I priced out replacing all the panels (now I can do in 10 panels what used to take 28) and the inverters with a single 5kW inverter, $7,000. My price, no subsidies. That is over 80% reduction in cost, over 13 years, of the list price of $40K.
And that is why it is a huge problem for the power companies, it makes less sense now to not have panels on your roof.
It is a problem, but not necessarily in the way you may be thinking. Peak residential power usage is in the evening when solar isn't available. Power companies therefore end up spinning down coal and natural gas during peak solar, then just spinning them back up again as the sun begins to set. 
So you haven't replaced the coal and natural gas plants, you're just running them less. This results in higher overall costs, because you pay $$$ to build huge plants then just let them sit most of the day, which results in higher per-watt cost of non-solar power because the infrastructure and maintenance is no longer amortized over whole-day usage.
 My friend, a manager of 30 years at a huge mid-west power company
That said, there will be teething pains but this is a net positive thing that is happening. Growing up I lumped solar into the perpetual 10 years away category. It looks like I am going to see solar be competitive after all.
 I implement trading and risk management software in the energy sector, including Crude, NGL, NG, and electic.
 Work for a multinational in their energy & utilities consulting practice; above comment is my own.
A lot of people are willing to make confident, but very wrong, statements based on out of date information. It serves to protect entrenched interests and stop competition, but I have a feeling that disruption is far closer than anybody is publicly saying.
m = 10^9.10^5 / (10*100) = 10^11 kg of water. = 10^8 m^3
This is not a big reserviour, being 1/20th of the size of Warragamba dam's reserviour (in Sydney). One valley could provide 20GW for a day. Compare that with demand for where I live:
Peak demand for 7.5M people is 9GW, with an average closer to 7GW. One valley could provide overnight storage for over 20 million people, with first world demands (all of Australia). The limitation is transmission and generating/pumping capacity, rather than storage volume.
The highest summer peak appears to have been just above 13GW.
However your point still stands I believe.
Could I efficiently use excess solar to pump water in to a house roof storage area and generate electric from that?
The energy in one gallon of gasoline is equivalent to the potential energy stored in 13 tons of water one kilometer up
Gravity potential energy = mgh. Suppose pool is 10 meters up, then you need 239,000 kg of water = 63K gallons or 8400 cu ft. This is a huge pool: 29 ft. x 29 ft x 10 ft.
You could use the city water supply: borrow water through a turbine at night, and return it during the day :-)
Or have pool up very high, for example on a cliff overlooking the Mediterranean:
Has Flywheel storage every been seriously used in large-scale commercial applications? Someone mentions it on every energy-storage thread, and I'd like to know if the people suggesting it are just spinning our wheels.
FES has 10x specific energy than supercapacitors or batteries with no memory and precise state of charge. Magnetic bearings and hard vacuums make them quite efficient.
I believe some electric cars used capacitors to store regenerated electricity from breaking.
"More Ampères please Mister Woodbine." - Road to Welville
 - http://pia.sagepub.com/content/200/2/95.abstract
 - http://www.euro-fusionscipub.org/wp-content/uploads/2014/11/...
Edit: Seems the purpose is purely frequency regulation, rather than storage per se.
Interestingly, it does not use a dam. There's a natural lake at the bottom of a mountain and a man-made reservoir at the top, and the entire pumping facility is completely inside the mountain; it's not at all obvious that there's anything there at all from the outside. I think about that whenever people moan about the environmental impact, or flooding valleys.
And it allows you to push some levers and dials as to whether it's cheaper this year to increase your water capacity or your power capacity. City planners love that kind of thing.
I remember parking at the lower reservoir and hiking to the upper one and being amazed at how big the water pipe is.
Demand side response is already used in industry to regulate electricity demand and smooth peaks. Smart meter penetration will allow utilities to do this more and more in the residential sector too.
Supergrids are also starting to emerge and indeed, some large grid companies are pushing hard for international interconnects. (China wants a supergrid). Countries are building out more and more HVDC interconnects, both across borders and within countries. Once you have a network of utility scale renewable sources across multiple countries, meeting peak demand becomes more a matter of coordination between grids. Europe for example, is looking like a very interesting area for this right now with planned interconnects between North Africa and Southern Europe.
Since we're all citing employment, I work for a renewable energy company :)
There are already programs for industrial users to get electricity for much cheaper, if they can tolerate power cuts during peak demand. Those programs will become more and more rewarding to join and extend and automate as supply gets spikier.
It'd be interesting to see a study comparing the two options.
If you have an industrial process that can cope with intermittent power supply, it may be only slightly more expensive to design or build so that interruption of power won't result in interruption of production. If the overall cost increase is less than the decrease of energy costs due to incentives, there is no downside.
The energy producers likewise price the incentives so that their loss of revenue is lower than their cost savings.
Unless of course the market is created and operated by Enron, then we're all fucked.
Where I live, I pay five times more for electricity between peak hours of 2pm and 8pm than I do between off-peak hours of 10pm-8am. (The remaining hours are priced at a medium level.) This has changed my behaviour, in that I now tend to wait until bedtime before switching on the clothes dryer and dishwasher.
See also Ecobee vs. Nest: http://controltrends.org/controltrends-news/news-and-informa...
I wonder whether they create that signal artificially with electronics these days, or if it's still a natural consequence of the mechanics of the spinning generators they run in power stations?
Does anyone know more about this? Is this able to meet baseload demand?
In areas with cold weather, one of the most interesting (and underrated, due to only making fossil use more adaptable) developments is the installation of huge, insulated hot water tanks, to make the power generation and the great generation of combined cycle plants individually dispatchable.
I can envision older warehouses in an industrial district being converted in to vacuum flywheel storage sites where power fed in to the grid earlier is buffered and then released back to it.
Changing our culture is another possible approach. Power is used in the evenings because that's when most people get off work/home/etc and they tend to have /that/ time to do cooking and cleaning (thermal cooling / heating are more solvable with changes in materials and building shape than culture change).
I'm not saying that markets should be unchecked but it's very strange to see such naked Marxism on this site.
Aggregating the preferences via price will drive new technology and business models.
The "duck curve" that your friend is referring to will be solved in a variety of ways, from wind to storage to HVDC interconnects to the rest of the nation, to peaker plants.
In the future, coal is dead. No need to build any more of it. Nuclear is too expensive to build anymore. (Unless somebody actually does thorium innovation, but I'm not holding my breath...)
When storing a kWh costs $0.10, and there's also adaptive pricing to match supply and demand better, these problems will melt away.
It does require a huge mental shift, but the cost savings will make that happen
If the math and assumptions in this article are correct, then that's exactly the (wholesale) price point Tesla is aiming for with the Powerwall:
There are a couple other (not yet released) energy storage solutions mentioned there that might get the cost down even lower - Eos Aurora and Imergy Flow Battery
I wonder if there's enough raw materials to make that realistic. And how to you manage recycling, repair, replacement, end-of-life concerns for all those batteries on that scale?
Not asking a sarcastic hypothetical. Genuinely curious. It's hard to wrap my head around numbers that big.
For reference I used this: https://en.wikipedia.org/wiki/List_of_countries_by_electrici..., divided it by days, then the Powerwall's 6.4kwh capacity and then halved that number.
4,686,400,000,000 / 365 / 6.4 / 2 == 1,003,082,191.8 Powerwalls.
A single gigafactory is going to produce 35 GWh in a year, which is about 5.3 million power walls a year. If their lifespan is 10 years, than we need to produce 1e9 power walls / 10 years = 100 million powerwalls/year to maintain that capacity.
So we'd only need 20 gigafactories worth to do this. And with wind and proper grid interconnects we won't even really need much storage at all to keep the electricity going; the national weather is very very consistent.
We will need enough lithium for our ~300 million cars and their batteries, which are probably going to be 50-100kWh each, which is far far more than storing half a days worth of electricity.
Tesla has already planned on it: https://i.imgur.com/oLBNeW4.png | https://i.imgur.com/pectzXn.png
I'm not as concerned about the factory as the supply chain, can we actually supply that much raw material, and what will mining it do to the environment? I assume lithium is much rarer than iron or copper. But I don't really know.
For reference 16 million vehicles were sold in the US in 2013, but many (most?) of those were trucks and large SUVs, which AFAIK aren't on the roadmap for any EV manufacturer right now. And then there's fleet/work vehicles, single car families in states without long distance transportation or quick chargers (like TX).
It makes me wonder if 20 years from now fuel cells won't completely obsolete batteries?
It might not be possible to make all those batteries using lithium, but that doesn't really matter for stationary batteries.
He's mainly talking about lead but for lithium it's even worse.
A lot of things look great until you look at the scaling limits. Hydro storage is another example; Murphy's got a post on that too.
It's no use for everyone to argue over wether a completely implausible idea is financially competitive on a small scale when the implication is we're talking about scaling on a national level.
Variable electricity needs already mean we use less electricity at night time . Shift electricity expensive processes preferentially run at night to the day and using 80%/120% seems like a reasonable rough approximation. So we need 4,686,400,000,000 / 365 / 2 * 0.8 ~= 513,5780,822 kwh in the '12 dark hours'
Between current supplies nuclear hydro and wind we account for approximately 30% of electricity generation , on the assumption that electricity generation from these is constant, but can't be ramped up during the night, we get about 4,686,400,000,000 / 365 / 2 * 0.3 = 1,925,917,808 kwh. Leaving 3,209,863,014 kwh needed from storage, or 501,541,095 powerwalls.
But this would mean turning a car-park with just 40 plugs into needing 1,600 amps at 240v. With those grid connected homes having modest 2kWh solar installations you're talking 80kw/h. If you only spent 3kWh getting to work on average (double that for the round-trip) you'd fully charge the cars in a couple hours.
So I guess the goal would be to run your home off the unused capacity. But then you're putting a far heavier duty cycle on those batteries. Whose going to pay for them when that $10,000 pack needs to be refurbished in five years? Or do we just accept EVs depreciating down to zero when the pack replacement cost exceeds their value?
There may well be good answers to all this. Just some things that popped into my head.
It would seem at first glance to be very costly for the car park, the grid and the consumer. I'm not sure any technology with the depreciation schedule of lithium batteries makes sense financially or environmentally?
My modest intended implication was that if we only care about total sums, where the car is doesn't matter too much, as long as it has access to the grid.
The economics could work out, if the car park charges you more for electricity than they pay the grid; and the grid your home less that it charges the car park.
The car park and the grid both take a cut. For the home- and car owner, this works out to a slightly less efficient battery cycle. (If you convert the money charged back into the equivalent amount of energy.)
Of course, if you are going to use your electric vehicle like as a battery like this, it's going to affect the battery's useful life. The same would happen with the single purpose battery you have sitting in your home.
Now, the performance characteristics one looks for in a car battery and a grid storage battery are different. So I don't know whether using the car battery as a home battery even makes sense. (Ie home batteries can be bulky, but better be cheap. Car batteries have to be light and charge fast.)
On a more refined note, one can play the same game, but only do it during spikes. Ie the car can stop charging during a spike in demand, and even uncharge if the spike gets big enough or the battery is already full.
This won't do much for the diurnal cycle (that we discussed above), but a contribution during the spikiest peaks might already be worthwhile.
My gut feeling is that we will see the demand shaping for charging, but I am more doubtful about whether we'll see cars actively feeding back into the grid.
He is definitely biased against solar, but is acutely aware of the costs it presents to traditional power generation and definitely well qualified to comment on them.
They don't understand these things, they see less than half of the equation because they don't want things to change, and they only see the problems and have no interest in solving them.
IT wasn't that long ago that they were saying that solar was impossible, or that wind would never be affordable.
They were wrong about that and they will be wrong about how difficult it is going to be to adapt to lots of intermittant renewable energy powering the grid. They will complain vociferously, and they may be able to talk about some of the difficulties, but we can't trust their perspective on the big picture.
What about coking coal, for the production of steel from iron ore?
Fission plants are held to a much higher standards of safety in terms of eg decrease in quality adjusted life-years per Gigawatthour than any other form of producing electricity. Even solar.
(Though most deaths and injuries from solar come from people slipping off their roof when installing residential capacity. If memory serves right.)
The problem with nuclear is waste disposal (still not figured out, and a will be a problem for decades/centuries after the plant is closed) and amortization of billions of capital costs.
With the price disruption potential of other technology, it's a bad bet, and has been so for many years.
I used to work at a power company as well.
(It's true that the daily peak is in the evening and that won't be helped by solar. But capacity is built to handle the annual peak, not the daily peak, and because the annual peak tends to be hot afternoons, solar actually will replace other generation in the long run.)
I bet this could even out demand quite a bit.
With the current flat rate pricing structure, there is no incentive whatsoever to shift demand to blunt spikes.
$$$ per kWh stored (and the lifetime/cycle life + operating costs of that storage) is a key benchmark.
It's already happening, but I predict we'll see more of that in the future.
Eg lots of industrial applications like smelting aluminium can do with short-ish power cuts. In return, they get a steep rebate on their electricity bill.
Would it be possible (in an utopian world) to actually have a global power network and route electricity produced during the day in one area across multiple timezones to an area where the demand is greater and no available solar? e.g. Electricity produced in West Africa at noon to be delivered to .. Tokyo, where it would be 9PM.
I understand that politically this is almost impossible, but I am curious whether there are any technological impediments for this to be feasible.
Assuming it's not a battery backed system, prices on those are dropping (or more correctly remaining stable while capacity slowly climbs).
It also makes coal less economical and makes gas plants, which are cleaner and safer to operate more economical.
Some countries need AC, others need heating.
Plus there is the problems of cities with not enough sunshine and otherwise problematic weather (snow on the panels).
You need local storage. As much as is said about batteries, the only real solution here is hydro. Expect to see every viable valley start to get dammed over the next decade or so.
Except that dams are instead being removed for a variety of environmental and associated reasons. Free lunches are rare.
First, I work from a baseline cost of $19K, even though the list price was closer to $40K I didn't pay that for the system so I use the actual cost in my calculations.
Second there is the point where the money you've saved is equal to the money you paid, we hit that point about 10 years in. And then, depending on the life of your system (which has "positive cashflow" at that point) determines your overall rate of return. The replacment inverter (which is actually going to replace both inverters) is $2K ("upgrade" pricing from the manufacturer) And as the inverter was failing our system was under performing (so not generating as much power). The question will be how much longer am I willing to run the panels. The warranty is 25 years, so in theory another 10 years but the manufacturer (Sharp) no longer makes them and cannot replace them under warranty (they can only offer to repay you to buy a panel from some other vendor with equivalent specs and size).
So from a money perspective, had I used the $19K and put it into an S&P 500 ETF in 2003, it would have doubled by now (SPX was 1,008 in 2003, its over 2,016 today). So "bad investment" comparatively. If the panels continue for an additional 8 years and PG&E's costs stay about the same then I'll have generated about $20K in value from them so that would pencil out to a ARR of about 3.5%. Initially I funded the panels with a refinance of the house loan and that was at 6% but that has since been refinanced even lower. However had it not been, at my original purchase I'd still be running a deficit trying to both pay back the house and generate cash from the solar.
Interestingly for me, with the $7K it would cost to re-implement that system today, and 4% mortgage rates, it would have a rate of return of closer to 14% (10% if you subtract 4% as the cost of capital for a mortgage refi) and pay for itself in a bit more than 3 years and have doubled the return in 6. The challenge is additional regulatory changes which get incorporated into new installations versus the regulation regime I operate under based on my 2003 install date. I wonder sometimes what the trigger is for resetting the project's origin date.
By comparison, the risk that your solar panels will stop producing electricity, or that someone will invent Mr. Fusion and drop the price of electricity through the floor in the next decade, is quite low.
So every time I find myself having this discussion in a group, there are folks who want to argue the financial model to "show" something (generally negative) about solar power. Either it's not a good investment, or it's just coal power used to make the stuff that now is generating not even as much power was was used to manufacture it, or it's causing more pollution by forcing utilities to turn plants on and off, etc etc.
I was fortunate that I could finance it without risking things like my kid's college fund, I live in an area where there is a lot of sun and mild weather so my house's "demand" is quite manageable, and as an engineer I get to live my belief that we can engineer solutions to the worlds problems like energy interdependence and climate change.
I am grateful that today, the systems costs have gotten so low that it's possible for more people to make that choice.
I find your belief inspiring.
It's true that stocks in the US in the 20th century dramatically outperformed that 3%. This is for three reasons: first, up to about 1975, the world's economic growth rate was higher than 3%, due to the Second Industrial Revolution; second, up to about 1975, the US's economic growth rate was even higher than the world's, because it was taking over the markets previously supplied by the bombed-out economies of Europe (especially the UK) and Japan. Third, since about 1970, the share of economic output that went to owners of capital (rather than labor) increased dramatically.
Now, the third of those things probably can't happen again, because capital's share of output is already super high. (It's not that it can't get higher, but it can't go past 100%.) The second could happen again, but if it does, the US will be in the position of the UK, Japan, or Germany — it's now the Single Superpower (not even a mere Great Power) who could lose market share, probably to China or to a non-nation-state power. Investors in Japan's and Germany's stock markets in 1925 or 1935 didn't do so well.
The first, well, that's anyone's guess. It's a total wildcard.
It's certainly reasonable to posit a Third Industrial Revolution, made out of some of free software, nanobots, biotech, abundant solar energy, AI, and automated fabrication. I sure hope we get one. But if we do, it's not at all obvious who the returns will flow to. (Everyone, I hope, not just shareholders.) Accumulating capital goods, as we've been doing for three million years, is less important when your capital stock can double every 24 hours through self-replication. Breweries do not account for the quantity of yeast they have on hand as a durable capital asset.
And it seems equally plausible that we'll instead experience a new Bronze Age Collapse or Decline and Fall, as inexpensive DIY drones, very affordable precision projectiles, anonymous markets in assassination, and ubiquitous retail surveillance provide a decisive advantage for attackers over defenders in the physical world, just as their software counterparts have on the internet.
GDP growth flows to both debt and equity. The debt market is actually much larger than the equity market and since its returns are lower than equities, and they both share GDP as a source of returns in the long run, equities should beat GDP growth in the long run. This argument isn't iron clad, but hopefully you can see the general picture.
The Gordon growth formula is taught in intro to finance classes to estimate returns to equity. The theory is that stock market returns equal the dividend yield plus growth in stock prices. Stock prices alone are in the long run expected to grow at the same rate as GDP, but the actual return should be higher by the rate of the dividend yield.
These are the most basic arguments against what you're saying, but I would also caution against assuming that any particular macroeconomic trend will end, especially that it will end in a timeframe relevant to decisions related to solar panel installations. Sometimes they just keep going. There is no mathematical reason that equity prices can't go to infinity, as required rates of return can decrease to zero. If the world becomes more predictable and stable, equities can keep becoming more and more valuable with no damage to finance theory.
If the growth did continue, then they would make money, but often it doesn't, so they overpaid, so they get below-average (and often below-break-even) returns.
Also, per-capita GDP growth is irrelevant; what correlates positively with equity returns is total GDP growth, including the change in population.
So, on the contrary, this article provides a great deal of reason and even empirical evidence to believe that returns on US stocks should follow US economic growth rates.
"...first, up to about 1975, the world's economic growth rate was higher than 3%, due to the Second Industrial Revolution; second, up to about 1975, the US's economic growth rate was higher than the world's, because it was taking over the markets previously supplied by the bombed-out economies of Europe (especially the UK) and Japan."
Do you read the posts you reply to? Because the chart I linked starts in 1970. And you are discussing GDP when the post you were replying to specifically was talking about investing in the market.
For example imagine I own stocks making up 1% of in a company w/ earnings of $X, and market cap of 10 * $X. If the companies growth over a year is 3%, at the beginning of the year my stocks should be worth 0.01 * $X and at the end of the year 1.03 * 0.01 * $X due to the growth, BUT shouldn't i also have received 0.01 * $X (my share of earnings) in dividends that I am free to reinvest, giving me a 4% return overall?
It seems like maybe you're saying that the revenues, and therefore the profits, don't count here because they're not part of economic growth, but just part of the ongoing economic activity. But what determines the P/E ratio, which is to say the return on capital (as a reciprocal), across the market? What keeps investors from bidding the market cap of the company up from ten times earnings to a hundred, a thousand, or ten thousand times earnings? It's the availability of other investments that they expect to grow in value at a higher (risk-adjusted) rate. If you can get a 16% annual return on your investment by buying solar panels instead of stocks, then the guy who does that will have 16% more money to invest in more solar panels every year, until either he bids the price of solar panels up (due to limited manufacturing capacity) or he bids the price of electricity down (due to limited transmission grids or electrical demand). The first of those is already happening; the second one should start happening in about 2024, earlier in some areas.
Now, you could argue that there's a difference between this solar panel maniac guy spending 16% of his capital base in solar panels every year, accumulating more and more solar panels and selling the electricity from them to buy more, and GDP growth, because the solar panel maniac is accumulating a stock, while what the GDP measures is a flow.
But note that by the hypothesis that the maniac is investing to get some relatively inflexible percentage return on his investment, he receives a flow of earnings that is proportional to that investment. And that flow is part of the GDP.
You should not expect stock market returns to mirror GDP growth. The S&P 500 is not strictly representative of US economic performance, which is precisely why the huge corporations did so well with the cheap dollar and significant global economic expansion while domestic locked companies didn't fair nearly so well.
However here I assumed that there was no drop in optimism, or pessimism over the one year period. For if you were to bought in when expectations were high, your actual return would be lower.
Sometime the relation between growth and return is completely paradoxical. You would expect that in the past 100 years a portofolio invested in UK stocks to be dominated by one of US stocks. After all the first country went from being The Global Superpower to dubious second rate global player, meanwhile the US had done the same in reverse. Yet an investor in UK stocks would have been marginally better of.
Likewise you would expect China with its spectacular growth, to have brought impressive returns compared to the US. Yet that had not happened.
If growth slows or stalls, eventually the markets will catch up. A market that grows independently of the underlying economy doesn't make sense in the long term.
So if the DB grows by 10% weekly, then it will double in 6.9 weeks. If the interest rate is 3% then the debt will double in years, etc.
The Rule of 69 is good for a approximation, that works well with low single digit increases.
I have a hard time imagining a world of -5% to -10% rates!
A year ago I would've agreed with you, but with the ECB at -.04 and Japan at -0.02, I believe it more likely than previously.
In many cases solar is really close to a no brainier. Which is why Florida Utility's have tried so hard to block residential adoption.
This is actually turning into a hollow victory for Florida utilities. To bring people up to speed, Florida outlawed homeowner PPAs  (which locks out firms like Solar City, who install the panels and sell you power; no out of pocket cost for you, and you get solar immediately).
With the rapid decrease in panel costs, and the uptick in firms who are providing extremely cheap (or even zero percent loans in some programs!) financing for solar, Solar City (and other installers) are moving towards a financing model, which kills Florida's efforts to stop the spread of distributed rooftop solar.
Disclaimer: I did some volunteer work for the non-profit who attempted to fight utility legislation in this space .
Being responsible for the full 20 year term is also a somewhat onerous financial agreement.
I don't think so. Is it wrong to be responsible for a car when you lease it? Different asset, different terms.
Of course, the correct solution isn't to compound one perverse incentive (out-of-sync fixed vs variable pricing) with another (ban on solar or refusal to buy); it's to change to a system of decoupled maintenance and power pricing.
"yeah, but how long before you see a return on investment?"
how about instantly?
this is what we did:
1) calculated our monthly electricity payment: $160 or so a month.
2) priced out solar to push our payment to net-zero-ish: the savings really start multiplying once you get down into the regulated tiers.
3) replaced our electricity bill with a solar installation loan.
what did we get in return?
instant insulation from rate hikes:
instant equity on our house.
oh, and look! i can now have a solar-powered car!
but yeah, if i happen to still live in this house in 15 years, sure, no electricity bill. and, i'm sure somewhere along the line i'll end up "making all my money back".
Solar leases bring down the resale value of a home.
If the equipment is owned it raises the resale value of a home.
I've sold 2 homes this year with solar leases. Both of them were great deals for the buyers netting basically the value of the lease off the full retail value of the home.
In the past 25 years, electricity rates in CA have seen a 3-4x increase. If this continues, then even as some of the advantages drop away, the comparison function (monthly electric bill) will also increase, likely offsetting a lot of lost value.
Depends. Solar doesnt necessarily add value. Depends on the appraisal. I only know because I tried to buy a home with solar panels. The homeowner had raised the price of the home to include his investment in the panels but the appraiser wouldnt include the panels in the appraisal.
But it stands to reason that the prices of energy will rise faster than the rates of inflation, so it would still be a good investment.
It might even be profitable to play a 'buy when it is free or cheaper, use when it costs money' strategy. You can get there by buying large batteries, charging them from your neighbor's solar panels when there is lots and lots of sun (they may even sell at prices below zero), and discharging them, selling to you neighbors, when there is little sun and wind.
And during the day, when you have peak-solar energy, you'll be at work and won't be taking advantage of it. You'll recoup some of the costs through net-metering, but you usually buy back at wholesale prices and not at retail prices.
Finally, I'd expect utility companies to change their pricing scheme in the near future to account for solar. They service your electrical wires for example, and you'll likely have to pay a certain amount of money for that. So while you're not buying "power" (or at least, as much power) as before, you'll still have the service cost of being hooked up to the grid.
This means if utilities attempt to squeeze people with solar on their roof, they will simply move to batteries eventually. This already makes sense, today, in Hawaii (where the local utility was stalling on additional grid tie capacity, and with their per kwh rates so high, is was cheaper to go off grid). The more people who move off grid, the less people the utility can spread its costs across, increasing the rates for those remaining (which then rapidly incentives those people to move off grid).
This is called "the utility death spiral". Its a very real possible outcome, and utilities are aware of it. [+]
But what's to stop utilities from purchasing or creating cheaper large-scale projects?
I know you've seen my previous comments on Reddit with regards to Redox Flow batteries, CAES, and Pumped Hydro storage technologies. Utilities simply have access to battery-technology that the common people do NOT have access to. Some energy storage technologies only make sense in larger-scale 50MW applications or more.
If utilities serve a cooperative role in energy service, they will switch to the most cost-effective technology BEFORE the typical homeowner can switch.
Basically, solar pricing is moving FASTER than rooftop solar. Rooftop solar will always require insurance and roof-workers, while solar utility companies can just buy out a field in the middle of no where and install solar on the ground.
Cheaper and safer for utilities to work with. And then everyone in the town benefits, instead of just a few rich people who can afford panels (and the insurance of the rooftop workers)
Rooftop solar only needs roof-workers and their insurance until you have a cherry-picker-style robot arm to stick the panels up there with.
So from their perspective it makes sense to lobby politicians to stall residential solar as long as possible, the environment be damned.
Look man, you may not notice it. But the big utility companies out there are investing heavily into solar.
In the Bay Area, there are other things that screw up the numbers but the program "trues up" once a year (rather than monthly) so some months (usually late spring through early fall) I'm generating more power than I use for the month, and fall/winter I consume more power than I generate in a month. The target is to hit it at exactly 0 which was easier to do when PG&E would exchange kilowatts for kilowatts but it is harder now with their system of charging extra kilowatts over baseline. Its screwed up and not fair but I get that they are hurting, if I could get Elon to sell me the battery pack out of a Model S and the inverter infrastructure to go with it, I could leave the grid entirely and that would be easier.
Depends on the state.
Sometimes, you buy at retail prices and sell at wholesale prices. Which honestly, is far more fair. You're basically using the utility's batteries / energy storage at no charge right now (if you're in a state with pure net metering laws)
And yes, purchasing a PowerWall is more "fair". Instead of relying on the service and tax-incentives to give you a free battery pack, its definitely more fair if you got your own.
It's not fair for utilities to force costs onto consumers just because of a differential of political influence. It's not fair that solar reduces grid load at their peaks and saves them money on building out grid capacity and expensive and inefficient CO2 producing gas peaker plants and that benefit is not returned to the provider of that service.
Overall the many benefits of rooftop solar can be calculated and a value assigned. Most seem to come out at net or above, so talk of average wholesale prices is misdirection.
If consumers are using the utility's batteries and the utility's network, then the consumer should pay for the use of those services.
Peaker-plants can have a very simple solution: carbon taxes. Simple enough, and I support this measure to handle the externality.
Rooftop solar currently is probably a net benefit as long as the storage issue isn't a problem. (IE: the rest of the neighborhood doesn't have solar). But once solar adoption is widespread, someone needs to solve the storage issue (or "energy waste", if there is no more storage)
I could say that if a coal producer wants to dump sulphur, radiation, C02 etc. into the air then it's "fair" that they recompense the people who live in the countries they pollute and the people they help to kill. Why should those who don't do this (people who generate their own electricity or pay to have non-coal energy) have to shoulder these costs?
Simple argument right? But no, it's a decades long political fight with no end in sight, because some groups have dispersed interests, while other groups have very direct incentives.
The same is true here, lots more rooftop solar would be of small benefit to most people. But it directly threatens some concentrated interests. And they will happily tell you that solar will destroy the grid, or net-metering isn't fair etc. etc. Not because it's true, but because it's in their narrow and short term interests to lie.
A thing I haven't seen, but which ought to be practical, is a solar thermal fridge — for example, using the ammonia-absorption cycle that propane-powered fridges use, but heated with sunlight instead of flames. PV panels are typically 16% efficient, but it's easy for solar thermal collectors to reach 50% efficient, and they're also about five times cheaper per unit area (still). So you'd think it would make sense to power the fridge directly from sunlight.
I'm in Central Texas and I have two dogs at home. Even if I'm not there, I still leave the air condition going so they are comfortable. The last time I checked, my A/C system was the biggest power hog and so my electricity consumption aligns very closely with when the sun is shining.
But not the only thing. My point is that its way too idealistic to assume that 100% of the costs will be covered.
I mean, yes, the laws as written seem to encourage a 1-to-1 transmission of energy. "Net Metering" is a law that subsidizes decentralized solar energy.
But in the future, when the subsidies run out and the laws are written to be FAIR (instead of written to encourage solar, as they are right now), you will not be allowed to purchase electricity and sell electricity back at the same prices.
All markets have a bid-ask spread. Wholesale prices are always going to be cheaper than retail prices.
> when the subsidies run out
Why stop subsidizing solar? Do you think all energy subsidies are going away, or just solar?
Other solar subsidies may remain a bit longer. But net-metering is probably the biggest once.
> I'm not sure what you mean by 100% of the costs will be covered. All I know is that I can reduce the amount of electricity that I buy during the day when I consume the most. The savings are greater than the cost so it's pretty much a no-brainer for me at this point. If I finance, I can pretty pay for the system with the money that I'm no longer using to buy electricity.
SunEdison's model has been proven to be incompetent. SolarCity's "MyPower" loans have been scuttled. That's WITH the current large number of pro-solar subsidies that the US Government is paying for.
I think that it's a "no brainer" to take advantage of SolarCity's deals as a consumer. But in the long-term, it looks like their finances are unsustainable.
Personally speaking, I'm more concerned about a long-term reliable model that manages to get the energy to the most number of people. Utility scale solar seems to be the best solution, although its a bit boring.
> Utility scale solar seems to be the best solution
I don't think it makes sense to talk about a best solution. Large scale solar will contribute along with nuclear, coal, natural gas, wind, etc...
Or you can use "molecular spring", which is very compact, for same purpose.
Most people don't work in the dark
Most solar quotes take this into consideration, and quote you for enough solar to get into the minimum bill for your region (most utilities have a few hundred Kwh you can use per month at an obscenely low rate, and then it ramps up from there--solar is quoted so that you'll always stay within that cheapest range.)
For my current house in Austin, I'm still interested in solar, but it was both more cost-effective and had a shorter payback time to re-insulate to R36 in the attic and redo our horrible system (which had no ducts at all--agh, stupid 1956 house) than it was to do solar at the time.
Spending $40,000 of that on "clean energy" so that they can "feel better" is well outside of the typical person's price range. Even $7000 would be cost-prohibitive, especially if they're paying or saving up for their kids.
A cold can of beer also makes you feel better. Its a hell of a lot cheaper too. The answer for the typical American is to wait for utility-scale to build Solar out for them.
When the city as a whole notices that solar is cheaper than running peaker plants or whatever, then the city / municipality can purchase an entire field of solar (AND the energy storage needed to make it useful) and give it out for the whole town.
And in the mean time, you can drink your beer on the porch while you wait for progress to be made.
If you want to "save up for your kids", the way to do it is to invest your money in the investments that have the highest ROI, as long as you have enough liquidity to weather emergencies. Pay off your 23% credit card before your 17% credit card, pay off your 17% credit card before you start putting up solar panels that will have a 16% internal rate of return, and put up the solar panels before you buy the cold can of beer with its 0% ROI.
Twenty years from now, you'll be drinking your beer on the porch and sending your kids to college, while your typical American loser neighbors are whining about their credit card and electric bills.
Chuck is replacing a $2000 inverter in just 10 years. If your emergencies include "fixing the damn solar panels that you bought", that's your own damn fault.
In any case, when middle-class Americans start buying solar en masse, I'll admit I'm wrong. But for now, I'm going to bet you that this is a luxury that is not cost-effective for the typical middle-class American.
It ain't like a Washing Machine, Refrigerator or Water Heater. I'll tell you that much.
An inverter that cost $2000 ten years ago now costs $400. (Amazon has a Bestek 2000W inverter for US$140 right now; three of these can supply more than what my house is wired for.) Even if you did have to buy a new $2000 inverter every 10 years, that's US$17 a month.
It's true that financing the up-front investment is a difficulty, and that's why Solar City is doing such great business. But as the component cost drops, accelerating both the IRR and the up-front investment size, that's less and less of a problem.
If you do want to bet on it, I imagine you can buy stock or long-expiry call options in coal-mining companies (BTU is in penny-stock territory right now because they filed for bankruptcy a couple weeks ago, and ACIIQ is too because they filed for bankruptcy in January), or puts on SCTY and Enel Green Power. This is a terrible idea and will lose you money, and you should not do it.
Because you refuse to calculate, you are doomed to talk nonsense.
On the contrary. SolarCity hasn't made a profit and their stock has tanked. It seems like solving the up-front cost issue is difficult.
Widespread deployment of Utility-scale Solar will harm SolarCity and their customers (who have entered into long-term purchase agreements). If Widespread Solar LOWERS prices in the long term, then SolarCity dies.
Good for the world of course, but SolarCity's bets are on the wrong side of progress IMO.
The up-front financing business is hard.
Promise? Because that day will be here sooner than you think.
The relevant number is "Amercian median house-owning household income"
Why would electric bills be rising if solar is getting cheaper? If solar is cheaper and more efficient today, and utility-scale solar can afford efficiencies like motors (to directly face the sun throughout the day), and building the panels on the ground (easier to maintain, fewer rooftop deaths)... why would I want to jump the gun and purchase solar for myself?
Tell me, do you think you can beat $.06/kWh that Utility-scale Solar is getting TODAY? Do you think you can beat the estimated cost of $0.03/kWh in 5 years?
I THINK the article is trying to say that electric prices in America is going to start going down, thanks to solar. Depending on how quickly solar gets deployed of course.
Now yes, I do realize that buying your own solar comes with its own rewards. But we cannot ignore the risks. Gas prices have halved from their height of $4/gallon, and other forms of energy have also dropped in price.
Most noticeably, solar. No reason to buy solar yourself if you can just wait for the utilities to deploy solar after all.
A generator probably beats a lot of battery systems (which along with the right inverter and a transfer switch is another way to use the solar for backup power).
But a side benefit of putting in the system was we did a lot of electrical panel work, and as as result put 8 circuits on to a transfer switch (the incremental cost was the transfer switch and the electrictian's time wasn't materially affected.) So when the power does go out we can fire up a generator and switch over to gen power easily.
- Retail cost of electricity is already v low in most of TX (Houston, Dallas) - so it's hard to compete.
- not much competition in the solar rooftop installation space (due to first point above)
- No net metering policies in Houston, Dallas.
- High solar yield
Why can't the utility companies do the financing (upfront investment), place them on our roofs, and get a little bit of the profit? Seems like a win-win situation.
And otherwise government, or specialized banks?
And for the do-it-yourselfers, how much of the cost is installation now? Is it practical to do most of the grunt work yourself and then get an electrician in to do the final part?
I can recommend that as a plan of action, find a local group offering job training as a solar installer and take it. Then using that knowledge you can design an installation that meets your local code.
I'm a bit surprised there are no mini wind turbines. I read about some promising developments (with close to 0 noise output) but it seems to have fizzled.
I would not expect a company to quote a new install for that price since they will have to add the mounting system and pay their installers for a day's labor getting everything set up.
Well that's the utilities opportunity to survive. Utilities should actually lobby against ICE cars and pro-EVs. They will be the ones charging EVs everywhere. Not everyone will afford to charge their own EV at home where they have solar panels.
I think the barrier is not only cost, but also know-how. Few people are likely to tackle a challenging project like this with a $7k out-lay.
I am already "in the black" as it were since the system has already provided more value than it cost to install and maintain. So no worries there. But 325W panels are physically larger than 185W panels (not twice as large but still) so replacing the 28 panels on the roof with them would get my raw input up to 9.1kW but I'd need roughly 33% more surface area. That would add another strut on the mounting system and the top row of panels would extend beyond the peak of the roof (now disallowed by the building code). However, it would be "easy" get get 16 in there, which would be an equivalent raw foot print (5,200 watts)