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Thread: Solar electric...what's up with that?

  1. #31
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    The catch with PVs is that they generate less power as the ambient temperature rises.

    That means that on the days with the longest sun exposure the panels are putting out less juice per photon.
    This is actually good news for Northern latitudes, we're not hamstrung by the high temperatures of our Western deserts.

    Coupled with a net Zero home (superinsulation) this is a winning proposition.
    If you drive a plug in EV or plug in Hybrid EV, they're brilliant.

    For me, just South of Boston, it was more holes in my roof than I want in Hurricane alley.

  2. #32
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    If you search "True cost of solar" it brings up a number of hits that discuss the total cost per KwH to generate solar voltaic energy by installing a residential unit. This "true" cost is defined as what it would cost a homeowner if there were no subsidies, or tax rebates, and the cost is truly astounding. An article by WKB Associates (10/12/2012) calculates that in a semi-realistic example the true cost is $0.42/KwH. Costs vary around the nation, but mine last year from the local power company was $0.117/KwH. That is a big difference. Another article by the American Thinker (10/19/2012) estimates that for every dollar you spend installing, maintaining and operating a solar system, you would get $0.12 back if there were no subsidies or tax rebates.

    But this is unrealistic because there are subsidies, and tax rebates. So who is making up the $0.30/KwH difference? Of course it is the American taxpayer. The homeowners who install these units are actually transferring the bill for the difference between the true cost, and their cost to the rest of us. Am I missing something here?
    Last edited by Rich Enders; 03-26-2013 at 9:59 PM.

  3. #33
    Quote Originally Posted by Rich Enders View Post
    If you search "True cost of solar" it brings up a number of hits that discuss the total cost per KwH to generate solar voltaic energy by installing a residential unit. This "true" cost is defined as what it would cost a homeowner if there were no subsidies, or tax rebates, and the cost is truly astounding. An article by WKB Associates (10/12/2012) calculates that in a semi-realistic example the true cost is $0.42/KwH. Costs vary around the nation, but mine last year from the local power company was $0.117/KwH. That is a big difference. Another article by the American Thinker (10/19/2012) estimates that for every dollar you spend installing, maintaining and operating a solar system, you would get $0.12 back if there were no subsidies or tax rebates.

    But this is unrealistic because there are subsidies, and tax rebates. So who is making up the $0.30/KwH difference? Of course it is the American taxpayer. The homeowners who install these units are actually transferring the bill for the difference between the true cost, and their cost to the rest of us. Am I missing something here?
    I don't know about your state, but the rebate from Southern California Edison is not that much. The federal tax credit is 30% of the system cost. I don't know what those people who did the "true cost of solar" used as numbers but here in CA, the cost of electricity in the highest tier is presently around $0.36 per KWh. Most people do not try to zero out their electricity bill, but just generate enough to get them down to tier two ($0.16 per KWh). And just FYI, tier three is $0.29 per KWh, and tier four is $0.33 per KWh - this is winter rates and summer rates are a bit higher.

    But in analyzing the payback, you have to take into account that there's very little variable cost in the system - it's all up front fixed cost. So if the system will last for 30 years, you need to take the present value of what you would have paid for the electricity you generated (and therefore didn't have to buy) during those 30 years and compare it to the capital cost of the system. My guess is that you will get to payback (in present value) a lot sooner than 30 years. I expect to get paid back (in present value) in about 10 years. That means that I get 20 years of free electricity, which seems like a pretty good deal to me.

    Regarding who pays for the tax credit and rebate. Let me address the rebate first. Here in CA the power company has a mandate to generate about 30% of it's power from renewable sources by some date (maybe 2020, I don't remember). By encouraging homeowners to put up solar panels, the electric company avoids having to invest in renewable energy power plants. They feel it's a pretty good deal for them.

    As for the federal energy credit, the government has funded (in many different ways, sometimes directly, sometimes through tax credits) the investment in many technologies that are believed to be important to the future of the country. The federal government funded the development of what became the Internet, for example, and radar was developed completely with government funding during WWII. GPS is fully funded by the government - what would we do without it now?

    Mike
    Last edited by Mike Henderson; 03-26-2013 at 11:50 PM.
    Go into the world and do well. But more importantly, go into the world and do good.

  4. #34
    Quote Originally Posted by Rich Enders View Post
    If you search "True cost of solar" it brings up a number of hits that discuss the total cost per KwH to generate solar voltaic energy by installing a residential unit. This "true" cost is defined as what it would cost a homeowner if there were no subsidies, or tax rebates, and the cost is truly astounding. An article by WKB Associates (10/12/2012) calculates that in a semi-realistic example the true cost is $0.42/KwH. Costs vary around the nation, but mine last year from the local power company was $0.117/KwH. That is a big difference. Another article by the American Thinker (10/19/2012) estimates that for every dollar you spend installing, maintaining and operating a solar system, you would get $0.12 back if there were no subsidies or tax rebates.

    But this is unrealistic because there are subsidies, and tax rebates. So who is making up the $0.30/KwH difference? Of course it is the American taxpayer. The homeowners who install these units are actually transferring the bill for the difference between the true cost, and their cost to the rest of us. Am I missing something here?
    Would you provide a pointer to the web site where you got your numbers, please. I did as you suggested and found a number of articles, including one that was focused on Los Angeles. Here's what that article said:

    "In this example, the post-incentive cost is $9,213. Incentives for this system consist of the federal tax credit of 30 percent, a property tax exemption from the state and a rebate of $0.12/kwh for 20 years from the city of Los Angeles. The breakeven point is 3.64 years — where the savings equal the initial investment. Over a 25-year period, the total savings is almost $100,000."

    Mike
    Go into the world and do well. But more importantly, go into the world and do good.

  5. #35
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    The idea of a distributed power system makes a great deal of sense in areas with fragile power lines.
    (Anyone from Connecticut or Vermont can tell you what that meant in the last major snow storms.)

    PV makes the most of it's output if you have a bank of batteries storing power, and an inverter to supply AC to your mains.
    If you're looking at it with a view to ROI, it may not make a great deal of dollars and sense.

    If you're adding PV to augment an increasingly creaky Electrical grid, it has the same utility as buying insurance.
    I invested in a standby generator that runs on natural gas instead of PV, as the additional cost or battery storage wasn't price competitive.

    I think the "killer app" for PV arrays is in battery storage of excess power, either in an Electric vehicle or house stack.
    Lacking that, it's a perforated roof that holds me back from making the leap.

  6. #36
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    Quote Originally Posted by Jerry Thompson View Post
    Kevin;

    Gernment subsidies is my money along with millions of other taxpayers. If solar power is such a good deal it would not have to use the people's taxes to promote it. The free enterprize/captilist system would be all over it if it were financally feasable.
    +1.

    More on topic though, all of these wind/solar power schemes require high subsidies from multiple levels of government. In case no one has noticed, there is a slight financial crisis on hand, do you trust the government to pay its obligations, or worse, that it will agree that it still has an obligation? Especially on something that would likely be gone the instant the other political party gains power? If you are worried about buying green bananas, I suppose it doesn't matter to you, but what kind of potential mess are you handing to your kids?

    Worse then that, these are generally also dependent on subsidies from the state and the local power company. I know a guy who put up three large wind turbines, only to have the rules be changed by the local power company. The shorter payoff is now something like 50 years. Oh, the life span of the turbines is 7.

    Next issue, what is the logical thought process to "invest" in something that doesn't even break even until the device is at the end of its usable life, and has no salvage value? Would't it make more sense to take the money and use it for something else? If you want to feel good, just give it to a charity, you'll get better returns.

  7. #37
    Turbines are a bad individual investment ( in terms of actual power production, possible maintenance, damage ). I probably mentioned a relative's experience with a 10kw generator on a 90 foot post earlier here. I don't see how they could ever come close to solar's economic viability in most parts of the country. Certainly on a large enough scale and in certain places, they can generate a fair amount of power but an individual has no hope of placing one on a 200 foot tower on an ideal clear ridge top in a high wind area.

  8. #38
    Quote Originally Posted by Steve Rozmiarek View Post
    Next issue, what is the logical thought process to "invest" in something that doesn't even break even until the device is at the end of its usable life, and has no salvage value? Would't it make more sense to take the money and use it for something else? If you want to feel good, just give it to a charity, you'll get better returns.
    I don't know about wind, but my solar installation is guaranteed for 20 years and the payback is significantly less than that (I estimate 10 years). I expect to get at least 30 years out of the system. Regarding investing for the long term, yep, some people do invest for the long term. Some people buy land and don't develop it or sell it for 30 years. Many of us put money into a 401K and don't take it out for 40 to 50 years. There's nothing wrong with having a long investment horizon.

    Mike

    [Regarding the rules changing, I do worry about that. Let me use myself in this example. I generate electricity and feed my excess back to the power company - and in doing so, I zero out my electric bill. So the electric company doesn't get a penny from me. But they still have to provide generating capacity and distribution to me because I need to take power from them during the evening and when the sun isn't shining. They can't do that without getting some money from me to pay for that. So I do think the rules will change in the future.]
    Last edited by Mike Henderson; 03-27-2013 at 11:22 AM.
    Go into the world and do well. But more importantly, go into the world and do good.

  9. #39
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    As Mike says, the objective is to keep your electric bill in tier 1 and 2. Tier one is kept very low and is used as a break for fixed income seniors, etc. It is a very short tier, which quickly jumps to tier 2 (16 cents). Trying to stay out of tier 3, which almost doubles (29 cents), and 4 (33 cents), is the goal. In CA the amount the Edison Co. pays you back for generating more than you use used to be more, but now has phased back to 3 cents kWh. It makes no sense to think you will make money on the deal, the object is to save money on what you use.

    The system I am installing will provide most all of what I use, and the average kWh over the 20 year period the system is maintained and guaranteed is 6 cents. Remember, the current tier 2 rate is 16 cents. We can only guess what it will be in the future. As I mentioned before, my payback is 4 1/2 years.

    As to the rebates, I am in agreement that they will not always be there, that's why I am getting the system now. BTW, there are six houses on my street, and I am the third to get solar.

    If this system works out as expected, I will be looking at a plug-in hybrid for my next car in a couple years.

    Rick Potter

  10. #40
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    Mike,

    Thanks for your response. I spent most of my career in Southern California, but we moved everything to Arizona when we brought manufacturing in house. We could not compete in our business with all the extra costs applied by California.

    The $0.117/KwH is the rate we paid last year in the Phoenix area, and that includes 5 months of full on A/C use. For reference I just read another article that estimated the average cost across the US last year was $0.11/KwH.

    I am no expert on solar. My interest is how our taxes are spent, and solar is just one area of concern.

    One of the articles I referenced on "true" cost is available at www.americanthinker.com/2011/ The original article was written July 11, 2011, and then reprinted in their October 19, 2012 issue. The other article seems to have fallen off the internet, but I found it by doing a search of WKB Associates. It is highlighted as True Cost on their web page. If you are still unable to find the articles, I will be happy to email or fax them to you directly.

    I noted the special situation you have in California, and the incentives that encourage solar. However the really significant subsidy seems to be in the cost of the panels to a home owner. According to the American Thinker the residential panels that sell for a few thousand would have a true unsubsidized cost in the 10's of thousands. In their particular example a 900 kilowatt-hour-per-month solar array has a true cost of $67,500. As I read the article this size array is about enough to run a 2 ton A/C unit.

    Again I am not an expert, but if these numbers are even close to factual then we need to rethink what we are doing, and what it is costing all of us.
    Last edited by Rich Enders; 03-27-2013 at 2:20 PM.

  11. #41
    Quote Originally Posted by Rich Enders View Post
    However the really significant subsidy seems to be in the cost of the panels to a home owner. According to the American Thinker the residential panels that sell for a few thousand would have a true unsubsidized cost in the 10's of thousands. In their particular example a 900 kilowatt-hour-per-month solar array has a true cost of $67,500. As I read the article this size array is about enough to run a 2 ton A/C unit.

    Again I am not an expert, but if these numbers are even close to factual then we need to rethink what we are doing, and what it is costing us.
    Solar panels are coming in from China, and I'm sure they don't receive any US government support, and are driving the cost of solar panels down. It's hard for me to believe that US companies are that much different in price from the Chinese panels. The US plants have to pay higher wages but there doesn't seem to be that much labor in a solar panel. And if the Chinese were "dumping" the product in the US, they wouldn't have to sell that cheaply to drive the US plants out of business. Additionally, there are avenues that US companies can pursue to have tariffs applied to products that are deemed to be "dumped".

    No, I think the cost of solar panels represent the cost of manufacturing them, plus some profit.

    BTW, for everyone's information, the before credits and rebates cost of solar around here is about $5.25/watt. This is fully installed, parts and labor. My guess - and it's just a guess - is that the material cost (solar panel, inverter, and mounting hardware) is about $3/watt. So a 260W panel with inverter would be about $750 or less. A 900KWh/month installation would be about 25 panels, or about $19,000 in material (let's call it $20,000 in material). If the material cost is $3.50/watt, the material cost would be about $22,750.

    Mike

    [That article you gave a link to is not available through your link. Maybe something wrong with the URL?]
    Last edited by Mike Henderson; 03-27-2013 at 5:19 PM.
    Go into the world and do well. But more importantly, go into the world and do good.

  12. #42
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    Quote Originally Posted by Mike Henderson View Post
    I don't know about wind, but my solar installation is guaranteed for 20 years and the payback is significantly less than that (I estimate 10 years). I expect to get at least 30 years out of the system. Regarding investing for the long term, yep, some people do invest for the long term. Some people buy land and don't develop it or sell it for 30 years. Many of us put money into a 401K and don't take it out for 40 to 50 years. There's nothing wrong with having a long investment horizon.

    Mike

    [Regarding the rules changing, I do worry about that. Let me use myself in this example. I generate electricity and feed my excess back to the power company - and in doing so, I zero out my electric bill. So the electric company doesn't get a penny from me. But they still have to provide generating capacity and distribution to me because I need to take power from them during the evening and when the sun isn't shining. They can't do that without getting some money from me to pay for that. So I do think the rules will change in the future.]

    Mike, you illustrated what I meant. The example you cited of land and a 401K have intrinsic value for an infinite period. Machinery, cars, and solar panels don't. One way to look at it is you are prepaying the electric bill until the system breaks even, then you are in the profit. Using a quick google of some government site http://www.eia.gov/tools/faqs/faq.cfm?id=97&t=3

    my state uses an average of 1029 kWk/month, costing $95. This puts breakeven on a 900 kWh/month system at 17.54 years as calculated on cost. If it runs for another 2.5 years (20 year life) you make $2,850, or if it goes to 30 years, you make $14,250, assuming no breakdowns.

    Now, if you had invested $20,000 at 3% for 20 years, you would get back $33,090, 30 years gets you $42,570. For my simple mind, investing in this scenario nets you $10,240 more, or for a 30 year, $8,320 more.

    At some point, it looks like the solar panels beat the return of the investment, but it would be in year 70 or so I think. Another thought, sure the panels may last 30 years, but what if technology changes between now and then, and in year 15 the "new improved panel" comes out and you want to replace yours. Then you've lost money for the first 15 years.

  13. #43
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    Quote Originally Posted by David Weaver View Post
    Turbines are a bad individual investment ( in terms of actual power production, possible maintenance, damage ). I probably mentioned a relative's experience with a 10kw generator on a 90 foot post earlier here. I don't see how they could ever come close to solar's economic viability in most parts of the country. Certainly on a large enough scale and in certain places, they can generate a fair amount of power but an individual has no hope of placing one on a 200 foot tower on an ideal clear ridge top in a high wind area.

    Just to clarify, the turbines I referenced are 25Kw, IIRK, and they are large, on 150 foot poles. We are very rural, and they would not be allowed in most places. The issue here is the local utility changed the rules on what they paid for locally generated power. They are now not even close to profitable, and short of changing laws, there is no recourse.

  14. #44
    I'm sure they're a better investment there than they are here. What do they pay you now, generation?

    We have gobs of them popping up around here (the big ones), but something happened with solar credits recently because a lot of the implementation has been put on hold. I haven't a clue about the subsidies for the windmills, but something must've changed drastically.

    My relative tried to go the turbine route way back in the late 70s or early 80s, the last time alternative energy was popular. It was sickening to watch the turbine moving fairly slow or not moving at all a lot of days. And after a while, it seemed like the whole thing was down more than it was up. I'm sure they're a little better now, but they go back and forth between doing nothing and taking a beating.

    Do you know what yours will average over a season? Will it come out around 15%.....or 25% of rating or something like that overall?

  15. #45
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    David, they aren't mine, a neighbors. I don't know the answer to the average, I would guess a bit better than that though. We have the (mis)fourtune of living where the wind always blows. Some day I may make a little money, and move someplace between the mountains with tall trees so that I get a change of pace.

    I'm not sure what the rate that the utility paid initially, but he set them up based on it, and got cut to about a tenth. He is using them when he runs the irrigation now, said it costs money to run them into the power line. I think you are right, turbines are probably a horrible idea in most of the country.

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