The price of solar power just fell 50% in 16 months • Hacker News Board

Re: The price of solar power just fell 50% in 16 months

#201

Post by gonzoflip » Tue, May 03, 2016, 6:42 PM UTC

kragen wrote: post #194

gonzoflip wrote: post #179

Earlier quoted context omitted.

May I ask where you got your 3% because that number is very low compared to any number I have ever read? This Wikipedia chart shows annualized returns to be 10.47%. That is >3x your 3%. https://en.wikipedia.org/wiki/S%26P_500_Index#Annual_returns

3% is an estimate of the rate of economic growth: http://www.tradingeconomics.com/united-states/gdp-growth As I said above, we should expect the market's long-run returns to be close to the rate of economic growth. It's true that stocks in the US in the 20th century dramatically outperformed that 3%. This is for three reasons: first, up to about 1975, the world's economic growth rate was higher than 3%, due to the Se…

I understand the rate of GDP growth, the person you replied to specifically stated that they would have made more money on the SPX. Granted the S&P 500 is not guaranteed to go up, but historically it does.

"...first, up to about 1975, the world's economic growth rate was higher than 3%, due to the Second Industrial Revolution; second, up to about 1975, the US's economic growth rate was higher than the world's, because it was taking over the markets previously supplied by the bombed-out economies of Europe (especially the UK) and Japan."

Do you read the posts you reply to? Because the chart I linked starts in 1970. And you are discussing GDP when the post you were replying to specifically was talking about investing in the market.

Re: The price of solar power just fell 50% in 16 months

#202

Post by gonzoflip » Tue, May 03, 2016, 6:44 PM UTC

harryh wrote: post #195

SEJeff wrote: post #189

Earlier quoted context omitted.

Actually the markets are "supposed" to double every 10 years, which is said that on average over 10 years, the markets will grow 10% per year. Since the recession 8 years ago that has been much lower, but in general, that is the rule most industry people will give you. I work as a tech guy in finance and have for the past 8.5ish years.

Anyone who tells you to expect a 10% annual return from the S&P500 is lying to you. And probably trying to sell you something.

Really, I do not understand your reasoning since the S&P 500 has an annualized return of >10% since 1970.

https://en.wikipedia.org/wiki/S%26P_500_Index#Annual_returns

Re: The price of solar power just fell 50% in 16 months

#203

Post by Someone » Tue, May 03, 2016, 6:44 PM UTC

antisthenes wrote: post #159

toomuchtodo wrote: post #127

Earlier quoted context omitted.

Excellent example of why solar panels (in the right locations) and LEDs are a better investment than the S&P500 right now. You spend dollars now to eliminate the need for future dollars.

While that is true, keep in mind that future dollars are less expensive than present dollars. But it stands to reason that the prices of energy will rise faster than the rates of inflation, so it would still be a good investment.

If everybody buys solar, electricity prices will only rise faster than inflation in periods without much sun.

It might even be profitable to play a 'buy when it is free or cheaper, use when it costs money' strategy. You can get there by buying large batteries, charging them from your neighbor's solar panels when there is lots and lots of sun (they may even sell at prices below zero), and discharging them, selling to you neighbors, when there is little sun and wind.

Re: The price of solar power just fell 50% in 16 months

#204

Post by up_and_up » Tue, May 03, 2016, 6:45 PM UTC

m3mnoch wrote: post #183

warmwaffles wrote: post #107

Earlier quoted context omitted.

How long until you start seeing a return on investment? Right now my electricity bill for my home is ~100 a month in Texas. I would need to keep the same panels without maintenance fees for 33.33 years by your price point of 40k

this argument kind of annoys me. "yeah, but how long before you see a return on investment?" how about instantly? this is what we did: 1) calculated our monthly electricity payment: $160 or so a month. 2) priced out solar to push our payment to net-zero-ish: the savings really start multiplying once you get down into the regulated tiers. 3) replaced our electricity bill with a solar installation loan. what did we get…

> instant equity on our house.

Depends. Solar doesnt necessarily add value. Depends on the appraisal. I only know because I tried to buy a home with solar panels. The homeowner had raised the price of the home to include his investment in the panels but the appraiser wouldnt include the panels in the appraisal.

Re: The price of solar power just fell 50% in 16 months

#205

Post by rhino369 » Tue, May 03, 2016, 6:47 PM UTC

ohitsdom wrote: post #55

samfpetersen wrote: post #51

Is this not just a symptom of oil prices dropping? Solar has to remain competitively priced or the industry is screwed

An entire industry can't just lower prices to meet a competitor.

Without subsidies an industry can't not just lower prices to meet a competitor.

Especially with the sort of auction pricing in energy markets. If the going rate for energy is 5 cents a KW*hour, then you can't sell it for 6 cents.

Solar survives off subsidies in the USA. Though in places like Dubai it might be a competitive energy provider.

Re: The price of solar power just fell 50% in 16 months

#206

Post by maxerickson » Tue, May 03, 2016, 6:48 PM UTC

efields wrote: post #149

Curious… does it ever get low enough that electric heat becomes desirable? We moved into a place that had electric heat on the ground floor, ran it the first cold month, saw the bill, then made it a purely "on demand" heating solution. The rest of the apartment was gas forced hot air, which was on a normal schedule. To heat a whole home in a Boston winter seems like it might cost $1000 or so. Is it reasonable to expe…

An air source heat pump might make more sense than just using the electricity (they often provide 3 units of heat for each unit of electricity, a COP of 3 compared to 1 for resistive heating). It depends on how much summer power could be sold for and how much all the things cost.

Newer ones would work fine for most of the Boston winter.

Re: The price of solar power just fell 50% in 16 months

#207

Post by digler999 » Tue, May 03, 2016, 6:50 PM UTC

kragen wrote: post #163

ChuckMcM wrote: post #139

Earlier quoted context omitted.

That is a slightly more nuanced question than you might think. First, I work from a baseline cost of $19K, even though the list price was closer to $40K I didn't pay that for the system so I use the actual cost in my calculations. Second there is the point where the money you've saved is equal to the money you paid, we hit that point about 10 years in. And then, depending on the life of your system (which has "positi…

I think you're being a little unfair with the S&P comparison: you should be comparing the returns on your actual investment with the expected returns on the S&P, not its actual returns. The stock market got a 5.4% return over that time, yes, but that's above average; we should expect its long-run returns to be close to the rate of economic growth, or more like 3%. And it could easily have been zero or even negative o…

Additionally, you'd have to subtract the monthly power bill from those returns. I.e. you can't say "I would have doubled my $20k return by investing it for 10 years", because you can't defer your monthly power bill for 10 years and pay it in a lump sum after you doubled your money in the S&P. Paying $100+/month for power would substantially impede the interest compounding effect.

Re: The price of solar power just fell 50% in 16 months

#208

Post by Will_Do » Tue, May 03, 2016, 6:51 PM UTC

kragen wrote: post #194

gonzoflip wrote: post #179

Earlier quoted context omitted.

May I ask where you got your 3% because that number is very low compared to any number I have ever read? This Wikipedia chart shows annualized returns to be 10.47%. That is >3x your 3%. https://en.wikipedia.org/wiki/S%26P_500_Index#Annual_returns

3% is an estimate of the rate of economic growth: http://www.tradingeconomics.com/united-states/gdp-growth As I said above, we should expect the market's long-run returns to be close to the rate of economic growth. It's true that stocks in the US in the 20th century dramatically outperformed that 3%. This is for three reasons: first, up to about 1975, the world's economic growth rate was higher than 3%, due to the Se…

There's not much reason (and even less empirical evidence[1]) to believe that U.S. stocks should follow U.S. economic growth rates.

[1]: http://www.economist.com/blogs/buttonwood/2014/02/growth-and...

Re: The price of solar power just fell 50% in 16 months

#209

Post by freyr » Tue, May 03, 2016, 6:52 PM UTC

SEJeff wrote: post #189

kragen wrote: post #163

Earlier quoted context omitted.

I think you're being a little unfair with the S&P comparison: you should be comparing the returns on your actual investment with the expected returns on the S&P, not its actual returns. The stock market got a 5.4% return over that time, yes, but that's above average; we should expect its long-run returns to be close to the rate of economic growth, or more like 3%. And it could easily have been zero or even negative o…

Actually the markets are "supposed" to double every 10 years, which is said that on average over 10 years, the markets will grow 10% per year. Since the recession 8 years ago that has been much lower, but in general, that is the rule most industry people will give you. I work as a tech guy in finance and have for the past 8.5ish years.

The U.S. markets reflect the U.S. ascending to become the dominant world power over the course of a century. Naturally, the markets grew during this period of tremendous economic growth. The investment industry likes to extrapolate from this, and declare it a rule of the markets as if it's a law of physics.

If growth slows or stalls, eventually the markets will catch up. A market that grows independently of the underlying economy doesn't make sense in the long term.

Re: The price of solar power just fell 50% in 16 months

#210

Post by ptaipale » Tue, May 03, 2016, 6:53 PM UTC

lambertsimnel wrote: post #146

stale2002 wrote: post #118

Earlier quoted context omitted.

Solar power REDUCES peak grid usage; it does NOT increase it. When do you think solar power is producing the most electricity? In the afternoon on a hot summer day. When do you think peak grid electricity usage peaks? In the afternoon on a hot summer day! Solar power helps get rid of the peak electricity usage problem. If anything, power companies should be paying solar users even more, because they are reducing cost…

Why does grid electricity usage peak on hot summer afternoons? If it's because of air conditioning, it's probably not universal. I imagine hot summer afternoons are a time when factories operate below capacity (or not at all), and people heat their homes less and spend more time outside away from TV, etc.

Certainly not universal. Could be true in California or Texas, possibly. For sure it's not here.

Where I live, the peak is a winter morning which is windless and therefore particularly cold, at 8:00 (before sunrise). Solar output is zero, wind power output is zero. Everyone turns extra heaters on, puts the kettle on to make a hot cup before taking a warm shower.