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It is surprising how little attention has been created by this huge PV panel price decrease, from $4.00 a watt to $1.25 in three years. Solyndra is an early ca

by marze 15y ago

It is surprising how little attention has been created by this huge PV panel price decrease, from $4.00 a watt to $1.25 in three years. Solyndra is an early casualty, since their business model depended on PV panel prices to fall much more slowly. The economics of home based solar electricity depends on three numbers, the panel price, the local retail electric rate, and the interest rate of the loan for the system. Right now, in much of the US, you can see that a PV system makes sense for new construction. A simple example: $12500 : 4500 W PV system w/no storage (grid backed up) 4% interest rate, payment of $60/month $0.11 per kwh avoided cost, the system generates about $70 of electricity/month In a nutshell, this is grid parity, right now in 2011. And the owner of such a system does not need to worry about utilities increasing their rates over the years.

brc 15y ago
Does your example include a FIT (feed in tariff) provided by government at a much higher rate than grid power, or are you doing a calculations at grid power? A lot of places have a high FIT value currently, but this is subject to political whims and any incoming government might find it easy to gain votes by trimming the FIT, as has already happened in many places around the world. Another huge problem with these calculations is the very small fraction of people who stay in one house for more than 10 years. Essentially you have to stay in the house for the entire payback period or you've lost out. Personally I think the solar price will have to drop to the point where it is much lower than grid (with no subsidies), rather than just about equal. At that point, takeup will be much higher.
- compman775 15y ago
  Why would you have lost out? Couldn't you sell the house for more than you could have if you hadn't had solar panels installed?
- marze 15y ago
  No, just avoided cost. Unless your utility drops the rates significantly, the savings are locked in. As far as moving goes, studies show that solar systems increase the value of a house by approximately the cost of the system. Of course, if solar system prices fall as expected, this premium would likely drop also. And the economics are the same for a system where the cost is rolled into a loan during a home loan refinance, an option available to many people now.
droithomme 15y ago
Thanks. Could you explain in more detail how and under what conditions (location, type of system) a 4500W panel system generates 70/.11 = 636 kWH of power each month?
- 00joe 15y ago
  In Tampa FL with optimal tilt and no shade a panel rated at 1 peak watt would generate 5.3 watts a day X 30.4 days a month * 4500w panels = 725 Kw per month
  - droithomme 15y ago
    Thanks. For optimal tilt that implies a sun tracking system, correct? Do most installations track? Do the sun trackers use much energy to rotate all the panels? Are they reliable, or do they add maintenance costs. The system costs we are talking about here do not include trackers or installation of trackers, correct? How much would that add. Florida gets a lot of sun. I agree with you that a tracking array of new panels in Florida gives those numbers. For people in other parts of the country and without trackers I find this site that has monthly solar radiation numbers to be useful for estimating output. http://rredc.nrel.gov/solar/calculators/PVWATTS/version1/ http://rredc.nrel.gov/solar/calculators/PVWATTS/version1/ Looking around I see that a 4500W system, no installation, no tracking, runs about $20,000. http://www.infinigi.com/4500w-solar-grid-tie-system-20-sanyo-225w-ig4000-fronius-inverter-and-mounts-p-3966.html http://www.infinigi.com/4500w-solar-grid-tie-system-20-sanyo...
    - marze 15y ago
      $20000 isn't a good price. Check here to see more competitive pricing: http://www.sunelec.com/comparisons_of_grid_tie_systems_prices.html http://www.sunelec.com/comparisons_of_grid_tie_systems_price... Optimal tilt just refers to the tilt the panels are installed at, no tracking.
    - 00joe 15y ago
      No tracking system. Here are some average numbers of hours of peak energy a day for a fixed system Portland Or 4.0, Chicago 4.4, Tampa 5.3, San Francisco 5.4 Total hardware costs are currently about $1.75 watt for panels, inverter and hardware. Fed Tax rebate is 30%.
gvb 15y ago
That $60/month is over a 30 year period, which is a pretty long payback. On the positive side, electricity prices will probably go up. On the negative side, the PV cells will likely deteriorate at a 0.5 to 1% rate[1]. At 0.5%/year, 30 years would be 86% original rating (not bad). At 1%/year, 30 years would be 74% original rating (still fairly effective). [1] http://info.cat.org.uk/questions/pv/life-expectancy-solar-PV-panels http://info.cat.org.uk/questions/pv/life-expectancy-solar-PV...
- marze 15y ago
  The point is the homeowner saves money from day one, not even taking into account current rebates. The utility bill savings more then compensate for the extra $60 in the monthly loan payment. Most solar panels come with a 25 year warranty.
  - anamax 15y ago
    > Most solar panels come with a 25 year warranty. How much of "rated power" does that warranty cover? Suppose that the power output drops 20% by year 29, what will the warranty pay? How about if the output drops 15% by year 20? It's unlikely that the warranty will pay full replacement value. Most warrantys cover pay value, which is likely to be fairly low for 20-30 year-old PV panels. And no, they won't fix if that costs more than the "value".
    - justincormack 15y ago
      It is unlikely the warranties would pay for that, the manufacturers couldnt afford to basically replace panels for free.
      - lsc 15y ago
        depends entirely on how much they expect costs to drop. For instance, I would be very happy to provide you a 10 year warranty on 2tb of storage. Sure, it's going to fail and I'm going to have to replace it, but if I can get you to pay a price that would seem fair to replace the thing once or twice at today's prices, most likely when your device does fail, I'll be able to replace it with much cheaper parts. (Of course, this ignores the format differences; if sata goes out of style, it could actually cost me more to source a sata part. Of course, judging from how long PATA lasted in a largely backwards compatible format, I /probably/ wouldn't have to worry about that too much in the next 10 years, but it'd be a source of worry. I'd be much more comfortable promising you 2tb of storage of some type with some minimum performance level, and not specifying interface, or selling you network-accessible storage for the next ten years.)
onedognight 15y ago
> It is surprising how little attention has been created by this huge PV panel price decrease, from $4.00 a watt to $1.25 in three years. The sad thing is that First Solar's thin film panels hit $1/watt a few years ago, but you are unable to buy them in the US due to Solar City getting an exclusive and deciding to only leasing them at nowhere $1/watt.
- aptwebapps 15y ago
  If some company rolled out production right now for 50 cents a watt, unless their volume was ridiculously high or their tech looked easy to copy it wouldn't have that much affect on the market price. Why? Because they don't have to sell it at 50 cents, they can just sell it at market rate. Only when more than one (at least) company has the ability to sell for 50 cents is the price likely to approach that.
grannyg00se 15y ago
Aren't you missing another very important number? Avg # of sunny dys per mth. The system is going to generate near $0 of electricity per mth if the pv sees little sun exposure.
speleding 15y ago
> And the owner of such a system does not need to worry about utilities increasing their rates over the years. That's not how it works unfortunately. Most of the cost of a utility are fixed. If more people are using PV then the fixed cost get divided over a smaller number of kWh and the cost of the remaining non-PV kWh goes up. Since peak usage in most countries is when it's dark the utility will not be able to reduce its fixed cost until someone finds a way to store energy in an economical way. The utility will simply have to stop paying for electricity delivered back to the grid because they will no longer be able to afford it (the only reason they do that now is politically motivated).
- khafra 15y ago
  > peak usage in most countries is when it's dark Citation needed. http://www.srpnet.com/prices/home/tou.aspx http://www.srpnet.com/prices/home/tou.aspx Looks to me like most of the peak hours are when the sun's out; especially in the areas where PV panels work best.
  - speleding 15y ago
    Even in areas where the peak coincides with a peak in sunlight that helps very little since the reliability of sunshine is much lower than the required reliability for power, so you still cannot close power plants and need to keep the fixed costs. You can optimize your systems for a lower average output in those areas, especially in areas with lots of air conditioning where the peak load is expected to drop with lower sunshine, but we are talking percentage points, nothing drastic. Just look at the cost structure of an energy company, there is lots of staff driving around in vans, etc, the cost of fuel is only a small part.

by marze 15y ago

brc 15y ago

Does your example include a FIT (feed in tariff) provided by government at a much higher rate than grid power, or are you doing a calculations at grid power? A lot of places have a high FIT value currently, but this is subject to political whims and any incoming government might find it easy to gain votes by trimming the FIT, as has already happened in many places around the world. Another huge problem with these calculations is the very small fraction of people who stay in one house for more than 10 years. Essentially you have to stay in the house for the entire payback period or you've lost out. Personally I think the solar price will have to drop to the point where it is much lower than grid (with no subsidies), rather than just about equal. At that point, takeup will be much higher.

compman775 15y ago
Why would you have lost out? Couldn't you sell the house for more than you could have if you hadn't had solar panels installed?
marze 15y ago
No, just avoided cost. Unless your utility drops the rates significantly, the savings are locked in. As far as moving goes, studies show that solar systems increase the value of a house by approximately the cost of the system. Of course, if solar system prices fall as expected, this premium would likely drop also. And the economics are the same for a system where the cost is rolled into a loan during a home loan refinance, an option available to many people now.

droithomme 15y ago

Thanks. Could you explain in more detail how and under what conditions (location, type of system) a 4500W panel system generates 70/.11 = 636 kWH of power each month?

00joe 15y ago
In Tampa FL with optimal tilt and no shade a panel rated at 1 peak watt would generate 5.3 watts a day X 30.4 days a month * 4500w panels = 725 Kw per month
- droithomme 15y ago
  Thanks. For optimal tilt that implies a sun tracking system, correct? Do most installations track? Do the sun trackers use much energy to rotate all the panels? Are they reliable, or do they add maintenance costs. The system costs we are talking about here do not include trackers or installation of trackers, correct? How much would that add. Florida gets a lot of sun. I agree with you that a tracking array of new panels in Florida gives those numbers. For people in other parts of the country and without trackers I find this site that has monthly solar radiation numbers to be useful for estimating output. http://rredc.nrel.gov/solar/calculators/PVWATTS/version1/ http://rredc.nrel.gov/solar/calculators/PVWATTS/version1/ Looking around I see that a 4500W system, no installation, no tracking, runs about $20,000. http://www.infinigi.com/4500w-solar-grid-tie-system-20-sanyo-225w-ig4000-fronius-inverter-and-mounts-p-3966.html http://www.infinigi.com/4500w-solar-grid-tie-system-20-sanyo...
  - marze 15y ago
    $20000 isn't a good price. Check here to see more competitive pricing: http://www.sunelec.com/comparisons_of_grid_tie_systems_prices.html http://www.sunelec.com/comparisons_of_grid_tie_systems_price... Optimal tilt just refers to the tilt the panels are installed at, no tracking.
  - 00joe 15y ago
    No tracking system. Here are some average numbers of hours of peak energy a day for a fixed system Portland Or 4.0, Chicago 4.4, Tampa 5.3, San Francisco 5.4 Total hardware costs are currently about $1.75 watt for panels, inverter and hardware. Fed Tax rebate is 30%.

gvb 15y ago

That $60/month is over a 30 year period, which is a pretty long payback. On the positive side, electricity prices will probably go up. On the negative side, the PV cells will likely deteriorate at a 0.5 to 1% rate[1]. At 0.5%/year, 30 years would be 86% original rating (not bad). At 1%/year, 30 years would be 74% original rating (still fairly effective). [1] http://info.cat.org.uk/questions/pv/life-expectancy-solar-PV-panels http://info.cat.org.uk/questions/pv/life-expectancy-solar-PV...

marze 15y ago
The point is the homeowner saves money from day one, not even taking into account current rebates. The utility bill savings more then compensate for the extra $60 in the monthly loan payment. Most solar panels come with a 25 year warranty.
- anamax 15y ago
  > Most solar panels come with a 25 year warranty. How much of "rated power" does that warranty cover? Suppose that the power output drops 20% by year 29, what will the warranty pay? How about if the output drops 15% by year 20? It's unlikely that the warranty will pay full replacement value. Most warrantys cover pay value, which is likely to be fairly low for 20-30 year-old PV panels. And no, they won't fix if that costs more than the "value".
  - justincormack 15y ago
    It is unlikely the warranties would pay for that, the manufacturers couldnt afford to basically replace panels for free.
    - lsc 15y ago
      depends entirely on how much they expect costs to drop. For instance, I would be very happy to provide you a 10 year warranty on 2tb of storage. Sure, it's going to fail and I'm going to have to replace it, but if I can get you to pay a price that would seem fair to replace the thing once or twice at today's prices, most likely when your device does fail, I'll be able to replace it with much cheaper parts. (Of course, this ignores the format differences; if sata goes out of style, it could actually cost me more to source a sata part. Of course, judging from how long PATA lasted in a largely backwards compatible format, I /probably/ wouldn't have to worry about that too much in the next 10 years, but it'd be a source of worry. I'd be much more comfortable promising you 2tb of storage of some type with some minimum performance level, and not specifying interface, or selling you network-accessible storage for the next ten years.)

onedognight 15y ago

> It is surprising how little attention has been created by this huge PV panel price decrease, from $4.00 a watt to $1.25 in three years. The sad thing is that First Solar's thin film panels hit $1/watt a few years ago, but you are unable to buy them in the US due to Solar City getting an exclusive and deciding to only leasing them at nowhere $1/watt.

aptwebapps 15y ago
If some company rolled out production right now for 50 cents a watt, unless their volume was ridiculously high or their tech looked easy to copy it wouldn't have that much affect on the market price. Why? Because they don't have to sell it at 50 cents, they can just sell it at market rate. Only when more than one (at least) company has the ability to sell for 50 cents is the price likely to approach that.

grannyg00se 15y ago

Aren't you missing another very important number? Avg # of sunny dys per mth. The system is going to generate near $0 of electricity per mth if the pv sees little sun exposure.

speleding 15y ago

> And the owner of such a system does not need to worry about utilities increasing their rates over the years. That's not how it works unfortunately. Most of the cost of a utility are fixed. If more people are using PV then the fixed cost get divided over a smaller number of kWh and the cost of the remaining non-PV kWh goes up. Since peak usage in most countries is when it's dark the utility will not be able to reduce its fixed cost until someone finds a way to store energy in an economical way. The utility will simply have to stop paying for electricity delivered back to the grid because they will no longer be able to afford it (the only reason they do that now is politically motivated).

khafra 15y ago
> peak usage in most countries is when it's dark Citation needed. http://www.srpnet.com/prices/home/tou.aspx http://www.srpnet.com/prices/home/tou.aspx Looks to me like most of the peak hours are when the sun's out; especially in the areas where PV panels work best.
- speleding 15y ago
  Even in areas where the peak coincides with a peak in sunlight that helps very little since the reliability of sunshine is much lower than the required reliability for power, so you still cannot close power plants and need to keep the fixed costs. You can optimize your systems for a lower average output in those areas, especially in areas with lots of air conditioning where the peak load is expected to drop with lower sunshine, but we are talking percentage points, nothing drastic. Just look at the cost structure of an energy company, there is lots of staff driving around in vans, etc, the cost of fuel is only a small part.