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!”