RetireJapan

Teflon wrote: ↑Mon May 10, 2021 11:15 pm We can assume this is a highly unrealistic scenario under pristine climatic conditions and stable, non-depreciating land and solar asset values. In reality, the solar panels will depreciate by about 90% over the 20 years leaving you with 1,000,000 + (0.1 x 1,654,000) + 163,000 = 1,328,400 on your initial investment of 2,654,000 yen for a net loss of 1,325,600 yen.

I don't think this is quite right. You've deducted the cost of the panels twice. The 163,000 is the net profit after repaying the initial cost of the panels, so the assumed residual value is already zero. Also, commercial units will have a higher capacity and a lower cost per kwh than the domestic unit in this case. I'd still rather have my money in stocks though...

fools_gold wrote: ↑Tue May 11, 2021 2:27 pm

Teflon wrote: ↑Mon May 10, 2021 11:15 pm We can assume this is a highly unrealistic scenario under pristine climatic conditions and stable, non-depreciating land and solar asset values. In reality, the solar panels will depreciate by about 90% over the 20 years leaving you with 1,000,000 + (0.1 x 1,654,000) + 163,000 = 1,328,400 on your initial investment of 2,654,000 yen for a net loss of 1,325,600 yen.

I don't think this is quite right. You've deducted the cost of the panels twice. The 163,000 is the net profit after repaying the initial cost of the panels, so the assumed residual value is already zero. Also, commercial units will have a higher capacity and a lower cost per kwh than the domestic unit in this case. I'd still rather have my money in stocks though...

Ah yes, you are right. Thank you for the correction! Clearly the coffee hadn't kicked in yet when I typed that up this morning.
And I agree with you that sticking the money in stocks is still a much better investment.

With regard to commercial units, my understanding is that anything over 10kW is rated as commercial and then the Feed In Tariff (FiT) drops dramatically which negates any efficiencies of scale. Seems like the government wants to discourage businesses from gaming the system since the FiT is actually paid for by higher electric bills for everyone else.

Teflon wrote: ↑Tue May 11, 2021 3:29 pm With regard to commercial units, my understanding is that anything over 10kW is rated as commercial and then the Feed In Tariff (FiT) drops dramatically which negates any efficiencies of scale. Seems like the government wants to discourage businesses from gaming the system since the FiT is actually paid for by higher electric bills for everyone else.

That's a good point. The farms I see on my way to work are on plots that are 3 or 4 times the average house size, but I've no idea about the capacity. I guess there must be some profit in it otherwise people wouldn't bother doing it. It seems like a lot of hassle to me though...

fools_gold wrote: ↑Wed May 12, 2021 11:40 am

Teflon wrote: ↑Tue May 11, 2021 3:29 pm With regard to commercial units, my understanding is that anything over 10kW is rated as commercial and then the Feed In Tariff (FiT) drops dramatically which negates any efficiencies of scale. Seems like the government wants to discourage businesses from gaming the system since the FiT is actually paid for by higher electric bills for everyone else.

That's a good point. The farms I see on my way to work are on plots that are 3 or 4 times the average house size, but I've no idea about the capacity. I guess there must be some profit in it otherwise people wouldn't bother doing it. It seems like a lot of hassle to me though...

It's not a competitive form of energy because it's intermittent and expensive. The only reason it's popular is because of the FiTs, tax credits, loan guarantees, and other government subsidies. It's just another political gravy train and if you have the right connections you can get on the train.