
Solar PV rapidly becoming the cheapest option to generate electricity - ph0rque
http://www.grist.org/solar-power/2011-10-11-solar-pv-rapidly-becoming-cheapest-option-generate-electricity
======
marze
It is surprising how little attention has been created by this huge PV panel
price decrease, from $4.00 a watt to $1.25 in three years.

Solyndra is an early casualty, since their business model depended on PV panel
prices to fall much more slowly.

The economics of home based solar electricity depends on three numbers, the
panel price, the local retail electric rate, and the interest rate of the loan
for the system. Right now, in much of the US, you can see that a PV system
makes sense for new construction. A simple example:

    
    
      $12500 : 4500 W PV system w/no storage (grid backed up)
    
      4% interest rate, payment of $60/month
    
      $0.11 per kwh avoided cost, the system generates about $70 of electricity/month
    

In a nutshell, this is grid parity, right now in 2011. And the owner of such a
system does not need to worry about utilities increasing their rates over the
years.

~~~
brc
Does your example include a FIT (feed in tariff) provided by government at a
much higher rate than grid power, or are you doing a calculations at grid
power? A lot of places have a high FIT value currently, but this is subject to
political whims and any incoming government might find it easy to gain votes
by trimming the FIT, as has already happened in many places around the world.

Another huge problem with these calculations is the very small fraction of
people who stay in one house for more than 10 years. Essentially you have to
stay in the house for the entire payback period or you've lost out.

Personally I think the solar price will have to drop to the point where it is
much lower than grid (with no subsidies), rather than just about equal. At
that point, takeup will be much higher.

~~~
compman775
Why would you have lost out? Couldn't you sell the house for more than you
could have if you hadn't had solar panels installed?

------
rmason
He's making way too many assumptions. In 1894 a writer said that at then
current rates of population expansion in fifty years the streets of London
would be buried in horse manure.

[http://www.thefreemanonline.org/columns/our-economic-past-
th...](http://www.thefreemanonline.org/columns/our-economic-past-the-great-
horse-manure-crisis-of-1894/)

Course he didn't foresee the advent of the automobile. Breakthoughs like the
horseless carriage come out of nowhere. Something like Thorium could end up
generating ultra cheap electricity and in fifty years solar might end up being
thought of as a quaint technology like buggy whips.

Our goal for the US should be energy independence, not a slavic devotion to a
specific technology.

~~~
marze
Since solar is less than 1% of US electricity generation, it is unclear why
you interpret this to be "a slavic devotion to a specific technology".

Solar is the ultimate option of energy independence, since as the OP
discusses, 30 lbs of sand turned into solar cells will power a house for three
decades or more.

~~~
temphn
But it's hard to store energy and to transmit it across long distances. This
is the fundamental problem with solar and wind. You can put one of China's new
thorium [1] or pebble bed [2] reactors anywhere on the face of the earth, and
the wattage per surface area ratio relative to solar will be a great deal
less.

Solar will likely be some part of the answer but it's always going to be niche
relative to oil, coal, nuclear, and (where the region allows it)
geothermal/hydroelectric.

The question that only experts in the space could answer is whether the $1.25
price per Watt is due to a real decrease in the price of fundamental
components/manufacturing processes or whether it is due to subsidies of some
kind.

[1]
[http://www.telegraph.co.uk/finance/comment/ambroseevans_prit...](http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8393984/Safe-
nuclear-does-exist-and-China-is-leading-the-way-with-thorium.html)

[2]
[http://www.nytimes.com/2011/03/25/business/global/25chinasid...](http://www.nytimes.com/2011/03/25/business/global/25chinaside.html)

~~~
marze
Not hard to transmit solar electric fifty feet, from the rooftop to the iPad
charger, pretty much a solved problem.

The OP graph showed solar prices falling faster than linear on a _log_ scale.
Meanwhile, nuclear and coal plant construction costs are now two to three
times what they were a few years ago.

Not sure where your confidence solar will be a niche player comes from when
the pricing trends favor solar so dramatically.

~~~
brc
Solar will always remain niche because it can't do baseload power. Sure,
there's been some success with solar thermal providing power for 24 hours, but
during bad weather there's no chance it's going to do that for a week at a
time. Anything that can't do baseload power has to have baseload power backup,
which is a large cost of duplicating power. Which is why very few people will
every totally rely on solar power if they can get a grid connection.

There is no way around the fact that the sun doesn't shine 24 hours a day, and
residential power usage peaks after dark.

In short, other types of large-scale generation will always outdo solar
because it just cannot reliably provide power around the clock.

A bicycle is cheaper than a car by an order of magnitude, but can't carry
passengers or luggage, can't go long distance, and isn't weatherproof. That's
why nearly everyone with a bike also has a car, even despite the massive cost
advantages to cycling.

~~~
marze
So the question is, is it possible to imagine a system that uses a majority
solar? And does it appear to have the potential to be economically
competitive?

First, however, residential usage does not peak after dark. Peaks occur on
sunny hot days when A/C usage is maximum. And since in the US the electric
grid already exists and no one is proposing dismantling it, that simplifies
the problem.

Ten years in the future, iPad-level power consumption will rule for computing
machinery at home (iPad == 2.5 watts). LED lights will be common. Solar panels
will be the cheapest form of electricity, if current trends hold. Even on a
cloudy day, solar PV generates significant power, so about the night?

Batteries, either connecting a city's worth of hybrid cars, dedicated battery
packs, pumped water storage, compressed air storage, are all options. Others
are to run natural gas generators at night, or wind or hydro or geothermal,
all grid connected. None of these are particularly difficult to imagine, and
combined with efficient lighting and other expected improvements in efficiency
could easily be expected to cover residential night time load.

~~~
brc
The majority of power usage in homes is heating, cooling, cooking,
refrigeration and appliances. Lighting is already falling down the list of
energy usage because of more efficient lighting solutions that are already
widespread. It is a total red herring to discuss the power usage of computing
devices, because they already constitute a tiny minority of power consumption.

Adding battery packs significantly increase the cost of a system by an order
of magnitude. These are all true but they do not factor cost into the
equation. With any of these additions, solar will still be far more expensive
than baseload grid power, and for most will still not negate the need for a
grid connection.

All these technologies will be fantastic for remote areas to obtain a higher
standard of living, but essentially have zero chance of displacing baseload
grid power as the majority of power usage in urban areas.

The only way they will win out in the long run is with punitive taxation of
large-scale power generation, which is essentially a political dead end for
all those who try it.

It's great to be enthusiastic about solar power, I personally like solar
technology and will buy when it makes sense to do so on it's own merit. But
there are limitations that are very difficult to overcome.

~~~
Daniel_Newby
> Adding battery packs significantly increase the cost of a system by an order
> of magnitude.

At current prices. Grid-scale batteries are expensive now because each is a
unique specialty product. If we built sodium-sulfur batteries in the same
volume as we build gasoline storage tanks, the price would decrease
dramatically.

Efficiency gains also matter, because net system efficiency is a geometric
process. Consider a 20% efficient solar cell and a 20% efficient battery: the
system efficiency is a ghastly 4%. And that's not counting power conversion
and transmission.

If the solar cell and battery were boosted to 40% efficiencies (physically
possible), then the system efficiency would rise to 16%, a factor of 4
increase. That's halfway through the order of magnitude price problem you
give.

Then there's heating and cooling efficiency. American buildings and
refrigerators tend to have horrible insulation. In many localities, merely
using proper insulation closes the rest of the price gap.

~~~
jws
Lead acid batteries are 85% to 95% efficient. A good AGM is 98% efficient.

As a data point, I sized the batteries at my cabin to provide two days of
power under total cloud (more than enough for getting to 24 hour solar power)
and the batteries cost about half what the panels did.

(That discharges the batteries to 60% capacity. You also need to consider that
the batteries will last about 6 years then get recycled. I mentioned AGM
because they can charge much faster. If you are only interested in 24 power
shifting, it might be cheaper since you'd need to buy more capacity in lead
acid batteries to tolerate the charge rate. )

------
orijing
This is really interesting because very recently, a bunch of American solar
companies joined together to sue Chinese solar companies for selling panels
"below cost" (i.e. "dumping") [1].

I don't understand how that works. What is the cost they use? For industries
with steep learning curves, the right strategy would be to use expected future
cost as the basis for business decisions, rather than the trailing average
(realized) cost, in order to build the market and more quickly progress on the
learning curve.

If that's illegal (it's often used in instances I mentioned above), then I
feel like progress in industries with steep learning curves will be slower,
because companies will be more timid, causing the market to grow less quickly.

What is everyone's opinions here?

[1]
[http://www.ibtimes.com/articles/234291/20111019/solarworld-s...](http://www.ibtimes.com/articles/234291/20111019/solarworld-
solar-panels-cells-china-antidumping-subsidies-lawsuit-complaint.htm)

~~~
mhb
We should thank the Chinese for giving us free solar panels which will
eventually help disentangle us from the geopolitical mess in which our fossil
fuel dependency involves us. We will be able to devote the intellectual and
financial resources formerly devoted to those pursuits to more beneficial
endeavors.

~~~
mattmanser
I'm more inclined to view it cynically, China have already said they want to
be the world leader in alternative power sources, a move like this could be
seen to deliberately destroying foreign competition, stopping any incentive
for non-Chinese companies to invest in R&D leading to a Chinese monopoly on
the technology.

At best China will collapse a-la Russia under its own evil government, at
worst this will help prop them up for many years to come.

Scary thought.

I'm not thanking any nation involved in such wholescale thought control. Let's
not forget it's an evil nation, they're liberty and freedom hating bastards.
This seems to be a lost thought recently in the capitalist land rush that's
been going on the last decade.

------
pingswept
I've found Travis Bradford's book Solar Revolution to give a good overview of
the solar industry, with the same numerate feel as this article:
<http://www.prometheus.org/research/solarrev>

The best rebuttal I've heard (to renewables generally, not PV specifically) is
the second to last chapter of Matt Ridley's The Rational Optimist:
[http://www.rationaloptimist.com/books/rational-optimist-
how-...](http://www.rationaloptimist.com/books/rational-optimist-how-
prosperity-evolves)

(Sorry I can't link directly to the content, but so far as I know, it's not
available online in either case.)

~~~
schiffern
As far as Matt Ridley's writing, can you speak to whether these are the same
arguments:
[http://online.wsj.com/article/SB1000142405274870342120457632...](http://online.wsj.com/article/SB10001424052748703421204576327410322365714.html)
?

Summarized, Ridley argues here that the "renewable/non-renewable" distinction
is quantitative (not qualitative), and that renewable energy harvesting
devices are built from non-renewable materials.

~~~
pingswept
Some of the arguments in that article are repeated in the book, but it's not
the main thrust of the chapter I was referring to. I'm afraid I gave the book
to my brother after I read it, so I can't give you an authoritative summary of
the arguments in the book. As best as I can recall, the argument was
renewables generally have such low power density (W/m^2) and high energy cost
($/J) that they are unlikely to be an effective solution to climate change,
should climate change be as severe as we fear it might be. (Ridley is not a
climate change denier, but he does think scientists' worst fears are
exaggerated.

Here's an audio interview with Ridley that might cover some of the same stuff
in the book:
[http://www.econtalk.org/archives/2010/10/ridley_on_trade.htm...](http://www.econtalk.org/archives/2010/10/ridley_on_trade.html)

------
tryitnow
If solar really does drop in price significantly and has a big impact,
wouldn't that lessen demand for coal/natgas/etc? A drop in demand will lead to
a drop in the price of those fuels everything else held equal.

Of course, maybe the declining supplies of fossil fuels will cause fossil fuel
prices to rise. But what about advances that make the extraction and
consumption of fossil fuels more efficient?

I'm just throwing these things out there because there's a lot of economic
dynamics that could move targets like "grid parity" significantly.

------
ars
Too many assumptions. The biggest of course is that that "22%" number will
continue despite the fact that "the learning rate has been exceptionally
high".

Another assumption is that natural gas prices will stay the same, when
actually they are going down right now.

Not an assumption but rather an omission: He uses a 25 year payback period for
solar, but does not include opportunity cost of that money (i.e. how much that
money would have brought in interest) over 25 years. Once you include that
(and you should) it doesn't look as good. And in any case 25 years is far too
long. 10 years is the standard for evaluating payback periods.

6% over 25 years is 4.5 time the base value. So the solar power actually costs
4.5 times as much as he assumes. Even assuming just 3% would give you 2.1
times your cost.

Edit: These calculations are a bit off since they assume paying for the
standard power all at once at the end, but actually you make payments
throughout.

~~~
biot
He says that $700 worth of solar cells would produce 4000kWh of electricity
per year which is what the average family consumes. Over the course of 25
years ("a lifetime of household electricity") had you purchased that from the
grid, it would have cost $25,000. Ignoring maintenance, you get $25,000 worth
of electricity for an initial one-time investment of $700. Though that's
production cost, and excludes installation, maintenance, etc. so likely
multiples of that at retail.

I think you misread the 25 years as being a payback period.

~~~
anamax
> Ignoring maintenance, you get $25,000 worth of electricity for an initial
> one-time investment of $700. Though that's production cost, and excludes
> installation, maintenance, etc. so likely multiples of that at retail.

Something is wrong here. Installation is maybe $3k. The typical retail markup
is 2x. So, let's call it $5k.

25 years of 4,000kWH is 100,000kWH. $25K means $0.25/kWH, which seems high.

~~~
guimarin
in south san jose, we pay an average of $.42/kWH in the summer. and it only
goes down to about $.31 in the winter.

~~~
anamax
Huh?

I'm in San Jose and my last electric bill was $107 (including taxes) for
587kWH. That's just over $0.18kWH.

I'm not on a life-line or time of use schedule. (That's a two family house.)

~~~
guimarin
well there you go. I'm on a time of use, stepped schedule.

~~~
anamax
> I'm on a time of use, stepped schedule.

Why? My average is considerably less than yours.

------
00joe
sunelec.com, PV Panels $1.28 Peak watt, Inverter $0.5 watt, Rails and Cables
$0.27 watt.

In my area I expect to save .18 cents per year per peak watt.

Prices have been falling at 1-2 cents a week since june.

<http://pvinsights.com/>

------
ck2
_But the fact that 30 pounds of silicon, an amount that costs $700 to produce,
is enough to generate a lifetime of household electricity baffled me._

Except per panel is at least $300 and you need a bunch of them.

I guess the idea is also to avoid battery storage and just feed the grid.

Price comparison for grid-tie
[http://www.sunelec.com/comparisons_of_grid_tie_systems_price...](http://www.sunelec.com/comparisons_of_grid_tie_systems_prices.html)

------
droithomme
This is true for deep space satellites and locations where running a power
line is cost prohibitive, such as weather monitoring stations in Antarctica.

~~~
CapitalistCartr
It's also true in parts of Florida. In rural areas, PV can be cheaper than
paying the power company to run out their lines. I expect, in five years,
it'll be worth my while to put them on my house, in the middle of the city.

------
nradov
Beyond the power price issues there is some value in being able to partially
power your residence when the grid is down. Many of the nicer homes in Florida
now have fossil-fuel generators since everyone has seen how a hurricane can
knock out power for weeks. And grid reliability is likely to decrease due to
lack of infrastructure investment.

------
roel_v
Anecdote != data, subsidies are bad, etc etc - but my parents' PV installation
is paying off at an 11% ROI right now (Belgium, heavily subsidized), up from
an estimated 8% at the time of installation (3 or so years ago) because of the
high amounts of sunshine there have been there. Bring on the global warming.
There are many people getting filthy rich on these installations (for example
those who have large industrial buildings with roof space they don't use -
they are getting 4-8% NET YIELD on as much money as they could borrow back in
2006-2007, which back then of course was easy as pie).

------
jakeonthemove
A fascinating idea is to use solar and wind power to power factories or
mining/production sites that are in remote locations - often, that's one of
the main limiting factors.

The main disadvantage of solar power is that it can't be used 24 hours a day,
however besides the expensive batteries, solar power can be stored in other
ways - for example, you can use every minute of idle time or free capacity to
power compressors that pump air inside a few large tanks, and use that
compressed air at night to power the generators.

------
feb
In the article the author claims the price reductions came from technology
improvements. But some say they are caused by the entry of the Chinese on the
market with heavy subsidies and dumping practices
([http://www.grist.org/solar-power/2011-10-19-are-we-in-a-
sola...](http://www.grist.org/solar-power/2011-10-19-are-we-in-a-solar-trade-
war-with-china)).

------
prodigal_erik
How can landlords make this an investment that pay off?
[http://sfbay.craigslist.org/search/apa?query=solar+panels...](http://sfbay.craigslist.org/search/apa?query=solar+panels&srchType=A)
hardly finds any hits, so I take it "you'll have lower electric bills in this
apartment" has not been found an effective way to attract renters.

------
ww520
This is fantastic. Haven't looked at the solar pv for couple years. Didn't
realize they have dropped so much in price.

Does anyone know the current approximate total cost (labor + material) in
Northern CA? It was like $8-$10/W last I looked couple years ago. Also how
easy is a DIY approach in installation?

~~~
ph0rque
I just got quoted $5.10/W in NC, can't imagine the CA costs are too different.

------
Havoc
>As scale goes up, per-unit costs come down. This is known as a "learning
curve"

Weird. Where I come from that is called economies of scale & learning curves
are applicable only to the labour component.

------
icebraining
"European solar radiation"? How much is that exactly? I'm pretty sure the
radiation levels where I live (Portugal) are _much_ higher than in
Scandinavia.

