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By Robert Rapier on Mar 3, 2010 with 87 responses

Will Solar Prices Fall into Grid Parity?

The following is a guest post written by Dan Harding. Dan has written numerous articles on the solar industry, and is a regular contributing author to CalFinder.
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Will Solar Prices Fall into Grid Parity? 


By Dan Harding

The Holy Grail…in solar-speak, it translates roughly to Grid Parity. It is a goal either mythical or predestined, depending on which side of the solar power movement the speaker resides. A recent surge in supply and technology, coupled with increased government subsidies, are tipping the scales toward destiny, although by no means is the path to grid parity set in stone. The rapid fall in prices for solar panels and other system components in an oversupplied and flooded market could continue home solar power on its way to that mythical Grail but, all mythos and wishful thinking aside, what are the odds?

Good, says Swami Venkataraman, Director of Corporate and Government Ratings at Standard & Poor’s, in a recent assessment of the U.S. solar market for Renewable Energy World. As of February, 2009, installed costs for residential and commercial photovoltaic (PV) systems had fallen to $7.60 per watt from $10.50 per watt just two years earlier. Prices continued to fall throughout 2009 and, while expected to stabilize somewhat as the national economy rebounds, they should remain on that downward slope in 2010 and beyond.

So when will solar cross that line? It could be soon, very soon in regions of the country with either abundant sunlight (southwest) or relatively high electricity costs (northeast). Yet some valuable help is still needed at the legislative level which, if provided, could propel solar power to grid parity in the short-term in the aforementioned regions.  


Three factors, says Venkataraman, can help make PV cheaper than, say, a combined-cycle gas turbine plant. One or all of the following could ensure solar power a level playing field in the long term:
  • Rising gas prices
  • Renewable portfolio standards that make renewable energy credits (RECs) more valuable
  • The passage of carbon legislation that would force gas power producers to buy carbon credits, thus forcing an increase in price for natural gas.

Including incentives, solar power is already close to grid parity in many areas. The Northeast holds the handy combination of some of the most lucrative solar incentives (per watt installed) in the country, as well as the highest electricity prices. Therefore, solar has far less distance to make up to reach at least natural gas, and gives solar power the best and fastest chance to reach grid parity in the nation. In California, where incentives have been declining for several years now, the primary advantage is in abundant sunlight (same goes for Arizona, New Mexico, west Texas, etc.), as well as a powerful RPS and a general eagerness from the public to adopt clean energy.

But as those two examples illustrate, grid parity will almost certainly NOT come to the United States as a whole all at once. Federal incentives were expanded in 2009, including the removal of the $2,000 cap on residential systems and the admittance of utilities into the Investment Tax Credit, but continue to vary widely between states. The feds provide a baseline subsidy, but what truly makes solar affordable for most homeowners and businesses are the added incentives offered by their state. So, in terms of reaching grid parity, we can expect the Southeast — despite its healthy share of sunshine — to be the slowest to reach the Holy Grail. This is due primarily to a lack of incentives, low electricity costs and a deep connection to fossil-fueled electricity.

Without incentives, there is still a real chance for PV, especially commercial PV, to reach grid parity in the relative short-term. Current capital costs for commercial PV are about $5.50 to $6.60 per watt depending on the size of the installation, according to Standard & Poor’s. Incentive levels in many northeastern states are upwards of $4.00 per watt, which means that, given incentives, the levelized cost of electricity (LCOE) of commercial PV systems was already below standard commercial rates. Furthermore, if falling panel prices enable systems to reach or fall below $5.00 per watt, then solar PV could reach parity even without subsidies.

Residential grid parity is more distant but still closest in the Northeast. Outside of the Southwest and Northeast, where solar irradiance and/or electricity costs make the solar-grid-parity question more complicated and uncertain, help will have to come from other renewables. Most notable among these are geothermal (Northwest) and wind power (Midwest). It is important when discussing grid parity for solar power not to forget its intermittency and the fact that some backup power system will be needed. Even if our solar infrastructure were so advanced as to provide all our power needs during peak load times, we would still need alternative sources to pick up the slack on cloudy days and at night.

Of course, straight-laced economics aside, we must also consider the inherent value of solar power beyond mere dollar signs. The point of renewable energy is to switch from pollutive, peaking sources of energy to clean, renewable ones. Solar power emits no greenhouse gases, no carbon dioxide and, when distributed, can provide power at or near the point of use without turning our cities into smog factories. That alone is reason enough to subsidize solar, wind, geothermal and other renewable resources until they reach the Holy Grail that is their destiny.
  1. By rufus on March 3, 2010 at 4:53 pm

    What happened to that $1.00/Watt I kept hearing about?

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  2. By Kinuachdrach on March 3, 2010 at 5:23 pm

    This is just so sad.

    Lots & lots of words about UNSUSTAINABLE subsidies. Not one word about how to deal with the principal technical issue of intermittency. Not one word about how to continue to get subsidies in a world in which California, New York, and the Federal Government are in a race to see which is the first to become functionally bankrupt.

    Sad. This is as bad as ethanol.

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  3. By robert on March 3, 2010 at 5:46 pm

    They're trying to get the manufacturing costs of PV below $1/watt so the installed cost to the customer can drop to $5/watt or grid parity. This is a labor intensive business.

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  4. By Benny BND Cole on March 3, 2010 at 5:56 pm

    I agree, parity is not reached if solar is heavily subsidized–although it should be subsidized to some extent.

    The burning of even natural gas produces pollution, a cost not captured in the price signal. So we could tax natural gas or coal and subsidize clean fuels.

    It would be nice if solar could stand on its own two feet, however.

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  5. By Kit P on March 3, 2010 at 6:03 pm

    “we must also consider the inherent value of solar power beyond mere dollar signs. The point of renewable energy is to switch from pollutive, peaking sources of energy to clean, renewable ones.”

    Okay then, we shall. The electricity generating industry produces huge amounts of energy with insignificant environmental impact.

    “without turning our cities into smog factories”

    It should be easy then for someone to provide as city where air pollutions in caused by making electricity.

    Solar is like a lemonade stand that the kids might put up in the summer. It is fun to think about but not a serious endeavor.

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  6. By Robert Rapier on March 3, 2010 at 6:49 pm

    Today we can tack on another $80 million. That puts Range's announced funding thus far at $400 million. Not clear to me is if the $80 million bond money is totally separate:

    Broomfield, CO – March 3, 2010 – Range Fuels, Inc., a company focused on commercially producing low-carbon biofuels and clean renewable power, today announced that it had received a loan note guarantee from the U.S. Department of Agriculture and closed its related $80 million bond issuance. The proceeds from the $80 million bond will be used to partially finance the first two phases of construction of Range Fuels’ first commercial cellulosic biofuels plant using renewable and sustainable supplies of non-food biomass near Soperton, Georgia. The first phase is scheduled to be mechanically complete this month, with production scheduled to commence in the second quarter of this year.

    As someone just asked me "Who is making decisions here?"

    RR

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  7. By John on March 3, 2010 at 7:27 pm

    Robert, do you go through edit/comment cycles with these guests? This guy doesn't bother to cite or qualify his numbers, which seem to be fictional. $5/W PV is nowhere near parity without subsidies, unless you're in the Mojave and the overnight storage (expensive) and new transmission (extremely expensive) fell off a truck. My own estimate for PV grid parity in the Northeast is $2/W installed, but following the custom here I'll omit the calculations.

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  8. By Paul on March 3, 2010 at 7:55 pm

    Looks like we are all unanimous here.

    I think the premise of this article is flawed from the start if "grid parity" includes "incentives".

    I have no problem with a carbon tax ( I already pay one here in BC, and it will be $25/ton soon), applied to everything, and even trading in REC's, which really amounts to the same thing.

    Beyond that, grid parity is not achieved until there is no need for other "incentives" It simply represents a transfer of (dwindling) wealth to the solar industry, and to the few homeowners that can afford to pay the difference.

    Having said that, the one and only other "incentive" that should be implemented is time of day pricing for electricity, as used in many other parts of the world for decades. Then solar gets to be sold at the prevailing peak rates, and it encourages everyone to shift discretionary loads to the evening hours, which is not as hard as many people think.

    At $5,000/kW, and a capacity factor of 20%, at best, you get 1752kWh per year, so the "real" cost is about $25,000 per kW of PRODUCTIVE capacity.
    That is about an order of magnitude more than anything else, except home scale wind , which is about half that.

    Those northeastern states with incentives of $4/W are paying $20,000/kW for this capacity – they could get utility scale wind, and have just as unpredictable/intermittent power, for about $5000/kW.

    If they are trying to generate clean electricity, there are cheaper ways to do it. if they are trying to "create jobs" there are cheaper ways to do it.
    If they are trying to "buy votes", there are cheaper ways to do it.

    IF they must incentivise, pay the same $/kWh for capacity for any and all green generation, or have a carbon tax on the others. Note that is kWh produced, not kW capacity. Let the investor take the risk of capacity factor, and the government only pays a (small) premium for what is actually produced.

    Come to think of it, that would have saved a lot of money with Range Fuels…

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  9. By Robert Rapier on March 3, 2010 at 8:18 pm

    Robert, do you go through edit/comment cycles with these guests?

    Most of the time. But solar isn't really my area, and I figured I would put it out there for discussion. I actually learn a lot from the comments on these posts that are outside my area.

    But I agree with the sentiment that it isn't grid parity if it is subsidized. On the other hand, I would argue that we don't pay the full costs of our coal usage, and therefore I don't know that grid parity is a stringent requirement.

    RR

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  10. By Anonymous on March 3, 2010 at 8:54 pm

    The $80 mil from USDA for Range Fuels today is just the 'official' award of the loan that was first announced in January 2009,so it's not anything new. At that time they were 'selected' for the loan pending resolution of the usual details. Now they actually can get the funding. It would be interesting to see what USDA knows about Range's competence to get to 20 MGY of ethanol – how long and how much will it cost.

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  11. By Robert Rapier on March 3, 2010 at 9:34 pm

    The $80 mil from USDA for Range Fuels today is just the 'official' award of the loan that was first announced in January 2009,so it's not anything new.

    I wondered about that, but it wasn't at all clear from the announcement. When they made the announcement a year ago, it said essentially the same thing; that they had received an $80 million loan guarantee from USDA.

    RR

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  12. By John on March 3, 2010 at 9:42 pm

    Got it. I appreciate the effort you put into this site and the heroic task of keeping comments useful, so let me suggest a citation rule for guest posts. The authors don't always stop by to answer pertinent questions like "Where did this number come from?" etc.

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  13. By robert on March 3, 2010 at 10:28 pm

    Say you finance your $5000 kilowatt at 7% or $350 per year. Then your 1752kWh/year costs 20 cents each. In california that's close enough to grid parity for government work. Even better it they institute time of day pricing.

    The problem is $5/watt is a wish. Right now we are at $7.50/watt installed with the manufacturing cost of a thin film panel around a buck. We need to get some of the labor out of the process. Maybe if there were higher volumes, people wouldn't need to make so much margin per panel.

    Nobody is going to build a new nuke unless Obama assumes all the risk. So we're asking solar to be at parity with all the other subsidized forms of energy. The government has got their gonads in everything.

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  14. By Kit P on March 3, 2010 at 10:36 pm

    The basic problem with solar is that the equipment to harvest the energy is not sustainable.

    I did a calculation to compare the time to build a nuke to PV. To produce the same amount of electricity as a large nuke, it would take 480 construction years.

    A 3000 person construction crew could produce a new nuke every 5 years. After that it takes about 500 to maintain the nuke.

    Solar PV could keep up with construction by have more crews. Since all power projects were require lots of concrete, steel erection, and wiring; we might need about the same ratio of construction workers per kw.

    The basic problem with PV is that it does not age well. It is a thermal loading thing. So at some point, PV starts breaking faster than than it can be built.

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  15. By Kinuachdrach on March 3, 2010 at 11:44 pm

    So we all agree that subsidies are bad for the long term health of supposedly "renewable" energy sources. We end up with rent-seekers buying politicians instead of entrepreneurs seeking to provide better or cheaper power to customers.

    Now back to the huge technical problem that the rent-seekers & their bought politicians have ignored — how to supply reliable 24/7 power from unreliable intermittent sources?

    Just maybe, if the "renewable" energy industry did not walk around with its hand out all the time, entrepreneurs & technologists might have approached the problem from the other end.

    Instead of pretending that intermittent sources could supply reliable power, real entrepreneurs might have focused more effort looking for intermittent power demands that could be married to intermittent power supplies. And then we might actually have "renewable" energy sources that could fill certain niches without depending on UNSUSTAINABLE subsidies.

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  16. By Paul on March 4, 2010 at 1:12 am

    Kinu, That's a good point about intermittent demands, and there some, although the more accurate term is "discretionary" loads.
    Peak/off peak rates are very good for getting customers to identify discretionary loads that can be time shifted.

    A good example is cold storage, you can "over cool" during off peak, or make ice, and and reduce (but not eliminate) load during on peak.
    So that's also a potential use for wind/solar, but there is always a catch – if the wind doesn't blow or sun doesn't shine for days, then you need that power from somewhere else – ideally hydro, or else any normal (coal, NG, nuke) power plant.

    So the problem becomes that the wind/PV can displace energy consumed from other sources, but it cannot displace capacity, so we end up with more generation capacity than we actually need.

    Coal and nuke are the baseload, so when the wind/sun picks up, they displace hydro and NG, which are the next two cleanest energy forms.

    We probably can't stop the government paying subsidies, but at least they should only subsidise "renewable" energy that is indeed controllable. That is of much more value to society than intermittent, uncontrollable electricity, so why they continue to subsidise that is beyond me.

    If controllable/dispatchable power was the ONLY type that the government paid subsidies on we would either have new forms of such energy, or would have saved a lot of wasted money on wind and (in particular) solar.

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  17. By russ on March 4, 2010 at 1:28 am

    1. The 1 USD per watt is for thin film only – not the rest of the goodies that go with it.

    2. Good name silicon panels are now getting down in the 2.50 USD per watt range.

    3. A system (say 5 kW) should cost 5 to 6 USD per watt installed – good brands with a 25 year warranty and top line inverter.

    4. CİGS (thin film) has a degradation problem they are working on.

    5. Silicon types are guaranteed to be 80% or better of rating after 20 years.

    6. İnstallers – there are far more shysters out there than honest guys. Too many just don't know what they are doing.

    7. 1BOG (1 block off the grid) is trying to convince people how wonderful they are using volunteers as sales people to get good leads. They then provide the lead to a real solar installer for a fee. Meanwhile behind the scenes they are collecting VC money to open more offices. 1 BOG is a for profit corporation.

    7. Too many schemes are out there where some copany puts a system on your roof top and provides you with a fixed electric rate for years to come. Seems to me there are many potential problems with this business model.

    8. İf the intermittent feed into the grid reaches an excessive percentage it creates big problems for the grid operator. CA just increased the limit from 1% to 5%.

    9. Only grid tie systems make sense even with the fantastic subsidies. Most people don't need batteries and all to tinker with.

    10. Battery systems operate in the 55% efficiency range. Half of the power you can generate is pissed away within the system.

    11. The most efficient solar systems are the water heating systems. Even in that case the dedicated heat pump type water heaters are more cost effective over a 13 year time frame. The solar panel cost is so high the thing does not make sense.

    Some day solar may make sense but it is a long way from being able to stand on it's own today. What (if anything) eventually works will probably be rather different than we see today.

    Politicians have learned that subsidies are great things. You can pacify part of your voters while not pissing of the rest too bad. A win-win for them.

    For the tax payer, you are just helping pay the neighbors (the one with solar panels) power bill.

    The whole subsidy/incentive model – be it farm, oil or solar – is a disaster! İt always has been and always will be.

    When the Chinese request that Mao's picture replace Benjamin Franklin's İ suppose the scale of the mess may become more apparent to everyone.

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  18. By rufus on March 4, 2010 at 1:33 am

    I guess I'll be the "Devil's Advocate," again. Everybody gets subsidies. Solar hasn't received all that many in the grand scheme of things.

    I'm going to support Solar Subsidies to the extent they've been proposed so far.

    I just look at it as paying for "research." But, "Good" Research. It's one thing to study something on the lab bench. It's quite something else, to get a few hundred people out on the job site working in the "Real" world.

    Same goes for manufacturing. It's one thing to run a computer model; it's something else, again, to set up assembly lines in L.A.

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  19. By rufus on March 4, 2010 at 4:35 am

    Actually, I kind of like how the government has done all this. They've spread fairly small amounts around between a lot of different technologies, and companies, and given the entrepreneurs a chance to try to "prove" their technologies.

    I think a good example would be the Range/Poet situation. A lot of people would have picked Range's gasification scheme as the probable winner; but, it's looking like "in the real world" Poet is going to be the Successful one.

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  20. By Anonymous on March 4, 2010 at 5:27 am
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  21. By Kit P on March 4, 2010 at 6:45 am

    So we all agree that subsidies are bad for the long term health of supposedly "renewable" energy sources.”

    No, Rufus said it better than me. We should keep building wind and solar as fast as we can. We should not expect the equipment to be sustainable until it is.

    Most renewable energy advocates are against coal and nukes but are ignorant of all sources of electricity. Having a reliable supply is the goal.

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  22. By Al Fin on March 4, 2010 at 11:14 am

    Intermittent. Non dispatchable. Non baseload. Expensive. A massive land footprint.

    Is this really where the Obama Pelosi government is putting most of its energy eggs for the future? Unreliable expensive energy?

    By all means, let's subsidize the hell out of it.

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  23. By Nick de Cusa on March 4, 2010 at 11:22 am

    Let's translate this into simple, straight, good English : PV could be profitable for you if you can get the government to steal money from your neighbour or from anyone (in fact, in this case, mostly people poorer than you) to then give it to you.

    Is that how you build a peaceful society? Clamouring for the government to steal from others in order to line your own pockets?

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  24. By LarryD on March 4, 2010 at 11:36 am

    "Everybody gets subsidies. Solar hasn't received all that many in the grand scheme of things."

    EIA – How much does the Federal Government spend on energy-specific subsidies and support?

    Subsidies and Support per Unit of Production (dollars/megawatthour)

    Nuclear – $1.59
    Wind – $23.37
    Solar – $24.34
    Refined Coal – $29.81

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  25. By Russ on March 4, 2010 at 11:53 am

    @Anon – the 98 cents is for thin film type – yet to be well proven and some have shown significant loss of efficiency even the first year.

    @Nick – thats right – steal from the poor and give to the rich while telling everyone how wonderful you are!

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  26. By LarryD on March 4, 2010 at 12:07 pm
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  27. By Anonymous on March 4, 2010 at 12:29 pm

    "A lot of people would have picked Range's gasification scheme as the probable winner"

    A lot of amateurs. But what would have been the basis for picking them? Gargantuan hype?

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  28. By robert on March 4, 2010 at 12:39 pm

    We already have an intermittent electricity source matched to an intermittent load. Solar power and air conditioning. I don't see why baseload power like coal and nuclear get credit for producing electricity all night long that nobody wants.

    You guys ought to move to China. You'll save a penny on every kilowatt hour but never see the sun. I think you'll be happier.

    My solar panels save my neighbors money. You think the tooth fairy powers their air conditioner? How much does it cost to build a natural gas turbine and run it 30 days a year? Their paying 15 cents for 50 cent kilowatt hours.

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  29. By Wendell Mercantile on March 4, 2010 at 12:41 pm

    "A lot of people would have picked Range's gasification scheme as the probable winner"

    And had I believed everything I read in Popular Science when I was a kid*, I'd have bet we would all have rocket belts by now; live in climate-controlled cities covered by huge plastic domes; raise all our food on hydroponic farms; have a colony on Mars; and be able to fly from New York to Tokyo in 30 minutes.
    ________________
    * And I was an avid reader of Pop Sci when I was a kid.

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  30. By Wendell Mercantile on March 4, 2010 at 12:55 pm

    Nick de Cusa said: Let's translate this into simple, straight, good English : PV could be profitable for you if you can get the government to steal money from your neighbor or from anyone to then give it to you.

    Excellent point Nick.

    The way I always remember that is: "One person's subsidy is somebody else's tax."

    That's always been my problem with corn ethanol. Corn ethanol would have never been able to make it on its thermodynamic merits, and w/o subsidies would have been dead in the water years ago*.

    ____________________________
    *And Rufus, I actually am not opposed to ethanol as a fuel. I just intensely dislike the political shenanigans, lobbying, Corn Belt politics, and back room deals that went along with corn-based ethanol.

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  31. By Paul on March 4, 2010 at 1:35 pm

    "My solar panels save my neighbors money."
    Robert, how exactly, are they doing that?
    Your neighbours are paying for your panels, through the array of subsidies, incentives, and feed in tariffs for solar PV.

    "How much does it cost to build a natural gas turbine and run it 30 days a year? "

    Gas turbine capacity is about $500/kW to build.
    It then costs $0.05/kWh for the fuel to run it. So to run it for 30 days equivalent, it produces 24*30=
    720kWh, and a fuel cost of $36. Assuming a 10yr period to pay down the plant, we allocate $500/10/720=$0.069 for paying off the cpaital, and a total cost of $0.12/kWh.

    Now, your 1kW of solar panel is costing $5000 to build, and runs for the equivalent of 61days/yr (20% capacity factor), producing1464kWh/yr with no fuel cost.
    Allowing the same 10yr period to pay down the capital, we have $5000/10/1464=$0.34/kWh – about three times the cost.

    So, approaching these two alternatives as a business proposition, the NG turbine produces electricity at a third the cost, and is controllable and dispatchable. The solar PV produces power at three times the cost, is uncontrollable, AND requires the turbine as backup for those cloudy summer, and short winter days, when there is reduced sunshine.

    So which one is a better use of resources, as measured by money?

    Of course, to avoid having to build either, you could decide not to run your air conditioner at all. That would make a BIG difference to the peaking problem.
    That would also avoid your neighbours having to work harder to pay higher taxes or electric rates to pay for your PV's while you sit at home in air conditioned comfort.

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  32. By Paul on March 4, 2010 at 1:45 pm

    Robert (NOT Robert Rapier) also said "I don't see why baseload power like coal and nuclear get credit for producing electricity all night long that nobody wants. "

    So tell us robert, how do you propose to use solar power to run the lights, which, by definition, are needed most when the sun goes down?
    Same goes for your fridge, TV, computer, the restaurant down the road, a cinema, supermarket, traffic lights, etc etc.

    One third of all electricity is used at night, so I wouldn't say nobody wants it, I'd say that most of this is fairly essential load.

    You seem to want to replace the cheapest, most efficient power (baseload) with the most expensive (solar) which then requires either energy storage, or backup generation, either of which increase the cost by half again. So now the REAL cost of your PV is about $0.50/kWh – and at that price, probably even you would turn off your air conditioner.

    And if you are going to do that, you should have done so in the first place and saved everyone all that money to build something that produces a product that is now too expensive to use.

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  33. By Kinuachdrach on March 4, 2010 at 3:03 pm

    On the folly of subsidies — political types like them, so you know they have to be a bad idea!

    But let me speak up for solar power. There is a market for it. One of those markets, interestingly enough, is the gas production industry.

    Gas well operators like to have a small amount of electric power at the wellhead, to run gauges & transmit data. Running electric lines to wellheads 1/2 mile apart is expensive and visually polluting. Many operators instead use small photovoltaic panels at the wells, charging a battery which provides 24/7 power. Effective $/kwh is high, but still cheaper than the alternative.

    And this is done without subsidy.

    That is how real technology advances. Find niches where the technology can offer better/cheaper performance, and then grow from there.

    The first mobile phone I saw was about the size of an airline brief case and weighed over 20 pounds — but a small number of users were prepared to pay a premium price for them. Then entrepreneurs & inventors found ways to get mobile phones down to brick-sized, and the market grew amazingly. Now mobile phones are the size of a billfold (or less), and they are well on the way to replacing conventional wired phones.

    All done without subsidy!

    If politicians had decided to subsidize mobile phones, would we ever have seen that degree of technological innovation and true commercial success? The question answers itself.

    If "renewable" energy is ever to amount to anything, it has to get off its hopeless addiction to subsides.

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  34. By rufus on March 4, 2010 at 4:18 pm

    A little help seems to have worked out pretty good as concerns corn ethanol. Today's Prices:

    Ethanol – $1.60 gallon – Chicago

    RBOB – $2.24 gallong – New York

    That $1.60/gal gives the farmer, the biorefiner, and the transporter a Profit "Before" any blender's Credit is applied.

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  35. By rufus on March 4, 2010 at 4:20 pm

    After allowing for 20% less mileage corn ethanol is still, w/o subsidies, beating gasoline.

    Hello.

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  36. By Benny BND Cole on March 4, 2010 at 5:32 pm

    Kinu

    Boy , I remember driving up I-5 in the 1970s, at 85 mph in the slow lane, in a Cadillac, that had a mobile phone in it. The exec called his office to make sure that a certain IBM Selectric ball typewriter was working, as he wanted to dictate a note to his secretary.

    By the 1990s, certain self-important types were carrying around bulky cell phones, the size of irons.

    Finally, last year I broke down and got a cell phone, smaller than some cigarette lighters. I even got a bluetooth attachment, that was so small I put it in the washer-machine and it doesn't work anymore.

    Solar? My guess is that it will always have to be subsidized, and it warrants a minor subsidy. Maybe if panels start converting a whole lot more light to juice they will work, but we are talking major breakthroughs.

    As I have stated, generating electricity is not our problem, even if we want to generate "clean" power–we have nukes.

    The tyranny of liquid fuels is our problem. That is where our money should go.

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  37. By Kit P on March 4, 2010 at 6:18 pm

    “Same goes for your fridge, TV, computer ..”

    And Paul do not forget the factory that produces the materials for PV comes from coal and nukes.

    I think it is fine if people like Robert want to invest there own money to produce their one electricity. It is their advocacy for solar other places.

    “Solar power and air conditioning. I don't see why baseload power like coal and nuclear get credit for producing electricity all night long that nobody wants.”

    Let me tell you how much my family needed the coal and nuke generated electricity all last month when the roof was covered with 4” of snow. In the summer, we have shade trees so the AC does not start till after 4 pm.

    “You guys ought to move to China. You'll save a penny on every kilowatt hour but never see the sun.”

    Our bus bar nuke generated electricity is less than 2 cents per kwh and coal less 3 cents per kwh. Unless it is cloudy, no problem seeing the sun because our air quality is good. My region exports lots of cheap electricity too to places where they made poor choices like they did in California.

    The reason electricity is expensive in California is too much reliance on natural gas. The west has lots of PRB cheap coal but California does not want to use. They to make electrical made with NG while talking about PV.

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  38. By Petes on March 4, 2010 at 6:35 pm

    Kinu said: "mobile phones … All done without subsidy!"

    Not only that — most governments made a killing selling off spectrum to mobile operators. ("Here – have our ether [should it exist] to make oscillations in. That'll be $100m please".)

    :-)

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  39. By PeteS on March 4, 2010 at 6:38 pm

    Over here we've got solar PV on the parking meters, on the emergency telephones on the motorways, and on the radar speed guns. Don't see 'em anywhere else.

    (Actually I don't even know how they power those what with our weather… unless the emergency phones only work a couple of days in June every alternate year.)

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  40. By Warren Schirtzinger on March 4, 2010 at 8:51 pm

    Kinuachdrach said…

    That is how real technology advances. Find niches where the technology can offer better/cheaper performance, and then grow from there.

    One of the primary assumptions in the solar industry is: "if the cost of something gets low enough, everyone will automatically buy it." In my mind there is no guarantee that solar power will become mainstream when it costs approximately the same, or even less than conventional sources.

    Here's why. Even with lower and lower cost per watt, solar power is missing two key elements of market expansion: product intangibles and a compelling reason to buy.

    Consider what happened with the personal computer (PC). Not only did prices go down (and performance went up) but MANY other things helped make the PC a mainstream appliance. One of the biggest factors was the addition of IBM's backing and reputation to the desktop computing industry (does anyone remember the so-called "IBM compatible PC" standard?) IBM's blessing along with other "standards" such as the DOS operating system and the ISA/EISA bus (i.e. product intangibles) all combined to reduce the perceived risk of buying a PC.

    But the most powerful factor in PC market development was a compelling application called the spreadsheet. Early spreadsheet software (Lotus 1-2-3 and Context MBA) running on the PC provided a quantum leap in capability over the existing ways of manipulating numbers…with adding machines, calculators, pens, pencils and sheets of paper.

    It's true there are future benefits associated with solar such as greater environmental health and sustainability, but that's like selling green bananas. The promise that someday a green banana will turn yellow is not compelling enough.

    In the solar industry, there are few if any risk-lowering product intangibles (who's the IBM of solar?) and the compelling "mainstream" reason to buy hasn't been sufficiently articulated yet. So when solar reaches grid parity, it will provide something that people already get from a utility…electric power for the same price. There's no quantum leap in capability or extraordinary advantage above what a utility already offers. Plus, there's no need to install a bunch of complex equipment when power comes from the grid.

    Solar does not have risk-lowering standards or intangibles, nor a compelling reason to buy, so the solar industry needs to use reference-based techniques to overcome these missing elements of market expansion.

    Warren Schirtzinger
    Solar Strategies Inc.

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  41. By Terry on March 4, 2010 at 9:36 pm

    So we all agree that we shouldn't count solar subsidies into the grid parity calculations for solar. But without those subsidies it will take even longer (if ever) to reach grid parity. So I think we should still subsidize it for now.

    It seems to me we should be looking more into ways of efficiently storing all this electricity we can generate from intermittent sources like wind and solar so that we can use it when the sun isn't shining or the wind isn't blowing. Maybe that is something that we can use all those 'spent' EV car batteries for. Just because it's not longer useful for a car doesn't mean we can't still use it for something else like energy storage.

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  42. By Kit P on March 4, 2010 at 9:47 pm

    Warren very nice post. Here is the flaw in your logic. Even if you are successful at creating a consumer market, the object is to produce electricity not sell useless junk .

    From you link, you wrote.

    “Those of us in the solar industry know that PV is in fact very reliable.”

    How does the very low availability of solar PV compare to the 99% availability of nuke plants?

    While I think we should be building solar as fast as we can manufacture equipment, it should be utilities, that own and operate these systems. The same systematic approach that has resulted in 99% availability for nuke plants cab be applied to PV systems. What are the critical components, what is the mean time to failure, can failure be predicted?

    When the 'solar industry' starts talking about how much electricity they produce they will be part of the energy industry instead of part of the consumer fraud industry. I get the sense that is Warren's goal.

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  43. By Kit P on March 4, 2010 at 10:32 pm

    “So we all agree ..”

    Are you from California by any chance Terry? It might be fine for all the English and poly sci majors to agree on a consensus but you may want to check with the engineers.

    After the 2000/2001 electricity crisis in California, the federal government under Bush came up with the National Energy Policy in a few months. Five years later, California published the policy for the state that achieved consensus. Talk about renewable energy, rely on natural gas.

    So Terry worry about storage when you have energy to store. Your plan is to hope that consumers will buy EV and PV and wind will still be working when that happen.

    The California plan is to put a lot of NG in storage and run it through cheap gas turbines during the summer. NG is easy to store, electricity not so easy.

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  44. By Paul on March 5, 2010 at 1:14 am

    "NG is easy to store, electricity not so easy."
    Kit, spot on, and of course, almost any other fuel, is easier to store than electricity. The only large scale storage that has proven economical to date is pumped hydro, and this only when at least one of the storage reservoirs already existed, and the second is close.

    I don't actually have a problem with solar PV at the point of use, leaving the economics aside, it seems a good fit, as the demand peak is generally during the day. But you can't leave the awful economics aside, and neither should they be masked by subsidies/incentives.

    As you also pointed out, careful use of trees, especially deciduous ones, provides great shade/cooling in summer, and lets winter light in. But most of the Californians seems to have forgotten this and prefer large lawns and air conditioners – more water and more power, and they import both.

    I am actually OK with government money going to support PV R&D – better to find ways to improve the panels so they are economic, than give money to install uneconomic ones.

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  45. By Terry on March 5, 2010 at 3:42 am

    "The California plan is to put a lot of NG in storage and run it through cheap gas turbines during the summer. NG is easy to store, electricity not so easy."

    And just what exactly is your point? No one said it was easy to store electricity, but if we don't start working on it now we'll never get anywhere. And there's nothing wrong with using natural gas as an interim energy source. It sure as hell is a lot cleaner than keep on burning coal. But in the long term we'll have to move off of that also because it will still put net carbon into the air.

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  46. By Anonymous on March 5, 2010 at 5:28 am
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  47. By Anonymous on March 5, 2010 at 10:01 am

    One problem:Gas prices aren't falling! Choose a discussion on gas prices later than January 09 and you find that they fell, and continue to do so.

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  48. By Kinuachdrach on March 5, 2010 at 12:34 pm

    Terry wrote: "it will still put net carbon into the air."

    So you are a big proponent of nuclear power, Terry?

    But spend some time informing yourself about the scam that is Alleged Anthropogenic Global Warming. Even the infamous Prof Jones at the even more infamous University of East Anglia has acknowledged in an interview with the BBC that:
    1) there has been no increase in global temperature over the last decade, despite all that 'dangerous' human-produced CO2;
    2) global temperatures were probably higher during the Medieval Warm Period than they are today, even though that was before all the 'evil' human-produced CO2.

    There are many things to worry about in energy supply — the minor human contribution to life-essential CO2 in the atmosphere is not one of them. That's what the real science says.

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  49. By Terry on March 5, 2010 at 1:30 pm

    "So you are a big proponent of nuclear power, Terry?"

    I don't know if I would say 'big proponent' but I am for more nuclear power because it's one of the only power sources I know of that can produce lots of baseload power 24×7. I am not sure if nuclear is THE answer mainly because of the current once-through fuel cycle we use.

    As for for anthropogenic global warming, I'm a chemist, not a climatologist so I have to rely on expertise of climatologist on this matter. And there just is too much research evidence pointing to global warming for me to ignore. Have groups like the IPCC made mistakes in their research? Sure, but so has any other large research body. But taken as a whole I accept the idea of anthropogenic global warming and that we need to do something about relatively soon.

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  50. By Paul on March 5, 2010 at 7:03 pm

    here is a timely story to add fuel to this fire..

    http://solveclimate.com/blog/20100305/hawaiian-utility-fights-solar-industry-over-private-installations

    The hawaiian electric utility wants to put a stop to any more roof top solar, which is very popular in Hawaii, saying it risks destabilizing the grid.

    Personally, I think they have had enough of paying ridiculous amounts for the feed in tariff, which is costing them money. With electricity there already at 20+c/kWh, there is no need for a feed in tariff.

    Nor anywhere else, for that matter…

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  51. By Kit P on March 5, 2010 at 7:35 pm

    “It sure as hell is a lot cleaner than keep on burning coal.”

    No not really. Coal being dirtier is a typical California answer. It is official California policy to import large amounts of natural gas to make electricity and dictate how other places make electricity based on ignorance. Just got my electric bill and 90% comes from coal. The environmental impact is insignificant.

    Terry if you are concerned about ghg, then nuclear is THE answer to fossil.

    As a chemist, Terry can tell us how much energy is lost storing energy in some sort of chemical process (a battery). I have lots of experience with dangerous batteries. Electricity is stored in dangerous batteries long enough for emergency diesel generators (EDG) to come on line (about 10 seconds). EDGs then converts stored chemical energy to electricity.

    “but if we don't start”

    What do you mean by we? I make electricity and I telling you it is a bad idea. Terry I have been waiting 30 years for people like you to show me how to do it.

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  52. By Kinuachdrach on March 5, 2010 at 9:41 pm

    Terry wrote: "I am for more nuclear power because it's one of the only power sources I know of that can produce lots of baseload power 24×7."

    That's certainly what the data tell us, Terry. I wish you every success in pointing this out to those concerned about the finite nature of fossil fuels.

    "I am not sure if nuclear is THE answer mainly because of the current once-through fuel cycle we use."

    Again, Terry, you have got hold of the right end of the stick. Taking energy-emitting used nuclear fuel and proclaiming it "waste" (instead of reprocessing it to generate more energy) was one of President Carter's dumber ideas. Fortunately, Carter is history. Our politicians could adopt more sensible policies any day they wanted. The technology is here today.

    "And there just is too much research evidence pointing to global warming for me to ignore."

    Oh well, two out of three wasn't so bad, Terry. So you don't believe a word that Prof. Jones at the University of East Anglia has said? Now that the IPCC's politically-driven Executive Summary has been completely discredited (in part by data in the seldom-read IPCC full report), what is left to cling on to?

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  53. By Anonymous on March 6, 2010 at 2:45 am
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  54. By Kinuachdrach on March 6, 2010 at 10:17 am

    Also from the BBC interview (as amended following additional input from the University of East Anglia — is your head spinning yet?):

    "[Question] Do you agree that according to the global temperature record used by the IPCC, the rates of global warming from 1860-1880, 1910-1940 and 1975-1998 were identical?

    [Dr. Jones] … the warming rates for all 4 periods are similar and not statistically significantly different from each other."

    "[Question] Do you agree that from 1995 to the present there has been no statistically-significant global warming

    [Dr. Jones] Yes"

    "Do you agree that natural influences could have contributed significantly to the global warming observed from 1975-1998

    [Dr. Jones] This area is slightly outside my area of expertise."

    So there hasn't been any warming in the last 10 years, the years of highest human agriculture & fossil fuels. The warming in the years before that was the same as in 1860-1880, when human population and impacts were a fraction of what they were in the 1990s. And Dr Jones tells us he is not qualified to discuss natural impacts on climate.

    In a Court of Law, Dr. Jones would have lost his case right there.

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  55. By Daniel on March 7, 2010 at 4:06 pm

    John in post #7 said
    "My own estimate for PV grid parity in the Northeast is $2/W installed"

    A little pushback John: When I look at retail prices in the NE, I see rates between 13-18c/kwh. Using 15c/kwh and 4 hours of sunlight/day, solar produces 22cents/Watt/yr or an 11% yield–w/o subsidy. 11% yield that is risk-free–in fact it is better than risk free because the yield grows at the rate of energy inflation.

    Since "risk-free" US treasuries normally trade for ~1/2 11%, I'd say that grid parity is probably around $4/W in the NE.

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  56. By Daniel on March 7, 2010 at 4:25 pm

    Paul said
    "So the problem becomes that the wind/PV can displace energy consumed from other sources, but it cannot displace capacity, so we end up with more generation capacity than we actually need."

    Hello? The grid ALWAYS, ALWAYS has more capacity than it actually needs…except for the black-swan events where the entire NE goes blackout!

    Solar currently provides a small fraction of 1% or our total generation (let alone capacity)…so really the problem with solar IS NOT (even close) that it cannot displace "capacity".

    If dispatchable capacity is your concern, then I can make a significant fraction (25% or more) of PV dispatchable for the cost of plumbing your solar field.

    (hint mix water to the desired temperature and run it through the solar array…to change output change the water temperature…)

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  57. By Daniel on March 7, 2010 at 4:33 pm

    Paul said
    "So, approaching these two alternatives as a business proposition, the NG turbine produces electricity at a third the cost, and is controllable and dispatchable. The solar PV produces power at three times the cost, is uncontrollable,"

    Only because you "arbitraily" picked ten years as the payback period. Why not pick 20 years? or 30? The NG and solar systems will still be working. Then the cost differential falls to 2x (for 20 yrs) or ~60% (for 30 yrs)

    And if dispatchability is what you need look above

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  58. By Daniel on March 7, 2010 at 4:39 pm

    Kit P says
    "The basic problem with solar is that the equipment to harvest the energy is not sustainable.

    I did a calculation to compare the time to build a nuke to PV. To produce the same amount of electricity as a large nuke, it would take 480 construction years."

    The solar industry installed 6 GW of solar last year alone. Even assuming you count 4 Solar GW = 1 Nuke GW (if you are the Kit P. I think you are…this is a safe assumption) how come you say it takes 480 years to do what solar did in 1 year?

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  59. By Daniel on March 7, 2010 at 4:43 pm

    Kit P says
    "No not really. Coal being dirtier is a typical California answer. It is official California policy to import large amounts of natural gas to make electricity and dictate how other places make electricity based on ignorance. Just got my electric bill and 90% comes from coal. The environmental impact is insignificant. "

    Huh? careful who you go around calling ignorant…you expect people to take you seriously when you respond like this?

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  60. By Paul on March 8, 2010 at 1:58 am

    "Only because you "arbitraily" picked ten years as the payback period. Why not pick 20 years? or 30? "

    Daniel, that is not on arbitrary number – I did say approaching this as a Business Enterprise. For most companies, if project X generates less than a 10% return on investment, they won't do it. Yes, if you take a 20 or 30 yr period the numbers change in favour of solar, but that is of little use if your company has gone broke in the meantime because you could not pay off the debt.

    Evenm using your northeast numbers at $0.14/kWh, you will earn $205/yr (1464*0.14)on your $5000 investment, a 4% annual return. So, unless you can borrow money at 4% or less, this will never even pay of the cpital to build it – what BUSINESS would take on that proposition?

    With the NG turbine, we generate 720kWh for $102, less $36 for fuel, leaving $66. We applt this to our $500 in capital for a 13.2% return on investment – over the 10% benchmark AND we have the opportunity to run for more hours, though at lower electricity prices, and we'll up our rate of return even more.

    I will even add in the cost of doing carbon sequestration (by making charcoal from wood waste, and using the charcoal as a soil improver), at $50/ton C ($180/ton CO2), a world record high price. This will up my fuel cost from $36 to $44, still giving me an 11.6% ROI, and improving the productivity of farmland at the same time.

    And, I can run the turbine at any time of day or night to provide extra power, should it be needed, something you can't do with solar.

    So which do you think is a better business decision? And if you want the real answer, look at how many NG plants have/are being built compared to solar, and consider how fewer solar plants there would be if not for the $0.30 solar price. The only way solar PV makes a good "business decision" is when you can get everyone else (the taxpayers) to pay half the cost, or double the price.

    And basing a business decision purely on the continuing existence of taxpayer subsidies, is a poor decision, for both business and taxpayer.

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  61. By Paul on March 8, 2010 at 2:16 am

    Daniel, the NE black out was not caused by a lack of generation, it was caused by a lack of transmission capacity (or, more accurately, too much demand). Yes there is always spare generating capacity. IF demand goes up by 1kW, we would build 1.2kW of capacity, to maintain a buffer.

    But with solar, IF we build 1kW of solar to meet the demand, then we still have to build 1kW of something else, because a weather event, such as a mid day storm covering the whole area, or a snowstorm, means we get zero production from the solar and it ALL has to come from somewhere else, otherwise we will get excessive voltage drop and start destroying equipment, or institute rolling blackouts

    So, the only was solar can avoid this problem with is to be a small fraction of the grid. And if it is that small, it is not making a significant contribution to meeting peak demand. And given that we pay twice the price for it, why bother?

    And as for "plumbing" water to solar PV, please explain how, exactly, you propose to use hot water to get power out of PV's after dark. If you just mean dumping excess power, that's fine (but uneccessary – we can idle my turbine). But it's how to turn the on when you need it that is the trick.

    I have no problem with you or anyone using panels on your house, to charge an EV car, etc etc. I just have a problem with subsidising you to do so, that's all.

    When solar stands alone as a good (unsubsidised) power generation investment, I will be the first to do so. And I am speaking as someone who has built micro-hydro systems when you are putting your own money on the line, not the taxpayers, you tend to sharpen your pencil and only choose the best projects – and that's as it should be.

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  62. By Kinuachdrach on March 8, 2010 at 10:09 am

    Paul wrote: "And basing a business decision purely on the continuing existence of taxpayer subsidies, is a poor decision, for both business and taxpayer."

    Well said, Paul!

    Let's also remember that the supply of savings for investment is limited. If we misdirect thsoe savings into economicaly unsustainable solar power, we reduce the investments available for other better opportunities.

    Short term, we can do that misdirection; long term, everybody will have to pay a price for it.

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  63. By Daniel on March 8, 2010 at 12:02 pm

    Paul says:
    "Evenm using your northeast numbers at $0.14/kWh, you will earn $205/yr (1464*0.14)on your $5000 investment, a 4% annual return. So, unless you can borrow money at 4% or less, this will never even pay of the cpital to build it – what BUSINESS would take on that proposition?"

    I got 11% return using a $2/W installed and 15c/kwh–$2000/kw installed was a figure that John suggested was likely grid parity in the NE. I suggested that given
    the $220ish dollar annual return (rish free)in the NE that people would probably invest if the installed cost were ~$4000.

    And before you hammer on me about the cost of solar today (I know it is currently around $7/W +/- $1), this was a discussion of what future installed price of solar is equivalent to grid parity…and grid parity means different things to different people in different places (as it should as long as we have regional power markets where different classes of customers get different prices).

    The future of solar depends on its continued progress in lowering its costs. I believe it is doing pretty well (at least on the technology side). All I'm saying is that grid parity for solar (with or without subsidy) is closer than many people realize.

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  64. By Daniel on March 8, 2010 at 12:19 pm

    Paul says:

    "And as for "plumbing" water to solar PV, please explain how, exactly, you propose to use hot water to get power out of PV's after dark. If you just mean dumping excess power, that's fine (but uneccessary – we can idle my turbine). But it's how to turn the on when you need it that is the trick."

    I'm not suggesting that solar provide power at night…I believe that solar works best while the sun is shining! All I was saying is that if you control the temperature of the solar panels you control the output…hence you can ramp solar power output up or down by cooling/heating the panels as desired. You were the one complaining about the "lack of control" from solar. This control is not complete (i.e. yes you still need sunlight) but easily allows you to get an extra 10-15% more power out–as well as control the top 1/4 to 1/3 of the array solar output.

    "I have no problem with you or anyone using panels on your house, to charge an EV car, etc etc. I just have a problem with subsidising you to do so, that's all. "

    That is interesting. But no matter how big a problem you have paying a miniscule amount to help the next guy use less oil, I've got a WAYYYYY bigger problem with our countries unsustainable addiction to foreign oil and the blood price we as a country routinely pay for access to said foreign oil. Oh and I also dislike the trillions we spend every decade on military action that feeds hostility and extremism at home and abroad.

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  65. By Paul on March 8, 2010 at 12:52 pm

    Daniel,

    As my father always said "two wrongs don't make a right".

    I don't agree with all the money being spent on troops in Afghanistan and Iraq either (I live in Canada, but our Afghan mission has so far cost $12bn and 140lives, and for little result). We can't (really) control what our respective governments do, but we can make rational, informed decisions about energy sources, and the relative merits of each – which is what this forum is all about.

    The fact that governmnets waste money on mideastern wars doesn't mean we should waste money anywhere else. And solar, or even wind power, does nothing to reduce oil dependence. Oil is primarily transport fuel, and electricity is not. So even if we have zillions of solar panels everywhere, it won't make a dent in oil use.

    As for the controllable part, if you want to run cold water to cool the panels, fine, as long as you are in an area that has the water. I would not call that "control", I would call that maximising efficiency of production, which is always a good thing.

    But for control, you you need to be able to turn it on, or off, or maintain production as desired. With solar, all you can do is turn down or off. A grid area with lots of solar PV (and wind) becomes more unstable as sudden weather events can lead to very sudden, unpredictable increases or decreases in production. The decreases, in particular, have to be made up from somewhere, such as turbine or hydro plants, both of which can come on line in short order.

    But then it means you are idling the most cost effective generation, as backup for the most expensive (solar), resulting, overall, in more $spent of them system per kWh generated. On this score, the utilities have, sensibly, voted with their feet, and preferred cheaper, controllable generation over the expensive uncontrollable variety. There is much more benefit to society from the scarce dollars than with solar.

    If you feel good having panels on your roof, that you have paid for (the full cost), then that may be a good use of your money. But it is not, not even close, to being a cost effective solution to providing large scale reliable electricity supply.

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  66. By Kinuachdrach on March 8, 2010 at 2:09 pm

    Daneil wrote: "I've got a WAYYYYY bigger problem with our countries unsustainable addiction to foreign oil"

    So your plan, Daniel, is to replace that 'addiction' to foreign oil with a totally unsustainable addiction to subsidized 'alternate' energy?

    You do realize, don't you, that the required minerals for the solar/wind subsidy scam (lithium, rare earths) are imported? The wind turbines are imported? The solar cells are imported?

    There is one major reason to get an early start on moving beyond oil — it is a finite fossil fuel. But if that transition is done badly by a bunch of Subsidy Addicts, it won't help your concern about dependence on hostile foreign sources.

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  67. By Daniel on March 8, 2010 at 2:42 pm

    "So even if we have zillions of solar panels everywhere, it won't make a dent in oil use."

    Well I agree with you if we are speaking about today…I was only responding to your concern about using solar panels to charge an EV car.

    "I have no problem with you or anyone using panels on your house, to charge an EV car, etc etc. I just have a problem with subsidising you to do so, that's all. "

    I really just wanted to put the subsidy or "waste" that you are railing against in context. Do you think fossil fuels don't get subsidies also? I would prefer to have no subsidy of any kind for energy (and that all costs were accounted for), because less would be used and therefore less "needed". I also think that solar would make a more compelling investment in such an "ideal" world.

    "But for control, you you need to be able to turn it on, or off, or maintain production as desired. With solar, all you can do is turn down or off."

    You still are not hearing what I'm saying. You are assuming only cold water–i agree that cold water will maximise your PV output–but the water can be warm/hot (and utilities generally have excess warm/hot water and experience with plumbing) which enables you to throttle the solar plant down. Turning the solar plant down is very counter-intuitive to most people in the solar industry who want to always get the most out of their plant. But utilties need to balance supply with demand which generally requires the ability to balance generating assets.

    I'm describing how you can control the top 25-30% of your solar production. If you have a nominal 10MW solar field you can control the top/last 2-3MW of production (completely up or down–on or off–in or out). If it is a partly cloudy day that "last" 2 MW could be the 2MW between 6-8MW, while on a hot sunny day you could have the 3MW between say 8-11MW (since you are cooling the panels you can get more than the nominal 10MW out!)

    The caveat is that you do need some sunlight and more is always better. (I can't believe I need to say that solar doesn't work without sunlight…but you do seem hung up on this point.)

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  68. By Daniel on March 8, 2010 at 2:51 pm

    Kinuachdrach says:

    "So your plan, Daniel, is to replace that 'addiction' to foreign oil with a totally unsustainable addiction to subsidized 'alternate' energy?"

    No. What part of

    "The future of solar depends on its continued progress in lowering its costs."

    did you not understand?

    To be clear, I believe in a modest and declining over time subsidy for carbon free clean renewables including solar.

    "The wind turbines are imported? The solar cells are imported?"

    They don't need to be imported…we have the materials/knowledge/technology here in the US to make this. It just so happens that other countries decided to subsidize these technologies to a much greater extent in the past and are now reaping the rewards of their enlightened policy (or boneheaded policy if you listen to Paul).

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  69. By Paul on March 8, 2010 at 5:14 pm

    Now Daniel, there is a difference between "subsidising the technology" and subsidising their installation.

    Subsidising the installation is paying these ridiculous incentives do something that shouldn't be done. Subsidising the technology development is different – it's purpose is to improve the technology to the point where it is useful. I have no problem with that, though the way it is currently done (in the US, anyway) often leads to debacles like Range Fuels, etc.

    I understand that there are things you can do to modulate the output of your solar system, though i don't understand why you would ever want to run it at less than maximum capacity. Once you have paid the outrageous capital cost (subsidised or not) you should then wring every kWh out of it that you can. Even utilities (I used to operate one) get that, at that point it is the cheapest marginal energy, so I will turn down a fuel using generator, , or hydro system to match the loads.

    But as a utility, if go and install a whole bunch of solar, I will go broke long before I get my investment back. The gas turbine is cash flow positive on day one, and even more so when paid off. Perhaps by then solar will be ready when the turbine needs replacing.

    I understand it won't make energy when the sun is not shining – the problem you seem to miss is that the sun might not be shining in the middle of the day, when you normally expect it to, and your 10MW solar is producing zero – what then? There has to be something else to fill the gap, and that something else is currently much cheaper to build, own and operate.

    A non technology specific renewable subsidy, or better yet a carbon tax, is fine with me. In fact we already have that (carbon tax, increasing annually) where I live. We also pay a levy on electricity to support development of new technology – I am fine with that too.

    What I am not fine with is spending huge $ on solar (or other) systems that are not cost effective. Keep developing for sure, and we'll know when it;s ready because the utilities will start building it, no subsidy required. Until then it is wasting resources to build 25yr life systems that will probably be obsolete in 5yrs.

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  70. By Daniel on March 8, 2010 at 9:40 pm

    On March 8 Paul says:

    "I understand that there are things you can do to modulate the output of your solar system, though i don't understand why you would ever want to run it at less than maximum capacity. Once you have paid the outrageous capital cost (subsidised or not) you should then wring every kWh out of it that you can. Even utilities (I used to operate one) get that, at that point it is the cheapest marginal energy, so I will turn down a fuel using generator, , or hydro system to match the loads."

    Fair enough…I was just responding to a criticism toward solar that you made on March 4th:

    "The solar PV produces power at three times the cost, is uncontrollable,"

    You made it sound like solar can't be controlled, when in fact it can be (within limits). Now perhaps it would be financially crazy to control it (I don't think it is, but some people do) but that is a different thing than not being able to control it.

    "But as a utility, if go and install a whole bunch of solar, I will go broke long before I get my investment back."

    Except that for most every utility I know (most utilities I know are highly regulated), the utility gets paid a relatively fixed return on their investment…that is not the case everywhere, but pretty common in the US.

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  71. By Paul on March 9, 2010 at 12:03 am

    The utilities do not get a fixed rate of return, they are regulated to a maximum rate of return (typically 10%). If you get less than that, too bad. If you get more than that, you have to reduce your rates/pay rebates to your customers.

    So you risk remains the same, but your reward is limited – that's why they are so picky about the rate of return on any generation investment.

    So with solar, you won't see the utility investing in it, because it is just not a good investment for them. They are perfectly happy to buy that solar power from a third party, and distribute it to their customers. Then the profitability becomes the third party's problem.

    Most of the PV installs are at customer sites, where they offset retail rates (which are 2x wholesale). Even so, for those customers, it is usually only the incentives that make it worthwhile. A wind turbine would be a better investment, you get more kWh per installed kW, and the kW is cheaper. Problem is wind turbines are best at large scale, the small scale ones are about same $/kW as PV.

    Look for a wind power partnership coming soon to your neighbourhood, where people can buy a share of a large wind turbine, in a windy location. That is a much more efficient solution, for those who feel the need to generate their own power.

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  72. By Daniel on March 9, 2010 at 3:01 am

    "So with solar, you won't see the utility investing in it"

    Except that utilities are investing in solar…not many clearly, but some are.

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  73. By Anonymous on March 9, 2010 at 6:48 pm

    PV owned by utilities: EDF, FPL, SDG&E, SMUD, and
    Duke Energy

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  74. By Paul on March 10, 2010 at 12:03 am

    Yes, but how many of those utilities have been mandated, or otherwise forced for PR reasons, to do so?

    Here is a good look at what is wrong with excessive subsidies for solar.

    http://www.nytimes.com/2010/03/09/business/energy-environment/09solar.html

    When the technology is ready and fit for purpose, it will be embraced no subsidies required. To pour money into it at any time before, is creating a false market, as Spain learned the hard way. The only way companies were successful was when the economic reality hit home, so why distort it in the first place?

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  75. By Daniel on March 10, 2010 at 2:41 am

    Paul says:

    "When the technology is ready and fit for purpose, it will be embraced no subsidies required. To pour money into it at any time before, is creating a false market"

    Nevertheless it is interesting that Germany's subsidy has really stimulated a global solar industry over the past decade which in turn has achieved enough scale to bring down the cost of solar. I expect that solar will reach grid parity (w/o subsidy) in the coming decade.

    Now I have ask Paul, are you as upset about every single subsidy elsewhere in the economy?

    Because we could have some fun ticking off all the explicit and hidden subsidies, excessive or not across all sectors of the global economy.

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  76. By Saar the climate change star on March 10, 2010 at 3:47 am

    I expect solar prices to fall into grid parity not this year but perhaps in 20 years' time.

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  77. By Paul on March 10, 2010 at 1:25 pm

    Daniel, Germany's subsidy has simply achieved a transfer of wealth from the general taxpayer to the the few that can afford to install solar systems, and the companies that have set up there, to take advantage of the incentives. if the incentives stop tomorrow, so does Germany's solar industry.

    did you read the Spain article – after they stopped the oversubsidising, business had to face reality, which was that many were unsustainable. The remainder had to focus on things that were actually likely to be profitable, though this usually means selling equipment to other places that subsidise.

    Am I upset about all the other hidden subsidies – in a word, yes. Almost all of these are implemented for political gain, and usually achieve little economic benefit. Everyone pays for the gov to win the favour of special interest groups.

    To quote the famous physicist Richard Feynman "in developing any new technology, reality must take precedence over public relations, for ultimately, Nature cannot be fooled"

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  78. By Daniel on March 10, 2010 at 10:55 pm

    Paul says:

    "if the incentives stop tomorrow, so does Germany's solar industry."

    LOL actually solar panels would get even cheaper!

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  79. By Rate Crimes on March 11, 2010 at 1:38 pm

    Solar reached grid-parity many years ago. Sadly, it’s been effectively disguised. The rate schedule structures in our nation’s sunniest state have long diminished the value of solar energy and energy conservation there; in favor of the heavily subsidized, unsustainably thirsty, largest nuclear power plant in the country.

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  80. By Jerry on Gulf Coast on March 11, 2010 at 1:42 pm

    First, this paragraph makes little sense:
    Without incentives, there is still a real chance for PV, especially commercial PV, to reach grid parity in the relative short-term. Current capital costs for commercial PV are about $5.50 to $6.60 per watt depending on the size of the installation, according to Standard & Poor's. Incentive levels in many northeastern states are upwards of $4.00 per watt, which means that, given incentives, the levelized cost of electricity (LCOE) of commercial PV systems was already below standard commercial rates. Furthermore, if falling panel prices enable systems to reach or fall below $5.00 per watt, then solar PV could reach parity even without subsidies.

    He starts off saying "without incentives" but backs that up by using 'incentives' to get back to the so called grid parity of $5/watt.

    I will disagree with the fact that he states solar is within 50cents/watt of so called "parity".

    Second, any dream of carbon taxes (or cap/trade revenue) being used by the government to further fund research or incentives is wishful thinking at best. Already in proposed legislation, that hoped for revenue stream will be kicked back to consumers, to help offset the high costs of renewable energy baked into their power bills (baked in, as in the regulated utilities will recover all costs + a fixed % revenue).

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  81. By Daniel on March 11, 2010 at 4:20 pm

    John, the link to the source article for the numbers given in the post are embedded in the link; "a recent assessment…"; via Renewable Energy World magazine…

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  82. By Daniel on March 11, 2010 at 4:51 pm

    I hear a lot about intermittency. People are working on handling that problem. Much of the research being subsidized by the government is working in that direction. MIT has several research projects in development, for example, and molten salts/power towers are being used in Spain to provide solar thermal power into the night.

    That being said, talk of grid parity does necessarily mean that I think solar power will become our single, absolutely reliable source of electricity. A more diverse energy mix than ever will be needed, including a completely refurbished and more intelligent electric grid to handle that mix. It may seem like a pipe dream now, but how many of us could imagine the iPhone 10 years ago? Or the laptop 20 years ago?

    Let's not forget that we are in the midst of a technological revolution that thankfully is overlapping with an energy revolution. I for one don't pretend to know how far that will go, but I also won't speak in absolutes by saying grid parity or reliable solar power is impossible or for certain. But I will say that we've already cut the price of solar – subsidized or otherwise – in half in less than a decade. Yes it is still expensive and subsidized – although still less subsidized than coal, a supposedly independent industry – but the whole point of this article is simply to say that solar prices are falling into grid parity.

    That grid parity, however, involves the TOTAL cost of an energy source, including environmental and social issues, very similar to the triple-bottom line that defines the new business paradigm of social responsibility. We must open our minds to a broader approach to energy and business in the coming future, and yes that includes using wind, solar and geothermal (the most reliable new renewable resource). I have no doubts that intermittency will be taken care of, whether through storage technology, hybrid power plants or simply a diverse energy mix combined with an intelligent power grid. And I feel its undeniable that prices and the people are leaning in that direction…

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  83. By Paul on March 11, 2010 at 5:11 pm

    Daniel, the end of your post answered the start. The best solution to intermittency is the mix of sources. Trying to do molten salt storage or the like for solar is so expensive, that you are better off to build more solar, or better yet, an alternate generation source (more diversity = more security).

    For a typical solar system, if you divert some of the energy to storage, you are giving up selling high priced peak electricity,, and then when you pull it
    back from storage, you have lost at least 25, if not 40%, and are then selling it at low, off peak rates. The storage does give you the ability to maintain output on a cloudy/snowy day, but that is a huge price to pay for backup power.

    The problem with the mix approach, is that the intermittent sources must remain a small % of the total, about 20%, or you have grid stability problems.

    But given that renewables (other than hydro) are less than 5%, and are barely keeping up with demand growth, getting to 20% is going to take some time yet.

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  84. By Daniel on March 12, 2010 at 1:33 am

    Just for the record the two posts by "Daniel" on March 11th were posted by a different Daniel than all the previous posts on this thread…(you can tell b/c the imitator Daniel doesn't snip quotes and respond.

    I can't believe I've been "handle-jacked"!!

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  85. By Daniel on March 15, 2010 at 3:36 pm

    Daniel, you didn't get "handle-jacked," at least not on purpose. My name IS Daniel as well and I have no idea how you got "jacked" I'm signed in under my own email…cheers…

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  86. By Ray Del Colle on March 30, 2015 at 6:29 pm

    The costs of Renewable Energy is up front. The REAL costs of Fossil Fuels come after … coping with the pollution, sacrifice zones, black lung disease, oil train explosions, oil spills and climate change. Switching to renewable, sustainable CLEAN energy will stimulate our economy, create jobs, save us some money, improve our health, clean up our environment and reduce our carbon footprint. “America has the natural resources to meet its energy demand with clean, renewable energy. It’s time to harness that full potential.” http://clmtr.lt/c/Wbx0fz0cMJ

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    • By Forrest on March 31, 2015 at 9:01 am

      Your premise is weak. For example natural gas has hardly any drawbacks other than carbon. Coal has some very clean power plants. Solar power is not economical nor practical as yet, except for limited applications. Wind power will always have low utilization since the power source can’t be scheduled and needs back up power. Rare earth mining and recycling is not exactly a green process which solar, BEV, and wind rely on. Hydro and nuclear very advantageous to your solving the problem you describe, yet environmentalist fight those two solutions mightily. Biomass and biofuel currently within the mix, yet not utilized or promoted to higher acceptance. These two offer very attractive attributes to improve environment per your desire. Microgrid and CHP solutions up the ability of all power production. Seems this should be a priority. So, guess I’m saying what you post of a solution is not that simple. It would be disaster to attempt. Currently, we have very “clean” class of power production, above most countries. The older coal plants should go or reserved for emergency backup status. We should utilize pipe line transport and nix the activist attempt to hurt the countries future. We should promote biofuel, hydro, nuclear, biomass, geothermal, energy savings, efficiency, and natural gas solutions as much as possible. Continue the construction of wind per best applications and ability of grid to accommodate. Continue invention and R&D efforts on all the above including power storage. This is in addition to typical oil and coal operations a good path.

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