Economics of solar panels

A search on Google gave

among others.

This is all about installing solar voltaic panels on the roofs of houses
in California. If I have read it correctly, installing a 2.5kW DC system
costs $6 per W or 6 x 2,500 = $15,000 and the system has a life of 30 years.

The savings on the home electricity bill depend on the local cost of
electricity but are typically estimated at about $50 per month or $600
per year.

They give the cost of a loan to buy the system as $44 per month (after
tax). Since the total amount paid in this way over 30 years is just 44 x
12 x 30 = $15,840, this barely covers the cost of repaying the
principal, let alone the interest on the loan. There is obviously some
strange accounting going on here. However, they do mention a "buydown
grant" of $2,800 per kW or $7,000 for 2.5kW which reduces the price to
$8,000 so the monthly loan payment based on this as principal could be
more plausible.

The question is, where does this grant come from? As far as I know US
State Governments don't have any actual money of their own and can't
print it so it can only come from the state tax payers. Since it is the
state taxpayers installing the solar panels I can't see any benefit in
paying half the cost directly and the other half as a tax rise.

Looking at true costs without grants, paying back a $15,000 loan at say
5% p.a. then, if I have done the sum right, this would cost $975.8 p.a.
or a total of $29,273. As this cost is about twice the value of the
savings made it seems that the solar panels cost more to produce than
the electricity they produce is worth. This is hardly going to save the
world as the oil runs out!

OK, the price of electricity will probably go up and the savings with
it, but so will the cost of manufacturing solar panels, so it is not
obvious there will be a break-even point somewhere. Nor is the costs of
purchase the only cost. Not many systems out in the open are going to
run for 30 years without maintenance or repair so the true costs will
almost certainly be higher. In Florida and other hurricane states the
roofs seem to often get blown off themselves so this could be another
problem.

Re: Economics of solar panels

"David Wilkinson" <> wrote in message
news:deddfv$21j$
> A search on Google gave
>

> among others.
>
> This is all about installing solar voltaic panels on the roofs of houses
> in California. If I have read it correctly, installing a 2.5kW DC system
> costs $6 per W or 6 x 2,500 = $15,000 and the system has a life of 30
years.

What does it cost to build and fuel a power plant in California?

I saw a news report about a utility in CA that was paying to put solar
panels on customers' roofs because it was cheaper than building new
capacity. A lot of the cost of a DC system is storage batteries. If you
have the utility working with you, you don't need batteries.


>
> The savings on the home electricity bill depend on the local cost of
> electricity but are typically estimated at about $50 per month or $600
> per year.
>
> They give the cost of a loan to buy the system as $44 per month (after
> tax). Since the total amount paid in this way over 30 years is just 44 x
> 12 x 30 = $15,840, this barely covers the cost of repaying the
> principal, let alone the interest on the loan. There is obviously some
> strange accounting going on here. However, they do mention a "buydown
> grant" of $2,800 per kW or $7,000 for 2.5kW which reduces the price to
> $8,000 so the monthly loan payment based on this as principal could be
> more plausible.
>
> The question is, where does this grant come from? As far as I know US
> State Governments don't have any actual money of their own and can't
> print it so it can only come from the state tax payers. Since it is the
> state taxpayers installing the solar panels I can't see any benefit in
> paying half the cost directly and the other half as a tax rise.

Of course they can print money. They call it municipal bonds.

>
> Looking at true costs without grants, paying back a $15,000 loan at say
> 5% p.a. then, if I have done the sum right, this would cost $975.8 p.a.
> or a total of $29,273. As this cost is about twice the value of the
> savings made it seems that the solar panels cost more to produce than
> the electricity they produce is worth. This is hardly going to save the
> world as the oil runs out!
>
> OK, the price of electricity will probably go up and the savings with
> it, but so will the cost of manufacturing solar panels, so it is not
> obvious there will be a break-even point somewhere. Nor is the costs of
> purchase the only cost. Not many systems out in the open are going to
> run for 30 years without maintenance or repair so the true costs will
> almost certainly be higher. In Florida and other hurricane states the
> roofs seem to often get blown off themselves so this could be another
> problem.

I have to think the cost of solar panels might well go down with
technological advance and mass production. Besides, when oil is a
scazillion dollars a barrel, money will be no object.

-herb

Re: Economics of solar panels

"Herb" <> wrote

> Of course they can print money. They call it municipal bonds.

That's called borrowing money, not printing it. Very different.

Re: Economics of solar panels

David Wilkinson wrote:

> A search on Google gave
>
>
> among others.
>
> This is all about installing solar voltaic panels on the roofs of houses
> in California. If I have read it correctly, installing a 2.5kW DC system
> costs $6 per W or 6 x 2,500 = $15,000 and the system has a life of 30
> years.
>
> The savings on the home electricity bill depend on the local cost of
> electricity but are typically estimated at about $50 per month or $600
> per year.
>
> They give the cost of a loan to buy the system as $44 per month (after
> tax). Since the total amount paid in this way over 30 years is just 44 x
> 12 x 30 = $15,840, this barely covers the cost of repaying the
> principal, let alone the interest on the loan. There is obviously some
> strange accounting going on here.

Yes, and I think I know what it is:

You left out the following key words from the article: "if the [solar]
system is financed as part of a 30-year mortgage." That means the solar
panel system is already installed as part of the home when you go to the
bank and get that mortgage to purchase/refinance the home.

Homeowners take out 30-year mortgages on their homes, despite the huge
amount of interest they'll be paying over the life of the loan, because
they expect the home will appreciate over time; hopefully appreciate at
a faster rate than the interest rate of the loan.

When you buy a home with a 30 year mortgage, some things that may be
included in the purchase price may actually DEPRECIATE over time; such
as appliances and carpeting. You usually don't mind because those are a
tiny part of the total purchase price.

But with an expensive solar panel system, a significant part of the 30
year mortgage is going to finance a part of the home that won't
appreciate. And the proponents of solar power are hoping you won't
notice that.


--
Steven D. Litvintchouk
Email:

Remove the NOSPAM before replying to me.

Re: Economics of solar panels

Steven L. wrote:
> David Wilkinson wrote:
>
>> A search on Google gave
>>
>>
>> among others.
>>
>> This is all about installing solar voltaic panels on the roofs of
>> houses in California. If I have read it correctly, installing a 2.5kW
>> DC system costs $6 per W or 6 x 2,500 = $15,000 and the system has a
>> life of 30 years.
>>
>> The savings on the home electricity bill depend on the local cost of
>> electricity but are typically estimated at about $50 per month or $600
>> per year.
>>
>> They give the cost of a loan to buy the system as $44 per month (after
>> tax). Since the total amount paid in this way over 30 years is just 44
>> x 12 x 30 = $15,840, this barely covers the cost of repaying the
>> principal, let alone the interest on the loan. There is obviously some
>> strange accounting going on here.
>
>
> Yes, and I think I know what it is:
>
> You left out the following key words from the article: "if the [solar]
> system is financed as part of a 30-year mortgage." That means the solar
> panel system is already installed as part of the home when you go to the
> bank and get that mortgage to purchase/refinance the home.
>
> Homeowners take out 30-year mortgages on their homes, despite the huge
> amount of interest they'll be paying over the life of the loan, because
> they expect the home will appreciate over time; hopefully appreciate at
> a faster rate than the interest rate of the loan.
>
> When you buy a home with a 30 year mortgage, some things that may be
> included in the purchase price may actually DEPRECIATE over time; such
> as appliances and carpeting. You usually don't mind because those are a
> tiny part of the total purchase price.
>
> But with an expensive solar panel system, a significant part of the 30
> year mortgage is going to finance a part of the home that won't
> appreciate. And the proponents of solar power are hoping you won't
> notice that.
>
>
Steve. It not only won't appreciate but with a life of 30 years it will
be worth nothing by the time the buyer has paid for it.

What was that other bit about a buydown grant? Does the taxpayer pay for
that?

Re: Economics of solar panels

David Wilkinson wrote:
> Steven L. wrote:
>
>> David Wilkinson wrote:
>>
>>> A search on Google gave
>>>
>>>
>>> among others.
>>>
>>> This is all about installing solar voltaic panels on the roofs of
>>> houses in California. If I have read it correctly, installing a 2.5kW
>>> DC system costs $6 per W or 6 x 2,500 = $15,000 and the system has a
>>> life of 30 years.
>>>
>>> The savings on the home electricity bill depend on the local cost of
>>> electricity but are typically estimated at about $50 per month or
>>> $600 per year.
>>>
>>> They give the cost of a loan to buy the system as $44 per month
>>> (after tax). Since the total amount paid in this way over 30 years is
>>> just 44 x 12 x 30 = $15,840, this barely covers the cost of repaying
>>> the principal, let alone the interest on the loan. There is obviously
>>> some strange accounting going on here.
>>
>>
>>
>> Yes, and I think I know what it is:
>>
>> You left out the following key words from the article: "if the
>> [solar] system is financed as part of a 30-year mortgage." That means
>> the solar panel system is already installed as part of the home when
>> you go to the bank and get that mortgage to purchase/refinance the home.
>>
>> Homeowners take out 30-year mortgages on their homes, despite the huge
>> amount of interest they'll be paying over the life of the loan,
>> because they expect the home will appreciate over time; hopefully
>> appreciate at a faster rate than the interest rate of the loan.
>>
>> When you buy a home with a 30 year mortgage, some things that may be
>> included in the purchase price may actually DEPRECIATE over time; such
>> as appliances and carpeting. You usually don't mind because those are
>> a tiny part of the total purchase price.
>>
>> But with an expensive solar panel system, a significant part of the 30
>> year mortgage is going to finance a part of the home that won't
>> appreciate. And the proponents of solar power are hoping you won't
>> notice that.
>>
>>
> Steve. It not only won't appreciate but with a life of 30 years it will
> be worth nothing by the time the buyer has paid for it.

Sure. But when you buy a new home with a 30 year mortgage, it typically
comes with new carpeting, new appliances and a new kitchen countertop
too, all of which will have crapped out in much less than 30 years.
Meaning that your 30 year mortgage is still paying debt service on these
items, long after they've depreciated to worthlessness.

In theory you ought to finance these other items with a separate loan
with a much shorter payoff schedule. But most people don't bother
because the interest rate on a first mortgage is relatively low; whereas
if you bought the appliances with a credit card, you'll be paying 18%
interest on that loan, making your monthly payments higher.


>
> What was that other bit about a buydown grant? Does the taxpayer pay for
> that?

The buydown grant looks to be a direct cash rebate (subsidy) paid by the
California Energy Commission. It took me a while to google for the
source of the money. It seems the money comes from a levy on the
ratepayers of the various electric utilities; probably it's a line item
in their monthly electric bills.



So that those ratepayers who don't have solar power are paying a subsidy
to those who do.


--
Steven D. Litvintchouk
Email:

Remove the NOSPAM before replying to me.

Re: Economics of solar panels

Are you and Ed competiting for the title of the most productive OT poster?

"David Wilkinson" <> wrote in message
news:deddfv$21j$
>
> costs $6 per W or 6 x 2,500 = $15,000 and the system has a life of 30
years.
>
One could consider that an expensive 30 year roof for owner's enjoyment.
People spend a lot more on cars that returns nothing. But solar panel
owners can at least laugh all the way to the bank when Enron/Exxon jack up
the price 100 times. It's been done, and it'll be done again.

>
> The question is, where does this grant come from? As far as I know US
> State Governments don't have any actual money of their own and can't
> print it so it can only come from the state tax payers.
>
Either way, tax payers pay for it. We are subsidizing hybrids already, which
cost more than it saves. Long term policies usually cost rather than
producing returns in short term. As far as I'm concerned, it's all worth it
to cure our addition to bloody oil. Imagine, Pat Roberton now wants to
assassinate Chavez to get his hand on Venezuelan oil. He apparently asked
"whom would jesus assassinate?" and got his answer. At least he is not
proposing to kill 100,000 civilians for oil.

Re: Economics of solar panels

"TK Sung" <> wrote

> Are you and Ed competiting for the title of the most productive OT poster?

If you go by percentage of posts then it would be Herb and Sam. 100% of
their posts are off topic.

Re: Economics of solar panels

TK Sung wrote:

> Either way, tax payers pay for it. We are subsidizing hybrids already, which
> cost more than it saves. Long term policies usually cost rather than
> producing returns in short term. As far as I'm concerned, it's all worth it
> to cure our addition to bloody oil.

There is no hope of "curing our addiction to bloody oil" with solar
panels. Only a tiny percentage of the oil consumed in America is used
to generate electricity. The vast bulk of it is consumed for fuel for
vehicles and for petrochemicals.

And we can't run cars on solar power.


--
Steven D. Litvintchouk
Email:

Remove the NOSPAM before replying to me.

Re: Economics of solar panels

Steven L. wrote:
> TK Sung wrote:
>
>> Either way, tax payers pay for it. We are subsidizing hybrids already,
>> which
>> cost more than it saves. Long term policies usually cost rather than
>> producing returns in short term. As far as I'm concerned, it's all
>> worth it
>> to cure our addition to bloody oil.
>
>
> There is no hope of "curing our addiction to bloody oil" with solar
> panels. Only a tiny percentage of the oil consumed in America is used
> to generate electricity. The vast bulk of it is consumed for fuel for
> vehicles and for petrochemicals.
>
> And we can't run cars on solar power.
>
>
You could indirectly, by using solar electricity to electrolyse water to
give hydrogen and then burning the hydrogen in cars. At the moment even
the electricity is not economic without the further costs of generating
and distributing the hydrogen. However, as Herb says, by the time oil
reaches silly prices per barrel and per gallon it may become economic.

Re: Economics of solar panels

"Steven L." <> wrote in message
news:VemPe.2019$
>
> And we can't run cars on solar power.
>
If you think about it, everything on earth, including humans and cars, are
solar-powered. It's just matter of how to capture it other than through
organic hydrocarbons which takes millions of years. If we can't figure it
out, then $10/gallon will surely cure our addiction. At least enough.

Re: Economics of solar panels

David Wilkinson wrote:

> Steven L. wrote:
>
>> TK Sung wrote:
>>
>>> Either way, tax payers pay for it. We are subsidizing hybrids
>>> already, which
>>> cost more than it saves. Long term policies usually cost rather than
>>> producing returns in short term. As far as I'm concerned, it's all
>>> worth it
>>> to cure our addition to bloody oil.
>>
>>
>>
>> There is no hope of "curing our addiction to bloody oil" with solar
>> panels. Only a tiny percentage of the oil consumed in America is used
>> to generate electricity. The vast bulk of it is consumed for fuel for
>> vehicles and for petrochemicals.
>>
>> And we can't run cars on solar power.
>>
>>
> You could indirectly, by using solar electricity to electrolyse water to
> give hydrogen and then burning the hydrogen in cars.

Care to calculate how many solar panels it would take, and what the land
area would be, to generate enough hydrogen that way?

The law of conservation of energy says that you can't get more energy
out of the hydrogen than the sunlight puts into the solar panel. So all
you need to find out is the solar flux per square meter of land in the
Northern Hemisphere, which you can find out on the Internet.


--
Steven D. Litvintchouk
Email:

Remove the NOSPAM before replying to me.

Re: Economics of solar panels

"Steven L." <> wrote in message
news:6xLPe.794$
> David Wilkinson wrote:
>
> > Steven L. wrote:
> >
> >> TK Sung wrote:
> >>
> >>> Either way, tax payers pay for it. We are subsidizing hybrids
> >>> already, which
> >>> cost more than it saves. Long term policies usually cost rather than
> >>> producing returns in short term. As far as I'm concerned, it's all
> >>> worth it
> >>> to cure our addition to bloody oil.
> >>
> >>
> >>
> >> There is no hope of "curing our addiction to bloody oil" with solar
> >> panels. Only a tiny percentage of the oil consumed in America is used
> >> to generate electricity. The vast bulk of it is consumed for fuel for
> >> vehicles and for petrochemicals.
> >>
> >> And we can't run cars on solar power.
> >>
> >>
> > You could indirectly, by using solar electricity to electrolyse water to
> > give hydrogen and then burning the hydrogen in cars.
>
> Care to calculate how many solar panels it would take, and what the land
> area would be, to generate enough hydrogen that way?
>
> The law of conservation of energy says that you can't get more energy
> out of the hydrogen than the sunlight puts into the solar panel. So all
> you need to find out is the solar flux per square meter of land in the
> Northern Hemisphere, which you can find out on the Internet.

Steven:

You respond to each idea as not being a panacea. There are many renewable
sources of energy: solar, wind, tidal, geo-thermal, biological, etc. As
things stand now, it is cheaper to haul a barrel of oil out of the ground
and refine it. The question before us is how will this change when those
barrels of oil start to run out and become increasingly costly.

I once saw a news report about a guy in England who powered his car on
chicken crap that he mooched from nearby farmers. I doubt he was even
considering economics. He just thought it was cool to run his car on
chicken crap.



-herb

Re: Economics of solar panels

Steven L. wrote:
> David Wilkinson wrote:
>
>> Steven L. wrote:
>>
>>> TK Sung wrote:
>>>
>>>> Either way, tax payers pay for it. We are subsidizing hybrids
>>>> already, which
>>>> cost more than it saves. Long term policies usually cost rather than
>>>> producing returns in short term. As far as I'm concerned, it's all
>>>> worth it
>>>> to cure our addition to bloody oil.
>>>
>>>
>>>
>>>
>>> There is no hope of "curing our addiction to bloody oil" with solar
>>> panels. Only a tiny percentage of the oil consumed in America is
>>> used to generate electricity. The vast bulk of it is consumed for
>>> fuel for vehicles and for petrochemicals.
>>>
>>> And we can't run cars on solar power.
>>>
>>>
>> You could indirectly, by using solar electricity to electrolyse water
>> to give hydrogen and then burning the hydrogen in cars.
>
>
> Care to calculate how many solar panels it would take, and what the land
> area would be, to generate enough hydrogen that way?
>
> The law of conservation of energy says that you can't get more energy
> out of the hydrogen than the sunlight puts into the solar panel. So all
> you need to find out is the solar flux per square meter of land in the
> Northern Hemisphere, which you can find out on the Internet.
>
>
Go on then, Steve. What's the answer? Why do I have to do all the sums?

Re: Economics of solar panels

In article <dep1gs$tum$>,
David Wilkinson <> wrote:

> > The law of conservation of energy says that you can't get more energy
> > out of the hydrogen than the sunlight puts into the solar panel. So all
> > you need to find out is the solar flux per square meter of land in the
> > Northern Hemisphere, which you can find out on the Internet.
> >
> >
> Go on then, Steve. What's the answer? Why do I have to do all the sums?

"The goal of the U.S. Department of Energy¹s Hydrogen Program is
for hydrogen to produce ten percent of our total energy demand by
the year 2030. Hydrogen may reduce our dependence on foreign oil
and provide clean, renewable energy for the future."


html

Of course, we also have a goal to put a man on Mars in the next
twenty years or so, and things aren't looking too good for
meeting that goal either.

--

"Did you notice that [Candaq and Gardner] never miss one of my posts and I
never read theirs, I have to wonder just who it is that's envious." -Ed, in
news:<9cn26l$6di6$>.