Interesting facts about solar power

[Big_Hitter]

solar salesperson came by yesterday to set up a meeting - about how much does a 40 panel system cost to install?

 

[ERD50]

I think LEDs are getting some subsidies from power company instant rebates. They are also getting a synthetic subsidy by the recent $0.25 surcharge per bulb on CFL.

I'm not aware of the CFL surcharge - yes, there are some utility rebates at times/locales.

But I'm pretty sure these are pretty small compared to the solar PV rates that residents can get.

For example, I think that CREEs main market is commercial buildings - they have lights on for many hours/day, use tube fluorescent as they are the most cost effective of current tech. But tubes dim over time, and need replacement (labor, lost efficiency), and the light isn't the most pleasant. So a relatively expensive LED can make sense when it is on 24/7/365 for years.

And that is how tech adoption works - a new technology might not be a 'no brainer' when first introduced, but it might make sense in some niche applications. As the tech improves over time, there are more and more applications where it makes sense. Or if the tech does not improve, it stays a niche. We see that happening with LED over CFL now. LED had many advantages, but was still too expensive. Over time, value improved, and the CFL can't keep up. The marketplace wins again!

And if the LED that only made sense in 24/7/365 applications comes down in price enough, it starts making sense for consumers in high usage sockets, and eventually medium usage (I expect I will be sticking with Edison bulbs for closets, attics and such for a long, long time).

-ERD50

 

[ERD50]

I installed a metal roof a year ago last winter and was really surprised by the savings. My peak summer electrical bill the prior year was $170 or so. Last summer my peak bill was under $90. I live in midwest so we get the summer heat. The light colored roof reflected so much heat it usually was late afternoon before AC kicked in. And the best thing was no "payback period" as installing the metal roof over existing shingles was cheaper than replacing the shingles.


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Nice. And this link I posted earlier:

http://www.lazard.com/PDF/Levelized Cost of Energy - Version 8.0.pdf - edit - hopefully fixed link

shows that hands down (I'm using technical language here), conservation is the cheapest $/MWHr investment we can make.

-ERD50

 

[scrinch]

I think we have the proverbial "failure to communicate". I am saying just the opposite. Subsidies do not kick start innovation, they stifle it. Subsidies encourage the seller to sell the current design, at a profit, because the consumer does not pay the full price.

Agreed. I was saying that subsidies resulted in a larger market for solar panels. The larger market resulted in more interest by manufacturers. More interest by manufacturers led to more R&D and large scale manufacturing investment. More manufacturer investment led to the 7.5x drop in PV panel prices that we have seen over the past 15 years. Are you suggesting that you think that the prices would have gone down more than that with fewer people buying panels in the US and Europe?

I understand the concept of price supports having the potential to stifle innovation, but not in a nacent tech industry like this. The huge size of the prize stimulated by US and European subsidies is clearly what brought all that capital to bear on PV design and manufacturing. Whether it has brought it down to levels that are competitive with other forms of power (including externalities) is another question. Now that there is lots of capital in the solar manufacturing industry, maybe it is time to withdraw the subsidies and let the industry innovate on its own to compete in the open power market.

That's the nature of the beast, wishing won't change it.

I wasn't wishing, I was responding to CardsFan's comment comparing the rate of change in the price of consumer electronics to the rate of change in the price of hardware installed on the roof. Pointing out that local installation make them different animals.

The panels are mass produced in large quantities already - after a point, the increased volume doesn't cut costs much, the curve flattens. But as pointed out, the labor for installation just isn't something that is going to respond in that way.

And I was pointing out that PV panels have already come down in price by a factor of 7.5 in the past 15 years. I think the rapidly growing size of the solar market in large part drove those prices down. And that growth was driven by subsidies. So I'm disputing that the subsidies have kept PV panel prices artificially high and stifled innovation.

 

[bld999]

Nice. And this link I posted earlier:

http://www.lazard.com/PDF/Levelized%...sion 8.0.pdf

shows that hands down (I'm using technical language here), conservation is the cheapest $/MWHr investment we can make.

-ERD50

ERD50, your link is fritzed, at least for me.

How these comparisons are accounted for in dollars is important, ie, cost would exist to tie large utility scale solar to the grid in cases where available land is far from the opportunity. Very large roof area buildings leased to utilities would not suffer that cost.
How big the accounting ring-fence is makes a difference in terms of achieving apples to apples.

 

[daylatedollarshort]

Interesting paper here, though LOTS to wade through:

http://www.lazard.com/PDF/Levelized%20Cost%20of%20Energy%20-%20Version%208.0.pdf

But what stood out to me is - they consistently show that a utility scale installation of solar PV costs less than half (without subsidies included) compared to residential rooftop (with subsidies included).

And of course, those subsidies come out of our pockets, so it's a shell game anyhow. So more like 3x cheaper to install at utility scale.

So if we stopped this silly notion of paying people to put the panels on their residences, the same $ could have installed about 3x the amount of solar panels, and everyone would share in any cost savings, rather than an elite few who can afford them (with help from everyone else).

If you are an environmentalist, wouldn't you want 3x the panels installed? Or the same number with 1/3 the money, and spend the rest as the price comes down, and/or on R&D? The price reductions seem to be just about inline with the payback period, it pretty much pays to wait.

-ERD50

Our utility company is starting solar farms and consumers have the option to choose all solar power. But the kicker is the solar power option costs more, at least for now. Directionally, our roof top is not situated the best for solar panels. It does seem to make much more sense to do it at the utility level. But our top tier rates are already 3 times the average U.S. electricity rates. I can't see offering to pay more. So at our house that brings us back to conservation as the most cost effective choice.

 

[ERD50]

ERD50, your link is fritzed, at least for me.

How these comparisons are accounted for in dollars is important, ie, cost would exist to tie large utility scale solar to the grid in cases where available land is far from the opportunity. Very large roof area buildings leased to utilities would not suffer that cost.
How big the accounting ring-fence is makes a difference in terms of achieving apples to apples.

sorry, chrome uses an extension to open these pdfs in a browser window, and it seems to mess with the link, try this:

http://www.lazard.com/PDF/Levelized Cost of Energy - Version 8.0.pdf


-ERD50

 

[samclem]

Our utility company is starting solar farms and consumers have the option to choose all solar power. But the kicker is the solar power option costs more, at least for now. Directionally, our roof top is not situated the best for solar panels. It does seem to make much more sense to do it at the utility level. But our top tier rates are already 3 times the average U.S. electricity rates. I can't see offering to pay more. So at our house that brings us back to conservation as the most cost effective choice.

These situations and many others would seem to offer the opportunity for individual fractional ownership of large industrial-sized PV installations. People could buy X sq ft of panel that is installed on warehouse rooftops somewhere, probably in the service area of their utility. The output from that gets credited against their utility bill through net metering. Installed cost per watt and maintenance should be a lot less expensive than an installation on residential rooftops. The square feet could be bought and sold to others. Crazy govt subsidies could flow to the individual owners just as they would if the installation was on their rooftop. It seems silly that, to own the PV output, we need to put the panels on our individual rooftops where they are more expensive to install, more likely t be damaged, less likely to be optimally pointed, more likely to be shaded, etc.

Is this being done?

 

[ERD50]

Agreed. I was saying that subsidies resulted in a larger market for solar panels. The larger market resulted in more interest by manufacturers. More interest by manufacturers led to more R&D and large scale manufacturing investment. More manufacturer investment led to the 7.5x drop in PV panel prices that we have seen over the past 15 years. Are you suggesting that you think that the prices would have gone down more than that with fewer people buying panels in the US and Europe?

First of all - got a link for that? My searching showed very different numbers, but time for others to do some work, rather than just throwing out nice-sounding statements with no back up.

Second - how much of that 'price reduction' is actually dumping by the Chinese, which is just another govt subsidy, not a reflection of the true price.

And yes, I am saying that fewer people buying something can cause the price to go down. I've said it again and again - the manufacturer needs to work harder to make their product compete, so (if they can), they work to bring the price down. Look at a supply/demand curve from Econ 101. I the general case, when demand goes up, prices go up.

I understand the concept of price supports having the potential to stifle innovation, but not in a nacent tech industry like this. The huge size of the prize stimulated by US and European subsidies is clearly what brought all that capital to bear on PV design and manufacturing.

It's not clear to me. How can this be clear and known for certain? I think it is clear to you because you want it to be clear to you. And did anyone really gain by buying solar at high prices (including the subsidy in the real price), before R&D brings the actual costs down?

Now that there is lots of capital in the solar manufacturing industry, maybe it is time to withdraw the subsidies and let the industry innovate on its own to compete in the open power market.

Good luck with that. Too many groups making money from these subsidies that will scream.

I think the rapidly growing size of the solar market in large part drove those prices down. And that growth was driven by subsidies. So I'm disputing that the subsidies have kept PV panel prices artificially high and stifled innovation.

You continue to have it backwards. Growth does not drive prices down, better prices (value actually), drives growth. Most of my career was in a high growth, high tech industry. I've seen it first hand. Been there, done that.

Yes, there can be some interaction there. Some large capital investments in automation maybe cannot be justified at smaller volumes. But in most cases, this works itself out naturally - as I've illustrated several times, a product often starts out with relatively small volumes, it is expensive, so only has a niche market. But tech advances bring the piece down, expanding the market. That allows for a little more capital investment, bringing prices down further, expanding markets further, rinse repeat.

Can that be kickstarted by artificial demand? Maybe, but it isn't clear that would be the case, and it certainly could stifle it as we have stated. Just look at all the successful tech that grew without subsidies. Too many to make any sort of claim that it is a requirement or that it was the cause in a specific case. Clearly, good tech rises to the top without subsidies.

-ERD50

 

[bld999]

These situations and many others would seem to offer the opportunity for individual fractional ownership of large industrial-sized PV installations. People could buy X sq ft of panel...

...Is this being done?

Yes it is.

Seattle City Light | Solar Energy | Community Solar

 

[daylatedollarshort]

These situations and many others would seem to offer the opportunity for individual fractional ownership of large industrial-sized PV installations. People could buy X sq ft of panel that is installed on warehouse rooftops somewhere, probably in the service area of their utility. The output from that gets credited against their utility bill through net metering. Installed cost per watt and maintenance should be a lot less expensive than an installation on residential rooftops. The square feet could be bought and sold to others. Crazy govt subsidies could flow to the individual owners just as they would if the installation was on their rooftop. It seems silly that, to own the PV output, we need to put the panels on our individual rooftops where they are more expensive to install, more likely t be damaged, less likely to be optimally pointed, more likely to be shaded, etc.

Is this being done?

In California this is called community solar and it is in the early stages.

 

[ERD50]

These situations and many others would seem to offer the opportunity for individual fractional ownership of large industrial-sized PV installations. People could buy X sq ft of panel that is installed on warehouse rooftops somewhere, probably in the service area of their utility. The output from that gets credited against their utility bill through net metering. Installed cost per watt and maintenance should be a lot less expensive than an installation on residential rooftops. The square feet could be bought and sold to others. Crazy govt subsidies could flow to the individual owners just as they would if the installation was on their rooftop. It seems silly that, to own the PV output, we need to put the panels on our individual rooftops where they are more expensive to install, more likely t be damaged, less likely to be optimally pointed, more likely to be shaded, etc.

Is this being done?

Agree 100%

To expand on that, if you want to buy into a share, you should be able to purchase solar panels to be installed at a commercial level in whatever grid is the dirtiest, and/or provides the highest ROI.

A solar panel will do more for the environment on a dirty grid, yet many are being installed in CA, which, I think has a relatively clean grid. Some combo of insolation, cost, and grid dirtiness should tell us where those panels will do the most good. Just direct deposit the money to your bank account, regardless where the panels are physically.

And as we've said before about the people with the EVs and solar panels - power the EV where the grid is the cleanest, and put the panels where the grid is the dirtiest. You can't do both in the same place.

-ERD50

 

[scrinch]

First of all - got a link for that?

See link in post 87.

 

[ERD50]

See link in post 87.

If you are trying to interpolate from that graph, I think you are being a little generous.

Regardless, 7.5x in 15 years seems pretty tame compared to other electronic components. What would a 32GB flash drive cost 15 years ago? Hmmm...

Flash Memory Prices (2003-2014)

I guess they were not available to the consumer. But looking at 2003, they were ~ $200/GB, now it's easy to find (faster, better) thumb drives at ~ $0.50/GB. Let's see... a 400x improvement in less than 15 years. And the government didn't have to pay me to buy them. Gee, maybe they made sense to people. When they were expensive, they only sold to people who were willing to pay the premium for the convenience and other value. Well, I've already said the rest enough times...

-ERD50

 

[samclem]

Yes it is.

Seattle City Light | Solar Energy | Community Solar

Wow, the idea briefs well, but it turns out to be little more than an "opportunity" for the local utility to rapidly harvest tax credits. It's not a chance for consumers make a one-time investment to lower their electric bills for a long time forward (as they might with panels installed on their roof), or to pool their resources to do the same thing more efficiently in a large-size project.

The Seattle scheme lets you buy units now -- $150 each, for 24 watts of solar panel capacity. You get the benefit of "owning" that unit only until June 2020, at which time the panels become owned by Seattle Light. So, customers would only "own" the panels for about 5 years.

Based on their experience to date, installed panels yield 1.05 kwh per year for each watt of panel capacity. So, for the 24 watts of each "unit", that amounts to a reduction of 25 Kwh per year and a savings on the electrical bill of residential customers of $1.36 to $2.37 per year at Seattle rates (depending on whether Seattle Light credits customers at their "energy " rates or "total service" rates). Investing $150 to get a total of less than 12 bucks back on the electric bill (for the whole 5 years of "ownership") is a terrible deal, and no one would do it.

BUT--Washington State and Seattle offer a total credit that amounts to $1.22 per watt of installed solar capacity--per year. So, paying $150 now to buy 24 watts of capacity = $29.28 per year or $146.40 total for 5 years. Added to the (unsubsidized) savings of about $6-$12 per unit and the investment makes okay financial sense (disregarding the time value of money). But, it's just a means for Seattle Light to get state/city capital for use in permanently boosting their solar generation capacity by using customers as pass-throughs. It's a great deal for them, a "wash" for the participating customers, and a bad deal for WA and Seattle taxpayers.

Lots of clouds in Western Washington. The same panels installed in many other places (see map) could produce twice as much power. To ERD50's point, find a spot with good weather and dirty power and these panels would be doing a lot more real good.

When we see crowdsourcing to fund the installation of solar arrays on an industrial scale without benefit of taxpayer funds, we'll know that solar has "arrived". But if it gets to that point, the organizers will get the money via a cheaper means (loans, bonds, etc) and keep the proceeds from selling power to the utilities.

 

[bld999]

"Wow, the idea briefs well, but it turns out to be little more than an "opportunity" for the local utility to rapidly harvest tax credits."

In a city like Seattle, over the top with "greeness", the panels are worth their weight in PR gold, and the tax credits are likely just lunch money. Not that trying to be green is bad, but around here, there is much green for green's sake. We are mostly hydro already.

 

[Big_Hitter]

I'm leaning towards doing this. I probably use 1.3kWh per month on average, so that's basically $130 per month.

 

[Dash man]

The panels are mass produced in large quantities already - after a point, the increased volume doesn't cut costs much, the curve flattens. But as pointed out, the labor for installation just isn't something that is going to respond in that way.



-ERD50

Unless a more efficient method of installation is developed.

 

[CardsFan]

Or, the technology improves so that the new design takes a lot less space (and installation effort) per kW.

Sent from my Nexus 7 using Early Retirement Forum mobile app

 

[samclem]

I'm leaning towards doing this. I probably use 1.3kWh per month on average, so that's basically $130 per month.

Maybe 1.3 mWh per month? 1.3 kWh would yield a monthly bill of about a dime.

But, my nit-picking aside, what do you find attractive about the Seattle solar program? It's about a wash from a financial standpoint.

 

[MildlyEccentric]

solar salesperson came by yesterday to set up a meeting - about how much does a 40 panel system cost to install?

We purchased our system as part of one of the "solarize" programs. A community organizes what amounts to a group purchase of the panels along with a vetted contractor to handle the installations. In our case they quoted $3.35 per Watt (complete cost including panels, racks inverter, installation and connection to the grid). Using our numbers, a 40 panel system would supply 11 KW and cost approximately $37,000 complete. This is a "net metered" system without batteries.

One caveat on the federal subsidy (investment tax credit). It is a 30% credit against your federal taxes, however, it is only credited against your owed taxes. If you owe no federal taxes, there is no federal credit. There is a carry forward provision for any unused credit, but I'm not sure of the details.

 

[Big_Hitter]

Maybe 1.3 mWh per month? 1.3 kWh would yield a monthly bill of about a dime.

But, my nit-picking aside, what do you find attractive about the Seattle solar program? It's about a wash from a financial standpoint.

we pay about 10 cents an hour so my bill is about $130 per month on average

after doing a bit more research, I'm going to cancel the appt - with lack of state (Idaho) subsidies and such cheap electricity (we have several hydro electric dams nearby) it would take forever for me to break even on an install

 

[jimnjana]

A recent large installation was $3.57/watt.

All flat roof (two large school buildings at different locations in the same town), lots of economy of scale. Far more cost efficient than sighting a single home.


896 Total kW $3,200,000 Installed $

-ERD50

Residential install in my part of FL is less than $2.7 per watt now.

 

[ERD50]

Residential install in my part of FL is less than $2.7 per watt now.

Is that the un-subsidized cost? I used the actual total cost in my calculation.

-ERD50

 

[jimnjana]

Is that the un-subsidized cost? I used the actual total cost in my calculation.

-ERD50

unsubsidized cost. In 2012 our cost before subsidy was $3.4 per watt installed on a 9.6k pv system.