Pololu's 305kW solar generation system: Was it worth it?

October 2024 marked one year of operation of our 305 kW rooftop solar power generation system. In this series of posts, I will reflect on our installation and operation experience over the past two years to try to assess whether it was worth it. This first post covers some background leading up to the project and the overall system design. I will detail the installation process, the first full year of operation, and the production and financial results in subsequent posts.

With oppressive abundance of sunshine and solar panels seemingly on every other house, it’s difficult to live in Vegas without yearning for a solar system of your own. The Mandalay Bay convention center has had lots of solar panels for a while, and I remember particularly lusting over those.

Lots of solar panels on the Mandalay Bay convention center.

But every time I looked into it, it didn’t make sense. Electricity here is quite cheap and has been extremely reliable: I have experienced only a few blackouts in the nearly 25 years I have lived here, and one of those was when a car hit a transformer just down the street from us. The explanation that was most helpful in keeping my longing under control was that however much solar technology might have become cost-effective, it would still be more effective to put a bunch of the panels on the ground in the desert 20 miles away than to put lots of separate little installations on irregular roofs.

Build Back Better Act/Plan and Inflation Reduction Act of 2022

With the big Build Back Better and Inflation Reduction Acts of 2021 and 2022, solar energy and government subsidies for it were in the news a lot. I think the Build Back Better Act ended up not really happening or maybe it turned into the Inflation Reduction Act, but in any case, that final thing went through in August 2022 and included in it was a 30% subsidy for solar power installations. With the new law actually in place (as opposed to speculation about what would probably be included), I started looking into the numbers again, along with any requirements and limitations that might apply to us.

Net metering and good Pololu business in 2022 expand project from 100 kW to 300 kW

We ruled out any battery or storage aspects very early on based on expectations that it would be too complicated and expensive, and we initially considered a system size of around 100 kW based on estimating that we would certainly use all the power and that the system could fit on our roof. As we looked into it more, it seemed that NV Energy, our local power provider, offered net metering and would even give us 100% credit for the power we put into the grid. That would effectively give us a free storage solution, and that allowed us to expand the scope of the potential project to one that at peak output would generate much more than we consumed instantaneously and that could cover our entire power consumption over the course of a year.

It helped a lot that after a down year financially in 2020 (we were happy to have survived at all), we rebounded in 2021, and in 2022 we had our best year ever. We passed our previous record annual revenue by 7%, which by itself might not have been that big (maybe just keeping up with inflation), but we did it with 30% lower employee count than we had at the beginning of 2020. So with our cash reserves looking better than ever and trending in a good direction, the project size expanded from 100 kW to 300 kW.

Initial bids came in around $575,000 to $775,000

We got bids from three companies. Two did primarily residential installations but had done some commercial projects, though not as big as ours, and one was just commercial or industrial and our project probably would have been on the small end of what they did. They were initially around $775k, while the smaller companies came in just under $600k and $700k. We ended up going with the more expensive of those two based on them seeming to have more experience with commercial projects and our preferring some details of their proposals and operations (including things like how much money they wanted in which stage of the project).

It wasn’t great that in late November I finally came down with COVID-19 for the first time and it knocked me out of commission for a few weeks. But we got the agreement worked out by the end of December, and I signed the contract on January 3, the first business day of 2023.

Final proposed system

The proposal we ended up committing to was for 630 solar panels in roughly this layout:

Proposed Pololu solar installation layout with 630 panels.

These were the main equipment details:

• 630 Hanwha Q Cell 485 Watt solar panels – datasheet (1MB pdf)
• 315 SolarEdge P1101 optimizers – datasheet (334k pdf)
• 3 SolarEdge SE120KUS inverters – datasheet (1MB pdf)

With 630 of the 485 W panels, the nominal system size was 305.5 kW. We had seen mixed reviews about optimizers, but for the scale of our system it seemed like the companies were not even offering other options, and being able to monitor the performance of the system down to a resolution of pairs of panels was appealing and probably turned out to be helpful later in the project.

We went with a ballasted racking system that would add 10° to the solar panel tilt without having to make any roof penetrations. Our roof slope is around 3°, so that would make the final panel angles around 13° on the south side and 7° on the north side (optimal for our latitude is around 18°).

Target schedule

2021 and 2022 were marked by shortages of all kinds of products, and one reason we chose the company we went with is that they assured us they had enough stock and good supply connections to cover all the optimizers and inverters called for in our system. We wanted to have the system running by summer to get the benefits during our peak power consumption months. The main schedule estimates were:

• start of installation: mid March 2023
• project completion: end of May 2023

Cost and estimated payback period

Our total system cost was $650,000. This portion of our contract shows some of the system details and estimated energy production over the course of a year:

With the 30% federal subsidy (the $195,000 in the summary above), the $650,000 system cost would drop to $455,000. The solar companies also push other potential tax benefits including that $165,750 bonus depreciation also listed there, but that doesn’t seem valid to me because they do not do a corresponding offset for the future electricity cost expenses we would no longer be deducting. With their rosier assessment, they were estimating the system could pay for itself in under five years.

I justified it to myself with a more conservative estimate, hoping that the system would generate at least 500,000 kWh (500 MWh) per year, which at $0.10 per kWh would be $50,000 per year for a 9-year payback period. If generation results ended up better and electricity prices kept going up, maybe the system could save us $75,000 per year, which would cut the payback period down to about six years.

One complication in the early estimating and approval stage was that NV Energy was questioning whether the system was too big for our power needs. They were using our power consumption numbers from 2020-2022, which we told them were very distorted by how the pandemic had changed our operations. In the end, our proposed 305 kW system was close to the maximum limit of what we could afford, what could fit on our roof, and what NV Energy would be willing to sign off on.

Read my next post to see how the system installation turned out!