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

#211

Post by maxerickson » Tue, May 03, 2016, 7:03 PM UTC

kragen wrote: post #161

A really interesting thing about this is that the price of solar panels has changed almost not at all in those 16 months: http://www.solarserver.com/service/pvx-spot-market-price-ind... shows that it's 0.49 to 0.63 € / Wp today, while 16 months earlier, it was 0.45 to 0.62. This is a dramatic contrast from the continuous 36% per year reductions from 2009 to 2012. In large part because it's night half of the time, sol…

It seems part of the story was crystal production getting ahead of demand.

https://en.wikipedia.org/wiki/Polycrystalline_silicon#Capaci...

The price graph a little lower is interesting.

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

#212

Post by extrapickles » Tue, May 03, 2016, 7:03 PM UTC

stale2002 wrote: post #118

jmcgough wrote: post #80

Earlier quoted context omitted.

My gf is an electromechanical engineer at a solar power startup (and obviously supportive of solar power initiatives). Just asked her about this, and she said that: 1) the electrical grid wasn't designed for transferring power this way, and it can damage the grid 2) because solar power isn't a constant power source (say, a cloud blocks the sun for a minute), power companies need to keep power available for someone wh…

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…

While solar and wind reduce peak demand, they have problems where they can suddenly loose a significant fraction of their output capacity (lull in wind, clouds) and that capacity has to be filled in by traditional peaking power plants, otherwise the grid will fail. Also the amount of power generated is not very predictable[1], and peaking/load following plants are needed to remain in standby to cover the shortfalls as the base load plants can take quite a while to respond to shortages in the supply of power.

[1]: https://www.ise.fraunhofer.de/en/downloads-englisch/pdf-file...

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

#213

Post by kragen » Tue, May 03, 2016, 7:03 PM UTC

digler999 wrote: post #207

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…

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.

No, that would amount to double-counting the returns. Yes, you need to time-discount future returns, and you may need to risk-adjust, but that's already taken into account.

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

#214

Post by copperx » Tue, May 03, 2016, 7:05 PM UTC

toomuchtodo wrote: post #129

Osiris30 wrote: post #123

Earlier quoted context omitted.

I keep a close look at the economic of rooftop pricing in TX - it's still not profitable switching but getting close. Cons: - Retail cost of electricity is already v low in most of TX (Houston, Dallas) - so it's hard to compete. - not much competition in the solar rooftop installation space (due to first point above) - No net metering policies in Houston, Dallas. Pros - High solar yield

Keep in mind that the 30% tax credit will eventually taper off. It might behoove you to wait now, but not forever.

What is this 30% tax credit you speak of?

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

#215

Post by coryfklein » Tue, May 03, 2016, 7:07 PM UTC

ChuckMcM wrote: post #103

The aggressiveness of the price drops on solar is pretty amazing. I just lost one of the inverters on my grid-tie system after it had run trouble free for 13 years. So we're looking at the first "major" repair to the system I installed in 2003. And in 2003 my 5.2kW of panels on my roof cost $38,000 before subsidies and $19,000 after. 28 panels, two 2.5kW inverters, net about 4.2kW of generation. I priced out replacin…

> And that is why it is a huge problem for the power companies

It is a problem, but not necessarily in the way you may be thinking. Peak residential power usage is in the evening when solar isn't available. Power companies therefore end up spinning down coal and natural gas during peak solar, then just spinning them back up again as the sun begins to set. [1]

So you haven't replaced the coal and natural gas plants, you're just running them less. This results in higher overall costs, because you pay $$$ to build huge plants then just let them sit most of the day, which results in higher per-watt cost of non-solar power because the infrastructure and maintenance is no longer amortized over whole-day usage.

[1] My friend, a manager of 30 years at a huge mid-west power company

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

#216

Post by coredog64 » Tue, May 03, 2016, 7:08 PM UTC

kragen wrote: post #169

dragontamer wrote: post #138

Earlier quoted context omitted.

Unlikely. Solar Panels don't replace all of your electricity costs. Naturally, you'll still run your refrigerator at night, right? And during the day, when you have peak-solar energy, you'll be at work and won't be taking advantage of it. You'll recoup some of the costs through net-metering, but you usually buy back at wholesale prices and not at retail prices. Finally, I'd expect utility companies to change their pr…

Unless it's dorm-fridge-sized, you can definitely run your refrigerator only during the day, generating ice to cool it during the night. Building HVAC systems often work this way, running the chiller to generate ice during the night (when electricity prices are low or even negative) and running the resulting chilled water through heat-exchanger coils during the day. And superinsulated fridges like Sunfrost models can…

As an EMH guy, I'd like to think that if an Einstein–Szilard cooler was more economical than grid power for A/C and/or food refrigeration that there'd already be systems for sale.

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

#217

Post by maxerickson » Tue, May 03, 2016, 7:11 PM UTC

toomuchtodo wrote: post #156

Retric wrote: post #151

Earlier quoted context omitted.

Don't forget about taxes. Interest on that 6% loan get's deducted from your income which is an arguable subsidy. Alternatively, you also avoid paying taxes on your S&P returns. In many cases solar is really close to a no brainier. Which is why Florida Utility's have tried so hard to block residential adoption.

> In many cases solar is really close to a no brainier. Which is why Florida Utility's have tried so hard to block residential adoption. This is actually turning into a hollow victory for Florida utilities. To bring people up to speed, Florida outlawed homeowner PPAs [1] (which locks out firms like Solar City, who install the panels and sell you power; no out of pocket cost for you, and you get solar immediately). Wi…

The accelerating payments in the PPAs might not be so great if electric prices drop due to solar (in the example below they go up 2.9% per year).

https://www.solarcity.com/sites/default/files/sc-contract-re...

Being responsible for the full 20 year term is also a somewhat onerous financial agreement.

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

#218

Post by TheIronYuppie » Tue, May 03, 2016, 7:11 PM UTC

up_and_up wrote: post #204

m3mnoch wrote: post #183

Earlier quoted context omitted.

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.

Appraisals are not strictly tied to price of homes. Only the value for the loan. That's not to say you're not going to associate the two together (if you're buying a house with a loan), but the $30k one way or the other isn't a huge percentage of a 30 year loan.

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

#219

Post by ZeroGravitas » Tue, May 03, 2016, 7:12 PM UTC

dragontamer wrote: post #162

ChuckMcM wrote: post #145

Earlier quoted context omitted.

You need to consider the economics of "grid tie" you generate excess power into the grid and "buy it back" when you aren't generating in excess. So if you generate as much power as your going to use for the entire day from your panels, you pay nothing for that day. Even though you are drawing power at night. In the Bay Area, there are other things that screw up the numbers but the program "trues up" once a year (rath…

> You need to consider the economics of "grid tie" you generate excess power into the grid and "buy it back" when you aren't generating in excess. Depends on the state. Sometimes, you buy at retail prices and sell at wholesale prices. Which honestly, is far more fair. You're basically using the utility's batteries / energy storage at no charge right now (if you're in a state with pure net metering laws) And yes, purc…

"Fair" in the context of a heavily regulated utility should have some relation to social benefit.

It's not fair for utilities to force costs onto consumers just because of a differential of political influence. It's not fair that solar reduces grid load at their peaks and saves them money on building out grid capacity and expensive and inefficient CO2 producing gas peaker plants and that benefit is not returned to the provider of that service.

Overall the many benefits of rooftop solar can be calculated and a value assigned. Most seem to come out at net or above, so talk of average wholesale prices is misdirection.

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

#220

Post by kragen » Tue, May 03, 2016, 7:12 PM UTC

Will_Do wrote: post #208

kragen wrote: post #194

Earlier quoted context omitted.

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...

To summarize the article, the long-run correlation between stock prices and economic growth rates is positive at 0.51, and in the short run the correlation is actually negative (no number given), because investors bid up stock prices in fast-growing economies, because they expect the growth to continue.

If the growth did continue, then they would make money, but often it doesn't, so they overpaid, so they get below-average (and often below-break-even) returns.

Also, per-capita GDP growth is irrelevant; what correlates positively with equity returns is total GDP growth, including the change in population.

So, on the contrary, this article provides a great deal of reason and even empirical evidence to believe that returns on US stocks should follow US economic growth rates.