electricity produced11,3903,797
Annual deficit2,038679

The table above shows the energy use data for our 4,500 sf building as a whole, and for each of the three households (apartments).

The solar array produced enough electricity to cover 85% of our total annual electricity consumption during the solar year 2020. It effectively reduced our electricity use to 679 kilowatt hours (kWh) per year per household, which was less than the average monthly Illinois household use of 728 kWh (Based on 2021 EIA data).

Our monthly bill per household for the solar year 2020 averaged $11.24 compared to the Illinois average of $95.56 for 2021 (Based on 2021 EIA data).

A key takeaway from these data is that even prior to factoring in any solar production, our deep energy retrofit has resulted in a 49% reduction in energy use when compared to the average Illinois energy consumption per household.

Once factoring in the photovoltaic array production our energy consumption was reduced by 92% compared to the Illinois average.

2020 solar year review

The gray column in the chart above represents the amount of kilowatt hours the 4,500 sf building with its three apartments/households used any given month. September was a low use month with only 633 kWh, while February was a high use month with 2,139 kWh.

The blue column is the energy we produced with our photovoltaic roof array for any given month. We discussed these data in the previous post.

The green (and orange) column reflects the kilowatt hour rollover month by month, which is a product of the net-metering agreement with our utility. It is the difference between kilowatt hours used and kilowatt hours produced and carried over to the next month.

Take April for example: The difference between the 825 kWh used and 1,094 kWh produced is 269 kWh (rollover). In May the difference is 463 kWh. Add the rollover of 269 kWh from April, and we end up with 732 kWh rollover for May, and so on.

From April to September, our production was exceeding our consumption, and we were building our rollover nest egg for the winter. Starting with October, our consumption exceeded our production, and we slowly began to eat into our rollover credits. By January, we had used up all rollover credits and started to run a deficit (-299 kWh), meaning that for the first time since April 1st 2020, we actually pulled energy from the grid for which we would be invoiced.

At the end of the solar year, the building had used a total of 13,428 kWh, which was offset by 11,390 kWh production from our photovoltaic roof array. That left us with a deficit of 2,038 kWh,  for which we would be invoiced.

How does this compare?

Data published for 2021 by the U.S. Energy Information Administration (EIA) lists 10,632 kWh as the average annual electricity consumption for a U.S. residential utility customer. 2021 EIA data for Illinois lists an average annual consumption of 8,736 kWh per residential utility customer, or household.

kWh use per yearkWh use per month
U.S. household average10,632886
Illinois household average8,736728
One household in our building w/o solar4,476 (actual)373 (actual)
One household in our building  household w/ solar679 (actual)57 (actual)

When adjusting the numbers for our building to a household basis for the solar year 2020, we get 4,476 kWh use per apartment per year. If we factor in our electrical production, we are down to 679 kWh per apartment per year. The numbers for our building include space conditioning (heating and cooling).

2020 solar year billing

Because the cost per kilowatt hour, service charges and net metering agreements vary by energy provider and service area, this section may be mostly useful to our Chicago readers.

Our electrical bills for the building for the solar year 2020 added up to $404.47.

As mentioned above, we did not pay for any electricity until our rollover credit ran out in January. We were still responsible for delivery charges on our bill (i.e. customer and meter charges). They averaged $12.83/month from April through December, leading to a total of $115.47.  Delivery charges don’t go away because we are still connected to and benefit from the electrical grid.

For January, February, and March, we paid a total of $289 for the 2,038 kWh deficit we accumulated for the building over those three months.

The table below compares our average bills on a apartment/household basis to those for residential customers in Illinois, based on 2021 EIA data.

Average month billAverage Electrical cost per year
Illinois household$95.86$1,150.32
One household in our building$11.24$134.82

More about our actual savings and ROI on our photovoltaic array in the next post.

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Photovoltaic array monitoring

A previous post covered how the inverter is an integral part of our 26 module, 8.58 kW photovoltaic array. Both, the inverter and the array, service our 4,500 sf building with its three apartments/households.

The inverter allows us to monitor our kilowatt hour (kWh) production in real time, either through an android/iOS or web app. The app interface also gives us access to historical production data, such as the past three years (2020 – 2022).

During those three years, the lowest monthly production on record was for December 2022 with a meager 273 kWh. Our worst production day was January 31, 2021 with 1 Wh due to a foot of snow on the modules.

June 2022 gave us the highest monthly production with 1,495 kWh, and the best daily yield so far fell on May 29, 2021 with 68.7 kWh.

Our array averaged 11,000 kWh in annual production from 2020 through to 2022, which is within 4% of what we were aiming for (11,459 kWh).

The 11,000 kWh for our 4,500 sf building breaks down into 3,667 kWh of self-produced electricity per household per year, or 305.6 kWh per household per month.

Annual production overview

Even though some months are sunnier than others, and despite the solar irradiation varying each year for any given month, the production across the year is remarkably consistent with an average of 11,000 kWh per year.

The overall small production decline since 2020 reflects the estimated annual system decrease, which is specified to average 0.26% per year for our Panasonic 330 watt modules.

While planning the system with our solar installer Lisa Albrecht from All Bright Solar, we targeted an annual production of 11,459 kWh. 11,000 kWh per year brought us within 4% of that goal. Some shading during the winter months from an adjacent tree was likely responsible for the 4% shortfall.

The “Estimated energy” is the minimum amount of energy we need to produce to fulfill our contractual obligations for the state solar incentive we received. The state incentive is based on how much kilowatt hours our 8.58 kW photovoltaic array is predicted to produce over the first 15 years. This number was calculated by our solar installer, and determined our total state incentive amount.

Monthly production overview

The data for the past three years on a monthly basis shows the expected seasonality in our production. We can also see the varying yield each year for any given month, a product of a given month being more overcast or sunny in one year than in another.

We are not always meeting our production goals between the months from October through to January. We have yet to meet the production goal for November, and January isn’t far behind. We suspect that the shading of the adjacent tree during these months is partially responsible for the lower than predicted production.

However, Lisa Albrecht mentioned that this is a trend across her portfolio and she assumes the region. Current forecasting models use 30 years of historic weather data to predict future performance. However, climate models suggest we may experience heavier cloud cover in Q1 & Q4 in our region as our winters warm.

The good news is that based on our net metering agreement the production goals are tallied by solar year, and the excess production during summer makes up for the underproduction in winter.

Worst production

Not necessarily a meaningful data point, but an interesting one. The absence of solar irradiation this past December (2022) manifested itself in a meager output of 273 kWh. Did snow cover have a negative impact? No. We only had two days that produced measurable snow, and I quickly cleared the snow from the array.

Out of the 31 days in December 2022, we had five sunny days (>20 kWh), two mostly sunny days (>15 kWh), and we had 15 gloomy days (<5 kWh). We had to turn lights on during the day for half of that month because it was so overcast.

The worst production day in the past three years was on January 31st, 2021 with a meager 1 Wh. We had a big snow storm moving through and there was no point clearing the snow off the modules until the storm system had left the area the next day and the wind had subsided.

Best production

No need to look any further than the height of summer. June 2022 with 1,495 kWh was the month with the highest yield so far, closely followed by July 2020 with 1,487 kWh.

The high solar irradiance in June of 2020 resulted in 19 mostly sunny days (>50 kWh) and only four mostly overcast days (< 30 kWh). Another 5 kWh in production would have given us a monthly total of 1.5 MWh.

Our highest yielding day in the past three years was on May 29th, 2021 at 68.7 kWh. That came as a surprise, because it was still a good three weeks away from the summer solstice. Humidity levels and the associated haziness around mid to late June must have kept yields below that of May 29th, 2021 for the past three years.

The above production data will set the scene for the next post, where we will compare it against our electrical use.

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Photovoltaic roof array shade study

While planning for our photovoltaic roof array, we were looking into optimizing the solar exposure. There are various online resources one can use, and there are site tools such as the solar path finder.

We did an assessment with the solar path finder tool, and knew that certain parts of the roof (or the photovoltaic array) would receive some shade around the winter solstice. With the photovoltaic roof array now installed, we could test those findings.

The biggest shade contributor, as expected, is the roof access enclosure. The good news is that by February 16th the sun is high enough over the horizon that the first row of modules no longer receives shade from the roof access structure.

The vent stacks to the right of the array are also shade contributors. But because all those vents were higher than they needed to be, I was able to lower them and reduce their shading potential.

We also knew that the American ash tree to the west would cast some shade in the afternoon. That tree has since succumbed to the Emerald Ash Borer, and we are now waiting for it to come down.

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Parapet coping

It is time to finish our never ending roof project with the crowning of the parapet. This coronation did not involve gemstones or precious metals, just a simple steel coping.

I had the coping manufactured by a local roofing supply company to fit the dimensions of our parapet. The one thing I had not manufactured were the turns or corners. Those I fit myself on-site.

I slipped each piece of coping over the cleats on the outside of the parapet while placing it, and made sure that the ends of each coping butt up against each other. On the inside of the parapet, I fastened the coping to the nailer about every 24 inches.

That was the easy part. The tedious part was to cover the seams between each coping section.

The roofing supply company supplied me with connectors that have the same profile as the coping itself, but are just a fraction larger. That way I could fit the connector over each seam. I first cleaned the coping and connector with rubbing alcohol. I then laid down a layer of high end silicone sealant around the seam, placed the connector on top, and carefully caulked it in on both ends.

Taking a look at the whole parapet assembly, we have the coping cleats on the outside, which hold the steel coping. On the inside we have the coping nailer, to which we fastened the coping, and the insulation and the cladding, to protect the roofing system.

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