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U.S. Government Incentives Hinder Local Ownership of Solar

By John Farrell, ILSR
June 23, 2008   |   46 Comments

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Sunlight falls everywhere, but America's pursuit of solar power is increasingly narrow. Before 2006, almost all electricity from solar in the United States was generated by solar photovoltaic panels. But by 2012, almost half of our on-grid solar electric capacity will be in ten concentrating solar thermal plants in the deserts of the Southwest.

The information and views expressed in this article are those of the author and not necessarily those of RenewableEnergyWorld.com or the companies that advertise on its Web site and other publications.

46 Reader Comments
Comment
1 of 46
June 23, 2008
I agree with Liz, it's bad to see this as a zero-sum game where any gains in large solar plants is seen as a loss for residential solar.

If you think the incentives are such a hindrance, then we should remove the hindrance by removing the incentives with their biases. When the incentives are gone (and they will be if congress lets them expire at the end of the year), will that make you happy? Will local ownership of solar suddenly boom? No, because the incentives are not a hindrance.
Comment
2 of 46
June 23, 2008
Thanks for this thought provoking article. There are many benefits to distributed solar power, but they don't have to come at the expense of additional centralized plants. We need all the solar power we can get, as soon as possible. Describing the options as "either-or" seems like a false distinction.

Society as a whole benefits from having distributed solar systems because it shaves peak loads, builds emergency kW sources, builds strong constituencies for clean power, and creates new jobs - the majority of which service the residential solar markets.

Whether it's a national RPS, feed in tariffs, tax incentives, or we all just wait until the cost of kWh has doubled and solar seems downright cheap - we should work for the goal of all homes including some local generation, AND all utilities providing a 100% green power supply.
Comment
3 of 46
June 24, 2008
Hi: Any help dollar wise to spur use is good at this point..... but, you can not get rid of the strangle hold the oil interests have along with the military industrial complex... they are all linked together... that is why the oil interests are into solar PV development so much and every other possible replacement technology... it is not because they like it.. it is to control it...if you can not get rid of a genie, you let him out of the bottle in such a way that he makes no difference in your future plans…NO UNFORSEEN WISHES GRANTED!!!!
Comment
4 of 46
thanks for your post, Will. i only suggest the 10% figure because i recently read it in studies done on this issue (most were in Japan). Rack-mounted systems offer shade because they do not cover the roof like a blanket - they are above it, often at an angle. it's more like parking that car under a carport... You are correct that they absorb heat, so integrated systems will heat your roof up, but they do not reflect it back up into the atmosphere, like a white roof does, which actually can contribute to urban heat islands, ironically... i am a fan of white roofs, too, though, and am waiting patiently for contractors to learn how to install the EPDM roofing in my area... I have actually heard of systems that capture reflected light on their undersides, so maybe we could both get what we want! all that to say, i think we agree there are a lot of great reasons for PV on most rooftops, and a lot of great reasons why not to obliterate ecosystems for a "green" energy movement! Don't let the government bring you down, though. we gotta fight back! we have a real opportunity here to shift things in our favor if we push...

Speaking of, Larry, you are an inspiration. I think Amory Lovins (?) referred to those conservation and efficiency savings as "negawatts" and ran an economic model showing they are the cheapest, greenest and most ubiquitous source of energy on earth. I would LOVE to hear more details - 630 watts is an incredibly low number...
Comment
5 of 46
June 25, 2008
Hello: I don't mean to sound too "fringe" here, but efficiency is a powerful, fairly easy to use tool that seems poorly understood. I built an off-grid house. It's about 1800 square feet and comfortable and is powered with 630 watts of PV. The entire power system was about $5000; far less than tying into the grid would have cost. The point is that making the house super efficient, thermally and electrically, made heating and powering it much easier to do. The yearly fossil energy use measures out at 12,000 BTU per square foot of living space. I submit that we can do much more with efficiency than most realize.
Comment
6 of 46
June 25, 2008
Hi stop killing.. you miss the point on the PV heat issue. First putting a white roof under PV would be a waste, except for where the PV isn't. Second, its the PV that gets hot and adds heat to the urban heat island effect. What you suggest is like painting your car white and then throwing a black blanket over it. Yes the car gets some shading, but the blanket gets hot and still heats the air. White cool roof coatings, unabated, reflect 80+% of the solar energy back into space. The energy created by the PV and the shading effect buffered by roof insulation, don't add up to that high reflection number... I think you will see this if you think about this a bit more...
And of course all these things appear to be screwed up, except to the ones making the money.. for them everything is wonderful.. I know this is sickening... to live in this country and see this Democracy, in its entirety, being run by corporations, not by the people.. I tune in to the Docus on the War profiteers in Iraq, and I have to stop watching half way through because I feel like I will literally blow a gasket if I continue to watch.... the war crimes being committed by some of our government officials and heads of certain corporations makes the parties prosecuted at the Nuremberg Trials seem like small potatoes in many respects...
Comment
7 of 46
almost all PV systems are rack-mounted, not integrated, and as such, provide a 10% reduction in cooling, just by virtue of their shade. no reason you couldn't install them over a white membrane roof and really get some benefits. with a tiny bit more work, you could direct water from that roof into a cachement basin/barrel and have a fantastic water source as well. think bigger!

i spent much of the day exploring another totally gamed system - the "feed-in-tariffs" in CA. Nobody knows about them because (a) utilities don't want to pay us and (b) they won't have to, because the whole thing is a joke.

utilities get to externalize almost ALL their costs, so it is really better for them, under that system, to own a bunch of generation capacity (built on taxpayer land at ratepayer expense) that they can manipulate (supply and pricing). if they had to actually pay the costs of doing business, and if they had to actually meet their RPS, they would VERY quickly push through tariffs which encourage US to install generation on our roofs. no capital outlays, no transmission losses, RPS met quickly, and yes, profits.

instead, the rates are so incredibly low that even if you do not draw a single watt of power yourself, your house is in the Mojave, and you have a large system, you cannot possibly even pay for the system, not to mention interest, in the first 10 years, possibly even 15 or 20. you cannot get the CSI rebates, you cannot own or sell your RECs, all you get is a few pennies which literally cannot pay down the system installation costs.

still think the incentives are not gamed against residential/decentralized use? Germany has 500,000 rooftop systems up, paying down at 40 eurocents/watt, more than double the "peaker" rate SCE will pay at mid-day in mid-summer. never mind the rest of the day or the rest of the year, that is just pocket change. Sunny LADWP region has fewer than 5% of Germany's systems, per capita. what's wrong with this picture?
Comment
8 of 46
June 25, 2008
Hi CL: It all depends what you want. I prefer my backup to be independent of hydrocarbon fuels, or anything that needs to be supplied to me by man. Generators are not without issues either. If you use a small HP gasoline powered gen, and you don't run it for a year, you might get a surprise when you go to start it in your hour of need.
Regarding batteries, all you really need is the well pump (if applicable), fridge, freezer, heating if Winter and a few lights... maybe a microwave... your are not going to be drying clothes in an electric dryer or doing a turkey in the electric oven.. A dozen 12V junk yard batteries can do that for one day... There is a difference in what you need to run and what you are used to running without thinking....
On the heat island issue, you are right from that perspective. A white cool roof coating wins hands down over PV, due to most of the energy being converted to heat.
Comment
9 of 46
June 25, 2008
I won't quibble with the claim that the government incentive policies are in some respects irrational--that is pretty much the status quo with such policies.

The author states that "before 2006, almost all electricity from solar in the United States was generated by solar photovoltaic panels. But by 2012, almost half of our on-grid solar electric capacity will be in ten concentrating solar thermal plants in the deserts of the Southwest." He attributes this expected change to the incentive policies. The PV market--at least for the moment--is mainly limited by production constraints rather than a lack of demand. By contrast, the solar thermal market has been limited in part by the initial costs of the first few plants, before economies of scale kick in (at least if we believe some of the optimistic projections). Under such market conditions incentives would be far more effective if they targeted solar thermal. Thus, the current irrational policies are actually leading to the desired result, albeit through pure serendipity rather than design.
Comment
10 of 46
June 25, 2008
Back to the topic, the incentives are biased so that it's easier for Bob the business owner to install a 3KW PV system to power his business, than for Harry to put the same system on his house. But Bob's business is local ownership of Solar, so the bias is not against local ownership. ILSR should be happy that Bob has incentive to own decentralized PV to be used by his business without the need for long distance transmission lines.
Comment
11 of 46
June 25, 2008
William F.,

Our longest blackout was 17 hours. It would take quite a large bank of batteries to get us through a 17 hour blackout. On the other hand, in the nearly 10 years we've been in this house, we've had less than 30 hours total of blackouts. For something that would be used so infrequently, but possibly for such a long time when it is needed, a generator would be cheaper. Also, batteries self-discharge at a rate of about 6% a week. I'd rather be using or selling that energy rather than losing it in batteries.
Comment
12 of 46
June 25, 2008
I'm not sure that photovoltaic panels on roofs reduce the urban heat island effect. California's building code as a "cool roofs" requirement for new buildings.
http://www.energy.ca.gov/2005publications/CEC-400-2005-053/CEC-400-2005-053.PDF Q14
"there are some solar electric photovoltaic (PV) systems on the market that are embedded in or integrated into the roof, becoming the roof surface. With the dark color of solar cells and their function of absorbing solar energy to create electricity, they are not a cool roof material."
Comment
13 of 46
June 25, 2008
Well said Phil...
CL... depending on your inverter, you could manually throw the main off and engage the inverter if you had batteries. I myself never could see the real full benefit of producing your own electric power if you don't integrate SOME level of battery backup, even if only for a day.. that is at least half of the benefit... being able to keep minimal systems running, including solar thermal, in a power outage scenario...
Comment
14 of 46
June 25, 2008
There are definitely unfair biases in the incentive even though I insist that incentives are in no way hindrances. I think the biggest bias is that while the incentive is 30%, individuals are limited to $2000 max and businesses have no maximum limit. I've noticed that some PV installers are offering homeowners a way around this with a lease-to-own program. Since the installer owns the system for the first five to fifteen years, they can get the entire 30% tax credit, and they pass the savings on to the homeowner. After some years the homeowner can own the PV system free and clear.
http://www.solarcity.com/tabid/315/Default.aspx
http://www.beohanasolar.com/free_solar_2008/index.html

As for blackouts, on my no-battery grid-connected system, if the power goes out, by law, my PV system also has to turn off. The only way I continue to have power during a blackout is if I have a generator. I figured having a generator would be cheaper than having batteries that needed replacing every 5 to 10 years.
Comment
15 of 46
June 25, 2008
I just spent the three day weekend at the largest renewable energy fair in the midwest, the MREF. Many "tire kickers" but few buyers, except for "pseudo solar" goodies and food. So many entries to choose from and stories abound about what is best, as well as a clearing ground on practicalities and what works. After reading this column, I can only say that PV is pissing into the wind if a large portion of it is used for heating purposes. When the homes and businesses in this country are dedicated to home and business installed solar thermal for water and space heating then they could budget toward PV and by then it may be cheaper if those supply stories pan out. But guess what- there is even less incentive for promotion and education of solar thermal of the decentralized individualized variety. It's as if it needs to be kept secret because no utility benefits, no politician gets payoffs, it isn't glamorous for techies and geeks, it's not very sparkey, don't run computers, and oh yes, it simply works once it is correctly installed. It is simply the biggest return on solar investment out here, or there, depending on your projection. The most valuable dollar is the one you don't need to spend every month just to be healthy and happy in your home.
Comment
16 of 46
Man, I am baffled by all the people who are AGAINST encouraging a level playing field to allow individuals to participate in a free market economy! I am equally baffled by the voodoo economics that completely devalue lost wilderness ecosystems as a huge part of the "cost" of remote, 10,000 taxpayer-owned acre (plus roads and transmission, plus tens of millions of gallons of desert groundwater/year) power plants, and who refuse to build that into the "price."

Are we really that brainwashed in this country that we will pass up an opportunity to build an infrastructure which helps deflate the growing Big Energy monopolies? Haven't you people seen the gas prices? What if, 30 years ago, we had set up a system where you brew your own fuel for free - how many of you wish that was the case now? Everyone in CA still remembers the market manipulation our friends at Enron used to hijack ratepayers and black out our homes in 2001. You think that era is over? Honey, it's just beginning. Check out the 2005 EPA and the frantic push by Big Energy to solidify their monopoly re-entrenchment in the "renewables" era if you don't think so...

So, why can't you see beyond the unproven projections these snake oil salesmen are making about the fantastic potential of wilderness-killing solar thermal and start thinking about what would be the best for US in 5-10 years? The "efficiency" of a baking roof is a lot less than even the guesstimate of 5% efficiency - and the roof is already there - and PV panels reduce peak summer load by 10% by preventing urban heat island effect.

None of you have any idea what the death of a million acres of Mojave will look like to the planet, either, but if melting glaciers, deforested Amazon, developed flood plains, destroyed mangrove systems or bleached reefs are any indication, I can't see any "discount" in the cost/prices of remote systems whatsoever - in fact, more likely a ripple effect that will cost us 500 times the "savings."
Comment
17 of 46
June 25, 2008
this may be slightly off track, but can an individual contracting the construction of his own home somehow incorporate himself to take advantage of the larger incentines? or does corporate = resale of power? if it is even doable, is the $$ advantage worth it? how about partnering with a local contractor & split the savings? just wondering.
another advantage of a private pv system is control. when the grid goes down or brown in august or january, as it projected to do more often, you still have power. i have had solar dhw for 20+ years and it is still useless without electricity. and the cost of power is not going down. i know a generator is cheaper for emergencies, but why should i have to wait several years for the govt., utilities, and everyone else on the block to change before i can have clean, renewable power? a fair incentive system will help make this a reality. frank
Comment
18 of 46
June 25, 2008
@John and @Rick

Thanks for your comments!

While it's true that an individual PV installation might cost more per watt than a large-scale one, there are two dynamics to take into account.

1) There's nothing from stopping cities, counties, or cooperatives of citizens from creating a purchasing pool for solar panels that would get the lower prices, EXCEPT the federal tax incentives that are nearly impossible for individuals or communities to use. In other words, the playing field isn't level. Why should commercial installations be favored over other types of ownership when they all give us the same clean, renewable energy?

2) You may already oppose individual, small-scale solar installations, but that's no reason to support the biased incentive structure. An 3 kW commercial installation has no economy of scale over a 3 kW residential one, but the incentives are hugely skewed toward the commercial installation. With RPS goals to meet and an industry whose costs improve significantly as the installed base increases, it's crazy to be deliberately restraining a big part of the market.

There are several ways we could make the solar incentives fair, from least effective to most:
1) Make the tax credit refundable, so individuals can compete with commercial producers.
2) Turn the tax credit into a production incentive, so we pay for performance and anyone (including nonprofits) can play.
3) Adopt renewable energy payments (a feed-in tariff) like Germany and Spain, and give solar energy producers a predictable, long-term payment for their energy that doesn't require tax liability or a degree in accounting.
Comment
19 of 46
June 25, 2008
Responding to Mr. Fitch's comments;

Technology is limited by the laws of thermodynamics. Only so much energy can be removed from a gallon of gasoline or a square foot of sunlight. I remember Volkswagon Rabbit's being advertised with 50 mpg in the 70's.

I work for an Architectural Engineering Firm, and we are heavily involved with LEED projects. We have never been able to get an owner to commit to installing photovoltaics to get a LEED point, but it's pretty typical that they'll buy green power. Thus centralized power has an advantage.

How about a cooperative of micro generators who combined sell their green electricity on the market for the premium kwhr price it brings?
Comment
20 of 46
June 25, 2008
Homeowners are discriminated against by the government. Utilities game this issue by making it difficult for homeowners to install large systems or even more for homeowners to receive any compensation at all. The San Francisco Sunday Magazine published an article about a homeowner in Berkeley that unfortunately donates $700 of solar energy to the grid each year and never receives any compensation. The Utilities are using their lobbyists to block homeowners for having larger systems by denying them any compensation for any surplus solar energy they contribute to the grid. The Utilities want to credit the homeowner at 9¢ and charge them 36¢ a kWh. Southern California utilities (SCE) want to charge 46¢ a kWh to pump in solar from business rooftops. Homeowners should have the same rights as businesses. Lets level the playing field and you will see that a homeowners can put just as efficient system on his roof.
Comment
21 of 46
June 25, 2008
It is great to see we all agree on the subject at hand, cost commercial versus residential. But I must add this, In my state Connecticut the local municipalities are hampering the effort for solar, the CT CCEF is hampering in not allowing Qualified electricians to install systems without first installing 2 systems and it must be commercial systems before they allow a residential install,. because if you want CCEF rebates you must be a (under their terms) Qualified installer. and to do that you have to qualify under this catch 22 rule...The system needs fixing!!
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22 of 46
June 25, 2008
Hi Joel:
I agree with you, sort of, but it is not that simple... look at solar thermal with total efficiencies at the 50% level or higher... have they breed like rabbits over the roof tops of America..??.. NO!! Again, big picture... Look at every engineering endeavor that began say 70 or 80 years ago and has created an area of science or specific engineering. All of them have improved in efficiency, size, cost and functionality, dramatically, hugely!! To use the most extreme example of this of course, is the computer. Buts lets put this one aside... Look at the transportation area and oil usage. Has this improved?? How is it that every other engineering area has had major breakthroughs vastly changing the end result, yet oil consuming products remain basically the same (sorry GPS in auto, N/A) and technologies that can replace don't develop to the market... (My 1984 Leberon station wagon can haul 800 pounds of solar collectors with it's 2.2L engine at 55MPH and still achieve 30MPG on the interstate. What are the MPG's that the car ads are bragging about today, 24 years later?? 30 to 35MPG..WOW!! what an improvement!! GO Crossovers…) All the truly brilliant scientists and engineers that are in the world today have made astounding discoveries and breakthroughs that have GONE TO MARKET AND SUCCEED, but when it comes to effecting oil usage, all of a sudden, everybody seems to become stupid.. do you think the free market is functioning here... do you think the "average JOE" elects the president or a member of congress or the senate... Its not a conspiracy, please.. just money buying power to make more money… Stanley Kubrick had a great title, "Eyes Wide Shut".. he just should have applied it more broadly.... to the American public at large…
Comment
23 of 46
June 25, 2008
good point Joel residential solar only works well in certain situations.
I can't use it in this house cause I have very little solar access.
Comment
24 of 46
June 25, 2008
RK: Your stab there is really shallow...your way to deep in the forest... think big picture... BTW, plans are not sinister or a conspiracy.. its all just one big business opportunity for the ones with the power and money... don't be so melodramatic...
Comment
25 of 46
June 25, 2008
The political discussion here is valuable and necessary, but let's also look at the physics of a non-tracking residential rooftop PV system. Consider a one square foot patch of sunlight, which represents about 100 watts. A PV panel of that size rated at 16% peak efficiency would harness the equivalent energy in a 4" x 4" patch of full sunlight. Since the residential application is non-tracking and the sun is intermittent, that patch shrinks about 60% to a 3" x 3" patch. The electronics and wiring take away another 25%, so we're down to the size of a business card (7.2 square inches from our original 144 square inch patch). That translates into 5% year-round efficiency.

This is not to fault PV manufacturers, or the political process, but to simply illustrate the unrelenting physics in residential PV applications.

Joel Fairstein
Solar Labs
www.solar-labs.com
Comment
26 of 46
June 25, 2008
John Briggs is getting this discussion on the right track. Most states are requiring that utilities meet a certain percentage of their electricity sales through renewables. This is called an "RPS" which stands for "renewable portfolio standard". Thus, to get the most "bang for the buck" utilities want to invest in projects such as the large centralized type versus the more costly and least productive homeowner solar panels. This is not some sinister plan by the "military industrial complex" to shaft howeowners and keep control at a higher level. It is simply a matter of economics.
Comment
27 of 46
June 25, 2008
How about a mix. Promote municipal solar projects, and make sure that local legislatures clear the decks of any old regulations which may impede the progress. Most communities have the space on rooftops,(schools, firehouses, police stations and unused land to provide all of the energy needs of the municipality and then some. Promoted through the local municipalities
has a lot of weight. Congressmen and Senators even the most corrupt have a hard time openly fighting any organized group that can vote for or against them in the next election. This is also a way to reduce local taxes.

Read the nanosolar blog. This is the approach taken in Germany and other European countries.
Comment
28 of 46
June 25, 2008
I appreciate the desire to get a better deal for home owners, but I find this article misleading.
From the data that I have seen on installation costs (and my own experience) home owners looking to install a 3KW system will pay about $9-$10 per Watt. For larger commercial systems, say 100KW, the cost is closer to $5-$6 per Watt. This is related to the fixed costs of installing a PV system.
So I think this is more about who is going to benefit as we build consensus to "go green". Home owners want some of the benefit too, even if the economics are not in favor of doing small systems.
Thanks
John C. Briggs
Comment
29 of 46
June 25, 2008
The underlying motive in my opinion is profit. When XCEL or any other IOU purchases power from or activates a Central Solar or Wind Project they are doing business as usual, and reselling electricity.

Onsite solar, while a popular PR success, is a royal pain in the ass for XCEL and has zero profit line. No matter that Colorado mandated onsite solar, XCEL is now in its Resource Plan throwing On Site under the bus and is planning to shift all the RESA funding into large central projects.

The stimulus for On Site is the Grass Roots participation. Breaking into peoples doldrums and creating action at the home or business level is key to reducing demand. Yea, XCEL has Commercial Conservation programs, but they are awkward for all but the most adept to roll out. The Distributive Grid Concept will go away, a victim of large scale industrialization, unless we fight for it tooth and nail.
Comment
30 of 46
June 25, 2008
Adrian, that's a bit of a shallow comment and you of all people should know better. Consider:

- PV prices can't come down until PV costs come down.
- PV costs can't come down unless production volumes go up (producing the oft-cited benefits of the learning curve and economies of scale)
- PV production can't go up unless there is a large demand from the market

Germany, with its feed-in tariffs and equal treatment for home owners, is getting the job done. PV costs are down (despite huge increases in the cost of the raw materials involved, e.g. aluminum, steel, and copper) and the prospects for the industry are leading to a production boom that promises to reduce PV market *prices* as well. And prices will have to decrease because the German feed-in tariff levels decrease every year by between 5 and 10%. The market share of large centralized systems (in the megawatt class), in Germany is less than 10%.

So if you want cheap PV, support an incentive program that gives the tens of millions of US-homeowners a reason to go solar. Do that, and you'll see a tidal wave of solar power development in the USA that will dwarf that of Germany.
Comment
31 of 46
June 25, 2008
If inexpensive PV becomes available, people will then have incentive to invest in this direction. The cost of PV is just too high right now to worry about whether it should be centralized or distributed.

adrianakau2aol.com
Comment
32 of 46
Sadly, I think that with corporate interests being dominant in our politics, the system is biased against individual ownership. If there were some way that individual ownership could somehow give more power and money to the corporations, it would happen tomorrow.
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33 of 46
June 26, 2008
Hi All:
For those who would like a more broad opinion of what solar is doing and needs to have, to expand into the future, try this link:
http://www.un.org/Pubs/chronicle/2007/issue2/0207p63.htm
.....Bill
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34 of 46
June 26, 2008
Hi CL: Solar is not only PV you know... yes it gets the most hype and visibility due to who is pushing the market, but it is the most expensive and least efficient form of solar generation capacity. I have had solar for decades, but I have yet to purchase PV....
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35 of 46
June 26, 2008
I'll add more. The reason the manufacturers won't sell direct to consumer is because they've worked a long time to build up their sales and distribution system. They are afraid that if they sell direct and it falters, they won't be able to go back to their distributors and dealer network. These D&Ds are all multi-brand which means their competitors would work very hard to keep them from coming back to the D&D network. The D&D network which ranges from two guys and a truck (aka pickups and ponytails) to well organized integrators such as PowerLight acquired by SPWR.

The second reason they refuse to sell direct and lower the prices is because it would show everyone they no longer need any subsidy. If the price dropped by 30-40% then a clever politician in Sacramento would say "hey wait a minute. Why are they getting billions if they are dropping the prices drastically?" This would jeopardize the entire scheme.

At some point, besides being painted as ugly capitalists taking advantage of the poor under the guise of "saving the planet" a disastrous investigation into price fixing could surely happen.

Yes, know thy financial truth indeed...

But wait there's more. Call any manufacturer and tell them you want to start a dealership and sell their product at a fraction over cost to win over your local market. Oops...
Comment
36 of 46
June 26, 2008
Mr. Fitch,

It seems that you have decided to go all in with your position. You mention everybody under the sun doing bad things but you seemingly glide past the obvious truth that the solar industry is gaming the system to the detriment of the disadvantaged public.

Let me add more.

The solar industry itself is the reason that solar isn't ubiquitous. Because they refuse to wean themselves from the subsidy, they are not responsive to competition. Why should they? A government subsidy will take care of 50% of the installed cost. This is the shame of it all. If the industry which is quite profitable now were to compete, we could see a 40-50% decrease in cost overnight. That is before they compete on the cost p/w. How?

Average 2kWh system installed approx $21k.

Hard cost in components approx $10.5k

The distributor/dealer network now buys, sells and installs it.
This means there is 100% mark-up from the time it leaves the manufacturer.

A 50% government subsidy of $21k is $10.5k which equals the 100% mark up from distributor/dealer network. This means that the entire subsidy is used after the manufacturing process. Basically sales and installation. The subsidies were never meant to be used this way. It is widely known in the solar industry the typical installation should be priced at $1,500 -- not $10,500. If the industry were to sell direct to consumer (forget SPWR) they could drastically drop prices overnight. The entire industry knows this as their dirty little secret.

So the industry takes from the poor and defends the subsidy to keep the prices high. It is quite shameful actually because we need this technology. Can you explain how this industry is minting new million and billionaires (Peng LDK as an example) yet they scream they will fail without subsidies? It's a sad joke.

This will end badly. It is the fault of the solar industry themselves and we will all suffer because of their greed.
Comment
37 of 46
June 26, 2008
Hi 33:

Well, that's all wonderful isn't it... no problemo.. just stop all the subsidies to oil, coal, nukes, etc.. and all the 1x10*12$ combined companies that basically control our government... sure...that should be easy...
That will NEVER happen... and you forget in your little extreme ends example, all the people in the middle who now purchase systems because they are cost effective, do to those terrible tax credits.... In the real world the biggest subsidies are paid to the richest entities... so lets not hear about the theoretical intent when the reality is the exact opposite...Are there down sides, of course, and in a perfect world the playing field would be level. ...but the world isn't perfect is it....
Oh, and as a little PS,.. you talk about people paying when they have no claim in the benefit... look at the whole Iraq, "oil war" bill... tell me... who's pockets do my tax dollars wind up in.... all the oil corporation's and the military industrial complex's bank accounts... KNOW THY F.T.'S ....PLEASE..!!!.
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38 of 46
June 26, 2008
W. F., Solar grew to where it is today without subsidies? That's not how it looks to me. It seems to me solar has grown only in the states in the US where there are sizable state incentives, and has mostly grown in countries like Germany and Japan that have government-imposed incentives. There is one exception that I can think of. Kenya supposedly has the highest per household ownership rate of PV, and I believe that's entirely market-driven. I thank Japan for pushing the advancement of solar technologies during the dry years in the US.
Comment
39 of 46
June 26, 2008
Mr. Fitch,

You ask "who's side are you on". I thought it was obvious. I'm on the side of solar.

May I point a few things out.

1. Subsidy's are for nascent industries trying to develop scale. The money is to be used to develop technology and technique to deliver volume at the right price. The technology, manufacturing and delivery are accomplished. The subsidy's worked. Again, you and others should look at the 10k/q of many of the solar companies to see that they are producing in scale with great profit.

2. It is a non sequitur to try and compare oil subsidy to solar subsidy. Truth be told they should ALL end. Oil subsidy is supposed to encourage exploration and production. If any citizen wants in on that action they can easily through a master limited partnership for incredible tax advantage. The overall idea is that every man, woman and child is exposed to the oil subsidy so it is presumed to be uniformly fair. Solar subsidy is paid for by every rate and taxpayer yet it only benefits one individual homeowner.

Let's use this example in California. PG&E is the utility. SF Bay Area

Homeowner one lives in a million plus dollar home. He has a $200k per year salary.

Renter two lives in lower demographic area. He rents because he can't afford to buy and his salary is $50k.

Both pay into the subsidy. Renter two will never have solar. Renter two will never have a monthly bill zeroed because of net metering. Renter two will never see home appreciation rise because of a new PV system on his roof. In a word, the system is taking money directly from the disadvantaged every month so that wealthy homeowners can strut and drive their monthly bill to zero.

Now consider if this homeowner buys his system from someone like BP Solar. BP makes over $80k per minute in profit. Why should a disadvantaged renter be subsidizing a wealthy homeowner who is in turn buying from an oil company? The answer -- they shouldn't...

Again, know the financial facts.
Comment
40 of 46
June 26, 2008
Hi 33:
It already happened.....have your forgotten... the old solar was what was born from the rebates of the 80's... business exploded.. and then Ronald came along...12000 businesses went under in 6 months... a hand full of companies remained which grew and more companies slowly came into existence...this is what blossomed into the current state of affairs nation wide WITHOUT subsidies... pre 2000 there were only a couple of states that offered anything at all... solar grew to where it is today without the help of government...it is only in the last half dozen years or so that the subsidies game has been on the board for solar again... Now, the conventionals have always enjoyed huge government subsidies paid in on the back end where the common "Joe" doesn't see it...that has always been business as usual.. but calling for, "crush" the current system now...LOL!! you are 25 years late!! Who's side ARE YOU ON... or maybe, who's your daddy....
Comment
41 of 46
June 26, 2008
The REALITY is...

The Reality is that ALL subsides should end now. This will cause the solars to compete which they do not currently do. They are all part of the semi industry which is subject to Moores Law -- except for the solars...

If people truly understood the economics of the subsidy on the residential solar application, then the subsidies would be abandoned in a nano second by the political base. This would be the disaster that ushers in the rebirth of solar. The new solar that would be so inexpensive that it suddenly appears everywhere

All you that are in solar business know -- exactly -- what I'm talking about. Here's a hint, read the 10k/q of companies such as SPWR and look for something called "profit margin". Then take a look at the consumer base that pays for the subsidies such as California's program. Notice a problem? It's like a ticking time-bomb.

Crush the current system. Long live the NEW solar paradigm.
Comment
42 of 46
June 26, 2008
Hi Stop K: You are almost there... a blanket was maybe a poor choice because it gave you the idea that I was trying to trap heat under the black.. Integrated PV has more of that problem, true... but to use your analogy, lets make the car port roof black instead with plenty of air circ under. The problem is the same....HEAT, instead of reflection and that is where PV looses to cool white roof coatings from the perspective of urban heat island. I actually wrote an article last year on this exact topic in the Philadelphia House and Home magazine.
I don't exactly agree with you on halting TRUE green projects based on possible eco disruption, with the emphasis on TRUE. We are already burning the house we live in and everyone is on fire... someone is coming along and wants to open up the water hoses...but you are saying NO, NO, we may get wet and some may drown... well maybe and even yes, but it is better than burning to death and you can prototype the GREEN technologies as you go based on new information... It sure beats strip mining, pilled Nuclear waste for eternity, clean coal (I love that one), etc..
and Larry you are right on with reducing all loads first, then look at RE solutions for the remaining.. insulate, insulate and insulate more.... for starters…
Comment
43 of 46
June 27, 2008
Hi Richard:
.....or the big screen TV, the clothes on our back, a pair of sun glasses, the lawn mower, the swimming pool, 50 pair of women's shoes, eating out over home (that's a reverse ROI), electric garage opener, etc..etc.. the list is endless.. we spend more money on things we just want, that will NEVER pay back, but when it comes to RE items the show stopper question is, "but what's the ROI?".... gee, I wonder how we (not I) got brainwashed into automatically thinking "that", and having it determine whether we buy or not buy into the technology for our own well being....... very good point RM...
Comment
44 of 46
June 27, 2008
After reading all of the comments I noticed it has not been mentioned that solar power in whatever form, increases national and personal security. As one who lives in hurricane alley, I can attest to this fact. Yes I have a generator, just in case the grid goes down. However, keep in mind that one can legally only store a small amount of fuel in an urban environment. The grid has been down in this area for many days, sometimes weeks and fuel availability is limited or non-existent. This is when my limited amount of solar power really pays off, not in dollars and cents but in personal security and health. Everyone wants to know when a solar power system pays for itself but this is often the incorrect question. One could also ask when does grid power pay for itself (it doesn't but we all want and need it). When does a vehicle pay for itself (again, it doesn't)?
Comment
45 of 46
June 30, 2008
BOYCOTT ALL CARS THAT ARE LESS THAN 100 MPG

Do you want to see a quick resolution to the energy crisis?

The public should boycott from purchasing any vehicle that is less than 100 mpg.

That is surely to grab the automobile industry attention worldwide to produce an energy efficient car that does 100 mpg or better on alternative energy – the vehicle must be pollution free.

"The 'big three' is not the 'big three' anymore," Iacocca told National Public Radio, referring to the falling sales of General Motors, Ford, and Chrysler. "[They] didn't adapt quickly enough to the energy problem in this country [and were] not ready with the right kind of cars."

Any big corporation that is too bureaucratic and cumbersome to quickly react to changing market conditions is doomed to failure.

In today's fast moving market conditions and technology – you must be innovative, utilize the cutting edge of technology and produce a quality and economical product.

The public has a short memory, all they care is what have you done for me lately.

In life we must always live in hope.

Jay Draiman
Comment
46 of 46
July 23, 2008
I'd like to build a solar PV plant in massachusetts but it takes about 45 cents/kw to be profitable.

they got to get the price down on systems or price up for the electric
so i cen generate Green$ (pun) energy
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