Solar + Heat Pump savings… will you ever break even?🤔
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- Опубликовано: 25 июн 2024
- In this video, we talk about solar panels and heat pumps, and the actual break even period. there’s not a lot of information out there about how to actually account for the breakeven period for installing solar panels and Heat pumps, so in this video, we do a deep dive into an example that gives you a breakdown of how long it takes to break even and what the actual savings would be.
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Website for historic energy inflation calculations over any given time period.
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Interesting video, but one thing you left out was interest payments if you finance the solar installation. Most people will not be able to pay 40k up front for this type of installation.
I agree this is a valid point and I could have included it, but I was trying to limit factors and keep it simpler. But that’s probably something I could have added. Most of our jobs are either check or card (for “mileage” or rewards), or 0% promotional financing… in my experience people piecemeal these expenditures over the course of a few years not all in one lump to avoid exactly what you’re pointing out.
on top of that as someone who can pay cash for solar, its normally better to put that money into an investment
If you were building a home and had a 30K grant with 2 options (1) High efficiency heat pump with solar panels. (2) improve your building envelope. I would make the case for the better building envelope that reduces energy use by 75 to 90% less energy through great air sealing and upgrade windows, doors and insulation.🎉
I would 100% agree!! This is the best way to improve efficiency is reduce your heat loss.
Only thing I’ve wondered about is how to go about making sure your envelope isn’t so tight you don’t get enough air exchange? I’ve never understood how HRV’s worked without degrading efficiency at the same time because they’re bringing in outside air. I guess it’s less that the heat exchange ? I’ll have to look into this more but excellent comment and I agree. I’ve seen people insulate everything, and do windows / doors weather stripping / siding and cut their bill by more than half without replacing their HVAC. It’s wild how much of an impact this makes and is often taken for granted.
I live in Alberta Canada. We have a solar club of retailers. When my solar exports more than I import they switch me to the higher summer rates. In the fall they switch me back to the lower rate. The credits I get cover 100% of my power and the remaining credits cover most of my gas.
Sounds like it’s working out!
I built a house south facing that sees sun all day. We have a 24 panel array paired with a Hybrid Heat Pump/LP Furnice. I live in NH. We save so much money every year on whole house running expenses with this setup!
That’s awesome!
Your $81.36 calculation - that is not how inflation is calculated over time. You need to multiply the value at the end of each year by 1.0339 to get the value for the next. At year 20 you should be at $4521.
You’re correct 😁 for what it’s worth I didn’t use compounding interest I was trying to keep the video simple because the truth this is this is all guesswork anyways and there’s a lot of factors that could throw it off. Hyperinflation and / or deflation being one of them and both are very likely now depending on what the fed does and when…
@@TheHVACDopeShow for what it's worth, I had the same thought as they did - you are not calculating the impact for inflation to energy prices correctly. I took away from the presentation. If you are using the historical average of inflation of energy prices, then you reply about hyperinflation and deflation is a bit moot. The historical average is a good as you are going to get in regards to a data point, especially of you are going back over 20 years. I think there is a big difference between "guess work" and using valid data points to calculate a ROI for an investment. Yes, there will be a statistical variance factor, but I would not call it "guess work."
Been there, seen that. The moment people start going off grid in any noticeable numbers, the new tax will be introduced on those who don't "pay their hair share"
Probably right!
I know this is all sort of a rough estimate, but shouldn't inflation be calculated as a compounding effect, rather than a linear, simple-interest type progression?
Yes you are correct 😁 many people have pointed this out lol… I was trying to keep it simple, had several comments on a few other videos stating some of the videos are overly technical or complicated so I errored on the side of simplicity because this is all guesswork anyways. Truth is if the economy crashes or a global catastrophe or hyperinflation or stagflation or energy prices skyrocket or plummet or 1 of 100 other factors happen, then these calculations kind of go out the window so I was just trying to provide a cautious conservative easy to read estimate.
Where do you get the $38000 price? It's not even half that for a heat pump and solar to run it.
Median price including installation for bids I’ve seen, not sure what type of heat pump or solar you’re buying (single mini split and a few panels?) but our parts cost is higher than that on some installs… not sure when the last time you priced stuff is but quality items are not cheap.
Good breakdown but you forgot one major flaw. Based on your chart, if that $40K is invested compunded at 7% rate of return. That person would never pay a utility bill because his investment would easy pay the $200/month. Essentially that person will never have to pay any utility bill until the rate of utility inflation surpass the investment which could be well over 50+ years.
Solar + heat pump never make sense if the initial cost is in the tens of thousands of dollars. These units have a life cycle between 20-30 years and you also have to take in degradation of the panel at 1% lost/year. These things don't last forever.
Sorry but your math is flawed, that's why you didn't want to go into the finace or leasing option because it doesn't make sense.
Finance or lease adds interest expense but what you’re saying is correct and won’t argue that…
But it’s also leaving out the fact that you can’t just invest every dime and delay consumption forever. You’re still going to live somewhere and need heating and cooling and electricity so yeah you’re right but you’re thinking is also flawed. And this isn’t a finance channel. For what’s it’s worth I live by the way you think (invest in assets that produce Cashflow and rate of return instead of consuming “stuff” we don’t need) but I also spend money on infrastructure because if the power went out permanently tomorrow and you’re sweating bullets would you care more about a random number in a computer? Or about the fact you’re self sustaining and have power independence. It’s just a balancing act I’m not saying spend all your money on heat pumps or solar, I’m just putting out the info as food for thought
@@TheHVACDopeShow Don't get me wrong, I want to get into solar and battery backup with heatpump. Currently, the issue is that it doesn't make financial sense even looking at it from a long term perspective. It's a huge investment. Yes, your channel isn't a finance channel but you are alluding to a financial question of "savings, and break even". The cost is the major hurdle as those who need it, can't readily afford it. These cost will need to come down significanlty in order for the math to make sense in any of the solar/heatpump setup. There are other aspects where need/want outweigh the financial aspect but for most it is not financially sound. I have an all electric lawn equipment from EGO except the zero turn mower as I went back to gas because the equipment didn't meet my need. Gas vs electric for these lawn equipment or even cars are a slight premium but solar is entirely an investment cost that majority just can't afford.
A similar case to why EV adoption is going to take a bit longer than most would like. I drive an EV and the charging infrustrure is bad for long distance trip. YOY EV sales are gaining market share and I do feel that way about solar, heatpump, battery backup, geothermal, etc; that it will become more mainstream but not at it's current state from a financial standpoint.
I watch many of your videos regarding heat pumps, but joining them with solar panel system seems to add a complexity and cost that may not produce the cost savings within the life expectancy of the unit or panels. Every time I watch a video, yours included, on heat pumps they seem to be getting more complexed every year which seem to equate to an increased cost of repairs when needed. I’ve been in maintenance all my life and I look at things from a reliability and simplicity perspective. I will spend more upfront if I see a product that has reliability, good customer support and reasonable cost in repairs. I know that that you often mention the Daikin brand. Do the have heat pumps that have a simple operating design that would pair with adding solar panels at a later date?
It's as complex as a refrigerator. So, it's not complex at all from a maintenance and reliability standpoint.
The heat pump is completely unaware of the solar panels, as they are separate. You aren't adding complexity by having both, but you get the benefits of them working together (solar providing electricity, and heat pump powered by electricity to give you heating - or cooling in the summer).
Valid concern, and I agree with some of the responses. It’s not anymore complex to add solar… as far as higher end equipment having higher repair costs that can be true but it still typically outweighs your operating expenses on a simple basic system. The name brand inverters we discuss like Daikin Mitsubishi Carrier Trane etc are all relatively reliable. Some will have more issues than others / recalls etc periodically but that just happens in general. I’ve had similar warranty experiences across all brands which is why we’ve been selling Daikin for a while now since they’re very reliable about making the warranty process simple for us as contractors.
Your calculations have some fundamental errors.
1. They don't take into account compound interest that could be earned on the initial cost of the heat pump and solar if the money had been invested instead.
2. Inflation compounds like interest, by a given percentage on each year's cost, not on the first year's cost.
3. The first year cost on utility bills should be $2400. Inflation happens over time, like interest, not instantaneously.
Also, did you include the cost of batteries in you solar system? If you are going to run your house on solar 24/7/365, you will need very large batteries to store enough power for nights, cloudy days, winter, etc.
You only need batteries for backup if the power goes out, grid tie is net metering, and I tried to keep the video from being unnecessarily complex thus using simple interest although I realize inflation is compound interest - meaning the savings are understated not over. You wanted me to factor in opportunity cost too? Lol it’s just a video about solar panels and heat pumps, not investing… and that would make it unnecessarily complex and off topic if I factored in average returns on the stock market ~8% and then basically came to what conclusion? “ok don’t spend money on ANYTHING FOREVER because you could be earning interest on it…” thanks for the comment, agree to disagree 😁
There is soo much bad math here and false assumptions. My neighbors are getting scammed right and left with this type of sales tactic.
Make a video about it then instead of trolling in the comments… what’s the bad math? Simple interest vs compound? Lack of opportunity cost? It’s a simplified video about a complex topic with infinite variables…
@@TheHVACDopeShow for starters since you said you were in the phoenix area, the summer on peak rate for SRP in 2013 was .1907/KwH and in 2024 it is .2270/KwH. Annualized that is only 1.59% per year increase. So your compounding is way off. 2nd you dont account for all the fees the electric companies add when you switch to solar which kills any returns you are going to get. There is not enough space on youtube to argue every bad thing you said in this video.
"Grandpa.. how come you didn't stop climate change and destroyed the planet?"
"Well.. the break even of the ROI didn't make a good investment so I kept just burning greenhouse gases for you to deal with.. "
“Because I lived in an apartment and couldn’t afford a house”
Climate has naturally changed in the past, is changing now, and will change in the future.
Carbon dioxide is plant food to help feed the billions of people on the planet. The added greenhouse warming is most likely LESS than the natural change that was already taking place as the planet came out of the Little Ice Age (LII). Climate is getting MILDER, NOT more extreme. Average temperatures are increasing because LOW temperatures are increasing (primarily at night, at higher latitudes, in the winter), NOT high temperatures. Extreme weather is NOT increasing, just extreme headlines.
Biodiversity is greatest in the tropics (where it is warmest) and least at the poles (where it is coldest). Polar bears and coral reefs are doing great (if you check the actual facts, and not extremist MSM screams).
Ocean level rise started in the mid-1800s naturally due to the end of the LII. Greenland got its name when it was settled by the vikings during the Medieval Warm Period before they were driven off by the natural climate change of the LII. At current rates of melting (definitely not a given due to natural cycles of change), it will take 14,000 years for Greenland to melt and 168,000 years for Antarctica to melt.
Don’t buy every headline… I’m pretty neutral on this stuff because although it’s no doubt we’re impacting our environment by existing, the truth is heat pumps and solar panels still have a thermal signature and would still cause “climate change” because a heat pump generates heat while it operates… also solar panels have heavy metals in them and if you look at the heavy metal toxicity issues associated with solar waste it’s a real issue. The reason I don’t get into heat pumps and climate topics is because it’s fuels divisiveness and there’s no data about the thermal footprint of EV’s or Heat pumps being talked about in any media (mainstream or otherwise). But if you look at what a heat pump does it literally rejects heat, and a byproduct of electricity is heat, and therefore should be accounted for in the equation/conversation but it’s not for some reason. In any event, thanks for watching and thanks for the comments!