9 ms·

When will rooftop solar be cheaper than the grid?

132 points by leejoramo 11y ago

kelukelugames 11y ago
Has this been shared on HN yet? You put in your address and Google tells you how much you save by installing solar panels. https://www.google.com/get/sunroof#p=0 https://www.google.com/get/sunroof#p=0
- NDizzle 11y ago
  Cool site, thanks for sharing. I have never seen it. According to that site a $20k install would pay itself off in 6 years. That is compelling.
  - bnolsen 11y ago
    I live in colorado and it says i would lose money by going solar. Interesting since at costco, etc the solar guys are pushing pretty hard. I've held off so far because I think there's still room for dramatic improvement in solar panel and battery technology in the next few years. Also I seem to get a new roof every 5 or so years due to all the hailstorms we get around here. I suspect solar panels don't like big hailstones very much and I have no idea what would happen if both the roof and panels are damaged. I doubt a roofing company is well equipped to handle the panels.
    - MSM 11y ago
      That's actually pretty surprising to me, I have only visited Colorado a few times but I have always been very (pleasantly) surprised by the amount of sunshine. A quick look on Wikipedia says Denver has sunshine 70% of the time totaling ~3,100 hours a year. I'm from MI where we see sun about once a week so I'm out of touch, but that seems like it should be more than enough to recoup costs. Is the amount of sunshine in Denver significantly different from where you're at, or is there something else I'm missing?
      - bnolsen 11y ago
        might be current cost of energy is low here. and yes we get tons of sunshine, amazing amounts.
    - rogerbinns 11y ago
      I'm curious how this is all going to shake out in the housing market. The guys pushing hard have ~20 year contracts. If you go to buy a house in 2020 that had a system installed in 2012, the panels etc would be fairly dated (plus wear and tear), and there would still be 12 years left on the contract. I'd insist on paying less for the house due to being saddled with the obligation, or the homeowner would have pay (a lot) to get out of the contract early. Like you I too see dramatic improvements over the next few years, hence committing now not being a good decision.
  - marssaxman 11y ago
    I bought a $15k system in 2013, and if current trends continue it will have paid itself off 7 years after installation. I was interested in solar purely as a means of reducing my carbon footprint; I was surprised to learn that it had already become such a good investment, too. I'm glad to hear that the numbers have continued to improve. (I could have gone bigger and come close to covering all of my household power needs, whereas the current system gets maybe 60% or so, but I'd have had to cut down the big old cedar tree which shades part of my roof, and that just seemed like it would be missing the point somehow.)
- theandrewbailey 11y ago
  It only works in a few places. That means it doesn't work for me.
- sp332 11y ago
  Wow, it does 3D modelling of roofs and trees to estimate coverage!
paulsutter 11y ago
The article assumes net metering, which is a huge subsidy for solar. Peak solar generation causes low spot prices for power (see the California "duck curve"[1], and the negative prices that Germany has on sunny days[2]. In Texas wind can cause energy prices to go negative[3]). The costs of storage must to be included for a fair comparison, so that power can either be saved and used by the household, or provided back to the grid. If provided back to the grid, the homeowner should get paid the spot price like every other generator, not full residential rates. [1] http://www.bloomberg.com/news/articles/2015-10-21/california-s-duck-curve-is-about-to-jolt-the-electricity-grid http://www.bloomberg.com/news/articles/2015-10-21/california... [2] http://www.pv-magazine.com/news/details/beitrag/german-renewables-pushing-wholesale-electricity-further-into-negative-territory_100019141/ http://www.pv-magazine.com/news/details/beitrag/german-renew... [3] http://cleantechnica.com/2015/10/01/texas-electricity-prices-going-negative/ http://cleantechnica.com/2015/10/01/texas-electricity-prices...
- gregwtmtno 11y ago
  > If provided back to the grid, the homeowner should get paid the spot price like every other generator, not full residential rates. I mean "should" depends on the goal of the pricing policy right? If the goal is a "fair comparison", perhaps the policy makers should include the cost of mitigating externalities in the price of carbon-producing electricity sources.
  - paulsutter 11y ago
    We should absolutely put a price on carbon, yes. That would penalize carbon emissions. Net metering is no substitute for a price on carbon. For real green power, we need to storage to balance out solar generation. Net metering /prevents/ storage from being installed. EDIT: Never going to happen? Actually it's /already/ happened. Examples: - California already has a low carbon fuel standard[1] that regulates "well to wheel" carbon content of transportation fuels (some sources like tar sands have high carbon emissions in the production process[2]). This is a significant step towards a real carbon price and an opening to provide fuels generated through a green process. - California' Emission Performance Standard (EPS) no longer allows use of coal-generated electricity[3] which has caused a complete phaseout of coal plants in favor of natural gas (which has half the carbon intensity). Again, this is a restriction of the carbon-intensity of power generation which is also an effective step towards a carbon price. [1] http://www.wsj.com/articles/california-restores-rule-to-cut-carbon-in-fuel-by-10-1443219215 http://www.wsj.com/articles/california-restores-rule-to-cut-... [2] http://www.scientificamerican.com/article/tar-sands-and-keystone-xl-pipeline-impact-on-global-warming/ http://www.scientificamerican.com/article/tar-sands-and-keys... [3] http://www.energy.ca.gov/renewables/tracking_progress/documents/current_expected_energy_from_coal.pdf http://www.energy.ca.gov/renewables/tracking_progress/docume...
LeifCarrotson 11y ago
> Also, residential electric rates, on average about 12 cents per kilowatt-hour in in the U.S., are much higher than wholesale electric rates – the price utilities pay to power generators – which are usually less than 4 cents per kilowatt-hour. That 8 cent difference is mostly the cost of distribution and storage or variable supply. Distribution from the roof to the home would be inexpensive, but storage is not cheap. Asking utilities to accept solar energy input at this flat rate in exchange for the variable supply and grid backup may work for a small fraction of society, but it will hit a critical mass sooner or later and become infeasible.
mikekchar 11y ago
Where I live, it's already gobs cheaper. I live in Shizuoka prefecture in Japan. We get about 2200 hours of sunshine a year at a latitude of about 35N. I pay the equivalent of about 35 cents per kWh for electricity from the local power station (hey, they turned off all the nuclear power stations and the only fuel we have is gas from Russia). You can buy solar panels in any electronics store. If you go to the mall, you will run into billboards and displays and salespeople wanting to sell you solar panels. Already, if I walk down the street at least 30% of the houses have solar panels. Lately virtually every single apartment building has put solar panels on the roof. All the farmers are putting up vast solar arrays because they can make more money doing that than growing food (which worries me quite a lot... food security is pretty important for a chain of islands off the coast of China). I'm really curious to see how this affects pricing going forward.
- Roboprog 11y ago
  I live just outside the Sacramento area. Talking to a coworker, I was surprised to learn that SMUD's (Sac area utility) highest "tier" rate was just under PG&E's (most of the rest of CA) lowest "tier" rate. Once you use your "quota" of electricity (easy to do with kids), you move out of tier 1 base pricing ($0.18/kwh for PG&E) into tier 2, which is currently $0.25/kwh, then tier 3, then tier 4 (which I think is in the $0.35 to $0.40 range per kwh). So, putting in at least a partial system is a no brainer. If you look on the price map in the article, there is a pale colored blob around Sacramento, which reflects that SMUD's prices are a great deal less than PG&E's. I don't know that solar makes sense if you are on SMUD. During Spring break (nice sunny but not hot) weather, we generated a surplus (although we would not have if it were cloudy). I'm looking forward to being able to use the A/C this summer w/out getting a $300 to $400 electric bill.
- pilom 11y ago
  Hawaii is another great example. $0.40-$0.50/kWh for their oil generated electricity. Solar comes in even cheaper than the article mentions. There have been so many solar installations in Hawaii that the power company has effectively put a moratorium on installations that don't include storage because they can't cover the swings in demand when a cloud rolls through town. They expect things will get better once they install a connection between the islands to connect their grids, but for the moment, the power company can't handle the market penetration.
lafay 11y ago
I had a 6.7 kW solar system installed here in the Bay Area late last year, and you can beat the costs stated in this article by quite a lot if you shop around. The best bids I got were around $3.30/watt installed -- that's $2.31/watt with the 30% federal tax credit figured in. For my particular location, assuming a 25 year system lifespan, I calculate LCOE of 5.6 cents/kWh. Way, way cheaper than PG&E. Even without the tax credit, it's still a significant savings at 8 cents/kWh LCOE. Of course this math only makes sense if you're reasonably sure you're going to stay put for a significant portion of those 25 years.
- tertius 11y ago
  Does this include storage?
  - lafay 11y ago
    No storage. This is a grid-tied system that exports power onto the grid during times when I am a net producer, for which I get credited at retail rates.
    - Domenic_S 11y ago
      Retail rates? Are you sure? (PG&E?)
      - lafay 11y ago
        Yes, quite sure. However, the credits can only offset the "debits" from the times when you are a net importer from the grid (night, cloudy, etc). PG&E sends a once annual true-up statement where you pay for your excess annual kWh (assuming consumed kWh > produced kWh). If you are net exporter on an annual basis (produced kWh > consumed kWh) PG&E only pays wholesale rates for those at ~$0.04/kWh. They used to pay nothing if you were a residential net annual exporter, but after recent change in CA state law, they now have to actually cut you a check.
- pilom 11y ago
  Yeah my system was way lower than $3.50/watt last year too. Their numbers are surprisingly out of date for being 2 years old.
amelius 11y ago
If rooftop solar has a net positive efficiency, why aren't companies paying me to put solar panels on my roof?
- e1ven 11y ago
  There are companies who will put the panels on your roof for free, and then sell you the energy (http://www.solarcity.com/residential/how-much-do-solar-panels-cost http://www.solarcity.com/residential/how-much-do-solar-panel...) There are also power companies who pay their users a discount if they're allowed to install solar panels (http://www.komando.com/happening-now/325802/power-companies-could-pay-you-to-put-up-solar-panels http://www.komando.com/happening-now/325802/power-companies-...)
- mikeash 11y ago
  It's easier and cheaper for a large company to just find a big plot of cheap land and put the stuff up there. Same basic reason that nobody's offering to pay you to grow vegetables in your yard, even though growing vegetables is a profitable activity in general.
  - sremani 11y ago
    One advantage of Solar on rooftop, is reduction of transmission and transmission losses, also local handling of the peak etc. Utilities love Distrusted solar in limited numbers. They do not love the idea of everyone getting on the bandwagon.
pilom 11y ago
"Note that the total installed costs include the federal investment tax credit and any local rebates and tax incentives." $3.50/W is WAY higher than I paid per watt last year after the federal tax rebate. I had 3.125kW installed on my roof for $2.16/W. Looking at the map, Denver gets grid parity between $2.00 and $2.50 and that has exactly been my experience with the panels.
known 11y ago
Never IMO
lutorm 11y ago
They conveniently omitted Hawaii from that map. Solar here is already cheaper than the grid, even after the very high installation costs and even if you go totally off-grid.
th0waway 11y ago
Not being an electrical engineer, I wonder how hard it would be to build a company that provides battery-based (or some other technology) storage of power during off peak hours (buy it from the grid at off-peak power rates) and supply it back in as demand/production balance changes, to even out the demand to the power company?
beaud 11y ago
If solar interests you, we're hiring senior software engineers at Wunder (TS '14). Wunder was founded with one simple vision: to address the greatest crisis of our generation by accelerating the proliferation of solar energy. Members of our team have raised hundreds of millions of dollars in private equity, developed energy infrastructure solutions for the Department of Energy, and built digital products used and loved by millions of people. Now, we’re saving the world. Learn more at https://www.wundercapital.com/hustle https://www.wundercapital.com/hustle

132 points by leejoramo 11y ago

Has this been shared on HN yet? You put in your address and Google tells you how much you save by installing solar panels. https://www.google.com/get/sunroof#p=0 https://www.google.com/get/sunroof#p=0

NDizzle 11y ago
Cool site, thanks for sharing. I have never seen it. According to that site a $20k install would pay itself off in 6 years. That is compelling.
- bnolsen 11y ago
  I live in colorado and it says i would lose money by going solar. Interesting since at costco, etc the solar guys are pushing pretty hard. I've held off so far because I think there's still room for dramatic improvement in solar panel and battery technology in the next few years. Also I seem to get a new roof every 5 or so years due to all the hailstorms we get around here. I suspect solar panels don't like big hailstones very much and I have no idea what would happen if both the roof and panels are damaged. I doubt a roofing company is well equipped to handle the panels.
  - MSM 11y ago
    That's actually pretty surprising to me, I have only visited Colorado a few times but I have always been very (pleasantly) surprised by the amount of sunshine. A quick look on Wikipedia says Denver has sunshine 70% of the time totaling ~3,100 hours a year. I'm from MI where we see sun about once a week so I'm out of touch, but that seems like it should be more than enough to recoup costs. Is the amount of sunshine in Denver significantly different from where you're at, or is there something else I'm missing?
    - bnolsen 11y ago
      might be current cost of energy is low here. and yes we get tons of sunshine, amazing amounts.
  - rogerbinns 11y ago
    I'm curious how this is all going to shake out in the housing market. The guys pushing hard have ~20 year contracts. If you go to buy a house in 2020 that had a system installed in 2012, the panels etc would be fairly dated (plus wear and tear), and there would still be 12 years left on the contract. I'd insist on paying less for the house due to being saddled with the obligation, or the homeowner would have pay (a lot) to get out of the contract early. Like you I too see dramatic improvements over the next few years, hence committing now not being a good decision.
- marssaxman 11y ago
  I bought a $15k system in 2013, and if current trends continue it will have paid itself off 7 years after installation. I was interested in solar purely as a means of reducing my carbon footprint; I was surprised to learn that it had already become such a good investment, too. I'm glad to hear that the numbers have continued to improve. (I could have gone bigger and come close to covering all of my household power needs, whereas the current system gets maybe 60% or so, but I'd have had to cut down the big old cedar tree which shades part of my roof, and that just seemed like it would be missing the point somehow.)
theandrewbailey 11y ago
It only works in a few places. That means it doesn't work for me.
sp332 11y ago
Wow, it does 3D modelling of roofs and trees to estimate coverage!

paulsutter 11y ago

The article assumes net metering, which is a huge subsidy for solar. Peak solar generation causes low spot prices for power (see the California "duck curve"[1], and the negative prices that Germany has on sunny days[2]. In Texas wind can cause energy prices to go negative[3]). The costs of storage must to be included for a fair comparison, so that power can either be saved and used by the household, or provided back to the grid. If provided back to the grid, the homeowner should get paid the spot price like every other generator, not full residential rates. [1] http://www.bloomberg.com/news/articles/2015-10-21/california-s-duck-curve-is-about-to-jolt-the-electricity-grid http://www.bloomberg.com/news/articles/2015-10-21/california... [2] http://www.pv-magazine.com/news/details/beitrag/german-renewables-pushing-wholesale-electricity-further-into-negative-territory_100019141/ http://www.pv-magazine.com/news/details/beitrag/german-renew... [3] http://cleantechnica.com/2015/10/01/texas-electricity-prices-going-negative/ http://cleantechnica.com/2015/10/01/texas-electricity-prices...

gregwtmtno 11y ago
> If provided back to the grid, the homeowner should get paid the spot price like every other generator, not full residential rates. I mean "should" depends on the goal of the pricing policy right? If the goal is a "fair comparison", perhaps the policy makers should include the cost of mitigating externalities in the price of carbon-producing electricity sources.
- paulsutter 11y ago
  We should absolutely put a price on carbon, yes. That would penalize carbon emissions. Net metering is no substitute for a price on carbon. For real green power, we need to storage to balance out solar generation. Net metering /prevents/ storage from being installed. EDIT: Never going to happen? Actually it's /already/ happened. Examples: - California already has a low carbon fuel standard[1] that regulates "well to wheel" carbon content of transportation fuels (some sources like tar sands have high carbon emissions in the production process[2]). This is a significant step towards a real carbon price and an opening to provide fuels generated through a green process. - California' Emission Performance Standard (EPS) no longer allows use of coal-generated electricity[3] which has caused a complete phaseout of coal plants in favor of natural gas (which has half the carbon intensity). Again, this is a restriction of the carbon-intensity of power generation which is also an effective step towards a carbon price. [1] http://www.wsj.com/articles/california-restores-rule-to-cut-carbon-in-fuel-by-10-1443219215 http://www.wsj.com/articles/california-restores-rule-to-cut-... [2] http://www.scientificamerican.com/article/tar-sands-and-keystone-xl-pipeline-impact-on-global-warming/ http://www.scientificamerican.com/article/tar-sands-and-keys... [3] http://www.energy.ca.gov/renewables/tracking_progress/documents/current_expected_energy_from_coal.pdf http://www.energy.ca.gov/renewables/tracking_progress/docume...

LeifCarrotson 11y ago

> Also, residential electric rates, on average about 12 cents per kilowatt-hour in in the U.S., are much higher than wholesale electric rates – the price utilities pay to power generators – which are usually less than 4 cents per kilowatt-hour. That 8 cent difference is mostly the cost of distribution and storage or variable supply. Distribution from the roof to the home would be inexpensive, but storage is not cheap. Asking utilities to accept solar energy input at this flat rate in exchange for the variable supply and grid backup may work for a small fraction of society, but it will hit a critical mass sooner or later and become infeasible.

mikekchar 11y ago

Where I live, it's already gobs cheaper. I live in Shizuoka prefecture in Japan. We get about 2200 hours of sunshine a year at a latitude of about 35N. I pay the equivalent of about 35 cents per kWh for electricity from the local power station (hey, they turned off all the nuclear power stations and the only fuel we have is gas from Russia). You can buy solar panels in any electronics store. If you go to the mall, you will run into billboards and displays and salespeople wanting to sell you solar panels. Already, if I walk down the street at least 30% of the houses have solar panels. Lately virtually every single apartment building has put solar panels on the roof. All the farmers are putting up vast solar arrays because they can make more money doing that than growing food (which worries me quite a lot... food security is pretty important for a chain of islands off the coast of China). I'm really curious to see how this affects pricing going forward.

Roboprog 11y ago
I live just outside the Sacramento area. Talking to a coworker, I was surprised to learn that SMUD's (Sac area utility) highest "tier" rate was just under PG&E's (most of the rest of CA) lowest "tier" rate. Once you use your "quota" of electricity (easy to do with kids), you move out of tier 1 base pricing ($0.18/kwh for PG&E) into tier 2, which is currently $0.25/kwh, then tier 3, then tier 4 (which I think is in the $0.35 to $0.40 range per kwh). So, putting in at least a partial system is a no brainer. If you look on the price map in the article, there is a pale colored blob around Sacramento, which reflects that SMUD's prices are a great deal less than PG&E's. I don't know that solar makes sense if you are on SMUD. During Spring break (nice sunny but not hot) weather, we generated a surplus (although we would not have if it were cloudy). I'm looking forward to being able to use the A/C this summer w/out getting a $300 to $400 electric bill.
pilom 11y ago
Hawaii is another great example. $0.40-$0.50/kWh for their oil generated electricity. Solar comes in even cheaper than the article mentions. There have been so many solar installations in Hawaii that the power company has effectively put a moratorium on installations that don't include storage because they can't cover the swings in demand when a cloud rolls through town. They expect things will get better once they install a connection between the islands to connect their grids, but for the moment, the power company can't handle the market penetration.

lafay 11y ago

I had a 6.7 kW solar system installed here in the Bay Area late last year, and you can beat the costs stated in this article by quite a lot if you shop around. The best bids I got were around $3.30/watt installed -- that's $2.31/watt with the 30% federal tax credit figured in. For my particular location, assuming a 25 year system lifespan, I calculate LCOE of 5.6 cents/kWh. Way, way cheaper than PG&E. Even without the tax credit, it's still a significant savings at 8 cents/kWh LCOE. Of course this math only makes sense if you're reasonably sure you're going to stay put for a significant portion of those 25 years.

tertius 11y ago
Does this include storage?
- lafay 11y ago
  No storage. This is a grid-tied system that exports power onto the grid during times when I am a net producer, for which I get credited at retail rates.
  - Domenic_S 11y ago
    Retail rates? Are you sure? (PG&E?)
    - lafay 11y ago
      Yes, quite sure. However, the credits can only offset the "debits" from the times when you are a net importer from the grid (night, cloudy, etc). PG&E sends a once annual true-up statement where you pay for your excess annual kWh (assuming consumed kWh > produced kWh). If you are net exporter on an annual basis (produced kWh > consumed kWh) PG&E only pays wholesale rates for those at ~$0.04/kWh. They used to pay nothing if you were a residential net annual exporter, but after recent change in CA state law, they now have to actually cut you a check.
pilom 11y ago
Yeah my system was way lower than $3.50/watt last year too. Their numbers are surprisingly out of date for being 2 years old.

amelius 11y ago

If rooftop solar has a net positive efficiency, why aren't companies paying me to put solar panels on my roof?

e1ven 11y ago
There are companies who will put the panels on your roof for free, and then sell you the energy (http://www.solarcity.com/residential/how-much-do-solar-panels-cost http://www.solarcity.com/residential/how-much-do-solar-panel...) There are also power companies who pay their users a discount if they're allowed to install solar panels (http://www.komando.com/happening-now/325802/power-companies-could-pay-you-to-put-up-solar-panels http://www.komando.com/happening-now/325802/power-companies-...)
mikeash 11y ago
It's easier and cheaper for a large company to just find a big plot of cheap land and put the stuff up there. Same basic reason that nobody's offering to pay you to grow vegetables in your yard, even though growing vegetables is a profitable activity in general.
- sremani 11y ago
  One advantage of Solar on rooftop, is reduction of transmission and transmission losses, also local handling of the peak etc. Utilities love Distrusted solar in limited numbers. They do not love the idea of everyone getting on the bandwagon.

pilom 11y ago

"Note that the total installed costs include the federal investment tax credit and any local rebates and tax incentives." $3.50/W is WAY higher than I paid per watt last year after the federal tax rebate. I had 3.125kW installed on my roof for $2.16/W. Looking at the map, Denver gets grid parity between $2.00 and $2.50 and that has exactly been my experience with the panels.

known 11y ago

Never IMO

lutorm 11y ago

They conveniently omitted Hawaii from that map. Solar here is already cheaper than the grid, even after the very high installation costs and even if you go totally off-grid.

th0waway 11y ago

Not being an electrical engineer, I wonder how hard it would be to build a company that provides battery-based (or some other technology) storage of power during off peak hours (buy it from the grid at off-peak power rates) and supply it back in as demand/production balance changes, to even out the demand to the power company?

beaud 11y ago

If solar interests you, we're hiring senior software engineers at Wunder (TS '14). Wunder was founded with one simple vision: to address the greatest crisis of our generation by accelerating the proliferation of solar energy. Members of our team have raised hundreds of millions of dollars in private equity, developed energy infrastructure solutions for the Department of Energy, and built digital products used and loved by millions of people. Now, we’re saving the world. Learn more at https://www.wundercapital.com/hustle https://www.wundercapital.com/hustle