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Clean Power Cost Of Solar 2 To 100 Times Lower Than You Think

Published on April 5th, 2014 | by Guest Contributor

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The Future Of Solar: Solar Power To Surge in 2014?

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April 5th, 2014 by
 

By David Glenn

The 2014 Annual National Solar Conference is being held July 6–10 at the Intercontinental Hotel in San Francisco. There, established minds and up-and-coming experts will address new developments in the field of solar energy. But come on. The photovoltaic effect—the basic process that allows for the harnessing of solar radiation for electrical energy needs—has been old news for about 175 years, and the first commercial solar cells hit the market during the mid 1950s, is there really anything new about solar cells that will be worth discussing in 2014?

Well, yes, actually. And the thoughts that the experts bounce around will have the potential to really change the world, and not only for governments and corporations, but for everyday homeowners. See, solar power may be old news, but it’s news that residents around the world are finally starting to embrace. Below are three reasons that solar power is poised to become the next big thing in 2014 and beyond.

1. Decreased Costs

Solar IQ Rises As Costs FallWith the possible exception of mustache-twirling supervillains, pretty much everyone would like to see the the negative human impact on the environment reduced. The problem is that, while distant fears of ecological collapse may weigh heavily upon us while we’re watching Al Gore films, when we get back to our everyday lives, we’re faced with more immediate concerns, such as securing food, shelter, and clothing for ourselves and our families. Yes, it may make us sound selfish, but with a limited income, most people will choose to take care of their own immediate needs before they address the needs of the planet. Classically, the most obvious deterrent to the widespread adoption of solar power has been its cost. Thankfully, that’s all changing. Between 1977 and 2013, the overall cost associated with solar power dropped an amazing 99%. And this hasn’t been a gradual decline either. It has dropped 60% since the beginning of 2011. The point is that the initial costs of installing and maintaining solar panels is lower than ever before, and pretty soon homeowners are going to start wondering why they’re paying so much for city power when they could be getting it from the sun for a fraction of the cost.

Julie Jacobson, Editor-at-large at CE Pro, offered further insight into why solar costs are decreasing. She said, “The challenge several years ago was not just the price – what with all of the overly generous utility and government subsidies – but the access. It was a complicated mess with high up-front costs and multiple vendors and contractors. The process today is streamlined, as providers have honed their sales and installation process.” Now, solar companies like Vivint, SolarCity, and other startups have simplified the buying and installation process for solar panels, so customers merely have to set up a free installation to get started.

Furthermore, a period of solar panel overcapacity quickly brought down solar panel prices. Even with that period now over, prices have continued to trend down a bit. But the “soft costs” are the main aim for solar power reductions now.

2. New Advances in Technology

With more of the world’s attention focused on the advancement of renewable energy sources than ever before, some of the greatest minds on the planet have been taking a long, hard look at our current solar technologies, and they’ve managed to locate a fews points of potential improvement. For one thing, they’re concentrating on improving materials to make solar cells more and more efficient (with the most advanced cells currently in existence able to reach efficiency levels of over 40%). Of course, the most efficient cells are still very expensive, but as progress is made and new techniques are implemented, cheaper cells will also improve. Likewise, new materials (such as perovskites) are becoming even cheaper to manufacture, more efficient at converting energy, and could eventually supplant current silicon cells by absorbing only specific wavelengths of light—thus making it possible to “layer” semi-transparent sheets to increase the amount of energy being generated. And of course there are also recent breakthroughs in battery technology to consider. The point is that as technology continues to improve upon existing solar energy systems, more homeowners will begin to see solar power as not only viable, but as crucial to their existing energy needs.

3. Increased Awareness

From October 2010 to December 2013, the average cost of city-provided energy in the United States rose an astonishing 37% according to Citizens Advice. At the same time, with advances in technology and materials, the average costs associated with solar power have been going down (as was pointed out in point #1). The result of these two factors is that homeowners are beginning to look for effective alternatives to conventional energy, and they’re beginning to realize that solar power is the answer.

Of course, the upfront costs of installing solar cells still averages $17,056 in the US, which is too much money for many residents to be able to spend all at once, even if the resultant savings more than make up for the costs. This is why certain companies have begun to “lease” solar energy to customers. This basically involves homeowners allowing a company to install solar paneling on the home at no charge. The panels then produce energy, which the homeowner buys from the company at a substantially reduced price. As a result, the homeowner is able to save money on monthly utility bills, without having to worry about any of the upfront costs associated with panel purchase, installation, or maintenance. As Julie Jacobson, editor-at-large of CE Pro, points out: “The savings in these scenarios are far less than investing in one’s own system, but the homeowner still saves 10 to 20 percent on their energy bills with virtually no hassle and no risk.” The end result is that average citizens are beginning to take notice. In 2012, rooftop solar installations saw a 62 percent increase over 2011 installations, and almost double the installed capacity added in 2010 according to Center for American Progress reports.

So, it looks as though solar power may be seeing an unprecedented surge in 2014, only 175 years after the photovoltaic effect was first identified. Well, better late than never, right?

David Glenn is a retired businessman and home improvement expert with a passion for technology and the environment. He loves the outdoors, spending time with his family, and keeping up with the latest gadget release.

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  • wattleberry

    How about 2 more ‘accelerants’ in the form of the increasing jitteriness of the utilities reflected in unreasonable charge/profit hikes and the hyper-sensitivity of the public and media to dangerous pollution levels, now they know there’s an alternative.

    • Bob_Wallace

      Add:

      Likely an El Nino forming up which will mean much higher AC use and higher electricity bills. If it arrives it will also mean a higher concern about climate change and more “I better do my part” thinking.

      Possible first summer melting of the Arctic Ocean since humans have walked on the planet. Bringing with it some very weird, possible very hot weather and a round of “poop has hit the fan” panic.

      We’re on track to see the Arctic free of sea ice before 2020. There’s even a slight chance it could happen this year. The ice is in bad shape and we’ve had large enough single year drops to finish off what’s up there. If cloud cover is low and winds toward the Fram strong a combination of melting and transport could clear the decks.

      • Bob_Wallace

        The PIOMAS volume graph in the previous comment is of the volume at the end of the melting season. I just found one for the end of February across years.

        While there was an uptick last September that “gain” has pretty much disappeared over the winter. This last freeze season made less ice and the end of February volume is close to the year before.

        The ice is really mobile this year. The wind is spreading it around very easily. A lot is being blown out the Fram into the Greenland Sea and past Svalbard and Franz Josef into the Barents Sea. Those are places ice goes to die. Rapidly.

        Siberian snow cover is very low. There’s already open water appearing along that coast. The Sun is beaming down on that open water and heating it up. The snow-less land is heating up and warmer rivers are dumping heat into the ocean.

        We could have a cool summer like last but if we have a normal to warm one there’s going to be a lot of melting.

      • wattleberry

        Thanks,Bob; this is really snowballing.

  • Carey Campbell

    Green Party candidates for local, state, and federal office advocate solar on every house, building, school.

    https://www.youtube.com/watch?v=YnPIdiivyeI&list=UUJAvfgs4nK3Viu5HXZxv_bw

    Join the Green Party today.
    Be a Green Party Solar Energy candidate for local, state, or federal office.

  • Kevin McKinney

    I’m hoping that solar will surge in South Carolina in 2014:

    http://www.greenvilleonline.com/story/opinion/editorials/2014/04/04/create-free-market-solar-energy/7268941/

    We’ll see; I’ve learned never to underestimate the perversity of the SC political process. (Or the Georgia one, either.)

  • Johnny Le

    “the upfront costs of installing solar cells still averages $17,056 in the US”
    When do you think the upfront costs would drop below $10k? I hope 202.

    • JimBouton

      Johnny,

      I have posted my own costs in Texas before, but I purchased an 8.33 kw system (through a PPA) for $9,800. That price included the tax credits and rebates available at the time, which Solar City received. I have 34 panels and two inverters.

      My neighbor has signed up last month for 40 panels in a PPA through Solar City, which equates to a 9.8 kw system. He uses electricity for everything including heat, so he went as large as Texas would allow a residential system (and still receive rebates.) He has told me that he will pay $75 per month for 20 years, no money down.

      • Johnny Le

        Thanks, Jim, for answering my question. Would you mind I ask some more? :-) I know you are not working for Solar City, but just hoping you have asked them these questions. For your neighbor, $75/mo is a very good deal, but it $75/mo regardless whether he uses more electricity than the system produces? What happens if he buys two more Tesla? :-)

        What happens if a hailstorm damages the panels this year, will Solar City fix or replace them for free? What happens if your roof is damaged and needed to be replaced, will Solar City be willing to uninstall and reinstall the panels after the new roof is in? for free?

        These are the concerns that prevent me from having it installed :-( Thanks.

        • JimBouton

          Johnny,

          in Texas, we do not have any type of net metering, but we have three utility companies that offer payments for extra electricity. All three offer the same plan, between 9 and 4 pm, they will pay you (or charge you) a rate of 16.2 cent per kWh. During the off hours, they will pay you (or charge you) a rate of 9.2 cents per kWh. However, they cap the amount you get at 16.2 cents at 500 kWh per month. Basically, that means that if you produce at least 500 kWh per month, then you get a credit for $81.00. After that, the credit drops to five cents per kWh. (Obviously the key is to overproduce, but try to target an extra 500 kWhs per month.)

          Both my neighbor and I were given yearly targets that the panels must hit every year. In his case, SolarCity must produce 13,600 kWh per year. If the system fails to meet that during any given year, then SolarCity will pay him $0.04 per kWh under the total. If his system overproduces, then he gets it without penalty.

          If for any reason the panels (or the inverters) have an issue, then SolarCity is responsible for all maintenance and costs. We have only purchased the “power” and the equipment is SolarCity’s responsibility. Remember that the agreement is for power and that is SolarCity’s issue if I am not getting it from damaged equipment.

          I am a bit confused on the roof damage question. Assuming you have panels, then a hail storm would most likely save that portion of the roof. I cannot think of a natural disaster scenario where the roof would be damaged under the panels, but the panels are still intact and operational. (By the way, I have been told that the panels do act as a radiant barrier to an attic, much more than one installed below the shingles and roof.)

          I am also confused by your Tesla question. Could you restate that one?

          • Bob_Wallace

            Roof damage should be limited to an installation mistake causing a leak. I would think that would be a standard part of the contract to have the installer/owner deal with leaks.

            Panels on the roof should decrease your AC demand. That’s less heat getting into your attic. However, if your insulation is stellar and ventilation ample then it’s not likely you’d see much difference.

          • JimBouton

            Good point, Bob. I seem to remember them asking me the age of the roof. I am not sure what happens if a leak occurs under the panels and it is not their problem. I did notice that the panel installment went pretty quick once they had the rails up, so maybe a couple panels can be removed with minimal disruption. Hopefully I won’t run into that issue.

          • Johnny Le

            Thank you so much, Jim, for answering my questions thoroughly. My Tesla question was about your increase in electricity usage. For example, what if you or your neighbor bought one or two new electric cars. Obviously your demand for electricity would increase. From your answer above, I gather that you have to pay the utility company extra if you use more than what the panels produce (above 13,600 kWh a year).

            As for my roof damage question, let me rephrase it. Let’s say my roof is a bit old. It has about 10-15 years left in it. Do I have to wait 15 years to replace my roof before calling Solar City to put in the panels? If I call Solar City now, my gut feeling says I have to pay out of my pocket to uninstall and reinstall the panels when I need to replace the roof. Thanks again.

          • JimBouton

            Johnny, my roof was only three years old. In Texas, we can expect to replace our roofs every eight years or so, due to hail and the hot weather. I don’t believe I would worry about that for the shingles underneath the panels, since they are protected.

            I could see the logic that as long as the roof is not leaking today, then the panels will only protect them from most of the elements. That is a good question and one I did not discuss with the SC folks, since my roof was new. I do wonder what they would charge if you needed to replace the panels (and rails) to reroof.

            I get your Tesla question now. With the way the Texas utilities work, it is not worth going solar if you don’t AT LEAST produce enough energy that you use between 9 am and 4 pm. Otherwise, you will be paying 16.2 a kWh when the going rate is closer to 10 cents a kWh in the state. Again, the goal is to ensure you produce at least an extra 500 kWh per month during the hours between 9 and 4.

            If you have electric cars, then you just want to ensure you only charge them after 4 pm. That way you are paying only 9 cents per kWh. If you are in a different state (with net metering), then the strategy might be different.

          • Johnny Le

            Thanks, Jim.
            One more question. I heard that hail is a big problem for solar panels in Texas. Some are bigger than a golf ball. Is that true? Do solar panels have a much shorter life there?

          • JimBouton

            Johnny, hail is a big problem for everything and everyone when it hits. Cars, roofs, pets, people, etc. Luckily I was not at the IBM Coppell office a couple years back when we had hail larger than baseballs. Even the skylights were destroyed in our building. In Texas, you just learn to live with the occasional hailstorm.

            My guess is that baseball sized hail or larger might cause some type of damage to a solar panel, but I would think the orientation (not a direct hit in most cases) of the panel might reduce the damage.

            At least that half of my roof would be saved.

        • Doug

          My contract (in California) stipulates that the solar provider is responsible for all repairs to the panels, inverters, etc for 20 years. They are also responsible for any roof leaks caused by the system itself.

          Must suck to live in a state where you need to replace the roof so often. Roofs in most of the country can last almost as long as the house. The home I grew up in got 50+ years out of the roof!

          • Bob_Wallace

            Steel roof time. After 50 years it might need painting. Sheds heat better, as well.

      • Hurrya

        Do you have a cost break-down, if as the chart says the cost of PV panels is $0.73/w in 2013, then that’s $6059 for the PV panels, an 11Kw SMA inverter sells for around $900 on ebay. That’s $7000, where does the remaining $10,000 go? Racking hardware and equipment should not be that expensive. CleanTechnica needs to encourage more DIY to put more pressure on soft costs i.e. admin costs and profits. The medium term solution is DIY if solar is to go mainstream, hiring a roofing contractor to install PV panels, then stringing cables and connecting an inverter, the utility is responsible for installing the second meter and connecting it to the grid in either case.

        • JimBouton

          Hurrya,

          SolarCity did not break out the pricing at all. It was a bottom-line figure, plus I received an additional discount of $400 by signing up in 2Q13. (Bottomline $9800 for 34 “245 watt” panels and two inverters.) SolarCity paid for all of the fees and permits, plus they source out for their electricians. The electrician was there for 10 hours, so I would assume that is a pretty big charge. The two guys (they were one guy short) installing the rails and panels were there for about 15 hours. That team does work for SC.

          Remember that I do not own the panels, so you cannot base the cost on a purchase price, since there might be some residual value even after 20 years. Additionally, there were two rebates being offered (by the State of Texas and the company that is in charge of the grid in our area, Oncor). SC gets that money back along with the Federal Tax Credit.

          They also provide the SolarGuard system that provides the data for the system. Other than the cost, the main reason I chose SC was that I simply did not have to worry about the maintenance or setting up my own software to see the results.

          • Hurrya

            Thank you. This is very useful information. Reducing the cost by half will lead to a higher adoption rate and I think there is room for that. Software is an area where the Open Source community can help.

    • Ronald Brakels

      Unless the United States is doing something very wrong it should only be a few years behind Australia which is a few years behind Germany. And the way these things work is generally other countries catch up to the leader rather than fall behind as it’s easier once the leader has blazed a trail. The average cost of installing solar is now about $2.50 US a watt in Australai before any subsidy. That’s about $7,500 for a typical 3 kilowatt system. And unless you’re doing something wrong, the US should beat this within a few years. Maybe just a year or two with good old American know how, although that might be limited to certain States. Of course Australia will have moved on to cheaper installs by then. It will be interesting to see how low we can get them. I’m confident we’ll eventually see $1 a watt installations, although I wouldn’t want to guess when.

      • Hurrya

        For costs to go down there has to be competitive pressure, the PV market does not seem to be efficient. The move to leasing model could create one more barrier to entry and make it worse. Large installers like SolarCity could take the lion share of the market and lockout the competition.

        • Ronald Brakels

          Sounds like a great business opportunity for you and and electrician mate to purchase some panels and racks and make some money providing healthy competition.

          • Hurrya

            It’s not possible in my state, one of the few in the country where the utility can still block solar. An off grid system is not cost competitive and expensive as one needs a large set of batteries.

          • Ronald Brakels

            This whole “Land of the free” thing is just a song, isn’t it?

          • Hurrya

            It’s not just a song. At least we can slowly change things around, each year the utilities give a little bit of turf. They have a business to protect and use their power and influence to delay the inevitable.

          • Ronald Brakels

            Glad to hear you can fight back and are slowly winning.

  • tftillman

    “No hassle and no risk” ?
    What about when you want to sell your house?
    The new owner will have to qualify for the solar contract and take over the long term lease.
    Better hope they want them. Otherwise you have a big hurdle selling.
    You are far better off getting a loan to purchase them.

    • http://zacharyshahan.com/ Zachary Shahan

      From what I’ve seen, solar helps to sell a house.

      • Bob_Wallace

        Owned solar increases the selling prices of houses. Sometimes more than the solar system cost.

        Have you seen any data for houses with leased systems?

    • Johnny Le

      Why wouldn’t they? The price is locked in since the day the panels are installed and is normally 15% less than what the electric company charges. Unless electricity gets cheaper over the years, people should love taking over the lease.

    • Vulcanator

      Yes, and when people look at your house they are going to look at the quality of the doors, the windows, the furnace, etc. You could go crazy worrying about all the things that might turn certain people off…but unless you are the only person with solar power in your state, I doubt it will be a negative to the right person, and that’s what a sale always boils down to.

    • JimBouton

      You raise a valid point, but based on the pricing of the panels these days and the payback, I see this as a problem that is much smaller than even a few years ago. My neighbor has a $75 per month PPA contract. I would not think that would be that difficult to qualify for. HOAs are usually larger than that.

    • Tom Street

      If it is true that the monthly cost per kwh from the lease is less than the new owner would pay the utility company, I would think that the existence of the solar panels and contract would be a plus.

  • JamesWimberley

    , it looks as though solar power may be seeing an unprecedented surge in 2014,
    Read more at http://cleantechnica.com/2014/04/05/future-solar-solar-power-surge-2014/#aJSpvDKHk2TzwTp1.99
    it looks as though solar power may be seeing an unprecedented surge in 2014,
    Read more at http://cleantechnica.com/2014/04/05/future-solar-solar-power-surge-2014/#MPtvPIwqP1rz0v8f.99
    ” With the possible exception of mustache-twirling supervillains…” No! Donald Pleasance changed the stereotype for ever with his bald Ernst Stavro Blofeld plus – and this is essential – a white Persian cat.

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