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Economics of solar energy

Discussion in 'Home Power and Microgeneration' started by Pom-pom-pom, Jul 18, 2004.

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  1. Pom-pom-pom

    Pom-pom-pom Guest

    1) With solar electricity, the price is only investment.
    You must pay 100% of your next 30 years electricity bill before you get the
    very first kWh. As soon as your system is installed - and paid - the power
    is free. Even if were profitable on such a long time compared to classic
    power, many people would still prefer to pay as they use it (inertia,
    upfront capital...)

    2) Classic energy rate is likely to rise, while solar energy prices is
    expected to go down. The curbs should cross between 2010 and 2020. Just as
    the computer prices felt regularily since 1980 (Moore's law), one's interest
    is to wait a couple of months or years before one buys his or her solar

    These two problems are a major barrier for the growth of PV. But I also see
    good news.

    Many people who invest in mutual funds for their retirement worry about the
    future value of they fund. Especially when all the papyboomers will
    simultaneously claim their share, the stocks may fell at this time. The
    timeline here is 20 to 30 years ahead.

    Solar energy may well be the only industry who can proudly say: "I guarantee
    you that my product will be in high demand and more and more profitable in
    20 or 30 years"

    One way to boost the pv market should be to encourage mutual funds to buy
    the pv, install them at the consumer's place and sell the output at a
    long-term defined price: ex 15c/kwh for 30 years! (only corrected for
    general inflation). They'd have a guaranteed source of revenue much more
    stable than Nasdaq stocks or the price of oil barrel, and the consumer will
    be happy to have affordable energy whatever happens in the world.

    I see it as a market way of achieving a needed goal without massive
    subsidies (which are too often market distortions, even when well minded).

    I found only one website with a scheme close to what I'm thinking of :

    Your comments are welcome.
  2. Solar Energy (and Wind) are to be a short-lived, flash in the Pan source
    from my perspective of "Free" Energy. But I am only of a very small
    minority of people who believe in Perpetual Motion which of course will
    last indefinately both day and night.

  3. Vaughn

    Vaughn Guest

    The equipment must actually last and remain efficient for the two or three
    decades you are talking about. Therefore, your above statement can only be true
    if the equipment is warranted for that 20 or 30 years AND the warranting company
    actually stays in business. A tall order!

  4. Pom-pom-pom

    Pom-pom-pom Guest

    Present panels are warranted 20 years, and will probably last 50% more (as
    most usual stuff live longer than the warranty). Many panels installed 20
    years ago are still functional.

    It's part of the challenge to ensure the various businesses involved will
    still be there in 20-30 years. That's why people worry about their savings.
    To what extend do you trust your Microsoft stocks will be of substantial
    value in 2034?
    But industry wise, the risk seems lower. If you invested in emerging
    computer industry in 1980, with a 30-year vision, you'd need only 6 years to
    go now. Solar industry is at the same point now than computers in 1980, just
    about to soar dramatically.

    The job of mutual funds is to diversify among several companies in a growing
  5. ...D.

    ...D. Guest

    You know I have a thought (it happens occasionally) - here in California with
    our energy conscious Governor Arnold, and him wanting to up things a notch
    with energy concerns (his hydrogen gas station plan says so, even though it
    can't happen), I'd like to see a law that would require any new homes built to
    have to have some kind of PV system. No batteries, not something that would
    that gives you enough energy to run on, but just maybe half, or even as low as
    1/3rd, of average electric needs, this would be great. It would just feed
    into the grid & you get credit for it..

    With home prices here in the bay area costing $500,000 for a minimal 1200 sq
    ft 3 bedroom 2 bath home on the cheap side of town, or a few hundred thou more
    to buy on the better side of town, and prices else ware in Ca. at least half
    of that, even the whole central valley now (Modesto, Stockton, Sacramento of
    course, Fresno, etc, and 60 miles inland from there - just about anywhere now,
    an initial outlay of an extra several thousand dollars more doesn't amount to
    much. It would sure help for sure, and maybe get PV prices to come down even
    more with so much more volume the companies would be doing. I'm talking every
    new home, tract home or individual. Sure would be a boost to energy concerns
    & the whole PV market.

  6. Steve Spence

    Steve Spence Guest

    The panels do last that long. My Quad-Lams are over 20 years old.
  7. James Baber

    James Baber Guest

    There is an actual bill being actively discussed in the CA legislature whereby a
    certain %(20% as I remember) of all new construction statewide would be mandated
    to include a 2 kW grid tied PV system.

    Jim Baber

    1350 W Mesa Ave.
    Fresno CA, 93711
    (559) 435-9068
    (559) 905-2204 cell

  8. ....

    There is already more demand for the panels than the industry can
    produce. There is absolutely no need for more demand. An artificial
    demand which might evaporate at the flick of a pen somewhere would
    likely do more harm than good.

    The better method would be to work with builders and architects to
    sell them on the idea of incorporating solar PV into their designs.
    I believe many are doing this already because, as you say, it's not
    much of an added cost compared to the cost of the entire house.

  9. Great, a game!
    Most of my ideas for Mechanical Perpetual Motion Machines could use
    Scrap, most can be made from timber, but one Solid state idea actually
    utilises Solar Cells (this means that Solar Cells can produce light for
    themselves...). So you see, your question is a little ephimeral on this
    Why make anything if it takes too much effort for its returned
    you may well have asked?
    Basically, I have kept my thoughts towards utilising the most basic of
    construction materials found around most people most of the time.
    IF it costs several times of Solar, it would be viable where Solar would
    be difficult or impossible to utilise in that vicinity. Some people like to
    make things for alternative uses away from the shear power output
    (no examples required here).
    I personally have nothing against using the Suns power and have never
    expected a Medal for simply hanging my Clothes on the Washing Line
    but in some War torn areas there might just be a Purple Heart for it?
  10. Vaughn

    Vaughn Guest

    And I have some myself that are no spring chickens. Of course, there is
    more to a PV system than just the panels. I would be surprised if the
    electronics last for 30 years, there is the ever-present possibility of
    lightning or wind damage, and is is doubtful if the installation itself can last
    for 30 years because it is typically built over (and penetrates!) a roof surface
    with a lifetime that is some fraction of 30 years. Furthermore, you may have to
    wait decades to find out what the lifetime of any particular manufacturer's
    panels really are. There is just no way that you can install PV and then just
    sit back and count on your savings to roll in over future decades. It ain't
    gonna happen.

    Like you Steve, I love the idea of PV; but we must be careful not to

  11. Steve Spence

    Steve Spence Guest

    my panels are on a 6x6 pressure treated wind tower, and have been for 15
    years. no roof mounts. wrong angle, and hard to access for seasonal attitude
  12. daestrom

    daestrom Guest

    Great. Just what we need, more government rules interfering with our lives.
    Bad enough we can't put up wind-towers or build micro-hydro without a ream
    of governmental paperwork. Now you want to support your pet energy
    alternative and force it on others. I can see it now, a fleet of licensed
    'solar inspectors' signing off certificates of 'solar compliance'. Banks
    will require the plans to be stamped by a PE speciallizing in 'solar
    compliance'. Some civil service worker will file the 'solar certificate' in
    the county records otherwise you can't resell the house. Add
    air-conditioning to your home and some nitwit will figure that your usage
    has gone up so you need to upgrade your PV (for another round of
    construction, inspection, certification, filing, etc...).

    Yeah, lets make it 'mandatory'. And load on a bunch of regulation and
    bureacracy. That will make it more economical. Not!!!

    And who will pay off the hundreds of lawsuits/claims when alternative 'X'
    becomes cheaper and more plentiful than your PV system? All it would take
    is one breakthrough and all those homeowners will see the value of their
    systems (mandated by law) become obsolete and worthless.
    Hmmm.... In some other parts of the country, where we don't have a housing
    'bubble', adding 10K of solar to a home would raise the price of a nice 3
    bedroom from 75K to 85K. More than a 10% increase. And where the sun shine
    is a lot less, you're adding a lot to the price of a house for very little

    Try to think a little wider range than the 'central valley' of CA.

  13. Pom-pom-pom

    Pom-pom-pom Guest

    You may not need a full bureaucracy to enforce such a law. A smart
    government could just pass the law and advertize it, without strong
    enforcement control. You may have in the beginning 20-40% of
    architects/builders/homeowners who don't want to cope with it. But as the
    market grows, and as long as your miracle alternative 'X' energy is not
    foreseeable in the nearest future, PV-roofs eventually become standard. Just
    as airbags became almost standard on cars without any obligation by law.

    The role of government is to change the behavior of people when required by
    external conditions. But not necessarily by brute force. Solar is culturaly
    a decentralised form of energy. People involved in this industry don't want
    big obfuscated centralised systems.
  14. Vaughn

    Vaughn Guest

    Actually, that bureaucracy is already in place in most cities and populated
    counties across the United States, certainly in California. It is usually
    called the "Building Department" or something similar.
  15. ....

    I don't think the United States government is that smart and I doubt
    very many other governments are either. Enforcement control is often
    a revenue source for governments. I.e. Fees and fines. If it's a way
    for your local government to make money then it will be enforced,
    maybe even over-enforced.
    Airbags didn't become standard on cars until the obligation of law.
    It didn't even become "almost standard" without the law forcing it.
    I think we have different ideas about the role of government. I believe
    the role of government is to do things that individuals can not. The
    government is not there to change people or tell them how they have to
    live their lives or what they should do. The government is there to
    do things people want done, not the other way around. If people don't
    want big obfuscated centralized systems then the government is most
    certainly NOT the way to go since it is the biggest, most obfuscated
    and centralized system there is.

  16. daestrom

    daestrom Guest

    Well let's see, 'smart government'. There's an oxymoron if ever I heard

    Society has proven over and over, that a law with no enforcement is
    worthless. Just look at some of the agencies that haven't got enough money
    to enforce the laws that are already on the books. How many drivers on the
    road do *not* go at least a couple of mph over the speed limit, knowing the
    cop usually won't stop them for it. Adding another law with no 'teeth' may
    fool some people into voting for the supporters of it, but it won't have
    much other affect. Why would any home buyer, who spends an average of 7
    years in a home, spend an extra $10K for something that is only 'kinda
    required'. And won't pay for itself during his tenure in the home? Do you
    really think adding a $10K PV system to any home will raise it's resale
    value by $10K?? How many such systems will fall into disrepair within a
    couple of years? Just tell a home-owner he can spend $1000
    replacing/repairing components , or spend an extra $50/month in utility
    costs and see what they choose.

    The role of government is *not* 'to change the behavior of people when
    required by external conditions.' An excellent definition of the role of
    government is, "Establish justice, ensure domestic tranquility, provide for
    the common defense, promote the general wellfare and secure the blessings of
    liberty to ourselves and our posterity." Sound familiar? Another key role
    of government is to protect the rights of the minority. Even if 75% of the
    homeowners in your state could benefit from such a plan, forcing the cost of
    PV on the other 25% (even when it can be proven to be uneconomical for them)
    is unfair.

    You may argue that forcing people to spend money on *your* favorite solution
    to the long-term energy needs of this country is 'promoting the general
    welfare'. But I'm at least one citizen that disagrees. Making PV
    installations *mandatory* is heavily biased towards those that live in the
    'sun-belt'. It ignores other innovations that could be just as useful and
    perhaps less costly. And it would seem to dictate a change in lifestyle for
    some to shift their usage pattern to match the sunlight.

  17. Pom-pom-pom

    Pom-pom-pom Guest

    Not so. In the history of any country, you find periods where the government
    is smarter than the average governments. It makes just enough laws and
    enforcement to help people take initiatives. During these periods the
    civilization flourishes, economy is better and general wealth increases.
    Game: try to find when your own government was smarter, when was it dumber.
    Mine is currently on the low side of the curve. That may change...
    That's called a recommandation or normalization. It works in many fields
    without strict enforcement. In the computer industry (a very liberal
    market), you find many standards put on by various bodies, including
    govenmental ones.
    There's no law that forces anyone to buy a Ferrari. Why do people buy costly
    red cars when a good ol' Chevy does the same job at the fraction of the
    Ok my comment on the role of government was incorrect. Yours is better. But
    when people behave wrongly and jeopardize the general welfare, the
    governement has to do something. That is part of its 'defense' role. As in
    defense against any threat: military, economic, environmental... internal or
    external. If people behave like lemmings, I want the government to say
    'stop' before the cliff. Unless a large referendum unanimously decides: "We
    the people decide to commit suicide".
    The smart govenment wouldn't do that ;-)
    Note that it's not me who asked for a mandatory quota of PV. I called for
    market mecchanisms in my original post.
    And I'd lean toward recommandation and advertizing the benefits instead.
    That, the government can do it.

    While PV is not the ultimate solution for energy, it is part of the solution
    in the current state of scientific knowledge.
    If such a law was enforced in the sun-belt, and every house would get 20% of
    it's energy from PV, that would be significant in the nation's independance.
    Any solar kwh is one (?) less gallon of oil imported from unstable
    Mid-Eastern countries.
  18. Vaughn

    Vaughn Guest

    Let's take just one example; I can remember when I was happy to see my car
    reach 10 MPG. My motorcycle ('65 BMW) only managed in the low 30's. Today my
    air-conditioned Civic gets in the mid-thirtys. Why? Because of the NHTSA CAFE
    fuel economy regulations. The car manufacturers bitched and groaned, said it
    would make cars unobtainable, sued, lobbied, delayed, but today the CAFE is 27.5
    MPG. Can you inagine a world where 10 MPG was still considered good?

    Even a blind pig gets an acorn once in a while.

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