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

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

#231

Post by reitzensteinm »

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…

But what happens when you no longer get free power under net zero agreements (which is going to happen), and the cost of the system drops, reducing the value further of the already depreciating asset?

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

#232

Post by dragontamer »

kragen wrote: post #200
dragontamer wrote: post #188

Earlier quoted context omitted.

> US$40K was the cost when Chuck did it in 2003. Now we're talking about US$7000 over 25 years, which is US$23 a month. Chuck is replacing a $2000 inverter in just 10 years. If your emergencies include "fixing the damn solar panels that you bought", that's your own damn fault. In any case, when middle-class Americans start buying solar en masse, I'll admit I'm wrong. But for now, I'm going to bet you that this is a l…

It ain't like a washing machine in 2016, which everyone already has one of. It ai very much like a washing machine in 1916, when not many people had one yet, in that the year-over-year growth rate in installed solar panels is at about 26% ( http://www.economist.com/news/business/21696941-solar-power-... ). An inverter that cost $2000 ten years ago now costs $400. (Amazon has a Bestek 2000W inverter for US$140 right n…

> It's true that financing the up-front investment is a difficulty, and that's why Solar City is doing such great business

On the contrary. SolarCity hasn't made a profit and their stock has tanked. It seems like solving the up-front cost issue is difficult.

Widespread deployment of Utility-scale Solar will harm SolarCity and their customers (who have entered into long-term purchase agreements). If Widespread Solar LOWERS prices in the long term, then SolarCity dies.

Good for the world of course, but SolarCity's bets are on the wrong side of progress IMO.

The up-front financing business is hard.

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

#233

Post by jackcosgrove »

coryfklein wrote: post #215
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, y…

I would propose a global power grid as a solution to this problem, on which the sun would never set. The only problem is that earth is not set up well for this: the Sahara would be the solar workhorse of the planet, and the consumer of all this power would be Hawaii.

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

#235

Post by zsombor »

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…

The rate of economic growth has little relation to the stock market yield. For one you have forgotten about the dividends, currently around 2%. Now lets assume the company grows by 3%, so your shares will now be worth 3% more. But the total return will actually be 5%.

However here I assumed that there was no drop in optimism, or pessimism over the one year period. For if you were to bought in when expectations were high, your actual return would be lower.

Sometime the relation between growth and return is completely paradoxical. You would expect that in the past 100 years a portofolio invested in UK stocks to be dominated by one of US stocks. After all the first country went from being The Global Superpower to dubious second rate global player, meanwhile the US had done the same in reverse. Yet an investor in UK stocks would have been marginally better of.

Likewise you would expect China with its spectacular growth, to have brought impressive returns compared to the US. Yet that had not happened.

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

#236

Post by amenghra »

S_A_P wrote: post #229
coryfklein wrote: post #215

Earlier quoted context omitted.

> 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, y…

Can validate. The problem with electricity is that there is no large scale storage like there is for other forms of energy like NG and Crude. Until someone comes along and figures out how to store electricity, this will continue to cause grief to power companies. Power plants are really just options, if the price per kWh is at a certain point then it makes sense to spin up or take down a plant and generate power. Add…

Some countries store energy by pumping water up a dam. Seems efficient.

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

#237

Post by mjevans »

S_A_P wrote: post #229
coryfklein wrote: post #215

Earlier quoted context omitted.

> 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, y…

Can validate. The problem with electricity is that there is no large scale storage like there is for other forms of energy like NG and Crude. Until someone comes along and figures out how to store electricity, this will continue to cause grief to power companies. Power plants are really just options, if the price per kWh is at a certain point then it makes sense to spin up or take down a plant and generate power. Add…

We have a lot of good technologies already, the problem is they just don't scale well.

I can envision older warehouses in an industrial district being converted in to vacuum flywheel storage sites where power fed in to the grid earlier is buffered and then released back to it.

Changing our culture is another possible approach. Power is used in the evenings because that's when most people get off work/home/etc and they tend to have /that/ time to do cooking and cleaning (thermal cooling / heating are more solvable with changes in materials and building shape than culture change).

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

#238

Post by randyrand »

noir_lord wrote: post #227
coryfklein wrote: post #215

Earlier quoted context omitted.

> 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, y…

> Peak residential power usage is in the evening when solar isn't available. Assuming it's not a battery backed system, prices on those are dropping (or more correctly remaining stable while capacity slowly climbs).

Dropping, but still incredibly expensive compared to the alternatives =( ~doubles the cost of solar.

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

#239

Post by ChuckMcM »

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…

True, but its too easy to get lost in financial modeling. There were two high order bits in my decision, first was that the money was spent either way; Either I would be paying PG&E month to month, or I'd be paying off the system. And there was a good shot that the panels would generate as much or more energy for that investment. The second was that I felt it was the right thing to do, not a lot of people were in a position at the time to pay those sorts of costs and I really believe that finding better ways to power the world was a noble cause, by investing in a solar system, even if it was a 'bad' investment, it was jumpstarting the market for solar. That helped with the chicken/egg problem of people investing in new solar tech to meet a market that was (by the action of early adopters) clearly emerging.

So every time I find myself having this discussion in a group, there are folks who want to argue the financial model to "show" something (generally negative) about solar power. Either it's not a good investment, or it's just coal power used to make the stuff that now is generating not even as much power was was used to manufacture it, or it's causing more pollution by forcing utilities to turn plants on and off, etc etc.

I was fortunate that I could finance it without risking things like my kid's college fund, I live in an area where there is a lot of sun and mild weather so my house's "demand" is quite manageable, and as an engineer I get to live my belief that we can engineer solutions to the worlds problems like energy interdependence and climate change.

I am grateful that today, the systems costs have gotten so low that it's possible for more people to make that choice.

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

#240

Post by epistasis »

giarc wrote: post #6
Retric wrote: post #2

A side effect of this, large scale grid solar is now significantly cheaper than rooftop solar due to labor costs.

At which point would it be financially beneficial for a farmer to turn a field into a solar farm rather than plant a crop? I have no knowledge in economics of either so I couldn't even estimate.

Farmland is already being converted, with predictable NIMBY reactions:

http://watchdog.org/191942/critics-want-sunshine-huge-mn-sol...

http://www.startribune.com/big-solar-parks-proposed-for-minn...

Including "prime" farmland:

http://www.mprnews.org/story/2016/02/03/opponents-want-minne...

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