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Waiting for the Sun

In the scramble for solar related plays on words, Barron’s beat me to this one. They used it in the index of this week’s issue to reference their article on Applied Materials efforts in this market (solar power).

The pricing and discussion of cost of solar power can be a bit confusing. The typical benchmark used is dollars per KW. Currently, there are systems priced at $4.75/W or $4750/kW. (But this is for the Solar Panel only, the installed system will cost nearly twice this or about $9500. Now, for this to make sense, you need to ask how much power this really is. A 1KW system will produce about 1800 KWh/yr in Southern California. If 1 kWh costs about 20 cents, this is $360 worth of power, and a return of 3.8%/yr. Now, this isn’t great, admittedly, but as I’ve discussed prior, even with modest cost improvements, that number (the return on investment) will rise over time, and soon be a compelling alternative to buying off the grid. A site called solarbuzz offers much data on the progress of solar technology.


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