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That's because putting solar on rooftops makes little economic sense. The overhead in terms of installation cost was relatively insignificant when PV panels co

by derriz 2y ago

That's because putting solar on rooftops makes little economic sense. The overhead in terms of installation cost was relatively insignificant when PV panels cost 20 times as much - as they did 15 years ago. These days, the cost is swamped by installation costs. These days, the only place it makes sense to put PV is flat on unused or unproductive land. The 95% drop in PV panels means that it is no longer economic to bother with mechanical tracking in solar farms. Integrating panels into a domestic roof destroys the incredible cost advantages PV has over alternative power sources.

grecy 2y ago
I just installed 7.3kW on my roof, for a total out of pocket cost of $8000. (after rebates and free gov money) It looks like I'll make about $1000 of power per year, so I have an 8 year payback, after which I'll have free power for another ~20 years. How on earth does that make "little economic sense"?
- throwaway14356 2y ago
  the funniest part is where we assume everything stays the way it is. Centralized systems are more efficient but have poor reliability. What if they just stop supplying power? What if a kwh costs $10?
- szvsw 2y ago
  I think they probably meant from the perspective of society writ large. If you you are choosing between spending $10m on PV with the primary goal of decarbonization, are you better served by spending it on subsidizing rooftop PV or on utility scale PV? Probably the latter. > “In a base comparison, without considering subsidies, fuel prices, or carbon pricing, utility-scale solar and wind have the lowest LCOE of all sources. Utility-scale solar PV comes in anywhere from $24/MWh to $96/MWh, while onshore wind registers the lowest possible LCOE over the shortest range, from $24/MWh to $75/MWh. Offshore wind’s LCOE ranges between $72/MWh and $140/MWh. … Unsubsidized residential rooftop PV has an LCOE between $117/MWh and $282/MWh, while the LCOE of community and commercial and industrial (C&I) solar ranges between $49/MWh and $185/MWh. When factoring in federal tax subsidies under the US Inflation Reduction Act, including domestic contest provisions, rooftop PV comes in at $74/MWh to $229/MWh, and community/C&I rooftop PV at $32/MWh to $155/MWh.” [1] [1] https://www.pv-magazine.com/2023/04/14/average-solar-lcoe-increases-for-first-time-this-year/#:~:text=Unsubsidized%20residential%20rooftop%20PV%20has,%2FMWh%20and%20%24185%2FMWh https://www.pv-magazine.com/2023/04/14/average-solar-lcoe-in....
- didgetmaster 2y ago
  People often do this calculation without considering the time value of money. If you took that same $8K you spent on your system and put it in a bank CD; you would earn about $420 each year in interest. That means your real savings for the solar system is only $580 a year, not $1000. That makes the payoff time expand from 8 years to nearly 14. Still might be worth it to you, but also might not.
  - fratlas 2y ago
    True, but consider grid electricity prices increasing over those decades too.
    - kragen 2y ago
      they won't increase; they'll drop like a stone
      - grecy 2y ago
        Huh, my city has already approved rate increases for the next 5 years! (it has increased every year forever...)
        kragen 2y ago
        yeah, it'll take a while for the new technology to trickle down to the more backward regions
  - aoeusnth1 2y ago
    I find your comment misleadingly pessimistic. It makes more sense to compare ROIs directly (or equivalently, payoff periods) rather than subtracting them and finding a residual payoff period. Just annualize everything (depreciation, inflation) and see which one has a higher ROI. 1. You need to take into account depreciation of the value of the panels. They degrade in performance and eventually will be worthless after about 30 years. 2. You need to take into account inflation against the CD roi (or conversely the /appreciating/ value of the dollar value of the energy produced by the panels). The post-inflation value of the bank CD is going to be about 2% per year. Inflation does not need to be corrected for the solar power option because it produces energy instead of dollars. (1000/y-8000/30y)/$8000 = 733/8000 = 9.1% depreciation-adjusted ROI from solar panels 5.5% - 3.3% inflation = 2.2% inflation-adjusted ROI from bank CDs. So solar panels are about a 4x better investment than bank CDs, contrary to your comment where they are somewhat comparable.
- plopz 2y ago
  did you do your roof at the same time? theres a big cost of taking the solar off and putting it back on when doing roof work which can kill cost efficiency if not lined up with the lifecycle of your roof.
  - grecy 2y ago
    Tin roof, it will outlast the rest of the house
- triceratops 2y ago
  If we're counting overall RoI then the "rebates and free gov money" should be added in.
- kragen 2y ago
  because you're paying $1.10 per peak watt in a place with a suboptimal capacity factor, and if we add the rebates and 'free' gov money, probably closer to $2. if we're talking about us dollars, low-cost panels cost $0.08 per peak watt (though predatory usa import tariffs double that) and we can probably expect a whole solar farm built with them to cost about $0.50 per peak watt, maybe $1 if you're talking about the us. that solar farm can be located in a place with a 20% or even 30% capacity factor, because it gets twice as much sun as your house, so it generates twice as much energy with the same amount of panels so your utility company is probably going to make four times as much energy per dollar invested in solar panels as you are, unless you're in the usa, so they can sell it to you much cheaper than you can make it yourself so probably if you'd put the $16000 or whatever into the stock market it would yield more than enough to pay your electric bill for those 30 years or actually forever the panels won't wear out in 30 years either, though, and the reduction in risk may be worth it to you
  - grecy 2y ago
    > so your utility company is probably going to make four times as much energy per dollar invested in solar panels as you are, unless you're in the usa, so they can sell it to you much cheaper than you can make it yourself I agree they can make it cheaper than me, but I don't think your second conclusion follows. What they will do (and ARE doing) is simply increase their profit. My utility company has already approved rate increases for the next 5 years (7-12% per year), and it has increased every year for the previous 10+. So for me, the cheapest way to get electricity is to make it myself from my own roof. I made 933kWh in May for a bill of -$56.
    - kragen 2y ago
      yeah, to me it seems like a pretty reasonable investment even when you aren't being ground under the boot of kleptocratic government corruption, but an obviously good one when you are, unless they start levying a special solar panel tax ot something

by derriz 2y ago

grecy 2y ago

I just installed 7.3kW on my roof, for a total out of pocket cost of $8000. (after rebates and free gov money) It looks like I'll make about $1000 of power per year, so I have an 8 year payback, after which I'll have free power for another ~20 years. How on earth does that make "little economic sense"?

throwaway14356 2y ago
the funniest part is where we assume everything stays the way it is. Centralized systems are more efficient but have poor reliability. What if they just stop supplying power? What if a kwh costs $10?
szvsw 2y ago
I think they probably meant from the perspective of society writ large. If you you are choosing between spending $10m on PV with the primary goal of decarbonization, are you better served by spending it on subsidizing rooftop PV or on utility scale PV? Probably the latter. > “In a base comparison, without considering subsidies, fuel prices, or carbon pricing, utility-scale solar and wind have the lowest LCOE of all sources. Utility-scale solar PV comes in anywhere from $24/MWh to $96/MWh, while onshore wind registers the lowest possible LCOE over the shortest range, from $24/MWh to $75/MWh. Offshore wind’s LCOE ranges between $72/MWh and $140/MWh. … Unsubsidized residential rooftop PV has an LCOE between $117/MWh and $282/MWh, while the LCOE of community and commercial and industrial (C&I) solar ranges between $49/MWh and $185/MWh. When factoring in federal tax subsidies under the US Inflation Reduction Act, including domestic contest provisions, rooftop PV comes in at $74/MWh to $229/MWh, and community/C&I rooftop PV at $32/MWh to $155/MWh.” [1] [1] https://www.pv-magazine.com/2023/04/14/average-solar-lcoe-increases-for-first-time-this-year/#:~:text=Unsubsidized%20residential%20rooftop%20PV%20has,%2FMWh%20and%20%24185%2FMWh https://www.pv-magazine.com/2023/04/14/average-solar-lcoe-in....
didgetmaster 2y ago
People often do this calculation without considering the time value of money. If you took that same $8K you spent on your system and put it in a bank CD; you would earn about $420 each year in interest. That means your real savings for the solar system is only $580 a year, not $1000. That makes the payoff time expand from 8 years to nearly 14. Still might be worth it to you, but also might not.
- fratlas 2y ago
  True, but consider grid electricity prices increasing over those decades too.
  - kragen 2y ago
    they won't increase; they'll drop like a stone
    - grecy 2y ago
      Huh, my city has already approved rate increases for the next 5 years! (it has increased every year forever...)
      - kragen 2y ago
        yeah, it'll take a while for the new technology to trickle down to the more backward regions
- aoeusnth1 2y ago
  I find your comment misleadingly pessimistic. It makes more sense to compare ROIs directly (or equivalently, payoff periods) rather than subtracting them and finding a residual payoff period. Just annualize everything (depreciation, inflation) and see which one has a higher ROI. 1. You need to take into account depreciation of the value of the panels. They degrade in performance and eventually will be worthless after about 30 years. 2. You need to take into account inflation against the CD roi (or conversely the /appreciating/ value of the dollar value of the energy produced by the panels). The post-inflation value of the bank CD is going to be about 2% per year. Inflation does not need to be corrected for the solar power option because it produces energy instead of dollars. (1000/y-8000/30y)/$8000 = 733/8000 = 9.1% depreciation-adjusted ROI from solar panels 5.5% - 3.3% inflation = 2.2% inflation-adjusted ROI from bank CDs. So solar panels are about a 4x better investment than bank CDs, contrary to your comment where they are somewhat comparable.
plopz 2y ago
did you do your roof at the same time? theres a big cost of taking the solar off and putting it back on when doing roof work which can kill cost efficiency if not lined up with the lifecycle of your roof.
- grecy 2y ago
  Tin roof, it will outlast the rest of the house
triceratops 2y ago
If we're counting overall RoI then the "rebates and free gov money" should be added in.
kragen 2y ago
because you're paying $1.10 per peak watt in a place with a suboptimal capacity factor, and if we add the rebates and 'free' gov money, probably closer to $2. if we're talking about us dollars, low-cost panels cost $0.08 per peak watt (though predatory usa import tariffs double that) and we can probably expect a whole solar farm built with them to cost about $0.50 per peak watt, maybe $1 if you're talking about the us. that solar farm can be located in a place with a 20% or even 30% capacity factor, because it gets twice as much sun as your house, so it generates twice as much energy with the same amount of panels so your utility company is probably going to make four times as much energy per dollar invested in solar panels as you are, unless you're in the usa, so they can sell it to you much cheaper than you can make it yourself so probably if you'd put the $16000 or whatever into the stock market it would yield more than enough to pay your electric bill for those 30 years or actually forever the panels won't wear out in 30 years either, though, and the reduction in risk may be worth it to you
- grecy 2y ago
  > so your utility company is probably going to make four times as much energy per dollar invested in solar panels as you are, unless you're in the usa, so they can sell it to you much cheaper than you can make it yourself I agree they can make it cheaper than me, but I don't think your second conclusion follows. What they will do (and ARE doing) is simply increase their profit. My utility company has already approved rate increases for the next 5 years (7-12% per year), and it has increased every year for the previous 10+. So for me, the cheapest way to get electricity is to make it myself from my own roof. I made 933kWh in May for a bill of -$56.
  - kragen 2y ago
    yeah, to me it seems like a pretty reasonable investment even when you aren't being ground under the boot of kleptocratic government corruption, but an obviously good one when you are, unless they start levying a special solar panel tax ot something