I’m not going to pretend I’m smart enough to have read this entire article.
But in 2011 it cost $6.19 per installed watt of solar in the US vs. $3.00 per installed watt in Germany, and attempted to explain the cost difference.
The hardware is about the same cost in both nations, with the US’s hardware costing $0.47 per watt more, far less than the $3.19 in cost difference between the nations. Most of the costs came down to labor and regulations being cheaper in Germany.
Plus this was in 2011, if you go to places like sun electronics there are solar panels selling for $0.90 a watt, not $1.83 like is listed in this paper.
So if you assume 90 cent watts, that means a watt of solar in the US costs $5 and in Germany it costs $2. So even if you made the panels free in America, it would still cost more than to set solar panels up in Germany.
So the arguments I’ve been hearing for years are ‘wait for the panels to drop in price’ until parity is reached with the grid. But aren’t we pretty much at that point? If it costs $5 a watt and solar panels are less than a buck, then the panels themselves are only 15-20% of the cost of solar. The big costs seem to be labor to install the panels and connect it to the grid.
I zoned on the article too. I think a large part is simply that Germany has aggressively pushed for solar. They have or had, a feed in tariff that in my opinion goes a long way towards getting homeowners to adopt it.
Here in the US it’s maybe a rebate here, a teeny tax break there, but nothing to move people en mass to the newest coolest thing like a feed in tariff would.
I know it’s been tried here and there on small scales.
Although I can purchase materials for a properly sized system for around $2/watt without rebates and I could do 95% of the install myself, I won’t be allowed to grid tie it unless a solar company with a specific class of contractor’s license installs the grid tie cutoff. It’s important - when the electricity goes out it kills the panels so linemen won’t get electrocuted. But it’s only one step.
A solar company won’t bother doing that 5% of the job when they would rather sell the kit at a markup and perform the menial tasks of the installation for a premium and sell a loan for that inflated amount. They will get rebates and guarantee that the loan payment will be less than my savings on electricity, but it’s a 15 year loan on 15 year panels.
Instead of spending ~$10,000 and a few weekends to have a net-zero home I have to pay a year’s salary to a solar company and take rebates from my utility and the government and make monthly payments to a bank for (hopefully) the life of the panels.
I suppose more competition can alleviate the problem. It sure seems solar is priced “a little cheaper than you’re paying now” instead of a fair market rate based on the actual cost of the system as a consumer good.
Do you know how much longer you will definitely live in your house? Most people don’t–job loss or attractive job offer elsewhere, family sickness… If you only live there a short time then you won’t recover your money.
You should doubt whether current utility incentives and contracts will remain over the long term. Look what happened in Spain for example.
There may well be alternative energy conservation projects which have a higher payoff–insulating the attic or trading in a gas guzzler…
Solar panel prices have dropped a bit since 2011. The cheapest I recall off the top of my head are from Yingli, 50 cents a watt. Not that those are the most durable or most space-efficient, but they do produce power.
But still, the labor and installations are expensive. I bet if DeVry started offering “Solar Panel Installation” and “Solar Installation Management” programs, kids would sign up. Increase the labor pool, provide a lot of mid-wage jobs, dial some of the pay scale back from ‘specialist’ pay for 2015. I wouldn’t go nuts cutting wages though, I’d cut costs mostly by scaling up the whole solar program.
Seems to me that the business to be in might be to get that particular contractor’s license and hire yourself out as a contractor to guys like yourself at a somewhat cheaper rate than the solar companies.
IIRC the actual costs per unit of electricity produced in Germany is something like 70 cents for solar vs 6 cents for conventional generation? Here…
“Solar isn’t in the ballpark in terms of costs compared to other electricity sources. Germany is paying 50 Euro cents per kilowatt-hour for solar power. They have spent $3 billion a year on solar energy acquisition into their grid and it’s less than one percent of their electricity.”
Seems like the reverse of the claim in the OP. I’m not sure how to sort that out as I am not too familiar with German solar, but here in the US, solar truly is reaching grid parity.
The 6.9 cents is a post 30% tax credit price promised in a supply contract in a heavily subsidized and currently trendy industry. At this point it is a theoretical price, none of those projects have been built. Right now spot price for wholesale electricity is 3.2 cents.
Only in certain locations after subsidies, cheap loans, tax credits, mandates for existing electricity providers to purchase solar at above market value or to credit it year round regardless of demand, and very optimistic maintenance cost predictions.
Of course coal and nuclear power generating industries receive subsidies as well, but they have a proven capability of providing continuous base load power. So far the all the grid connected, distributed solar electric industry has proven is an ability to make a lot of money for banks and the companies they pay to install these systems. Their windfall is paid for one padded monthly electricity bill at a time, often by people who can’t really afford it.
Well, they’ve signed a 30-year contract at 6.9 cents/kwh, so the price isn’t that theoretical. Other large projects are coming online now, but I’m not sure what their numbers are. The lowest price I remember for solar power is ~5.5 cents, but I’d have to dig for the details.
Yes, it is all true, though the maintenance costs can be quite low. And some people are installing regardless of mandates. Plus, carbon isn’t priced into electricity yet, nuclear never hits its budget in the real world, and solar will continue to get cheaper. Within a decade I bet it will be the cheapest power source.
I don’t know, I’d like to see cites for some of these claims.
-Since solar is new, sure, it doesn’t have the centuries-old track record of coal. But it does provide ~1% of US power currently, and it is the fastest-growing power source.
-Some companies are profitable in the solar business, yes, and that helps banks too. But people are in business to make money, there isn’t anything wrong with that in itself. I think solar power is a cool way to make money.
-Whose bills are padded? Through companies that offer solar leases, the customer pays less for solar power than they would on their electric bill, and the solar power company makes a profit. What’s wrong with that?
The first point overlooks the fact that the system, once installed, becomes part of the capital value of the house (i.e. a house with such a system would generally sell for more than an otherwise identical house without one). The amount of that “more” may not be as high as hoped, of course – but if so it will be because of the (more valid) second and third points on the list.
The bottom line is: If, based on the situation (including predictions of future developments that may make solar less valuable than it is now), you would have made back your money if you stayed put, you will also make back your money by getting a higher price for your house (from a buyer who expects to recoup the investment later). If not, then not.
That used to be the case early on and there are still contracts like that, but the feed-in tariffs for new installations have been reduced regularly. Currently it is at 10.06-14.54 euro cents depending on location and capacity and falling every month.
There’s a lot more to a solar power installation that just the raw cost for photovoltaic panels. The supporting infrastructure (physical and administrative) will multiply your cost several times.
We have no clue whether those companies will be around in 10 years, let alone 30. And those numbers are after the tax credits and subsidies, they do not represent the real cost of electricity production.
We don’t know what it will be in the long term for these new cheaper systems. The numbers we have are the predictions of the producers and installers of the systems.
I don’t know of any mega scale projects that ever hit budget. But 20% of the pennies per KW hour wholesale electricity that we have now is provided by nuclear. According to the link I posted above it is only slightly more expensive than coal in Germany. And of course it has a much smaller carbon footprint.
I don’t know why you would think that, but even if it does we will still need as much hydro as possible and either coal or nuclear plants. You can not practically run refrigerators, washing machines, factories, hospitals, sanitary sewer pumping stations, and water purification systems solely or primarily on intermittent, diffuse energy sources like wind and solar, the notion that you can is whimsical.
At the cost of more expensive energy, which is horrible on poor people.
I think that is the main thing driving the rooftop solar boom (bubble IMO), that it is a “cool” way to generate electricity and make money, not that it is a practical way to generate continuous base load power.
That particular customer pays less, assuming the solar company stays in business to maintain it (a crap shoot in and of itself). But when you give tax breaks and subsidies to solar, and force utilities to pay above market rates for power even at off peak times when they don’t need any extra, you are increasing the overall cost of electricity to those who pay for it in their monthly bills and taxes. Ultimately it is a skimming like shift of money from electricity purchasers to banks and the well connected, highly subsidized companies that produce and install these systems.
If these solar lease companies go out of business their customers will have to find ways to maintain the systems. If this or one of many other factors, like the mandates to utility companies to buy the excess solar, changes, then there will be a situation where millions of people suddenly have loans on assets that are worth less than they owe. This industry has bubble written all over it.
That still appears to be between four and six times higher in cost than coal or nuclear, right at the time when the industry is trendy and has all kinds of legislative fingers on the scales. And we do not know if these installations will be able to economically produce electricity decade after decade, even at these highly inflated rates.
Total nonsense. While you decry all the incentives and subsidies for solar power, you did not mention that all power sources (and utility companies) have huge government backing: nuclear, hydro, coal, gas, etc. all new technologies cost money upfront to get them started. Solar and wind energy is storable, and in the long term the best choice for the environment; we need to lower manufacturing costs lest other countries do it first and gain an economic upper hand on us.
Nuclear and coal get subsidies, yes, but they have a proven record of providing the enormous, first world lifestyle enabling public good of continuous base load power. There is no reason to think that solar and wind will ever be more than a tiny supplement to this, as far as grid power.
Even if solar was providing enough power that there was excess at times, which is far from happening, there is no reason to expect that devices to store the vast amounts of power needed will be technically or economically feasible in our lifetimes or our children’s lifetimes, if ever.
Raising the cost of energy through mandates to utility companies to buy above market electricity is a sure way to raise the cost of manufacturing.
That’s not continuous base load power, that is the peak amount the battery can deliver for short periods, and it is a small fraction, like 1/10-1/30, of what a coal or nuclear plant can provide 24/7/365. And it apparently costs billions of dollars. It is not practically or economically feasible as a replacement to coal/nuclear, that’s for sure, and the claim that it makes sense as even a small supplemental source of grid electricity has yet to be proven.