Solar Payback & Opportunity/Other Cost

[flyoverstate]

Your KwH cost today is almost certainly lower than you will be paying 20-25 years out, the lifetime of a solar install. It is impossible to predict the complete impact, but here in Colorado, power costs will absolutely rise. The state has mandated the shutdown of all coal fired power plants by 2030. Lots of wind and solar farms are being installed, but the majority of power consumed in 2030 will be from natural gas fired power plants. NG is dirt cheap right now, but rising demand (some of it from coal retirement), as well as declining NG production (from shale gas declines) can mean only one thing: The 12.7 cent Colorado average today is significantly lower than what the price will be in 2044. Period. It isn't only fuel costs, here in CO, the electric infrastructure is being slowly replaced by more fire resilient lines and poles, or by burying lines, and that costs $$$$$$$$$$.

The big elephant in the room is how long the US natural gas production boom can last. It is pretty funny, if you look at "long term" forecasts, NG supply is all rosy, but "long term" is 7-10 years. When you look past that, in reality, worldwide NG production is expected to begin a slow decline in 2040. Currently, domestic NG is almost all used in the US, protecting US prices from global demands, but there is increasing demand for NG around the world, and most of those pipelines everyone yelps about are being built not to supply the US, but to allow US NG to be sold more efficently on the world market. This will cause US NG prices to align more with worldwide (higher) prices.

As history has shown us, predicting the economy more than a few years out is an exercise in futility, but oil and gas are absolutely finite resources, and rising prices are inevitable unless demand is lowered significantly. There is a supply decline at some point, it is just science. The economic impact of that decline depends on how well we can manage demand during the falloff.

There are a lot of moving parts in an analysis of solar panel payback, but they make a lot of sense today for a lot of people, and the number of people for whom solar makes sense is likely to continue to rise as power costs escalate.

 

[catii]

Your KwH cost today is almost certainly lower than you will be paying 20-25 years out, the lifetime of a solar install. It is impossible to predict the complete impact, but here in Colorado, power costs will absolutely rise. The state has mandated the shutdown of all coal fired power plants by 2030. Lots of wind and solar farms are being installed, but the majority of power consumed in 2030 will be from natural gas fired power plants. NG is dirt cheap right now, but rising demand (some of it from coal retirement), as well as declining NG production (from shale gas declines) can mean only one thing: The 12.7 cent Colorado average today is significantly lower than what the price will be in 2044. Period. It isn't only fuel costs, here in CO, the electric infrastructure is being slowly replaced by more fire resilient lines and poles, or by burying lines, and that costs $$$$$$$$$$.

The big elephant in the room is how long the US natural gas production boom can last. It is pretty funny, if you look at "long term" forecasts, NG supply is all rosy, but "long term" is 7-10 years. When you look past that, in reality, worldwide NG production is expected to begin a slow decline in 2040. Currently, domestic NG is almost all used in the US, protecting US prices from global demands, but there is increasing demand for NG around the world, and most of those pipelines everyone yelps about are being built not to supply the US, but to allow US NG to be sold more efficently on the world market. This will cause US NG prices to align more with worldwide (higher) prices.

As history has shown us, predicting the economy more than a few years out is an exercise in futility, but oil and gas are absolutely finite resources, and rising prices are inevitable unless demand is lowered significantly. There is a supply decline at some point, it is just science. The economic impact of that decline depends on how well we can manage demand during the falloff.

There are a lot of moving parts in an analysis of solar panel payback, but they make a lot of sense today for a lot of people, and the number of people for whom solar makes sense is likely to continue to rise as power costs escalate.

Sorry to sink your canoe, but someone is giving you bad information about how much shale gas is available:

"According to IHS, a business-information company in Douglas County, Colorado, the estimated recoverable gas from US shale source rocks using fracking is about 42 trillion cubic metres, almost equal to the total conventional gas discovered in the United States over the past 150 years...."

My wife & I were on the team that developed fracking for commercialization back in 1979, & worked for the U.S. Dept. of Energy to get that ball rolling. The feds happened to (stupidly) quash it for a couple of decades, but it has been in high gear for long enough to have a good idea about the reserves. I advise you to check your sources.

That said, I've had a 10.1 kWh solar PV system on my roof since November 2010, & the actual payback time was 5 years & 4 months. Obviously, depending on where you are, YMMV. But Hawaii has the highest cost for electricity - right now, the residential cost per kWh is 43.22 cents - & my monthly charge (to connect) is $18.05. So I definitely concur that solar power is cost-effective, even if the U.S. has no decline is NG for a very-long time.

 

[flyoverstate]

Again, the supply of natural gas is finite. Yes, even in the good 'ole US of A. Gas in the ground is just a small part of the price equation.

NG in the US has been mostly "trapped" in the past, so it is priced based on US demand. Now that there is increased worldwide demand for LNG, and the infrastructure is being created to satisfy that demand, the price of NG in the US will start to gravitate toward global prices *regardless* of how much gas is in the ground. US production of NG can and probably will continue to grow out to 2040, but the DEMAND will grow by a faster rate, due to many factors, including retirement of coal plants, increased exports, and increased natural non-powerplant demand. There are also a lot of political factors at play, in that the NG supply to Europe could be cut at the whim of Putin, or by a regional war. The US would have to pick up a lot of that slack. There is a reason that Germany decided not to ban nuclear, after all.

The fact that there are x number of units of gas in the ground has nothing to do with the economic accessibility of that gas. "Recoverable" does not mean "Economically Recoverable". We will NEVER run out of gas, because there will be gas that is so expensive to extract that will will substitute something else, probably nuclear.

The bottom line is that NG prices are going to rise, both in the near term, and the "long term" 7-10 years. The real hurt is going to come when US gas production peaks and begins to decline, and it *will* peak and begin to decline at some point, and probably in the lifespan of any solar system installed today. That doesn't mean we will "run out of gas", it means every cubic foot will cost incrementally more, until gas is no longer economically viable. Whether we can survive that peak economically is going to depend on how well we have prepared the alternatives. IMHO, nuclear is the only real solution, but as we saw at Three Mile Island, Chernobl and Fukushima, public sentiment for nuclear can switch on a dime. As bad as all of those incidents were, the US power generation industry has avoided a true catastrophe so far. One incident in the US with thousands of casualties, and the push away from nuclear will resume. We had better have some alternatives at that point, because natural gas would become so expensive that our economy would choke. The regional impact of simple spot shortages is already so bad that Xcel has had to spread the costs to consumers over years of surcharges. Imagine if instead of a week of shortages as happened with Storm Uri in Texas (which screwed Coloradans big time), there were months long shortages?

U.S. Natural Gas Prices to Jump 44%: What's Driving the Surge?

As U.S. natural gas prices seen to jump 44% by 2025, more demand from power generation, industrial use, and LNG exports could tighten supply.

carboncredits.com

The bottom line is that it is very easy to model your payback on solar at current prices and say that it isn't worth it, but try doubling or tripling the projected price per KwH during the lifetime of the solar install. Try modeling in a few more Storm Uris or even worse shortages. Power prices in many areas of Colorado have doubled in the past 20 years. and with the switch away from coal, the volitility of gas, and the increased infrasturcture costs due mostly to wildfire hardening, it is inconceivable to me that it wouldn't continue that trend. Heck, power in the Denver area is up 40% just in the past five years. There are literally constant rate increases being presented by Xcel Energy, the state's largest utility, to the Public Utilities Commission. On top of that, time-of-day metering has been instituted for most Xcel customers, meaning summer daytime power is over 30 cents per kWh. No way to opt out of that.

 

[Koolau]

Nat Gas is so plentiful as to be almost limitless - IF we knew how to get it. There is an incredible amount of the stuff trapped in deep ocean sediments. I'd guess that the ambtious bacteria, chewing up organic material at the bottom of the sea are producing NG faster than we are currently burning our underground reserves - but that's pure speculation on my part.

So far, we don't know an economical method to recover it. 50 years ago we didn't know how to frack either. SO, at some point, we may be limited only by the CO2 that burning the stuff produces. It's a complicated subject. Energy in general is even more complicated.

If I were just starting out (maybe age 19) I'd strongly consider a c@reer in energy, but... Now, I just want the lights to come on when I flip the switch and not have to go back to w*rk to pay for the privilege. YMMV

 

[RobLJ]

I think it is non-controversial to conclude that natty is replacing coal in the US generation schema, since gas is so cheap. New Wind and particularly solar are now much cheaper than new natty, so it is pretty clear that solar in particular will be replacing natty over the next 20 years, other than the very significant exception of peaker plants. But there is a world market for natty--liquified--so there is demand.
I will note that most of the source for natty is in the Permian and east and north, so it isn't as cheap in the West as one might think. And Canada. But the Moore's Law applied to solar suggests that solar will continue to supplant marginal natty, given the cost differential, with the very significant exception of peaker plants. This will occur over decades.
The rise of demand for AI is concerning. I remember an installation here in Reno signed an agreement for 2 terawatts. My view is that AI and digitalcoin farms should pay a premium for additional demand, including transmission costs, instead of charging the consumer, but that's just me and beyond my paygrade.

 

[RobLJ]

One could argue, for example, that Texas should locate a huge generation plant in the Permian, where sometimes natty prices are almost zero (as a byproduct of oil drilling), then export the electricity, but this would require large transmission infrastructure (I'm reminded of the old Navajo coal plant transmission infrastructure) and Texas inter-connecting to the grid. Which in a rational world might make sense, but then we're talking about Texas (where I lived for 30 years) interconnecting the grid. Probably won't happen.
I went to undergrad in Abilene (earlier years in Oklahoma) , and you could see the flaring at night, back in the day. Now it is all over the Permian, although being rightly regulated.

 

[skyking1]

^ that's a conundrum, but solvable. If we could locate energy intensive manufacturing near these excess locations, the transmission issue is solved.
That is the whole problem of energy, the WhereWhen. Where is it When you need it?

 

[Texas Proud]

I think nuclear will be the main supply of new energy in the nearish future... say 20 or so years....

The big problem with solar and/or wind is when it is not producing... that is solved with nuclear...

A question just popped into my mind... can these nuclear plants ramp up and down is a short timeframe? or are we still going to need peakers?

 

[flyoverstate]

There is no nuclear technology that can ramp output up/down easily.

Peak plants will still be needed, probably fired by natural gas, but there are various other solutions. One electric utility in Colorado is installing huge batteries. That has been done in Australia as well. Once more electric cars have V2H and V2G technology, and enough people have EVs, it is envisioned that you will be able to sell back the power in your vehicle batteries during peaks.

United Power Battery Energy Storage | Ameresco

With 78 MW of BESS power capacity, the United Power project will enhance energy resilience across the Northern Front Range.

www.ameresco.com

Bidirectional EV charging explained - V2G, V2H & V2L — Clean Energy Reviews

Bidirectional EV charging is an emerging technology that is set to transform how electric vehicles are used. We explain how bidirectional chargers work and the various technologies available including Vehicle-to-grid (V2G) and Vehicle-to-home (V2H), and Vehicle-to-load (V2L)

www.cleanenergyreviews.info

There have been a bunch of water reservoir storage schemes proposed in CO where water is pumped uphill into a reservoir at night, and then it is released during the day to cover peaks. Never mind that a huge percentage of the overall power is lost to inefficiencies.