Ex-President Carter tried to get this going in the mid 70's with no luck. 30 years later, very little changed, sad.
First off, I'm in favor of green energy, but if we're going to make a financial argument, we have to look at the whole situation.
The installation costs from the poster herself/himself:
The initial contract cost was about $45,000, BUT - my local electric company was giving $3.50/watt rebate for solar panel installation. I got a 6,000 watt system, so about $20,000 off the top that I didn't have to pay (installation company took the rebate and didn't charge me). I got about $13,000 tax credits back the following year (credit, so I got the actual cash back). Leaving about $12,000 out of pocket. However, when I signed the contract, I made them add a rider that I would get my roof inspected and if the engineer said the roof wouldn't hold the system I could void the contract. The engineer recommended a new roof. When I told the company that, they said they'd pay for a new roof (!) to keep my business. So I got a $5,000 roof plus the panels for $12,000 out of pocket.
So we'll ignore the roof issue and take the lowest cost ($12k) which is after all the rebates and subsidies.
Next the US Energy Information Administration states that:
In 2011, the average annual electricity consumption for a U.S. residential utility customer was 11,280 kWh, an average of 940 kilowatthours (kWh) per month.
Of course we need to know how much energy costs, and fortunately the Bureau of Labor Statistics just released last month that New York households paid 19.3 cents per kWh in May 2013.
All this means is that an average, non-solar panel New York resident is paying roughly $2180/year while our solared-up resident is only paying $72/year. (This makes the big assumption that varying electricity prices and power usage and solar power availability all even out.)
So, this means Tufflaw will pay off her/his investment in (only) five and three-quarter years (before interest and ignoring any additional maintenance costs), though it would have been closer to 21.5 years if she/he hadn't taken advantage of the subsidies, rebates and tax credits.
I'm not saying it's not for the best, I'm just saying this snapshot is just... a snapshot.
I've always been a bit cynical regarding consumer-scale solar PV systems:
1) The subsidies mean that someone else (perhaps less well of and unable to afford solar cells) is helping pay for your "good feelings" about using renewables through their higher electricity bills. Doesn't really seem fair. I know it is more complex than that but it still bothers me quite a bit.
2) Consumer-scale installations are inefficient in terms of bang for (non-subsidised) buck. Would the investment not be better pooled and used to finance industrial-scale efficient solar farms?
I'm having panels installed this week because of a leasing opportunity where the company takes the risk of the tax credits and I just pay a flat rate for a guarantee of X amount of kilowatt hours being generated. It's not a sustainable model, because the tax credits won't be permanent and if there's a significant change in policy, a lot of these companies will go under.
Of course, I'd be stupid not to take advantage of getting $75+ worth of electricity for $25/month for the next 20 years. If it turns out that the company goes under and I get to keep the panels, even better for me.
This is the biggest issue with solar. We've had to put so many tax breaks in place for it to become even remotely viable for a household to put them together, and even then, a $12k out of pocket cost is out of reach for most people, even if it will pay for itself in a few years.
I am confused by your notion of fair. Coal and oil industries receive subsidies from US tax-dollar funded budgets.
And I am confused by your assertion that consumer-scale installations are inefficient. You offer nothing to support that, but you want me to believe it.
Damn, just look at that light bill and go green... with envy.
I looked into this for the house I used to own. Sure, it would be a big outlay if I had other folks install, and do it all at once. However, if you are handy, and can do it bit by bit, the initial costs aren't so bad.
What about the subsidies we pay on each and every other power source from coal to nuclear? Stuff like mining, processing, transportation, land acquisition for plants, for mines, for power cables,...
Besides, if you get a solar panel, that reduces the load on the system as a whole. In other words, some of that subsidy given to the power economy would have already become redundant. Isn't it only fair that you get it instead?
It would be an interesting exercise to try and find out the difference in true cost before subsidy for different sources, and to see which one is actually most economical...
1/ Buy someone who can't afford one a solar panel. Problem solved!
(Although less flippantly, would a One Laptop Per Child-like system work in this situation?)
We just built a new high efficiency house in January, that included 10 panels at 2.5kW. We've yet to pay for power used, and have a 283kW balance on our account. Our panels, coupled with energy efficient living (power everything off when we're not around, installed a Nest thermostat, etc). means we're pushing more to the grid than we're using. Our system is online here if anyone wants to see it.
Hold on. I wasn't comparing solar to oil and gas at all. I was just comparing the relative costs of small-scale solar and large scale-solar. I'm for solar, not against it; and for that reason, I am keen to see the most economic and efficient systems installed.
This report talks to the difficulty in getting true cost comparisons. But if solar energy is like any other industrial process, scale brings economies. Indicative benchmark capital costs now have industrial solar at around $1.00 per installed watt. The OP said that the initial cost for his system was $45,000 for 6000 watts, or over $7 per installed watt.
See my (misposted) reply below. I am not arguing for oil and gas. Just for efficient depoyment of solar.
You are on the right track, but the differential is much narrower than the reports suggest (probably because of different ways of measuring project cost). I work for a very large solar company who does both residential and large commercial/utility scale projects. Residential is in the $4.50-5.00/watt range installed, commercial and utility more like $2.50/watt.
I'd suggest one different way of considering your position. Onsite solar, even if the incremental cost is higher, can be thought of not as the utility subsidizing the customer, but as the customer subsidizing improvements to the grid by paying for part of a generation resource that the utility would normally have to pay for entirely up-front. In that sense, the utility's subsidy is just their part of the purchase, and the benefit to the electric bill is a 0% interest loan repayment to the customer for fronting the purchase of the system. The improvements have to be made at some point - having customers do it for the utility is a benefit to them in the long run.
There is also the issue of transmission with large systems. While overall solar penetration is low in the US, there are feeders in "busy" solar areas that are at 50-60% of their capacity being fed by solar - this sounds great, but makes for tricky challenges in power management. One of our customers is paying a significant amount to upgrade feeders in a town just so that a 4.5MW system can be built there. On-site generation reduces the amount of infrastructure changes required (and so can be deployed faster).
The grid costs are indeed important to consider. I get it that distributed systems can have benefits in that regard. Continued improvements in grid management are essential for all solutions. The shift to gas away from coal helps renewables as gas can be ramped up and down much more quickly making integration of "difficult" (can't control the sunshine or wind) renewables easier.
Location is also key. Solar in Arizona saves more tonnes of CO2 per $ than in Portland. It doesn't matter where the CHG is saved, just that we save as many tonnes as we can for the $. One of the nice things about solar in hot, sunny places is that it can power (at exactly the right time) the AC that people need just to live there . A nice balance of supply and demand.
Yes, a complex issue, but I think we should look for the truly economic and scalable solutions. Not the politically expedient, easy, feelgood answers.
Has anyone worked out a financial formula (or set of formulas, or a template) to serve as an incentive for landlords to invest in solar panels on property they own when it's the tenants who pay the electrical bills?
Few people remember that while Reagan was being inaugurated - before he had even taken up residence in the White House - he had workmen up on the roof removing Carter's solar panels. What a malignant asshole.
That's fair enough. Sorry for misinterpreting what you meant. Still, I think the exercise I proposed would be very interesting to carry out. Unfortunately, I have no clue how to go about finding the raw data!
And phidauex's reply is interesting too. Especially about transmission losses and other transmission problems. I know that in some parts of India for example, transmission losses can be as high as 70%! Local generation would probably make that less of a problem...
New home builders, especial large say $500k+ homes, should be required to include solar/wind renewable energy generation into their development plans.