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Rooftop Solar Could Reach Price Parity In the US By 2016
Lucas123 writes: The cost of rooftop solar-powered electricity will be on par with prices of coal-powered energy and other conventional sources in all 50 U.S. states in just two years, a leap from today where PV energy has price parity in only 10 states, according to Deutsche Bank's leading solar industry analyst. The sharp decline in solar energy costs is the result of increased economies of scale leading to cheaper photovoltaic panels, new leasing models and declining installation costs, Deutsche Bank's Vishal Shah stated in a recent report. The cost of solar-generated electricity in the top 10 states for capacity ranges from 11-15 cents per kilowatt hour (c/kWh), compared to the retail electricity price of 11-37 c/kWh. Amit Ronen, a former Congressional staffer behind legislation that created an investment tax credit for solar installations, said one of the only impediments to decreasing solar electricity prices are fees proposed by utilities on customers who install solar and take advantage of net metering, or the ability to sell excess power back to utilities.
In the craphole region in which I live they've already passed ordinances about things like wind turbines within city limits. They call it an "eye sore" and "disruptive." That's how the utility companies will outlaw solar paneling after donating generously to their politician buddies. Either that or they'll so overregulate them that the price will skyrocket beyond most people's financial reach.
I think it'd be fine for utilities to charge something nominal for the privilege of solar. After all, you're not off the grid AND the power company has to deal with the upkeep of the cables. Provided it's not a money grab... that it's justified.
Net metering is when it runs backwards? That's probably find in a single month. But to carry it out over the year doesn't seem fair because during winter months, the solar panel user really is taking advantage of the grid.
As for the pricing when there's a surplus during the summer (when you sell it back), as I said before, you're not dealing with the cables/power lines... they are (the power company).
If solar power reduces carbon output from coal, good. Personally, if I could afford solar panels, I'd be interested in what uses it could provide during power outages combined with a battery backup for certain breakers/circuits (fridge, lights, and maybe one for TV watching).
With or without the government subsidies?
"fees proposed by utilities on customers who install solar and take advantage of net metering, or the ability to sell excess power back to utilities"
this reminds me of the states that are passing taxes on electric vehicles because they don't pay gas tax.
There is a monumental, staggering level of myopia in those who propose and enact measures like these.
We have to transition to ~ 90% of the transport and energy in the economy to non-fossil, in a damn hurry (e.g. 2050), and we are way less than 1% of the way to where we need to get, so why the H3LLLLLL! would anyone be trying to put the brakes on the change already. Insanity, or stupidity of the highest order.
Where are we going and why are we in a handbasket?
At the very least, rooftop solar producers will wind only being credited at the rate the utilities buy power wholesale. If you take a look http://www.eia.gov/electricity... that's considerably less than the retail cost.
You know they're desperate when the only argument against new technologies they can come up with is that they're ugly.
There's a 30% tax credit expiring in 2016. Not sure what you mean about an "idea" and being "scalable"; it's just a bank projecting in what areas photovoltaics will be worthwhile when. After 2016, you'll presumably still have new installations worthwhile in the south of the country and the area creeping northwards as prices continue going down.
Prices are so distorted at this point it is almost impossible to tell what anything costs.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
Demand for power is lowest midday? Funny how time of use metering charges you more for daytime usage due to high demand. Must be a scam.
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How many tax subsidies finance into your average power plant? How much are the indirect costs (ignoring CO2 emissions, let's just focus on locally increased health care costs from coal pollution, long term storage costs for nuclear waste, military adventurism for oil, etc.) of "traditional" fuels?
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FYI demand in summer in many states is highest with mid-day air conditioning, same time as solar peaks.
The grid as a whole needs to add much more storage, and long distance HVDC transmission lines, to balance intermittent power sources.
My general position is maybe start reducing the incentives for solar, EVs etc once we are at say 50% of where we need to get to in the level of penetration of these technologies. Until then, get any additional needed infrastructure revenue from gradually increasing carbon taxes.
Make sure there are both carbon taxes and affordable alternatives to burning fossil fuels.
That's the recipe for a successful transition of the energy system.
Where are we going and why are we in a handbasket?
The holy grail for solar and other renewables is "off-grid".
I'm not sure how you can look at this inexorable progress and not see that's where it's headed.
It's why there are already places where it's illegal to be off the grid.
I'll bet you that before we have ubiquitous self-driving cars we have homes that can produce their own power without the need for a "grid". My hope is that some day the grid will be the equivalent of the streetcar tracks that are still under the pavement in many cities. This is why I'm opposed to any large-scale public subsidy of the "smart grid".
Now that I think about it, my place has a "coach house" in the back. I've turned it into a garage, but there is still a hayloft in it. I've even left the block and tackle above the loft door for decoration. And that's just a few blocks from downtown Chicago. I hope I live long enough to see "the grid" become just another 20th century artifact. Of course, there are some powerful forces aligned to prevent that from ever happening.
You are welcome on my lawn.
" a power source that's only producing cheap power during periods where demand is lowest?"
Yep, I can tell you don't live anywhere in the southern United States. Especially the southwestern areas.
Still waiting on Serviscope_minor to wake up to fucking reality and realize that Jessica Price isn't going to fuck him.
Generally speaking, yes. Anything complying with international standards is required to handle a 1 inch chunk of hail at terminal velocity (50 MPH). Many panels are rated up to 4x that, for added robustness, but I doubt those are the cheap ones. :-)
Check out my sci-fi/humor trilogy at PatriotsBooks.
A solar installation is an investment. The proper analysis is return on investment. Current actual price before credits and rebates for a 4kW rooftop (16 panels, abt 25 m^2), installed, is about $16,000. This includes a substantial profit for the installer -- it should be available for less in a competitive market. There's a 30% US federal tax rebate, and here in North Carolina a 35% state tax rebate and a ~$1300 utility kickback. Assuming your tax situation allows you to take advantage of the credits, the net cost is about $6000. This will completely offset an annual electric bill of about $2000 - $2500. This is about 35% return on investment. Amortizing the net cost over a lifetime of 15-20 years for various components gives about 30% per year return. This return is tax free. This is an astoundingly good return. Berkshire Hathaway's total return over 49 years is 20% annually.
In other jurisdictions without the state tax rebate and utility kickback the tax-free return is 10 to 15%. Much better than the long-term return of any mutual fund.
Without any direct incentives the return is about 6%, tax free, very safe. CDs are currently about 1%.
Comparing the actual costs is the fair comparison. Apparently TFA omitted the actual government incentives on solar, while implicitly including them in the per kWh utility figures.
Rooftop solar has other benefits as well. Inverters are available that provide power during grid failure (during sunshine), and there are external benefits in replacing dirty coal or dirtier nuke power and slightly reducing the size and power of a monopoly corporation.
Verbum caro factum est
And, Americans thank China for their subsides on the manufacturer of Chinese solar panels.
Is this price parity before or after absorbing massive subsidies from taxpayers and electricty consumers? If it is after, then the idea is not scalable.
After. Yes, it includes the subsidies being renewed.
The Deutsche Bank's projection assumes that there will be three things happening, which are unlikely:
(1) It assumes that the door-to-door sales model of whatever solar technology happens to be cheapest on the Thursday they ring your doorbell will result in substantial cost savings which can then be kept back from the consumer as additional profit
(2) It assumes that the utility companies aren't installing all those "smart meters" so that they can tariff at differential metering rates - in other words, pay you less for the electricity than what they sell it to you at - as they are already doing in some markets (i.e. they pay you the wholesale spot market price, but charge you the retail peak price already in some markets
(3) It assumes the ITC (Investment Tax Credit), which is set to phase from 30% to 10% by the end of 2016, will be renewed so that you are paying a subsidized price for the hardware (actually, that money would go to Vivint, not the home owner, since Vivint continues to own the solar system themselves, and merely sells the electricity to the customer on a monthly basis; as soon as the phase out hits, look for a price hike)
So Deutsche Bank gave them a buy rating, but Citigroup gave them a neutral rating, and while the stock at IPO opened at $17.01 on initial trading on October first, it's now mid-November, and they're down to $11.25 a share, which is a drop in investment value of just under 34%; call it losing a third of its value.
I think I'm with Citigroup on this one; I think Deutsche Bank is overly optimistic in assuming that the ITC won't sunset on schedule, and I think they are optimistic about people being OK effectively just switching power companies, and not owning - or getting the tax benefits from - the solar themselves.
The price you receive has to be the value of that electricity to the utility. The calculation of that value is tricky because the utility has very high fixed costs related to infrastructure, operations, and generation; your electricity doesn't reduce their fixed costs at all. You might save them some variable costs of generation but you might also cause them to incur some additional management costs.
Charging a battery off of AC? Surely you mean RECTIFIER.
Nope, he said inverter, he was talking about a intelligent hybrid inverter like this Outback one.
The trick is that while it's called in inverter, that's only one of the things it does. Not only can it feed solar power to the grid, it can operate your home off of batteries, and if that isn't enough it can signal a generator to turn on(and off) as needs and power supply(solar AND grid) varies.
I don't read AC A human right
The power companies make a huge profit off of those solar users’ surplus power compared with what they would be paying for peaker plants. They can readily afford to absorb the infrastructure cost even if the customer is consistently producing more power than they consume.
In many (most?) States the power company isn't making any profit off this energy. Deregulation (a misnomer, actually they just changed the regulations) separated the supply/generation side of the business from the transmission side of the business. In New York State the utilities were forced to sell their generation facilities back in the 90s by the Public Service Commission. Customers are in turn forced to pick an "energy supplier" from a list of dozens of companies, the theory being that competition brings down prices. Of course this hasn't panned out in reality because electricity and natural gas are commodities; the price difference between the various suppliers is statistically meaningless even for customers that purchase large amounts of energy. I laid them all out in a spreadsheet once upon a time and the difference between the highest and lowest was less than 1%.
Of course, I digress. Bottom line, in New York State and many other States the utility isn't actually seeing any profit from your sale of solar energy. It goes back into the statewide electricity market and is bid on wholesale by spectators that then sell the energy back to consumers. The utility is only allowed to charge the usual transmission fees for this energy, which is a flat per kWh fee (with demand charges for larger commercial/industrial concerns) that doesn't vary based on the source of the energy.
If you want to make net metering competitive you'll have to attack this regulatory scheme that tried to improve a natural monopoly for a commodity by introducing false competition. Even at that it won't really be net metering because there's a non-zero cost associated with synchronizing your power supply with the grid. The fairest way would be to combine net metering with an additional flat monthly fee to cover the interconnection costs.
Of course, all of this is a moot point so long as the utility isn't actually allowed to touch your power but has to sell it into a virtual market that seemingly exists just to provide some middlemen with a profit opportunity.
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
...at least in Scandinavia.
I often drool over the prices in China, cheap CHEAP and functional solar panels I could have gotten for pittens. But the taxes are so high that it evens out the score. Which is kind of strange since the government is subsidizing solar power anyway, but it's all lost on the import tax alone.
What this world is coming to - is for you and me to decide.
In my area there's an extremely well funded (bribed) bill that the electric company is ramming through our legislature that will make the pay for back-fed electricity send into the grid like 5x lower. That's about as blatant as it gets when it comes to CO2-producing assholes being assholes.
Many utilities in the US are fighting rooftop solar through various means. The south-eastern states in particular are the worst for this.
Utilities are getting laws passed banning the "solar lease scheme" so popular in other parts of the US. And getting laws passed banning off-grid solar installs. And not providing net metering (either "you get paid for your excess electricity" or the "electricity you feed into the grid offsets what you use when the sun isn't shining but you wont get any money if you produce more than you use" model). And doing everything they can to push electricity generated from dirty black coal or nuclear reactors built to outdated 50s era designs instead of clean green energy.
If we had distributed storage (better batteries) we could crush the fossil fuel industry for good with this, and bankrupt Russia and the Saudis for good measure. It's within reach, within a very few years.
Many places in the USA have corrupted permit schemes. You don't pay a permit for an expert to verify your changes and protect the public-- you pay a % based upon the cost of the renovation. It is a home change TAX under another name and that is why you need permits for the most basic stupid things and why inspectors ignore checking most of the BS stuff; plus they are running around justifying the tax checking things that do not need it or enforcing the stupid rules (along with the good ones.)
I just got finished paying a 15% permit tax on top of the 7.5% sales tax for changes I made which were not inspected other than asking what the general plan was. On a huge solar installation that would be crazy just to have them make sure a few wires were connected properly.
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About 10 years ago I studied a graph of the cost of solar versus conventional energy over time, extrapolated out, and saw them crossing in roughly 10 years. So, I invested in solar companies thinking they are going to take over conventional energy.
I got the crossing part right. What I got wrong is that those were domestic companies. Chinese companies generally have beaten domestic companies such that my stocks languished.
Predicting the future is not good enough; you have to predict the location also. Warren Buffet, I am not.
Table-ized A.I.
This is a great development. The End.