Friday, December 14, 2012

Brave Helios! Wake Up Your Steeds!

Believe it or not, I am a fan of solar and other forms of alternative energy. Not because scolding Hollywood hypocrites told me to, but because I've been intrigued by such technologies for a long, long time, in a Popular Science kind of way.

Bloomberg News featured a typically pollyannish story about how great solar is, and while I deride their starry-eyed cheerleading, I do applaud them for bringing the numbers. And it's amusing, and encouraging, to hear liberal green energy fans moan about government red tape:
The hidden costs of obtaining permits and regulators’ approval to install rooftop panels is a big reason the U.S. lags behind Germany, which leads the world in rooftop installations, with more than 1 million. (Bloomberg - Solar Energy is Ready)
A few points

First, an ironic point:  Throwing government money at Obama's Solyndras won't bring down the cost of "green energy," but buying cheap solar panels from China will. The money made in this country on such technologies will not be in its manufacture, but in the engineering of systems, marketing, installation, and maintenance.

Second, we don't need a Grand Imperial Energy Strategy to cram this technology down people's throats. Where it is windy, people will install wind turbines when economically feasible, and the same can be true for solar if the price continues to fall, but these new technologies should be seen as supplements to existing coal- and natural gas-powered energy infrastructure. The wind doesn't always blow and the sun doesn't always shine.

Another irony is that this technology will advance furthest where the evil energy providers co-opt it and integrate it into their services so they can make money from it instead of watching it eat into their profits.

The Numbers

The Bloomberg article provides some anecdotal stories and useful numbers:
Nationally, the average cost of residential installations—including hardware, permits, and labor—has plummeted from $9 a watt in 2006 to $5.46. (Bloomberg - Solar Energy is Ready)
According to a state of Nebraska website, the average cost per kilowatt hour for electricity is 9.82 cents. Let's round it up to 10.

So you decide to buy 1000 watts (1 kilowatt) of solar power to install on your roof, and it costs you $5,460 ($5.46 x 1000). The first hour of operation, that kilowatt hour costs you $5,460, but you'll be operating a long time, hopefully, so the price comes down. You will break even at 54,600 hours of operation. If you figure you get ten good hours of sunshine a day, that works out to 5,460 days (see how easy math is when one of the numbers is a ten?)

Divide 5460 by 365, and you get 14.9 years to break even, assuming ten good hours of sunshine every day for those almost 15 years.

Is it worth it? Depends.

Would you hand $5,460 to someone who promised to pay it back, without interest, in 15 years? It's a losing proposition, especially in an economic environment where the value of a dollar is constantly eroding. "But," some protest, "I get a cheaper energy bill." Yes, but you paid for it up front, so it's a wash. You don't start realizing a gain until the 15th year.

But There's Hope!

The idea of solar panels on every roof intrigues me.  Each rooftop system a paltry drop in the ocean, but in the aggregate, a potential powerhouse, and in places where the grid sometimes collapses due to high usage, these systems can make a difference.

Is it economically feasible?

You would have to compare the maintenance costs of a power station against the X number of house-mounted solar panels that provide a comparable amount of energy.  One strike against the rooftops is that they don't operate 24/7. Still, there could be some potential benefit there, but how do we make it advantageous to the individual consumer?

How about if the electric company purchases the materials as a capital investment, since they are able to amortize the cost over the life of the systems.  This eliminates the rivalry between the Big Utilities and the Green Industry.  

This model could work, but only if the cost of solar continues to fall, because as an investor in the utility sector, I'm going to spend my dollar where it buys the most energy, and right now, that is still a coal or natural gas plant, and hence the "need" for government intervention to cajole people into buying a less efficient technology, and there's the rub.

In an area where no new power plants can be built, the model could work, but in a state like Wyoming where energy is very cheap and land for new power plants is plentiful, it would not.    

18 comments:

Rational Nation USA said...

It just makes sense. Technology of the future will be awesome. If we don't succeed in blowing ourselves up first.

Just sayin...

Always On Watch said...

I'm all for alternative forms and sources of energy -- as long as the cost isn't prohibitive AND those alternative sources actually work.

I recall an amusing incident of some years ago. My parents' neighbor decided to go "all solar" and, being wealthy, they installed huge solar panels on the roof of their house. Well, the winter was along the lines of snowmageddon of days on end (snow covered the panels, and the sun barely peeked through for a full two weeks), and those neighbors ended up coming over to my parents' house for several weeks so as not to freeze. Their pipes DID freeze, of course; the cost of the damages was horrendous.

The following spring, those solar panels ended up in the dust bin.

Maybe things are different now with the technologies, but I'll never forget that failure in my parents' neighborhood -- back in the 1980s.

conservativesonfire said...

Not my aarea of expertize. However, my opinion is that alternative energy is still not ready for prime time. It is not yet cost competetive. I doubt that utility companies are loosing any money by being forced to use a percentage of their power deliveries from renewable sources. Their tarrifs are based on their costs. The consumer always pay. As for the utility companies investing in the panels thenselves, not unless there is a reasonable pay back. 15 years is not a reasonable pay back.

Ducky's here said...

Germany has implemented a similar system with considerable success.

Silverfiddle said...

Ducky: Success? They are foregoing cheaper energy for the more expensive, paid for in higher taxes, since the government is subsidizing it all.

If they value environmental concerns over financial ones, then yes, I suppose it is a success.

Hugh Farnham said...

My home is powered by solar, wind, and the occasional generator.

Assuming a ten year component life, my cost per delivered kWh is around $0.34. There's more to a solar power system than panels - add in deep cycle batteries, inverters, chargers, etc.

The key to using alternative power isn't necessarily the generation of power, but the consumption of it. Much like our Federal Government, the key is spending, not generating revenue.

My home uses 3 to 4 kWh per day - and I have all the amenities of life here, Internet of course, lights, big screen TV, and so on. Heat is via propane.

In the grand scheme of things I pay 1/3 less for my monthly power bill than if I had a conventional grid power hookup and conventional consumption tastes. I just had to pay my power bill in one lump sum upfront.

Total cost for my current system: $4,000. The value of being independent of the local predatory power company: priceless.

FreeThinke said...

" ... these new technologies should be seen as supplements to existing coal, and natural gas-powered energy infrastructure. The wind doesn't always blow, and the sun doesn't always shine."

"Aye, there's the rub!"

I love the IDEA of freeing ourselves from fossil fuels. I don't really mind the governmnent "wasting" our money on RESEARCH -- as long as the research is HONEST and not used as a tool to implement a Power Agenda.


By the way, when I bought my present house, it came already equipped with solar panels covering most of the roof of the rear elevation. These were supposed to heat the pool not the house.

Well, three things:

1. They were UGLY

2. Over time they had caused hidden roof rot and soon after I moved in water damage inside the house.

3. THEY DIDN'T WORK!

4. They were expensive to get rid of, and it was a great more expensive to

____ A) repair the damage to the superstructure of the roof

____ B) replace all the shingles

____ C) Install a proper electrical heating system that actually raised the temperature of the water to acceptable levels for swimming and aquatic exercise.

SO, my opinion based on sad experience is that these things are a clumsy, ineffective, highly overrated intrusion into American Domestic Life.

~ FT

Ducky's here said...

If they value environmental concerns over financial ones, then yes, I suppose it is a success.

------
You assume environmental issues have no cost. Kapital is notoriously incapable of accounting for these intangible costs.

Also long term thought is not an American strength. The suns rays are cheap and as technology is adopted it becomes much cheaper.
Been paying any attention to the electronics industry?

Jersey McJones said...

The technology is advancing every day, and soon enough solar panels will be cheap and tough enough for common use. Not yet, but it's coming.

The pro-pollution crowd will be disappointed, but they can always burn some tires in the backyards when they need a whiff of the good ol' days.

JMJ

Thersites said...

I suppose we REALLY should keep Barrack O'Phaethon from stealing his father's chariot. Last time he tried driving it, the path of devastation was hard to bear...

The Amonix Solar: The manufacturing plant in North Las Vegas, subsidized by more than $20 million in federal tax credits and grants given by Obama Administration, has closed its 214,000 square-foot facility a year after it opened.

Solar Trust of America: Filed for bankruptcy in Oakland, CA, on April 3, 2012.

Bright Source: Bright Source warned Obama’s Energy Department officials in March 2011 that delays in approving a $1.6 billion U.S. loan guarantee would embarrass the White House and force the solar energy company to close. Bright Source then received more money.

Solyndra: Obama gave $500,000,000 in taxpayer money to Solyndra who shut its doors and laid off 1100 workers in August 2011 after billions in losses due to failure to make a solar product that works.

LSP Energy: LSPEnergy LP filed for bankruptcy protection and conducted a sale of its assets in Feb. 2012.

Energy Conversion Devices: On February 14, 2012 Energy Conversion Devices, Inc. and its subsidiaries filed for bankruptcy.

Abound Solar: Abound Solar received a $400 million loan guarantee from Barack Obama, then announced in June, 2012 that it would file for bankruptcy.

SunPower: SunPower stopped producing solar cells in 2011 at near bankruptcy, then restructured with the help of an oil company.

Beacon Power: Beacon Power Corp filed for bankruptcy protection in October, 2011 just a year after Obama approved a $43 million Government loan guarantee. They remain barely in business, still struggling to make energy that makes sense or that works at all.

Ecotality: ECOtality, a San Francisco green-tech company that never earned any money and remains on the verge of bankruptcy after receiving roughly $115 million in two loan guarantees from President Obama.

A123 Sola: A123 Solar received $279 million from taxpayers thanks to President Obama’s Department of Energy loan guarantees even after the Solyndra bankruptcy and is getting another $500 million from Obama after a loss of $400 million.

Uni-Solar: Uni-Solar filed for Ch 11 bankruptcy in June 20, 2012 after laying off hundreds of workers. UniSolar received even more Obama money after showing now progress, no profits and is still failing… yet they still remain in business with Obama’s help.

Azure Dynamics: Azure Dynamics filed for bankruptcy in June of 2012 after wasting millions in stimulus money.

Evergreen Solar: Evergreen Solar received $527 Million in Taxpayer money from Obama and filed bankruptcy in late 2011. Evergreen, which closed its taxpayer-supported Devens factory in March, 2011 cut more than 1800 jobs. Evergreen’s $450 million factory, turned out to be a colossal “waste” of taxpayer money.

Ener1: Ener1 Inc. received a $118 million U.S. Energy Department grant from President Obama to make electric-car batteries but filed for bankruptcy protection January 2012 after defaulting on bond debt.

Thersites said...

...anybody wanna invest in my perpetual motion machine?

Thersites said...

I promise to keep it moving for as long as I can get suckers to keep investing.

Silverfiddle said...

@ Ducky: "You assume environmental issues have no cost. Kapital is notoriously incapable of accounting for these intangible costs."

You assume environmental costs can be quantified. So how much in environmental costs is Germany saving?

Then there is this...

Windmills Overload East Europe’s Grid Risking Blackout

Everything has a cost. Everything.

viburnum said...

When I drove west this summer I passed through a very large wind farm along I 70 in Kansas. What surprised me was that 3/4's of them weren't in operation. That was in the middle of a heat wave ( 105 in Abilene ) when you would think electricity would be in high demand. We may be having the same surplus issues as eastern Europe.

Finntann said...

@Kapital is notoriously incapable of accounting for these intangible costs.

As are governments and politicians.

@The pro-pollution crowd will be disappointed

And the idiotic statement of the week award goes to.... (drum roll please)... JERSEY!

I've looked into both solar and wind... and bought neither, but as Jersey said before he went entirely off track, the technology is improving.

Cheers!

Silverfiddle said...

From Finntann, deleted by accident:

@Kapital is notoriously incapable of accounting for these intangible costs.

As are governments and politicians.

@The pro-pollution crowd will be disappointed

And the idiotic statement of the week award goes to.... (drum roll please)... JERSEY!

I've looked into both solar and wind... and bought neither, but as Jersey said before he went entirely off track, the technology is improving.

Cheers!

Inspector AIPAc said...

Vee hate the Nazi's
Vee love dee Jews
Vee'l oppress Palestine
And make YOU feel guilty, too!

BB-Idaho said...

Coal, oil, natural gas..all ultimately derived from the energy
of the sun. Makes sense to remove
some long natural processes and reserve if possible some finite resources.