OK, this is the first quote I found doing a simple Google search:
"Let's Be Realistic About Solar Economics Today
Solar electricity still costs more than fossil fuel electricity. Despite the fact that sunshine is free, it is still economically impossible to invest in a photovoltaic (PV) system and beat the per unit price advantage utilities have achieved for power generation through economies of scale and the low cost of traditional fossil fuel technologies. The installed cost per watt for PV technology continues to go down, but it has not yet reached a competitive level. This is why the simple payback calculation will consistently yield a discouraging result when used to analyze the return-on-investment for a residential renewable energy system."
Source: (broken link removed)
They go on to say:
"Increasing energy efficiency remains the most cost effective way to reduce the impact of fossil fuel use."
I certainly don't disagree with that and I doubt anyone would. An added perspective is that buying new fridges and a/c units helps the economy in America, compared to PV units that are primarily made in China. Helping the US economy helps all of us by lowering taxes and lowering the debt, in addition to helping the environment.
Next is the Minnesota Dept of Natural Resources Solar Payback Calculator:
(broken link removed to http://files.dnr.state.mn.us/aboutdnr/energysmart/solar_payback_calculator.htm)
This should be somewhere near you jebatty. I used Minneapolis with $.12 KWh for electricity rate since that's the national average number I could find (
http://www.npr.org/blogs/money/2011/10/27/141766341/the-price-of-electricity-in-your-state) plus 25 KW system, $4. PV cost /watt, zero rebates and 2% inflation and price increase with zero maintenance. The payback is 21 years or 3% ROI. If I got 3% ROI on any investment, I would fire the fund manager. My wife got 16% last year for her retirement fund and it's a conservative fund. Last year, the DJIA was 25.41% The returns for stock markets in the past 5 years are: DJIA 12.95%; S&P500 15.20% NASDAQ 21.33%. I've done a some searching for the current cost of solar panel systems and I can't find an accurate number. Either the information is outdated (see burning cutlery below) or industry BS. I want something that takes into account the recent costs with imposed anti dumping charges, inspections, and especially the cost of panels if they were manufactured without gov't rebates or incentives. I strongly suspect that you cannot buy panels that have not been made without gov't assistance. I used the $4. provided because I can't refute it (yet). So, really, if you are getting 3% ROI and could have got 13% by putting your money into DJIA, you are losing 10% /year for the last 5 years. That's a BAD investment looking just for a $$ point of view.
In your chart, you are using a 5% increase in electricity rates but 3.5% inflation and 3.75% investment. All of these are BS. No one can project the increase in hydro prices but tying it to the rate of inflation would be more fair. The avg. rate of inflation in the US for the past 5 years is 1.736%, so I used 2% for both.
Even though I believe the payback is closer to 30+ yrs without gov't incentives, the bottom line is that I consider 21 year payback to not be viable for the vast majority of people. You disagree and that's your choice but the general public agree with me and that's why so few solar installations are being constructed, even with gov't rebates. It has just not become widely accepted. If it were a 10 yr. payback, everyone would be doing it, don't you think? No doubt the fiasco of fed $$ into failed solar mfgs. and the conviction of China for dumping solar panels on the US market has had some impact.
http://www.bloomberg.com/news/2012-10-10/u-s-sets-anti-dumping-duties-on-china-solar-imports.html
Here's another consumer installation:
http://burningcutlery.com/solar/
Great site with lots of info. Their cost was $9. KW prior to any gov't rebates. Only after you add in all the rebates of 65% of the total cost did they manage to work out a payback of 12 years. Without rebates, the payback becomes impossible. Also, they clearly show photos of snow covered panels, which can be cleared if you are willing and able. In my brother in laws case, he's 62 and in ill health. That's an added cost (or lack of power & $$) if you have to hire someone to clear them. Also, it a fairly dangerous job with a fair expectation of problems.
The other factor is the value or cost of the system both through it's life span plus at the end of it's life. As my brother in law found out, it costs a great deal to remove the panels and reshingle when they are installed on a roof. There is also the upkeep and maintenance. He's already had 2 panels that have become defective and were replaced under warranty but once the warranty expires, the panels become expensive to replace. The BIG concern I have is the rapid changes in the industry with new technology making the old systems cost in-effective and the resulting disposal of them. I don't know anyone who does not believe that we will see significant changes in the industry in the very near future. Investing significant $$ in a system today IMHO is just not wise IF you are already have easy access to the grid.
Lastly, using a PV system is only viable when can rely upon power from the grid to provide power when there is no sun or unless you invest substantial $$ in a battery system. Both solar and wind power generation have real drawbacks. In our area, the high cost of electricity in the winter is early morning (7-9 am) and early evening (5-7 pm). Exactly when solar panels are producing nothing. Funny that. So, if your panels are producing power at non-peak times, when no one is home, how much value does it really have when you use the power at other times?
BTW, I have no idea what the breakdown of costs were for my brother in laws system. I have not been to his house in 2 years and not spoken of the system since them. I do get to hear 'things' when my wife talks to her sister though. I know he almost fell off the roof when shovelling snow off the grid. I've got 2,000 sf of flat roof facing south and the solar salesmen (vultures) have called on us a few times. I had a long discussion one and the guy knew very, very little - just how to make a sale. I am not anti gov't but as I stated earlier, IMHO, gov't money is better spent on people reducing their power usage though conservation than supporting PV or wind turbines. In Ontario, there's been a HUGE outcry over the thousand plus wind generators that have been installed and property values near them have plummeted. That's another discussion entirely.
I will jump when the price of PV systems come down to a realistic level and the output comes up to a realistic level. Until then, I use as little power during peak hours as possible and keep the wood stove running hard.
Back to you