Climate change: The Critical Decade

They have - they have risen with teh CPI, over time, just not as fast. "In comparison" is, as I pointed out, not the critical matter. If electrical prices rise as the CPI rises, the payback on the initial investment is faster - whether they match the CPI or not.

I didn't miss that, I pointed out its assumptions were not realistic - and also, that even so we were talking about the most expensive possible real life setup of solar power, and comparing it with heavily subsidized and scale-economized delivery of other source power. And even in that comparison, it almost makes straight economic sense.

There is quite a bit of benefit in sellling power you are not using - and as you point out, a residential home demand is unlikely to match the overall demand curve, and in particular a private home is likely to have power to sell at peak solar times.

And if peak demand is offset from peak production, the averaging of price for residential still favors the payback - the homeowner is selling at peak production, which would not match peak demand times or highest prices, so they are getting a break there.

One reason it's not standard. Huge subsidies are reserved for power companies, coal mining companies, nuclear reactors in need of waste storage, etc.

 

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Actually I've built a fairly sophisticataed model to figure this out and the model calculations include the increase in electrical rates over time, equal to the rate of increase over the last decade.

The assumptions are realistic. In fact they are quite optimistic.
In fact I assumed a favorable sun location and that every kWh the system produced was either used, or sold back at retail rates. For many users, unused kWhrs are simply unused. Nor did I factor in any drop off in output, which over a 25 year period is ~20%, nor did I factor in any expensive installation costs besides just pricing the standard mounting racks, nor removal/replacement costs (for roof mounted systems when the roof itself needs to be replaced), nor any losses due to suboptimal placement/orientation (typical for most roof mounted systems) nor any losses due to partial shading (a factor for almost all residential users), nor any costs from needing to upgrade/replace any of the electrical components (Inverters, disconnects) which experience shows have about half the life expectancy of the panels.

Actually I presumed every kWh produced was used, thus "spinning the meter backwards" when more power was used than needed, or in effect, selling it back to the power company at the full retail rate, a situation which is not likely to persist if PV home generation catches on.

Actually it is, in that the old style meters (still in general use) spins backward when current is flowing out of the house as a matter of design. Newer smart meters can allow it, but don't have to.

Arthur

 

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Cool. Try employing that here, instead of the posting so far.

You also assumed the entire capacity installed at one time, the full cost borrowed at 6% for ten years (I can borrow $15,000 for home improvements at less than 4%, today, by signing my name), no benefits from stability or storage (such as would be a great benefit from charging batteries of any kind, such as a car's), and retail prices for electricity stable nominally for decades to come.

Your assumed changes in the law are questionable (laws mandating buyback of power at any quantity are the trend, more than mere meter rollback), and irrelevant - we are not, here, talking about large scale PV home generation "catching on". It's the most expensive form of residential solar power that actually exists.

Rapidly being phased out - not to prevent buyback of power, but to allow remote reading and similar efficiencies. In my area there was recently a legal fight between some people and a local utility over the utility's policy of not paying retail, in fact paying less than wholesale, for home generated juice. I don't recall how it came out, but buyback at retail is not a general policy unless made so by law - power companies do not, in general, simply accept rollback on their meters at face value (let alone actual surplus, as even a modest incremental PV system would be producing after a couple of decades or so). They may even call the cops.
We are making an educational comparison between the most expensive form of residential solar electricity generation that exists right now in the early and inefficient years, and the cheapest form of large scale centralized power generation already refined and installed and standard now. And we are finding that it almost makes sense to switch even on those terms.

 

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That's what I used.
You can see the model at http://tech.groups.yahoo.com/group/homeenergysolutions/files/
PV Solar Sizing- Grid Tie version 3a

You always model the installation at the desired final capacity because that is the cheapest option. The system uses a component called an Inverter to change the DC voltage of the system to Sine-Wave AC power. It's an expensive piece of equipment and you want one large one, not a bunch of smaller ones. So even if you didn't buy all your panels on day one, you'd still want to buy the size inverter you would eventually need, but doing so would make your system MORE expensive, not less.

http://www.wholesalesolar.com/inverters.html

I checked HELOCs and they are running around 7%, so 6% was a fair number.
http://www.bankrate.com/funnel/home-equity/home-equity-results.aspx?zip=37404&fico=Good&prods=438

Zip benefits from charging batteries. IF you want to do that buy a PV system designed for that, but commercial PV panels are going to be way too many volts to be useful for charging 12V car batteries and you don't need the added expense of a DC to DC converter since there just isn't that much use for 12V DC in most homes. Stability is a moot point since the system has no storage capability and wasn't sized to produce the number of max watts most homes need (that's why you want to put in a grid tie system, because even though I speced a 3,800 watt system, when you need 8,000 watts at one time the grid supplies it, thus you don't have to worry about running the oven and the microwave and the air conditioner at one time. To do that using PV panels would cost a heck of a lot more than the system I speced). I presumed electric prices would rise at the same rate they did over the last decade. No reason to believe they won't be since so much comes from coal, but then again, they could fall, so there is always the risk that one buys PV expecting the rates to rise and some new discovery drops the price of electricity 20 years from now.

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No, since I speced a system at half the average usage and I assumed every watt was either used or sold back at retail prices you can't do better than that.

It is the cheapest form of residential ELECTRICAL power generation.

Most systems today allow you to sell what you produce "roll the meter back", but few systems allow the meter to go negative, meaning the power company would cut you a check. Where I live they will do so, but again competing with them is tough because you won't make money for several decades.

Only for residential customers in very good solar areas and who pay the most per kWh.

Arthur

 

You two are debating an issue that contains too many variables to be reduced to simple terms. For one thing, there are still several states where the utilities are not required to buy customer-generated power (mine happens to be one of them).

For another, the simplistic meter roll-back approach is quickly being replaced by a dual meter installation - one meter measure the power going into the home and the other measures power going back to the grid. The bill/payment you receive is calculated by the differential of the two meters.

In addition to those things, it's FAR more common for the utility to pay wholesale rates for customer generated power than full retail.

My point being that the numbers you're using can be greatly skewed between different parts of just this one country alone.

 

I'm aware of all of those issues, and of course everyone has to base their decisions on installing a PV system based on where they are, meaning what their solar insolation is, what they pay for electricity and what, if anything, the power company will pay for excess power and if it varies by time of day.

I stated my assumptions though (and they were all pretty optimistic) and so I was dealing with pretty much a best case scenario for the lower 48. Most people will not achieve the numbers I mentioned though.

I also pointed to a model I built that allows you to adjust for those key variables (you pick your site from the map to get solar insolation, size the system based on your usage (or how much you want to provide), you plug in the price of the panels you want to use, the current price of electricity, the interest rate on your loan, the annual % increase in electrical charges etc and it shows what the system will cost per month and when you will be in the black.

Arthur

 

In Australia we currently have a net feed in tariff in all states except I believe NSW. However there is strong surport for the NSW approach which is called a gross feed in tariff. Under that system the power company buys ALL the power you make and then you buy back what you need (rather than just buying the extra). Why does it make a difference? Because here governments have mandated that the power companies will pay something like double what the retail cost to you to buy power is

 

Yeah, that sounds like the kid of logic/math governments often use - since the end result is that the companies have no choice but to raise the rates that *everyone* pays.

 

*sighs* oh noooo, buiness might sufferrrr, cant have the needs of people put ahead of the needs of people can we, what idiocy.

I was thinking about this the other day, the comment was made that if interest rates were raised "some buinesses might go to the wall and have to close". My comment was "so what? no one cares if when intrest rates rise if PEOPLE go bankrupt, only buinesses". Im sorry but we are a COUNTRY, not an ECONOMY

 

A system where they buy all the power back is a good one; it encourages efficient systems sized larger than one's direct needs.

I think that's a mistake. That effectively penalizes the utility for supporting solar installations - and that's not a good precedent to set. Imagine a future where power companies spend millions to "get around" having to lose money to solar customers. I'd much rather have them WANT people to install solar, and work towards that end.

 

it doesnt penelise them for "surporting" solor, the surplie system is regulated in Australia. Why exactly do you think subsiding nuke is ok but subsidising homes to install solor is bad? because its people not companies? Trust me, concidering that the price of electricity is set by the goverment anyway based on "what companies can aford" it takes into acount the fact that they are required to pay consumers for what they make.

 

Actually, considering the HIGH up front costs to install a Solar PV system of any capacity, they are throwing a LARGE bone to those wealthy enough to install such a system.

And because electric rates are essentially based on the the overall cost of electricity, the net is given enough of this double the price PV in the system, those who can't afford to do so will pay even more.

You know, the MAJORITY of the people.

Seems totally backward.

Arthur

 

that would be why there are goverment grants of up to $10,000 to install these systems and that they are means tested.

 

Let's say you owned a clothing store. The government told you that when anyone came in to the store with used clothes you had to pay them twice what you charged for new ones. Would you think that was a penalty? Would you welcome such customers into the store, or would you do everything legal you could to discourage them?

I don't. Both are pretty bad.

But if you want to take tax money to subsidize solar, go ahead. Increase taxes and give the excess to solar-installing homeowners.

 

concidering in NSW the electricity company IS the goverment its hardly an issue and in the other states your ignoring the fact that the goverment also sets the price of those clothes based on your costs INCLUDING the fact that your pay double price FOR SOME of those clothes and that everyone else is charging the same. Electricity is an essential service and is goverment regulated where its not goverment owned

 

To the best of my knowledge, electric rates are government-regulated everywhere in the world.

But you just can't understand the simple math involved here: The electric company - or the government itself, if that's the case - normally buys it's power at wholesale rates. If it has to pay MORE than the wholesale rate, then to stay in business it has to raise the retail rate to cover the NEW costs of buying power. And if the government itself is the "company" it would have to raise taxes on everyone to maintain that same retail rate.

So, either way, it's still a foolish approach. :shrug: It's just a smoke-and-mirrors trick to get the population to support the installation of solar power. The difference between this and a direct approach is that it makes the politicians look like the good guys by "punishing" the big, bad companies. Just the sort of things the idiots of the world love to hear - "Make the Big Companies Pay."

 

or the other way to look at it is that this is the civic responcibility goverment imposes to pay society back for all the funding they recive from goverment. God Read, your acting like every single consumer is a retail house and you know dam well thats crap, the biggest consumers of power are companies and the goverment. The health sector alone uses a HUGE amount of power. Even if they do break even on the retail sector (no everyone does NOT have a solor system) they they would STILL make huge profits off companies and goverment

 

Just to clarify a couple of points about the Australian situation with solar rebates and feed in tariffs.

Asguard, the $8,000 grants were government funded and dried up almost two years ago. When that happened (and they pulled that rebate in a crude malicious way and left consumers and the industry out to dry) the government legislated incentives which were funded by the industry (think big coal), there was an onus on the industry to buy up REC's - Renewable Energy Certificates to 'encourage' the uptake of domestic solar. Legislation was also put in place to enforce premium Feed in Tariffs.

Now this Feed in Tariff is paid for by the energy retailer and yes, as Arthur said this puts upward pressure on energy prices.

The massive misconception we have here is that it is the sole driver of price increases. Energy prices are skyrocketing and the component of the price hike from the need to cover the feed in tariff is a meagre 4%

The cost to deliver energy to far flung parts of a huge continent from a couple of coal seams is very high (hence Australia has comparitively high prices by world standards).

Now consider that the infrastructure is old, tired, worn out, insufficient and is in constant need of replacement and upgrading and it doesn't take long to see where the price hikes are coming from.

The cost savings to the energy retailers by having a influx of electrons directly at the place where it needs to be used is saving them plenty (no transmission losses and far less new infrastructure to build).

The incentives to encourage domestic solar uptake in Australia were designed to do three important things at a time of global economic downturn - Provide economic stimulus (and with some other measures this actually worked a treat, Australia was almost unscathed in global terms)
- to make solar more visible and attractive and help reduce greenhouse emissions. Tick, that worked too.
- to create employment. Tick again, this also worked.

The current state of play is extremely alarming ( and all the Australian participants in this thread with the exception of moi will be blissfully unaware because good ole Vicco is maintaining its FiT).

The other states have started slashing and burning, they have gone from attractive FiT's to none at all. Any systems producing excess energy are pumping it back into the grid for free to the energy retailers.
It's a complete and utter shamozzle.
Barrel 'O Fun ( Barry O'Farrell) in his first week as the new premier is advocating retrospective legislation which will dishonour established FiT contracts. He is risking a huge class action and showing that his word is mud, he has chopped the burgeoning solar industry off at the knees and kicked 'em in the nuts for good measure.

The sad thing is the scheme was going too well and instead of making some adjustments, he's had a fucking meltdown and stopped the industry dead in its tracks.... Brilliant stuff!!!!!!
Politicians can be so fucking brain dead.

 

What I can't understand is why alternate energy can't compete. The price of fossil fuel continues to rise, yet alternate energy is can never close the gap.

The only explanation I can think of is connected to government involvement. Government is very inefficient, therefore its connection to alternate energy would be expected to dumb down the system so it can't compete, unless it applies control over the competitors. It is like a stupid farmer that can only compete, if he poisons the other farmers well. That is the government in a nutshell.

Regular energy gets regulated into higher and higher ineffciency. But since the free market will continue to differntiated itself, rather than merge with the government inefficiency, it contiunues to use free market efficency to compensate for all attempts to make it inefficient. This keep the cost lower than alternate energy. That is why the CO2 scare was invented. This ineffiency is expected to allow alternate energy to compete. But I am not too sure, unless there is a shakeup at the top.

One of the big differences between the free market and government is government spends other people's money. Now it even borrows so it can spend the money of our grandchildren, today. This accounts for the waste. If you go out to eat on your own credit card or on the company open tab, spending is different. This culture of waste and incompetence is worse ally for alternate energy. Alternate energy needs to leave the culture of waste and control to compensate for its incompetence.

Politics is decided by entertainment value, more than ability. Abe Lincoln could not compete today, since he is not pretty enough to entertain. What would get instead are actors playing the role of statemen. Actors will need a large entourage of writers, producers, handling, make-up people, directors, so the play comes out looking sort of real. This all adds to the inefficiency. One ugly Abe Lincoln does the same thing as the this herd, but he is not enterntaining or inefficent enough.

When you also have actors playing the role of scientists, who are in charge of alternate energy, don't expect this to be competitive any time soon. I would fire all of them, since a few decade of this foolishness is enough time to prove the system wide incompetence. Next, you recruit ugly Abe Lincolns, who are not pretty or entertaining but can get the job done.