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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

#191

Post by dragontamer »

thescriptkiddie wrote: post #185
dragontamer wrote: post #135

Earlier quoted context omitted.

The typical American median household income is $51k. Spending $40,000 of that on "clean energy" so that they can "feel better" is well outside of the typical person's price range. Even $7000 would be cost-prohibitive, especially if they're paying or saving up for their kids. A cold can of beer also makes you feel better. Its a hell of a lot cheaper too. The answer for the typical American is to wait for utility-scal…

Solar panels don't have to be replaced annually. They have 30 year warranties as standard, and are likely to last at least 40 years. Spending $100 per month to eliminate your $110 (the us average) and rising electric bill makes sense even if you don't value renewable energy on principle. This isn't even considering the fact that you can sell renewable energy credits for the energy you sell back to the grid.

THE FREAKING ARTICLE UNDER DISCUSSION IS ABOUT UTILITY-SCALE SOLAR.

Why would electric bills be rising if solar is getting cheaper? If solar is cheaper and more efficient today, and utility-scale solar can afford efficiencies like motors (to directly face the sun throughout the day), and building the panels on the ground (easier to maintain, fewer rooftop deaths)... why would I want to jump the gun and purchase solar for myself?

Tell me, do you think you can beat $.06/kWh that Utility-scale Solar is getting TODAY? Do you think you can beat the estimated cost of $0.03/kWh in 5 years?

I THINK the article is trying to say that electric prices in America is going to start going down, thanks to solar. Depending on how quickly solar gets deployed of course.

-------------

Now yes, I do realize that buying your own solar comes with its own rewards. But we cannot ignore the risks. Gas prices have halved from their height of $4/gallon, and other forms of energy have also dropped in price.

Most noticeably, solar. No reason to buy solar yourself if you can just wait for the utilities to deploy solar after all.

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

#192

Post by maxerickson »

brians wrote: post #181
michaelbuckbee wrote: post #114

Earlier quoted context omitted.

I've been trying to do this calculation myself. One factor I hadn't initially put in was the fact that I didn't need to think about a backup generator for our (east coast) storms.

You might—I do. Your inverter won't power the house when the grid supply is down. Why? Well, because if the grid supply's down, it's probably because there's a line down somewhere. Therefore there's a lineman trying to pick that line up somewhere. He's going to be handling both ends of a broken, downed line. The generator-side line is tagged out, that's safe. The house-side line? Well, that's up to you—and so your eq…

An auxiliary grid independent outlet is apparently becoming a feature on newer inverters:

http://www.sma-america.com/newsroom/current-news/news-detail...

A generator probably beats a lot of battery systems (which along with the right inverter and a transfer switch is another way to use the solar for backup power).

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

#193

Post by Retric »

SilasX wrote: post #172
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.

Usually, it's a more complicated issue, something like: "Historically, grid maintenance costs are amortized over electricity consumption, but when some people become net contributors, that breaks the model, since usage isn't high enough to pay for maintenance." Of course, the correct solution isn't to compound one perverse incentive (out-of-sync fixed vs variable pricing) with another (ban on solar or refusal to buy)…

The concern runs deeper than this. You can go off grid with solar for minimal additional costs, so they fear people will simply disconnect from the grid. Couple this with for profit electric company's and bribing/lobbying is the 'solution'.

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

#194

Post by kragen »

gonzoflip wrote: post #179
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…

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 Second Industrial Revolution; second, up to about 1975, the US's economic growth rate was even 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. Third, since about 1970, the share of economic output that went to owners of capital (rather than labor) increased dramatically.

Now, the third of those things probably can't happen again, because capital's share of output is already super high. (It's not that it can't get higher, but it can't go past 100%.) The second could happen again, but if it does, the US will be in the position of the UK, Japan, or Germany — it's now the Single Superpower (not even a mere Great Power) who could lose market share, probably to China or to a non-nation-state power. Investors in Japan's and Germany's stock markets in 1925 or 1935 didn't do so well.

The first, well, that's anyone's guess. It's a total wildcard.

It's certainly reasonable to posit a Third Industrial Revolution, made out of some of free software, nanobots, biotech, abundant solar energy, AI, and automated fabrication. I sure hope we get one. But if we do, it's not at all obvious who the returns will flow to. (Everyone, I hope, not just shareholders.) Accumulating capital goods, as we've been doing for three million years, is less important when your capital stock can double every 24 hours through self-replication. Breweries do not account for the quantity of yeast they have on hand as a durable capital asset.

And it seems equally plausible that we'll instead experience a new Bronze Age Collapse or Decline and Fall, as inexpensive DIY drones, very affordable precision projectiles, anonymous markets in assassination, and ubiquitous retail surveillance provide a decisive advantage for attackers over defenders in the physical world, just as their software counterparts have on the internet.

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

#195

Post by harryh »

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.

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.

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

#196

Post by dicroce »

dabeeeenster wrote: post #19
hughes wrote: post #14

If the price of solar continues to drop rapidly, why would anyone buy solar? Waiting a couple years for another 50% price drop seems like an obvious choice while we're still in the $5k-10k range to outfit a home.

Some of the costs are not going to come down much more. Installation labour, roof panel frames, inverter etc. etc. can come down a little but not by much. https://electrek.files.wordpress.com/2016/05/chart.jpeg?w=77... The price curve has to start flattening out soon! (I hope it doesn't, but I can't see how you can carry on achieving 50% price drops so rapidly...)

If efficiency went up, installation can come down...

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

#197

Post by logicallee »

There is a nuanced economic issue related to this priced drop.

Today, (and for some time in the past) solar panels can be an investment, that is paid off by the amount that is saved by not having to use the grid (for example.)

So a homeowner might calculate that by investing $20,000 in solar panelling today, they can have a 100% return within 72 months (6 years). It's free if they manage to use it for 6 years. Afterward the fact that this paneling is installed is "profit" - they get the ongoing money from their savings.

So they are motivated by self-interest to make this investment, even if they assign "$0" to how much it's worth to them to reduce their carbon footprint on the planet; they don't have to care.

But look at what happens if they consider that the investment price will drop by 50% in the next 18 months. Then they will have a 100% return in 36 months, plus the 18 months they wait means their investment is repaid in 54 instead of 72 months. Or, perhaps, they can install twice the paneling in 18 months. Either way their ROI is better.

So that means for the next 18 months they are simply continuing to use the grid, which might have a higher carbon footprint. This might, paradoxically, drop adoption of solar paneling today (depending on people's expectation of the price change in the future.)

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

#199

Post by codingdave »

dragontamer wrote: post #135
cmarschner wrote: post #131

Earlier quoted context omitted.

ROI can only be one factor. The other is that you are suddenly using clean energy. Doesn't this make you feel better?

The typical American median household income is $51k. Spending $40,000 of that on "clean energy" so that they can "feel better" is well outside of the typical person's price range. Even $7000 would be cost-prohibitive, especially if they're paying or saving up for their kids. A cold can of beer also makes you feel better. Its a hell of a lot cheaper too. The answer for the typical American is to wait for utility-scal…

First off, that 40K was the cost 10+ years ago, not today. Even so, lets be honest - the population of HN is not the median household. Even if the average American cannot afford to pay cash for solar, many software engineers probably can.

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

#200

Post by kragen »

dragontamer wrote: post #188
kragen wrote: post #184

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. US$23 a month is not "well outside of the typical person's price range" in the US. If you want to "save up for your kids", the way to do it is to invest your money in the investments that have the highest ROI, as long as you have enough liquidity to weather emergencies. Pay off your 23% credit card be…

> 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 now; three of these can supply more than what my house is wired for.) Even if you did have to buy a new $2000 inverter every 10 years, that's US$17 a month.

It's true that financing the up-front investment is a difficulty, and that's why Solar City is doing such great business. But as the component cost drops, accelerating both the IRR and the up-front investment size, that's less and less of a problem.

If you do want to bet on it, I imagine you can buy stock or long-expiry call options in coal-mining companies (BTU is in penny-stock territory right now because they filed for bankruptcy a couple weeks ago, and ACIIQ is too because they filed for bankruptcy in January), or puts on SCTY and Enel Green Power. This is a terrible idea and will lose you money, and you should not do it.

Because you refuse to calculate, you are doomed to talk nonsense.

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