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October 24, 2011

Solar Power is Free! FREEEEE!
(if somebody else pays for it)

I see a story from AP that says "Solar power is beginning to go mainstream" because the price of solar panels is beginning to drop. They make some questionable statements to support their premise. Because this is the internet I will do no research to support my disagreements* - this is all adlib, baby!

(Feel free to learn me in the comments)

*There's damned little supporting evidence in the story so it almost evens out.

(I have nothing against solar power. I think it's a neat idea to get some of the power you need via panels on the roof. I question the economics.

BTW, I'm pretty creative with my use of the ellipsis "..." But I never change the meaning, just condense to get to the point. This is a Dowdification free zone.)

Real estate companies are racing to install solar panels ... Utilities are erecting large solar panel "farms" ... creative financing plans are making solar more realistic than ever for homes.

Subsidy, subsidy, subsidy. None of those things would be happening unless they got somebody else (you) to pay for them. Note that all these subsidies are mandated by govt. Central Planners have made the decision that one industry (solar) should be favored with your money over competitors. This would work if Central Planners were infallible. Heck, it might be worth a shot if Central Planners were simply right more often than they're wrong. I'm pretty sure their success rate isn't that high.

More solar energy is being planned than any other power source, including nuclear, coal, natural gas and wind.


"We are at the beginning of a turning point," says Andrew Beebe, who runs global sales for Suntech Power, a manufacturer of solar panels.

Well, there's an unbiased source! I feel better about doing no research.

Solar power has been held back by costs. It's still about three times more expensive than electricity produced by natural gas,...

Interesting that they should use that as a comparison. Right now, gas is not cheapest way to make electricity. I think newer coal plants come in at around 5 cents per Kwh. (generated, not delivered) Over the next decade or two the price of natural gas (fracking!) should come down a lot.

But the financial barriers are falling fast. Solar panel prices have plunged by two-thirds since 2008 ...

Some of that is due to a lot of solar production coming on line RIGHT when the Great Recession started so there's a lot of supply and diminished demand. But I wouldn't expect Central Planners to consider Supply and Demand.

Making solar affordable still requires large tax breaks and other subsidies from federal and state governments. The main federal subsidy pays for 30 percent of the cost of a residential system. When state and other subsidies are added, as much as 75 percent of the cost can be covered.

There's a LOT of things that are financially viable when you can get somebody else to pick up 75% of the cost!

But prices of solar panels ... are falling so fast that its advocates now credibly claim that solar will be able to compete with fossil fuels even when the federal solar subsidy shrinks by two-thirds in 2016.

Oh,the advocates claim that? And they're credible. Case Closed.

The falling prices have made ... solar power systems so affordable they can appeal to homeowners who want to save on their electric bill,

Again, these savings are only possible if you get somebody else to pay for 75% of the cost.

Tim Johnson has a solar system. ... he couldn't justify spending $15,000, after subsidies, to do it. But since March, he has generated 50 percent to 75 percent of his electricity with a set of solar panels on his roof, saving 20 percent on his electricity bills. His upfront cost for the system: $0.

Zero! Kick Ass.

... he signed up with SunRun ... These companies earn money by charging customers for the power the panels produce.

Johnson pays SunRun $52 a month, and he pays his traditional utility for whatever extra power he needs from the grid. In all, he pays $60 to $100 a month for power; he used to pay $90 to $120.

Before Solar = $115 a month
After Solar = $80 plus $52 = $132 a month.

And It's All Free FREE FREE!!!

WTF? He pays $17 a month MORE? (They might mean that his total cost INCLUDING SunRuns monthly charge is $80 a month. Then Tim does save money. Because everybody else is subsidizing him.)

In California, which leads the nation in solar power installations, 51 percent of the residential solar systems installed through the first three quarters of this year were sold with these plans, up from 12 percent in 2009.

I'm not sure I'd use California as an example for the rest of the country to follow. In case you hadn't heard, we're doomed.

Solar panel prices have been declining for years because of lower costs for polycrystalline silicon, ... and larger-scale manufacturing ... demand has dropped sharply in Germany ... in response to shrinking subsidies. This has created a global glut of solar panels and accelerated the decline in prices.

The glut has been gut-wrenching for companies that make solar panels. Many of them remain profitable and are growing. But three U.S. panel makers have filed for bankruptcy in two months, including Solyndra, a solar panel maker that received a $528 million federal loan.

The case for home solar viability rests on lower prices due to economies of scale. But how do you get economies of scale when the manufacturers are going bust? I don't think you can depend on China to bail us out. Aren't their factories subsidized? Will those subsidies continue with less competition?

But there are more problems with large scale use of home solar.

1. They need maintenance. You gotta brush off the dirt and leaves or you lose power. That means you climb on the roof. Add the cost of falling off roofs to the total price. Seriously, if you have hundreds of thousands of homes that need their panels cleaned on a regular basis that's a lot of people clambering about. If you use a company like SunRun, they're responsible for cleaning the panels. But they're collecting a flat rate from the home owner. They get paid the same if the panels are clean or dirty. They have little incentive to pay people to clean the panels.

2. They Wear Out. Here's a story from the sidebar a few weeks ago.

Hey! Solar Panels take a lot of maintenance.
"...panels can degrade as much as 4.5% a year"

There's an assumption that solar panels are One and Done. Nope. They don't last forever. Maybe 20 years. And, when you consider that many of these panels are the cheapest crap that China can pump out, that 20 year figure seems optimistic.

3. Some people expect to reduce the solar cost by selling electricity back to the power company. Now companies are mandated to buy home solar electricity at the highest price. As more solar comes online that cost is going to start to hurt. Either they'll get the govt. to change that mandate (home solar owners screwed) or they'll pass the cost on to everybody else. (everybody else screwed).

4. It's one thing to pay out subsidies and indulge in Central Planning when you're solvent. We're not. We're 15 Trillion in the hole and running annual deficits of a Trillion or Two every year as far as we can estimate. Considering that, borrowing money to pay the cost of people generate electricity inefficiently seems... unwise. (same story for the many of the states that are joining in - I'm looking at you California!)

I've heard they are developing solar tech you can PAINT on your roof. When that shows up, maybe home solar will be sensible.

Also, I tweet at @ComradeArthur

Published out of draft by Andy

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