Go Solar?
An interesting analysis can be modelled with ESPlanner. Does it pay to install a solar system to save on your electric bill? You can buy turnkey systems today that will generate electricity from the sun and reduce or even eliminate your draw on the power grid.
With a little research, I found I could spend about $12,000 on a system (after substantial credits and rebates in Arizona) and probably save about $650 on my annual electricity bill. So take the baseline model, put in $12K as a special expense (or a 2nd mortgage to finance it) and $650 per year tax free income for say 25 years (in dollars, since rates will probably at least keep pace with inflation). Run ESP and compare consumption with the baseline.
For me with these numbers, it came out a wash from a strictly financial basis. But that doesn't take into account the likely increase in home value, perhaps even greater increases in electricity rates, the satisfaction of saving the planet, plus a great conversation piece!
I'm thinking about it, just as soon as I get thru the SS reset!
Lynn
RSS
Lynn,
I run a home in Honduras that's currently completely off the grid. Don't forget to consider the appreciation in values for the panels. Since the early 2000s, the oil companys have been purchasing the solar technology providers with the net effect the the cost of solar per watt has risen more than 60% iin 5 years, in direct contradiction to facts of economics, such as Moore's Law (what you see operating in computer performance and pricing) and the effects of increased production. So those "used" panels next year will, in effect be more valuable than they were.
Also, don't forget the the cost of maintenance in your calculations. The current high end panels have a nominal life time of about 25 years, which means that they will have to be replaced periodically. While you're probably running a grid tied system without any storage capacity (batteries) if you have batteries, the current technology batteries also have to be replaced.
You may be somewhat optimistic about how fast energy costs will be rising as well. The cost per kw where I run my solar installation is $0.35/kw (yes, that's 35 cents per kw) which puts the payback per watt of generated power at about 12 days (up from 4 days just a few years ago solely due to increased costs of panels).
FWIW, the state of Florida also has a very good solar grant program (up to $5/watt for up to a $20K installation last time I looked). The usefulness of such an installation will vary from place to place since not all electrical utilities will buy electricity from you, but it's found money, and "free" power.
Best,
Dick Munroe
Hi Dick,
That's very interesting about the increasing cost of solar panels. It doesn't make any sense to me, since the main thing holding back solar installations (aside from aesthetics) is that it is not yet competitive financially. Even with nearly a 50% incentive in Arizona, it is only a wash. I pay about 15c per Kwh with taxes and fees.
I thought the solar companies were hard at work trying to bring the cost per Kwh down. I found a chart on the Internet showing that; of course the chart only goes thru 2003, so it doesn't refute your statement.
So what's going on? Are the suppliers sucking up the rebates to fund research?
Lynn
Well, if you take a look at the costs of panels today (the cheapest place I've been able to find panels is at www.partsonsale.com and they've been the cheapest for years). I've been buying the same wattage of panels, working myself up to about 2.1 KW/hour with full insolation, since roughly 2002. Starting in 2000, several large oil companies purchased a variety of solar technology companies (Shell bought Siemans, BP bought someone but I can't remember who, etc). Since then the price per watt for panels has risen steadily.
Now I haven't done a ton of research and I haven't got enough time or resources to mount FOIA requests for lots of data, but it doesn't take a rocket scientist to speculate that when an OIL company purchases a technology that would replace OIL that there isn't any vested interest in actually using the new technology for anything but a cash cow and window dressing (at the same time if possible), e.g., the Ford hybrid SUV, try to buy one.
This is the sort of thing that I wish that Congress would get into instead of their typical earth-shattering in-depth investigations, e.g., steroid use in baseball.
Anyway, I've watched the price per watt (in 4 panel quantity) from about 2K for a set of 4 panels, to nearly 4k with virtually no corresponding increase in efficiency (about 10%). In computers specifically (and high tech systems generally) Moore's Law applys. Moore's Law states that every 18 months (approximately) the performance doubles and the price halves (same performance is half the cost, twice the performance is the same cost) and this has held true since the general distribution of digital computers starting in the 1950s. Something like this should be going on with solar technology. It should be getting cheaper for the same "performance" or more efficient for the same "cost" but it's not. The question is why and I only have a conspiracy fantasy WRT big oil and their purchase of a variety solar technology companies. My observation is subject to the causal fallacy (it could be coincidence, but does anybody really believe that Dubya's military records were destroyed just as they were requested under FOIA by accident or schedule?).
Further work in the investigation is apprpriate and there could be no end of research papers in economics (Larry, got a handy grad student?) but I'm pretty much flat out other than being in a position to bitch about the cost.
Best,
Dick Munroe
This reminds me of what I heard happened in the 1940's. GM etc bought up and operated all the streetcar companies. Seen any streetcars lately?
But that was new technology buying up old. I am guessing the situation with solar panels is simply supply insufficient to meet demand. Suppliers like GE and Sanyo are not oil companies.
I certainly wouldn't characterize the streetcar stuff as new buying out old. It was one buying out a competitor and shutting it down to increase market share. In California prior to the 1950s you could travel by trolley/streetcar from LA down to San Diego and nearly up to San Francisco all by rail of one kind or another. IIRC it was the tire companies that purchased (and shut down) the trolley lines to shift dependence for transport over to cars which had tires that had to be purchased and replaced relatively frequently. That's a tribal recollection though and I would have to go digging again to turn up the history.
Best,
Dick Munroe
Congress has passed a bill to remove the $2,000 cap on the 30% tax credit for solar projects. So, according to my ESP profile, it has become worthwhile to install solar panels in 2009. My standard of living would go up about $250 per year.
Lynn Grubb
lynnsgrubb at aol.com wrote:Congress has passed a bill to remove the $2,000 cap on the 30% tax credit for solar projects. So, according to my ESP profile, it has become worthwhile to install solar panels in 2009. My standard of living would go up about $250 per year.
Lynn GrubbVery cool. What's the new cap by the way?
Best,
Dick Munroe
From what I have read there is no cap on the federal solar credit, it is a straight 30%. Wind also.
One should probably move quickly, the prices will probably go up in response.
Lynn Grubb
From what I have read there is no cap on the federal solar credit, it is a straight 30%. Wind also.
One should probably move quickly, the prices will probably go up in response. The supply of solar panels is apparently already tight.
Lynn Grubb
Lynn,
What calculations did you use to develop the data you used in ESPlanner? If you have a spreadsheet that did this, I'd appreciate if you would send me a copy.
I've evaluated solar power a few years ago (before ESPlanner) & found it was not competative based on my assumptions. If you both work away from the home during the day, you can sell power back to the utility which may offset the power you buy at night. We're both home all day so we'd only be saving maybe 1/2 our typical daily KW consumption. On that basis it doesn't pay to go solar. Another consideration, in Northern CA, is that our utility limits the power you can generate to 80% of your average KW consumption - monopolies don't like competition. I could certainly install any power level I want but would probably be denied the ability to sell power to the grid.
Appreciate your thoughts
Thanks
James Mavrogenis
I'm surprised at that given the issues with power that California had. There is a California company called Real Goods whose consulting services I've used over the years when designing energy systems. At the time the consulting was free and they are very knowledgable about the California environment, you might give them a buzz and talk to them to dig out some more details.
Best,
Dick Munroe