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?
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.
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.
