What hidden costs make solar cost 0.50 a KWh generated?

Gmonroe · April 2011

I became interested in the subject when I looked at the crazy cheap systems they offer here : www.sunelec.com.

Picking their cheapest package system ($1.76/watt), and assuming I can "rig something" for the mounting hardware on a roof (technically you just need screws, some sealant, and a flat surface. As I note in another post the proper mounting hardware is very expensive) the system pays for itself, WITHOUT subsidies, in 11.65 years. That's using the PVwatts calculator with a derating factor of 0.77.

That's near Austin, Texas, with local electricity rates of 11.1 cents per kilowatt-hour.

Solar panels are supposed to last 25 years. Maybe these cheaper ones won't last that long. I'm sure inverters eventually die as well, probably in under 25 years. Stuff will break in wind and hail, etc. But at first glance, if you don't spend money on expensive mounting hardware and do all the work yourself, it doesn't look like the power generated is anywhere NEAR 0.50 a kWh.

Rooftop mounting hardware adds another grand or two to the cost, pole mounts raise the cost by 50%. But even then it appears to pay for itself, in an area where the utility charges 11.1 cents, with plenty of margin left for replacing broken parts.

The subsidies look like they make installing these a no brainer - an 8 year payback is better than most financial investments, and more prudent as well.

What am I missing?

BB. · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

A smallish 3.5 kW system...

"Station Identification"
"City:","Austin"
"State:","Texas"
"Lat (deg N):", 30.30
"Long (deg W):", 97.70
"Elev (m): ", 189
"PV System Specifications"
"DC Rating:"," 3.5 kW"
"DC to AC Derate Factor:"," 0.770"
"AC Rating:"," 2.7 kW"
"Array Type: Fixed Tilt"
"Array Tilt:"," 30.3"
"Array Azimuth:","180.0"

"Energy Specifications"
"Cost of Electricity:"," 9.7 cents/kWh"

"Results"
"Month", "Solar Radiation (kWh/m^2/day)", "AC Energy (kWh)", "Energy Value ($)"
1, 4.32, 346, 33.56
2, 4.96, 352, 34.14
3, 5.47, 427, 41.42
4, 5.52, 406, 39.38
5, 5.54, 413, 40.06
6, 5.93, 422, 40.93
7, 6.21, 450, 43.65
8, 6.22, 452, 43.84
9, 5.77, 417, 40.45
10, 5.65, 425, 41.23
11, 4.60, 343, 33.27
12, 3.96, 315, 30.55
"Year", 5.35, 4769, 462.59

Assume a 3.3 kW inverter installed (turnkey) at $6 per watt (roof mount, pre-rebates). 30% rebate, 20 year life with 1 inverter replacement after 10 years ($2,355 replacement cost present value) and no property taxes:

[(3,300 Watts * 6 per watt * .70 fed tax credit) + $2,335 replacement] / (4,769 kW per year * 20 year) = $0.145 per kWH

In California, my Time of Use rates vary from $0.09 to $0.57 per kWH (off peak, summer peak @ 1,000+ kWH per month). So--it is possible to get an estimated cost of power under $0.20 per kWH with Grid Tied power...

But, I would not call it an investment--more of a hedge against your state going nuts with power pricing (like California).

In California, we have 1 year net metering that is weighted towards zeroing out your electric bill... We may be getting a few cents a kilowatt hour for excess generation--but it is not going to make me money.

Conservation is the way to go first... Almost always a better "investment that solar PV system... It is not unusual for a family that has never focused on conservation to cut their power usage with new energy star appliances (heating/cooling/etc.), insulation, changing from desktop to laptop computer, insulation (lots of ceiling insulation, wall, windows, etc.)...

-Bill

Gmonroe · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

Wait a second. You're talking about spending 3 times as much money as the link I posted will ship you a working system for, per watt. And even then you're calculating rates MUCH lower than 50 cents a kilowatt hour. So are you agreeing with me? That solar PV is a fraction of the cost that apparently ignorant folk make it out to be?

solar_dave · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

this one is only 15 panels and $2.69 a watt,
http://sunelec.com/index.php?main_page=pv_systems&id=1050&type=GT

let's assume add shipping, conduit, wire, interconnect breaker, electrician, permiting & mounting hardware your soon at $5+ a watt.

the laminate panels you quoted @ $1.76 require 5 times as many panels and lots of mounting and wiring let alone roof space.

russ · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

Hi G -

The first panel on that list that is not thin film is the Evergreen - a company likely gone before long so forget warranties? The first company that will probably be around in years to come is Kyocera - 2.67$ per watt plus shipping.

Thin film will cost you at least double for mounting due to the lower efficiency.

The power cost shown by PV Watts is the generic power cost from the grid for the area you live in.

Bill is showing how solar PV helps him knock off the top tier prices.

Russ

BB. · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

I hate to call people ignorant who disagree about solar PV system costs...

There are huge variables in pricing, installation cost, power usage, utility pricing/billing plans, and whether or not a utility or building department will even allow a system to be installed/operated. Not including local site conditions (amount of sun, shading, etc.).

Solar PV systems, on-grid and off-grid, have their place. But they are hardly cheap and something a person can install without thought. And off-grid power systems probably are (in the US) somewhere in the $1-$2+ per kWH for off-grid power (at least). 10x what grid power costs. For solar, if you do not use it 9 months of the year or more, but only a few weekends a year (or emergency power use)--frequently a generator + some stored fuel is a better solution (cost wise).

Personal power usage (amount, emergency backup, green or not, etc.) is a highly personal choice. We here try to help people make the best decision for their needs--by educating and asking questions regarding their needs.

-Bill

solarix · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

As someone who is actively trying to install solar PV for other people and trying to drive down pricing so that as many people can have this clean, reliable means of power, I can tell you that my turnkey price is sub $5/W. Yes, you can buy the equipment for less than $3/W, but installing it so that it will reliably last 25 years is not trivial and not typically achieved by the do-it-yourselfer. But more to the point is that the costs involved in me building a system for you are significant. Building to code, documentation, inspections, utility requirements, UL listing standards, training costs, certification costs, insurance, all the overhead of running a business, advertising to find you, etc, etc. - all adds up to a lot. Yes, do it yourself and save on all this - I commend you because 10 times more people could afford solar if they could learn to do it themselves. However, most people can't or more likely can't take the time. If you add up all your time learning what I know (and it is mostly here on this forum) and charge yourself a decent wage for that time, you may be better off paying a pro to do it for you.

Gmonroe · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

Thanks for the feedback, folks. It sounds to me that if solar is ever going to be cost competitive it needs to be packaged in a way that almost any minimum wage employee or homeowner can figure out and install. And the mounting hardware needs to be standardized, dirt cheap, and probably made in China. Some of the panels are dirt cheap now but the mounting hardware hasn't caught up.

The reason is energy density. If it takes skilled people and careful thought to get the system installed per square foot, because sun is a relatively low density energy source it's going to be too expensive.

solarix · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

The fundamental problem is that houses were never designed to have solar installed on them and the permitting authorities require a fair amount of hassle to ensure that it is done properly. Also it tends to make each installation a custom design and you are going to have a hard time standardizing any kind of package system that a DIY can do. Since when has any kind of serious electrical work been doable by the average homeowner? This country is regulated up the whazoo and that is all very nice and safe but leads to plenty of cost. There is no free lunch and yes, the sun shines on everyone (well, to some degree) for free, but you have to work like hell to collect it. Solar is a long term good investment. In our area, over the warranty life of a grid-tie system, you will pay less than half of what the utility will charge you.

russ · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

The skilled people and energy density have nothing to do with each other in this case. Matter of fact if the energy density were higher it would most likely be more dangerous.

The skill is to get the job done in a manner that will last and be safe and can be warrantied by someone.

You will never see the day that day laborers and every home owner can install such a system in the US or Europe - though that is how it is done in much of the 3rd world - of course it is usually a mess and a dangerous one at that.

Russ

Cariboocoot · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

Gmonroe wrote: »

Thanks for the feedback, folks. It sounds to me that if solar is ever going to be cost competitive it needs to be packaged in a way that almost any minimum wage employee or homeowner can figure out and install. And the mounting hardware needs to be standardized, dirt cheap, and probably made in China. Some of the panels are dirt cheap now but the mounting hardware hasn't caught up.

The reason is energy density. If it takes skilled people and careful thought to get the system installed per square foot, because sun is a relatively low density energy source it's going to be too expensive.

Nope. The reason is efficiency.
Small-scale production of anything is always less efficient than large-scale.
Solar panels are only about 18% efficient.
Batteries are only about 80% efficient.
Household energy use is only about 50% efficient (i.e. most people waste half of the energy they consume).

Oh, and there is always the argument that utility power is often sold at a price that doesn't reflect its actual cost.

Still, solar electric has come way down in price over a very short period of time.

Peter_V · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

Gmonroe wrote: »

technically you just need screws, some sealant, and a flat surface.
What am I missing?

Technically that is NOT true. If you just screw the panels down to your roof you will quickly damage both the panels AND the roof from heat buildup.

Most panels need several inches of airspace between them and the roof for air circulation.

Part of the reason the mounting systems are expensive is because they need to provide this airspace while supporting the panels so they don't flex to much in high winds AND don't pull loose in high winds AND don't cause leaks in the roof.

If you've ever worked on a roof you'll know that just slapping some sealant around a bolt will not be waterproof for long. In fact keeping a roof from leaking when you mount something on it can be quite challenging.

One of the reasons I decided AGAINST roof mounting my array.

BB. · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

And, interestingly, mounting a solar panel about 5" off the roof (minimum recommended for efficient panel cooling in hot sun) is the perfect height to make Class A roofing shingles (classic asphalt 3 tab) burn quite nicely in the UL Fire Bran tests and Fail their Class A fire resistant rating.

Above 5", less of a chimney effect, less than 5", less of a chimney effect.

The more you read/work with various "things"--the more you find they are quite interrelated and the chances for something to go wrong increases dramatically--Even when you thought you were doing things right/to code.

HTG PVinPA wrote: »

At the Solar America Board for Codes and Standards there is a document called "Expedited Permit Process Report. It was prepared by Bill Brooks. http://www.solarabcs.org/about/publications/index.html

Not sure how many of you have read this.
Have any of you handed this to your local codes office? What was the reaction? Did it help or hurt?

Thanks!

Flammability Testing of Standard Roofing Products in the Presence of Stand-off Mounted PV Modules

The more you look through this stuff... Just causes you to shake your head. :roll:

Here are some examples of:

Vietnamese utility pole wiring examples
Typical Iraqi neighbor hood generator/pole wiring 2010

People make do with the resources they have... We are, frankly, quite spoiled.

-Bill

System2 · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

I think solar may be one of the cheapest energy sources ever invented if you get your system set up now because the dollar will hyperinflate soon and buying anything will cost billions of dollars. So you can buy the panels cheap now and make your own power, and then when electricity rates skyrocket to $4,000,000 per kW-hr in a few months no one will be able to afford it and you won't either, but it won't matter because you'll be making your own power "for free".

Cariboocoot · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

There is no reason to believe any currency is going to "hyper-inflate" and/or that electricity will suddenly go up to "$4,000 per kW hour".

Nor is it accurate to refer to solar power as "cheap", much less "free".

System2 · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

Hey Cariboocoot, I'm trying to get some land up in the Chilcotin, maybe somewhere around Williams Lake or Horsefly and set up a renewable energy system. Any tips to the peculiarities of our location would be appreciated.

Yes it seems the monetary system is about to collapse as the US is having to print trillions of dollars just to balance its budget, that's why prices are rising and it won't stop as many hope, it will get increasingly exponentially worse. Soon a point will be reached where people get concerned and lose confidence in dollars and try to spend their money rather than save it, which triggers an unstoppable snowballing hyperinflationary collapse. It will probably spread to Canada too since we aren't much better.

On the physical side of things you seem to be set up well. Just buy about 6 months worth of food and convert your money into gold and silver and you will be laughing. And get an electric car.

[Please note: This is not a political forum. We try to keep it more towards the solar/conservation/technical side of the spectrum. -Bill B. moderator]

icarus · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

I second Bill's comment. Too many forums are wreck by the divisions caused by arguing political rhetoric. There are plenty of places on the web to discuss ones own political opinions. Please feel free to ask and answer posts that are relevant to solar and wind.

Thank you,

Icarus

Cariboocoot · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

That's three votes for "no political stuff" - which is what I was trying to gently hint at with the earlier post.

Mark_BC wrote: »

Hey Cariboocoot, I'm trying to get some land up in the Chilcotin, maybe somewhere around Williams Lake or Horsefly and set up a renewable energy system. Any tips to the peculiarities of our location would be appreciated.

Ever spent any time up here? Beautiful in Summer; brutal in Winter. Our days get very short; down to about six hours total daylight by Dec. 21. Solar power systems have to be either severely "over paneled" or else you rely on a generator. The extreme cold has to be taken into account when setting up an array too, as it is very easy to go over the controller's maximum input when the panels superconduct. We're talking -40 here. Wind power isn't much good due to the mountainous terrain; there is a tendency towards gusts, squalls, and turbulence.

As for an electric car ... wouldn't be much good. Long distances to anywhere, rough roads, severe Winter weather. Not really an electric vehicle climate at all. Definitely a 4x4 zone.

BTW: There's actually signs up along the way that say "Horsefly Likely". The local joke is: "Mosquitoes for sure!"

niel · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

i think it's sufficient to say that electric costs will rise in the future along with many other things and no matter the cause it can be summed up as inflation. how much and why is speculative. i contend that solar is a good thing to buy into no matter the various reasons that can be given for it.

SolarLurker · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

There was a great article in one of my financial planning magazines stating that in some places in the united states commercial solar has reached parity other forms of electricity. It was unclear from the article if federal and state incentive were factored in.

I feel my solar system was an investment, maybe I could get higher return elswere. However, a bank cd isn't going to help the environment or run my house during power outages.

It's really hard to figure it all out. The government has been intertwined with the electric co since the new deal. Our whole electric infrastuture is subsidized by tax dollars. Coal and Natural Gas are exempted from many costly regulations, such as clean air and water acts.

cpetku · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

Sounds like you need to just hire Solarix and throw him a plane ticket. At $5 /watt he is very reasonably priced. The two most dangerous jobs on a house are Electrical and Roofing. Mix the two and throw in a migrant worker (or passe home owner) and you are just aching for trouble.

By the way, there are some governemt reports on inverter life, maybe 12 years before it needs to be replaced. That's about the limit of current technology fopr reasonably priced electrolytics and IGBT's in these Grid Tie units.

Hoonose · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

SolarLurker wrote: »

However, a bank cd isn't going run my house during power outages.

Neither will properly installed grid-tied roof solar! Otherwise we might surprise, or worse, someone working on the lines upstream!

RandomJoe · April 2011

Re: What hidden costs make solar cost 0.50 a KWh generated?

Hoonose wrote: »

Neither will properly installed grid-tied roof solar! Otherwise we might surprise, or worse, someone working on the lines upstream!

Sure it will, if you get the right system. Xantrex and Outback (and I'm sure others) both make grid-tied battery-back systems that allow you to wire part (or all, if you want) of a house to a subpanel that's fed from the battery bank's inverter.

Grid goes down, the grid-tie inverter shuts off. You will lose the use of anything on the grid side of the solar system, but whatever is connected to the subpanel will operate just fine.

What hidden costs make solar cost 0.50 a KWh generated?

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