Jul 25

When we look at where we were just a decade ago, Solar Power has come a long way. The little solar voltaic cells were enough to power a calculator, and I thought of it as saving me $5 every year or two for as long as owned it. In hindsight, it was less about the $5 and more about having a dead calculator when it mattered most.

We’ve come a long way and solar now seems to be hitting the mainstream, getting close to the point where it’s economical to power one’s home from these panels during the day. I specify day as there’s still a bit of an issue with storage of excess power that can bridge the gap until the next day. For now, the excess power you can produce is pushed back to the grid, driving your meter backwards. If solar continues to drop in cost, we will reach a point where the grid can’t absorb this power and local storage, either by home or neighborhood will be needed.

The math isn’t too tough. A 1KW panel enjoying 1500 hours of strong sun each year is going to produce 1500KWHs of power each year, and at 12 cents per KWH, the US average, save the consumer about $180 per year. Many electric companies are also charging for the peak demand, i.e. the top usage during a 15 minute period of time. This is the amount of generating power they need to service you, even though your average usage is far less over the full month. It varies by company, but I’ve seen a demand charge as high as $28 per kW of demand. That solar panel generating 1KW will save you $336 in demand charges over the year, this is in addition to the savings all ready mentioned.

There are a number of variables that come into play for when the tipping point will be reached. Panel cost, cost of financing (i.e. current interest rates), average number of sun-hours per year, cost per kilowatt-hour, and demand charges. Once these are all taken into account, a clever analyst will be able to product a map of the US identifying what areas are currently candidates for profitable solar installations, and which are in line as the price of solar drops.  The cost to produce electricity and natural gas will only continue to rise, and the technology driving solar panels continues to improve.

I hope to hear my grandkids ask me, “they burned stuff to produce power? Why? The sunshine is free!”

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Oct 06

The allusions to pork in every bill congress votes on often makes me want to swear off bacon for good. I’m sure that Friday’s bailout was no different. 451 pages? That right or was I reading an article that tried to make reference to Farenheight 451? One bit of tastey pork that someone slipped into the $700 Billion Bailout package was an extension of the solar energy credit. Back in June in my post Bad Energy Mojo, I complained that congress let the credits for wind and solar expire. Now it’s back and better than ever, a 30% credit with no limit. More details available from the SanFrancisco Business Times article Massive Solar credit Ok’d with Bailout.
I talked some numbers in April’s Waiting for the Sun, where I offered that a 1KW system would cost about $9500 installed, and give the user $360 worth of power each year. Now, with a 30% credit, the cost is down to $6650, and that $360 of electricity is a 5.4% return, an attractive rate given the alternatives. I remain optimistic that this snowballs into a competitive alternate energy source, ultimately offering the US energy independence.


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Apr 11

Some time ago, I read a book titled “Pop!: Why Bubbles Are Great For The Economy.” This is not a summary of that book, but I recommend it as it made for some interesting reading. Its premise was that bubbles leave in their wake some new infrastructure (telegraph lines or railroad tracks, as an example) or technology leap (as in the late 90’s ‘dot com’ boom leaving a huge amount of dark fiber and active bandwidth). Now, I put that book down wondering what the next bubble would bring, and perhaps I couldn’t see the forest through the trees. Regular readers know I’m excited about the prospects of alternative energy, specifically, solar energy. Sure enough, Harper’s recently ran an article titled “The next bubble: Priming the markets for tomorrow’s big crash.” In this article, Eric Janszen, the founder and president of iTulip, Inc. speculates that alternative energy may be the next bubble forming, and if his forecast is right, we have years ahead of us to take advantage of the opportunity this presents. This chart offers both historical numbers on Tech and Housing, as well as forecasts for the housing downturn and the Alternative energy bubble.



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Mar 14

In my recent posts where I share my excitement regarding the future of solar power, I talk about the potential cross over point where the cost of electricity, specifically from solar, is lower than the cost of gas. Well, a bit more googling, and I have some more numbers. From ‘Life after the oil crash’, I find that a gallon of gasoline contains energy equal to about 37 KWH. With gas at about $3 per gallon right now, this is about 8.1 cents per KWH versus a US average cost per KWH of 10.69 cents. As we approach $4 gas, the cost of gasoline will exceed the cost of electricity BTU for BTU.
The latest prices I see for solar show about $6000-$8000 for a 1KW installation. Assuming a 5%/yr return, that’s about $400/yr. If the system is running full power for 2000 hours per year, we are at a 20 cent per KWH cost for solar. Still more than what we’d pay our electric company, but prices are still falling. We may be a few years away, but the current oil crisis will only help the cause (for solar).


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