economics of solar break-even cost

Hey Carl,

> Every device produces less usable power in its lifetime
> than the power used to produce and run it.

Yes, I am aware of the laws of thermodynamics.
Coal plants convert chemical energy stored in coal into
heat energy which is used to vaporize water that turns
a turbine that turns a generator that produces
electricity -- each stage less than 100% efficient so
the conversion of energy type results in losing some of
the energy as entropy increases.

But your general point does not change the fact that
if I have to burn 100 lbs of coal to generate 2X Joules
of energy to fabricate, package and deliver a solar
cell and that solar cell will only generate X Joules of
energy during its lifetime, then using solar cells
results in the consumption of at least twice the amount
of fossil fuels and produces more than twice the
pollution than if I had simply plugged into the grid
and gotten the X Joules straight off the grid. This is
a different issue from the fact that no process of
generating energy is 100% efficient.

>>>Siemens rates the SP150 at 150W (I believe, during "peak"
>>>hours), and guarantees it will come within 80% of this
>>>for 25 years. Let's assume it only ever makes 80% -- 120W.
>>>Let's say I can expect in Berkeley only 2 hours per day of
>>>peak sun. That means in one month the SP150 can pay for
>>>itself, if I'm doing this right.
>>
>>OK, using these numbers you're off by a factor of 1000.
>>(kW vs W). (Sanity check here: obviously very few
>>people pay $870/month for electricity & most people are
>>also using a lot more than 150W of electricity at any
>>given time since that is only one 150W lightbulb and
>>1/3 of a typical 450W computer.)
>>
>>In 1000 months, it will pay off using these figures.
>>That's 83 years, which is more than 3 times as long as
>>the cells are expected to last.
>
> Oops; silly factors of 1000.
>
> I can make it pay for itself if we give realgoods the
> normal retail markup of 100%, and assume I get 3 hours
> of peak sun a day (which is quite reasonable, from what
> I've read). And that's still assuming Siemens uses
> electric heat to cook the thing, pays retail for
> electricity, and has no other expenses in making it.

You are forgetting that your electric power also has
about a 100% profit markup. I am a member of an
nonprofit electric power collective which sells me
electricity at cost which is 6 cents / kilowatt-hr,
which is 1/2 your stated cot of 12 cents/ kilowatt-hr.
Obviously we see here that local electricity costs and
the location and electricity contract of the solar fab
facility is a relevant factor, which is why the subject
of actual energy consumed in manufacture is so
important.

If though we wish to debate whether or not you can ever
break-even on the COST of a solar panel, that is a
different issue. First, let us remove the factors of
cost-supports and government subsidies that can change
the true economics here. (Obviously if the government
buys a solar panel and hands it to me for free, solar
power suddenly becomes infinitely more cost effective
than grid power.)

Anyway, the issue of break-even cost is already
well-known. Unless you live in an area in which grid
energy is unusually expensive -- Hawaii is currently
the only state in the US where this is currently true
for the already-grid connected -- you will *never*
recoup the cost of your solar plant.

See:

http://www.eren.doe.gov/millionroofs/breakevn.html

...for unassailable & recent evidence of this fact.

>>A standard 50W panel produces 250W during the summer
>>under ideal circumstances (noon, no clouds or shadows,
>>module nearly new).
>
> Oh, really?

Yes, seems that's the way they are rated.

>>of its original *peak* production (which should be 5
>>times the rating).
>
> Oh, I've been using the rating as the peak production.
> If I get three hours of peak sun a day at 600Wp/hr
> (.8 * 150 * 5), and assume once again that realgoods
> makes no money on the transaction, in pays off in 11
> years.

You will only get a moment of your peak production and
only at the beginning of your ownership curve
(performance degrades as time goes by) and only if you
are situated in an ideal location.

>>Cells do degrade quite a bit over time using the methods
>>that have been devised for creating them and the harsh
>>conditions to which they are exposed in use.
>
> They guarantee 80% of rated output for 25 years. I'm
> assuming it never makes more than that from day 1. And
> I'm assuming it's pitch black except for my 3 hours of
> peak sun every day.

This is an important distinction -- do they guarantee
that the peak will be 80% of rated at the end of 25
years? You seem to be saying so. In this case then
there is an apparent loss of peak power production from
750 W (peak = 5 * rated = 5 * 150) to 120W (.8 * rated
= .8 * 150) which means there is a *6.25* times
reduction in power output over the life of your cell.

Might also note that your cell cost $5.80/rated Watt
seems to be a good price if it is inclusive -- doe
states $6-$7 complete to be more usual, as of Dec.
2001.

Solar can be cost effective in remote areas where the
cost of running an electric line would tip the scales
to solar's advantage. But that doesn't change the
apparent situation we are in where fabricating solar
cells currently burns more fossil fuels than the solar
cell replaces in its lifetime, which means that the use
of solar cells right now results in more pollution than
coal.

The environmental spiel given by the for-profit solar
cell peddlers is just that -- a spiel. Those truly
hoping to reduce their generation of pollution would do
better to look elsewhere at this time than solar until
it is ready.

I have a feeling that the day that solar cells can
produce more electricity than they consume we will all
know it because that will be the day that construction
of the first commercial solar generating plant will be
announced.

Again, let common sense prevail -- if solar is more
cost effective than grid power, why does not a single
solar cell manufacturing facility run off of solar
power?

- Jeff

>>I can make it pay for itself if we give realgoods the
>>normal retail markup of 100%, and assume I get 3 hours
>>of peak sun a day (which is quite reasonable, from what
>>I've read). And that's still assuming Siemens uses
>>electric heat to cook the thing, pays retail for
>>electricity, and has no other expenses in making it.
>
>You are forgetting that your electric power also has
>about a 100% profit markup.

You're forgetting that I live in California. My utility
company sells power at a loss! Beat that with your
collective! :)

There is plenty of markup on that power, of course; you
just have to trace it further up the line than the folks
I buy it from.

>If though we wish to debate whether or not you can ever
>break-even on the COST of a solar panel, that is a
>different issue. First, let us remove the factors of
>cost-supports and government subsidies that can change
>the true economics here.

It's just a gloss, Jeff. I'm guessing they don't use
electric heat to cook the panels. I've already
disclaimed my use of the retail price of power to divide
more than once. Nevertheless I think it demonstrates
it's not impossible that I'm right.

>Anyway, the issue of break-even cost is already
>well-known.

The only thing I was able to find -- a couple posts on the
usenet -- claim it's an urban myth.

> Unless you live in an area in which grid
> energy is unusually expensive -- Hawaii is currently
> the only state in the US where this is currently true
> for the already-grid connected -- you will *never*
> recoup the cost of your solar plant.
>
> See:
>
> http://www.eren.doe.gov/millionroofs/breakevn.html
>
> ...for unassailable & recent evidence of this fact.

We're not talking about plants -- we're talking about
the efficiency of panels. Storage, transmission, and
business models have nothing to do with this issue.

I've also been told that no nuclear power plant has
ever paid for itself ("They only build them to get
weapons-grade uranium"). I doubt this, too, but less
so than your statement about solar panels.

>>>of its original *peak* production (which should be 5
>>>times the rating).
>>
>>Oh, I've been using the rating as the peak production.
>>If I get three hours of peak sun a day at 600Wp/hr
>>(.8 * 150 * 5), and assume once again that realgoods
>>makes no money on the transaction, in pays off in 11
>>years.
>
>You will only get a moment of your peak production and
>only at the beginning of your ownership curve
>(performance degrades as time goes by) and only if you
>are situated in an ideal location.

Siemens *guarantees* 80% of the rated output over
25 years. Maybe you weren't getting this?

>>>Cells do degrade quite a bit over time using the methods
>>>that have been devised for creating them and the harsh
>>>conditions to which they are exposed in use.
>>
>>They guarantee 80% of rated output for 25 years. I'm
>>assuming it never makes more than that from day 1. And
>>I'm assuming it's pitch black except for my 3 hours of
>>peak sun every day.
>
>This is an important distinction -- do they guarantee
>that the peak will be 80% of rated at the end of 25
>years? You seem to be saying so.

No, they guarantee the 80% of the rated output.

>Might also note that your cell cost $5.80/rated Watt
>seems to be a good price if it is inclusive -- doe
>states $6-$7 complete to be more usual, as of Dec.
>2001.

realgoods.com

>Solar can be cost effective in remote areas where the
>cost of running an electric line would tip the scales
>to solar's advantage.

That's what realgoods says, too.

>But that doesn't change the apparent situation we are
>in where fabricating solar cells currently burns more
>fossil fuels than the solar cell replaces in its lifetime,
>which means that the use of solar cells right now results
>in more pollution than coal.

Apparent. Produce some reference or numbers, or I'm
going to keep thinking the status quo.

>The environmental spiel given by the for-profit solar
>cell peddlers is just that -- a spiel. Those truly
>hoping to reduce their generation of pollution would do
>better to look elsewhere at this time than solar until
>it is ready.

I've got no goals for pollution here personally; I just
plan on being off the grid.

In general, I'm with you on the anti-environmentalist
thing (I think it applies better to hype about electric
cars and recycling plastic, though the following is
relevant to these points also:). You're making a very
important mistake in the "wait until ready department".
It's the consumer market that can really get something
ready in a hurry.

And solar cells on homes have the important effect of
de-centralizing power generation, yielding the social/
psychological benefits I mentioned earlier.

>Again, let common sense prevail -- if solar is more
>cost effective than grid power, why does not a single
>solar cell manufacturing facility run off of solar
>power?

Because it takes a lot of surface area, and land is expensive.

[You could put one in the desert, but you'd have to move the
power a good distance, which I'm guessing would involve loss
to resistance and incur large expenses of building high-
capacity lines in remote areas. It would also have a large
environmental impact. All of these problems go away when you
put them on already wasted space -- rooftops (actually worse
than wasted, since conventional shingles are designed to fail --
even sold based on their engineered lifetimes!), right next
to where the power is used. Unfortunately, the high initial
investment -- made up mostly of the cost of contracting,
installation, and batteries -- makes it difficult for most
home owners to switch.]

It generates the bulk of its power on off-peak hours.

-Carl

Here is a document that addresses the issue at hand:

http://lumma.org/EnergyPayback.pdf

According to it, it takes 3-4 years to break even
with today's technology -- about 15% of the power
a solar unit generates goes into paying back the
power it took to make.

-Carl

By the way, Jeff, I do think it's cool that
you're in an electricity co-op. If you want
to post any details of this, I'm guessing
I'm not the only one who would like to hear
about it.

-Carl