Do you have solar panels? If not, why not?
As part of our investigation into house builders something has come to my attention.
It seems like under the current rules, putting solar panels on your house is close to being a no-brainer: most house owners should be considering it seriously.
The system as I understand it works as follows:
You can install two types of systems: under 10kW (classified as domestic) and over 10kW (classified as commercial). A domestic system can use some of its own electricity and sell the rest. A commercial system must sell all of the electricity and cannot use any.
This site has price comparisons updated monthly. We were quoted 3 million yen for a system just under 10kW by a house builder.
When you install the system you are guaranteed a special rate to sell your electricity at for ten years. This year the rates are 30 or 28 yen per kWh (for a domestic system and depending on where you are), falling by 2 yen next year (and presumably being phased out over time). A commercial system gets a lower rate. You get to keep the same rate for ten years after signing up.
Unfortunately the government has chosen to phase out most of the subsidies (I think we can get 60,000 yen per installation here in Miyagi), but even without them the maths seems to work.
Predictions for how much you'll be able to sell electricity on the open market after the preferential rates end seem to be around 11 yen per kWh, but there are no guarantees here.
The simulations I have seen seem to indicate that by using some electricity in the day when rates are high (33 yen?) and selling the rest you should be able to pay for the cost of your panels in around ten years' time. You would pay for cheap night-time electricity normally during this period (11 yen?).
Once the panels are paid off, you then get free electricity for the rest of their working life (estimated at 25-40+ years).
The recommended strategy seems to be to sell electricity while you have access to the special rates, then once they end buy a battery so that you can charge it in the day and use it at night. You may also be able to sell any excess power for a small bonus.
Batteries are improving rapidly at the moment, both in capacity and cost. The Tesla Powerwall doubled in capacity in one year (from 7 to 14 kW). Tesla Powerwalls currently cost about 800,000 yen and can run a normal house for 2-3 days.
Right now a large number of companies are developing and selling batteries for cars and buildings, so I predict batteries will have much higher capacity and cost much less in ten years time.
Another benefit of having a battery is that during earthquakes or power outages there is a good chance you will have power. This probably doesn't sound so great until the power goes out for several days. Then it's wonderful.
You may also be able to use an electric car's battery as storage for your home, giving you more capacity if you need it.
There are of course many unknowns. How long will the solar panels last? How about the inverters and other equipment? Will it be possible to sell electricity after the ten-year period? Will grid electricity get cheaper or more expensive in the future? Will daytime electricity end up cheaper than night-time as panels become more common? Will solar panels become cheaper and more efficient, making it better to wait?
For me there are three other non-financial benefits to installing solar panels. I believe a quick transition to renewable energy is desirable for a number of reasons. By installing panels we can make future solar installations cheaper by increasing economies of scale, reduce demand for grid electricity, making it harder for the government to ignore renewable energy, and reduce emissions locally.
Eventually I also plan to get an electric car and charge it from the panels, for basically free transportation. Electric cars are predicted to last 4 times as long as internal combustion engine cars, mainly due to them having fewer moving parts.
So what do you think? Am I understanding the situation correctly? Is it really a no-brainer to get panels? What's your experience with solar installations? Did anyone seriously consider getting solar and then decide not to? Why?