
For the future of solar, we’ve got the tech – it’s the economics - shawndumas
http://arstechnica.com/science/2015/10/for-the-future-of-solar-weve-got-the-tech-its-the-economics-stupid/
======
diafygi
I work in solar, and here's some quick facts:

1\. 1 out of 78 jobs created in the U.S. last year were solar jobs[1].

2\. There are more solar employees in California than utility employees[2].

3\. Soft costs (non-hardware) are 64% of the installed cost of solar[3].

4\. Solar is expected to reach a load defection point (i.e. cheaper to leave
the grid) in most places in the next 10-15 years[4].

Like OP's article states, this industry's hardware has gotten so good, the
software in the industry hasn't kept up. So much so, in fact, that an entire
startup accelerator program in the bay area, Powerhouse[5], has been created
to try and attract tech entrepreneurs into the solar industry to make the next
generation of solar software. My startup recently went through the program,
and being a part of this industry is one of the most empowering and rewarding
things I've ever done. It's one of those extremely rare instances where you
can have a solid business model and a positive impact on the world.

And we need all the help it can get. Solar expected to grow 100-200x over the
next 25 years[6], but it won't happen if smart people don't join in. If you're
a tech entrepreneur, and want to do something that matters, please please
please consider doing a startup in solar.

[1]: [http://energy.gov/eere/articles/1-78-new-jobs-america-
solar-...](http://energy.gov/eere/articles/1-78-new-jobs-america-solar-job)

[2]:
[http://www.calseia.org/index.php?option=com_content&view=art...](http://www.calseia.org/index.php?option=com_content&view=article&id=231)

[3]: [http://energy.gov/eere/sunshot/reducing-non-hardware-
costs](http://energy.gov/eere/sunshot/reducing-non-hardware-costs)

[4]:
[http://blog.rmi.org/blog_2015_04_07_report_release_the_econo...](http://blog.rmi.org/blog_2015_04_07_report_release_the_economics_of_load_defection)

[5]: [https://powerhouse.solar/](https://powerhouse.solar/)

[6]: [http://www.bloomberg.com/news/articles/2015-06-23/the-way-
hu...](http://www.bloomberg.com/news/articles/2015-06-23/the-way-humans-get-
electricity-is-about-to-change-forever)

~~~
lumberjack
>4\. Solar is expected to reach a load defection point (i.e. cheaper to leave
the grid) in most places in the next 10-15 years[4].

How can it be cheaper to leave the grid? Won't energy storage be much cheaper
if it is done on scale by buy and selling energy as required and letting
utility companies figure out energy storage and load balancing?

~~~
jussij
Here in Australia we have one of the highest per capita uptakes of household
solar panels in the world. At some point during the day, most of those
households produce excess power and that power is sold back into the grid.

But because there is so much power being generated, the householder is only
paid a fraction of the equivalent price of extracting an equivalent amount of
electricity from the grid.

At present those householders have no choice but to put up with that dud deal,
as they have no where else to put that excess power. But move on a few years
when battery technology starts to take off and battery prices come down, that
will change.

When that happens, total household electricity costs will be coming down and
they will be one very big step closer to being off grid.

~~~
fian
The flipside to the dud deal you claim these solar owning householders get is
that they are not paying their full share for the grid connectivity that they
need to sell their excess electricity into.

The majority of the cost of retail electricity is the maintenance of the
transmission network (>50%) (poles and wires)[1], with metering/billing being
the next highest contributor (<20%). The cost of generation is around 20%.

Many of these householders with solar are paying very little or nothing for
their grid connection. Thus they are being subsidised by the non-solar
households for their ability to stay grid connected.

Household level batteries could change that scenario if they are good enough
to allow complete disconnection from the grid.

If household level batteries are successful, then we will reach a point where
it will not be economically viable to maintain the grid. Every house will then
need to become self sufficient for electricity generation and storage.

[1] [https://www.dews.qld.gov.au/energy-water-
home/electricity/pr...](https://www.dews.qld.gov.au/energy-water-
home/electricity/prices/tariffs-explained)

~~~
jussij
> The majority of the cost of retail electricity is the maintenance of the
> transmission network

I can't speak for the rest of the world, but here in Australia that's just not
true, since the utility companies have a tendency to "gold plate" those grids.

Here are some detail:

[http://www.smh.com.au/business/goldplating-the-power-
grid-20...](http://www.smh.com.au/business/goldplating-the-power-
grid-20120705-21iv5.html)

When governments sold the grid to private enterprise they also allowed them to
"gold plate" their systems and pass on the costs to the consumer.

The result was massive increases in electricity prices.

What those utility companies got wrong was thinking the consumer was a captive
audience and would put up with those rip off prices.

Those massive increases in electricity prices actually made solar an option,
hence the massive addition rate in roof top solar here in Australia.

What those utility companies have got wrong is the genie is now out of the
bottle.

------
maxerickson
I think if the economics don't work out you can make an argument that you
don't actually have the tech.

Which is why there are all those people working on storage technology.

~~~
lukeschlather
Economic costs of switching are always higher than maintenance costs. Solar
can totally be good enough to stand on its own while not being good enough to
justify de-commissioning perfectly good power plants.

~~~
001sky
but its not good enough, then

thats like saying a stone wheel would be good enough

if we didn't have pneumatic/michelin tires

anything is good enough when its the only option

~~~
jerf
"anything is good enough when its the only option"

No, it really isn't. If it costs more than it generates, it's not good enough.
That's why the power plants were built as they were in the first place; a lot
of them date from when a solar installation simply couldn't pay itself back,
ever.

~~~
001sky
costs and revenues don't happen in a vaccuum, thats what your missing. they
are relative prices, and only make sense in the context of a menu of choice
(or:none). a stone wheel is brilliant technology, just like the bronze or iron
age weapon was way back in history. but today its only useful (or not) in the
context of current alternatives.

------
benplumley
> a staggering 20GW of overproduction

> the recent drought

Desalination is normally shot down for being very wasteful of energy, but
given the energy can't otherwise be stored and California seems in constant
drought, are there any reasons why isn't it a viable use of the surplus energy
in this scenario?

~~~
ethbro
I think this will probably be a major energy sink going forward, as we've
never really had to find a use for "surplus electricity" on this scale before.

Moreover though, I think the general class of chemical storage is likely to be
another winner. Reversible reactions in liquid provide so many benefits:
modest infrastructure costs (compared to anything but pumped hydro) and
scalability in terms of both throughput (more reactors in parallel) and
capacity (additional tank volume).

~~~
epistasis
I agree! For example, vanadium redox flow batteries are looking pretty great
for grid storage lately, with estimates of storage costs below $0.20/kWh
stored. As I understand it, that's more than the daily price fluctuation in
some markets. Far more cycles than lithium ion and a wider range of operating
temperatures.

And I think we're just skimming the surface with flow batteries (pun not
intended). There's a massive amount of potential for new materials here.

------
roymurdock
> The biggest challenge with going to half renewables is overgeneration. The
> state receives power from a number of sources that simply can't be shut
> down—combined heat and power systems and nuclear plants, for example.
> Layered on top of that are renewable sources like solar that generate power
> whether you want them to or not.

What? The biggest problem is the cost of storage, not the fact that the
underlying technology is not yet efficient enough to compete with non-
renewables cost wise?

Can someone please summarize and explain this article to me? I saw no data,
and there was no serious discussion of the underlying technology or economics
of solar power.

~~~
lumberjack
The quote is talking about a problem the utility companies are facing with the
adoption of personal PVs.

Right now, the way your electricity bill is structured is heavily biased
towards consumption. The service charge is a small part of the overall bill.

What happens if 50% of the costumers have PVs is that the utilities will lose
a lot of revenue but they will still have exactly the same amount of costs
because they are not able to turn down their plants during the day and the PV
people will still consume the same amount of peak grid energy during the
night.

So there is two ways to fix this. One of them is for the plants to downsize
their constant power generation methods like coal fired boilers and get a
bunch of gas peaker plants.

The other one is to increase the service charge on your electricity bill.

~~~
jws
This gets into the other billing problem with domestic solar.

In rough numbers, half of your electric bill is for energy, the other half is
to pay for all the grid and capacity. Billing is purely on energy consumption.
The effect of this is that low electric users get subsidized by high electric
users.

When someone installs a domestic solar system they reduce their payments, but
they still depend on the grid infrastructure. The system reaches its ultimate
perversion when a grid tied domestic user achieves a negative bill. Not only
have they been paid for their energy, they have been paid for the utility
having a grid.

You can solve this economic distortion by a couple of ways:

• split billing into a grid-tie fee and an energy consumption charge: This
accurately covers the solar houses, but it also raises the bills of the poor
and cuts those of the wealthy (generally larger consumers).

• only pay domestic solar producers half what you charge for power: This works
out asymptotically for a huge producer where the grid portion vanishes, but it
doesn't work for people reducing their consumption but maintaining a grid tie
or selling a little bit.

• put a surcharge on each watt of solar capacity: This works out accurately,
but feels abusive. 1 watt of solar panel is going to make about 100 wHr of
power a month. If grid-tie privilege includes a surcharge to cover the grid
portion of 100wHr then this 1 watt solar panel user will end up paying the
same for the grid as he did before. If a domestic solar installation is a net
producer, it will end up getting paid for the energy and the grid fees will
cancel.

Even before we get to a point where the power company may say "no thank you"
to a domestic user that wants to sell power at 1pm on a sunny day, we still
need to straighten out the billing. The current system ends up with the
utilities (and by extension all grid users) subsidizing solar installations by
forgiving their grid costs. I'm in favor of that now, but in a future where
our carbon emissions are under control the distortions will need to be
smoothed out.

~~~
jarek
> Billing is purely on energy consumption.

This is not the case in many jurisdictions, and sometimes varies within a
jurisdiction.

In British Columbia, my summer electric bills were regularly more than 50%
constant fees.

In England, providers offer plans with varying levels of constant
fees/"standing charge" and only very few plans have zero standing charge.

------
melling
Forty years later and solar is still the future.... Now we're only 15 years
away. That's about the period of time it took humans to learn how to fly then
break the sound barrier.

I like the observation that it's about the economics because it's always about
economics. If solar could have had a consumer product like personal computers,
cell phones, or big screen TVs, we would be using a lot more solar today.
There was nothing to bootstrap the industry. No Intel of solar energy was ever
created.

~~~
maxxxxx
It took humans from 1903 to 1947 to break the sound barrier. That's a little
more than 15 years.

~~~
melling
You need to add in the other number. Let me rephrase:

"40 years later and solar is still the future.... Now we're only 15 years
away."

For some context, the President of the United States wanted to stress solar
energy in the 1970's:

[http://www.scientificamerican.com/article/carter-white-
house...](http://www.scientificamerican.com/article/carter-white-house-solar-
panel-array/)

We could probably dig up a few issues of Popular Sciences

~~~
Chathamization
Yeah, and he was followed by Reagan:

>By 1986, the Reagan administration had gutted the research and development
budgets for renewable energy at the then-fledgling U.S. Department of Energy
(DoE) and eliminated tax breaks for the deployment of wind turbines and solar
technologies—recommitting the nation to reliance on cheap but polluting fossil
fuels, often from foreign suppliers.

~~~
ZenoArrow
I think this says a lot too...

[http://usgovinfo.about.com/od/thepresidentandcabinet/tp/Hist...](http://usgovinfo.about.com/od/thepresidentandcabinet/tp/History-
of-White-House-Solar-Panels.htm)

Carter puts solar panels on the White House in 1979. Reagan orders them to be
removed when he comes into office in 1981 (they were eventually removed in
1986).

------
MilnerRoute
Electric cars look better all the time - and maybe even more electric mass
transit.

I mean, this article talks a lot about "overproduction" \- how the grid gets
taxed by massive daytime spikes in production on sunny days. But it seems like
if the problem really is going to be "too much electricity", then maybe green
vehicle designers can find ways to put all that "clean" energy to good use.

------
pjc50
For hard data, it's hard to beat
[http://gridwatch.templar.co.uk/](http://gridwatch.templar.co.uk/) \- has
anyone built an equivalent for their own country?

You can see that although wind is broken out to its own meter, solar is not
yet broken out. The effect of solar so far is a small dip in noonday demand.
The daily high point is about 6pm at the moment, as the end of the working day
overlaps it getting dark here.

From the rest of the graphs you can see gas and coal ramping up and down over
the course of the day. Gas is capable of fairly rapid response. At the peak,
the pumped storage (Dinorwig) is turned on.

Until rooftop solar pushes daytime net demand below the 4am current demand
low, I don't think we need to panic about storage.

The government policy on subsidies is incoherent; subsidies for renewables are
being cut, but the Hinkley Point C nuclear deal includes an obligation to buy
the power at a price far above market or renewable levels.

Personally I have 3.8kW of panels on my roof. At some point I'll go and have a
look at the data logger and see what conclusions to draw.

~~~
secabeen
The California Grid Operator has a similar page for our state:
[https://www.caiso.com/outlook/outlook.html](https://www.caiso.com/outlook/outlook.html)

~~~
mikeyouse
Cool link.. For people on Chrome, if you have the same issue as I did seeing
the charts, there's a little Shield icon in the address bar that prevents the
loading of 'unsafe scripts'. I'd never seen that before so it took me a minute
to figure out why nothing was showing up.

------
ta20101029
Want to help solve this puzzle? Genability is building software to stay ahead
of the utilities and save energy consumers money through clean energy on day
1. And we're hiring:
[http://genability.com/careers/work_with_us.html](http://genability.com/careers/work_with_us.html)

------
aidenn0
Come on Ars; Giga-Watts of storage? I expect that from other places reporting
on energy, but I thought you knew better.

~~~
surrealize
I had the same thought. The article does mention pumped hydro storage though.
And for that, watts (the capacity of the turbines/generators) is a relevant
figure of merit just as watt-hours (the capacity of the reservoir) is. The
article does use watts kind of indiscriminately, though.

------
afarrell
> Basore also noted that you can meet some of the evening surge simply by
> pointing photovoltaic panels to the west instead of the south. But since all
> electricity is priced equally, everyone tries to point theirs south for
> maximum productivity.

Does California not use Location Based Marginal Pricing like New York, New
England, and Texas?

~~~
mikeyouse
We do;

[http://www.caiso.com/pages/pricemaps.aspx](http://www.caiso.com/pages/pricemaps.aspx)

Not sure how the pricing varies over time, but the data is available at least.

------
laotzu
Solar is not cost effective on the scale of dollars. That doesn't mean it's
not cost effective though.

The dollar is a debt-based system which means when something is bought with a
dollar that thing is assumed to be owned and loaned by someone. No one owns
the sun, it's free and basically infinite.

Oil is the commodity which creates the most demand for and thus the most value
out of the dollar. 6 of the 7 richest companies in the world in terms of
revenue are oil and gas companies.

So with all things considered the cost effectiveness of solar power to the
dollar is not a valid comparison because what you are basically doing is
comparing the cost benefit of solar for oil production and the ability to
create debt.

>Even after all this time the Sun never says to the Earth, "You owe me." Look
what happens with a love like that, it lights the whole sky.

-Hafez

~~~
roymurdock
It takes time and money (among other resources) to convert the energy emitted
by the sun into a form that we can use.

Are you suggesting that we should not pay the companies who do the conversion,
routing, and storage of this energy because nobody owns the sun?

~~~
laotzu
No

