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Actually in many places solar is currently cheaper than the utility, without having to be a cheaper generation source. For example a cost of 15c per kwh cost f
by IkmoIkmo 11y ago
Actually in many places solar is currently cheaper than the utility, without having to be a cheaper generation source.
For example a cost of 15c per kwh cost from solar is pretty trivial in many parts of the world nowadays. But here's the thing, for example in the Netherlands, I pay 7c per kwh for electricity, and then about 13c in energy specific tariffs, and then VAT on the whole lot. My final electricity price is about 3x (22c) the cost of the electricity itself. But for every kwh I generate myself and don't buy, I save 22c.
In other words, at a hypothetical cost of 15c per kwh, twice as much as electricity from my utility, I save almost half of my bill.
That situation differs radically between countries and even states, but again, savings on solar are a very typical story nowadays. I'd say most solar buyers today are saving money. 5-6 years ago that was different, when most people who bought were still buying with a moral position in mind and paid a slight premium.
Mostly, I don't think people realise how incredibly subsidised solar is. Per unit of energy generated, direct taxes/subsidies are much, much higher than oil. The other part of that story is that we have path dependency in oil and that the carter doctrine has cost trillions of dollars, and that externalities aren't priced in much for fossil. (e.g. cost of pollution, droughts etc).
For example, here's an interesting thought. For every $1m you buy in solar, you get about half a MW in capacity, which generates a little under 1 GWH per year (rounding it up very heavily here but you'll see it's mostly irrelevant). Now here's what that means. First of all, you can get a 30% tax credit, which you can sell. That's $300k recuperated. Then on a portion of the cost, 85% iirc, you can depreciate within 5 years or so. At a tax rate of 35%, that's a total of $300k in tax avoidance due to depreciation. So right off the bat in tax structuring, you've already gotten more than 50% off. Then, your almost 1 GWH per year generates solar credits, which you can sell, too, for about $100k per year. And yes you can presell these for 10 years into the future.
And then and only then, after you've paid $1m, received $600k in tax back from the government and sold solar credits for just the first 10 years for $1m (on a system with 20-40 years of lifetime at least), when you already made $600k accounting profit without generating a single electron, then you can start to actually sell the energy to an offtaker (like an Amazon warehouse) for about 10c per kwh, making you a little under $100k a year.
So you invest $1m, you get $1m, you get $600k in tax benefits and annual income of a little under $100k. Sounds insane? Well it sort of is. It depends on the state, some states are crap (low cost of electricity, low price of solar credit market, little offtaker demand, few solar resources (sun), difficult regulations etc etc), some are great.
And beyond that, solar is simply becoming cheaper really fast. For example, SolarFirst just signed a contract for a 100 MW solar project at a kwh price of 3.8c. Pretty insane.
Anyway in short the notion that solar savings are disingenuous is completely false. In fact virtually all of the big solar companies offer leases right now, where you pay nothing upfront, you don't own the panels, but you lease them on your roof and pay an electricity bill that's lower in the vast majority of cases than your utility. That's their main selling point.