Starting to Make Sense

So I had the nice sales guy from ‘Solar City‘ – Elon Musk’s home photovoltaic rollup – come by and pitch me on taking my house solar. I’m interested, and had the feeling that it was close to actually making sense.

Here are the rough numbers:For a 3KW installation (about 275 sf of cells), the total cost to me would be approximately $18K. My electric utility uses tiered pricing, we’re typically just nosing into the highest tier, with power use of about 800KwH/month (we need to look at that…). 3KW would get me comfortably into the lowest tier and would do things like run the fridge and some lights if we had an outage (which we’ve never had).

So here’s how I’m seeing the economics.

We’d shed about $80/month from our bill. So assume a cost of funds of 9% and am amortization period of 15 years, and we can support about $8,800. Add to that a $2K federal tax credit (the state credits are already discounted into the price) and we’re at, call it $11K.

So there’s a $7K ‘feel good’ cost.

But out of that, we can offset two more numbers – increase in electricity prices over the life of the system, and an increase in the value of the house (per the salesman, underwriters will move the electricity monthly savings into capitalized value).

It’s interesting – if the number was smaller, I’d certainly do it. If it was bigger, I wouldn’t. I’m right on the cusp.

Meanwhile, we’ll get a detailed proposal next week.

I’ll also get a proposal on solar DHW, which certainly has better economics. But hey, we have a big roof…

52 thoughts on “Starting to Make Sense”

  1. Let us know which way you turn … I’ve always been interested in solar (hot water/electric) but could never make the numbers come out in a way that would sell me. Then there is the ‘extra cogs’ issue, maintainability, etc…

  2. Any info on cell upkeep, replacement, maintenance over say a 5, 10 year period? How about replacement for better performing cells?

    Personally, I’d wait until Nanosolar gets perfected and online. Those printable cells look awesome given how cheap they are. Paper your roof with them instead when they become available.

  3. S’interesting. The cells themselves have a 25 year warranty, and are warranted to produce 80% of rated power during that time. They’re manufactured by BP, so the warranty actually has some substance. They’re typical amorphous silicon cells, which is a pretty mature technology at this point.

    A.L.

  4. “warranted to produce 80% of rated power during that time”

    So in other words, if 19% of your cells are damaged, don’t expect any help from the manufacturer. ;p

    Honestly, here the fine details of the warranty are going to be all-important. You’re making a significant capital investment, and to make the numbers work, they need to be functional at the rated amount for the involved period of time – if they’re more susceptible to damage than you account for, if there’s extended downtime involved in replacement, if the warranty covers “parts only” and you have to hire a crew to do the replacement, or if the company actually providing the warranty isn’t there two years from now, you’re risking a huge loss.

    In other words, you need to make sure that your warranty covers any eventuality (after all, these suckers are going to be outside on your roof), that the company will pay for the actual installation costs of the replacements and not just ship you some panels, that there’s a service-time guarantee in the contract, and that all of the above is provided by the manufacturer and not just the sales drone who came to give you a visit.

  5. Why amortize over 15 years if there’s a 25 year guarantee?

    Why count house price appreciation? If you aren’t selling, that’s not a cashflow. If you’re amortizing, you’re at least implicitly acknowledging that the system degrades/depreciates.

  6. Because if I were to finance it against the house, I’d get a 15-year loan.

    And you do have to give capex some residual value; the question is whether it’s the depreciated value of the asset or what someoen else would be likely to pay for it.

    A.L.

  7. Thanks! Yes, I was missing what your notion of “we can support” meant – now I understand that you were using it in the sense of “decrease in outgoing cash flow on electricity offsets outgoing cash flow on loan”, not “we can make the economic case for”.

  8. Well, those are the figures, for California. The rest is a personal decision.

    My conclusion: photovoltaic electricity is simply uncompetitive.

    I’d try DHW, the investment return period is seven years, at my latitude. Not so cool to show to friends, but a lot more rational.

  9. Well here is something I can actually report first hand experience with. I was off the grid for about 10 years – in the Caribbean mind you. The biggest lesson learned besides how not to kill expensive batteries, was how to avoid the hopelessly inefficient electrical appliances which abound. Two examples – most people off the grid used a standard A/C motor based water pump which uses over a thousand watts to deliver 35 psi water at 3 or 4 gals/min. A permanent magnet motor powered RV pump used less than a hundred to do exactly the same job.
    An overhead ceiling fan running all night would consume about 800 to 1000 watt-hours, a pair of 12v permanent magnet motorized fans moved more air for about 160 watt-hours. The setup that made the most economic sense was in fact a hybrid system which utilized a generator for the 1500 watt jobs (skill saws, welding or the like) with the excess watts generated automatically being stored with an auto switching inverter/charger. With propane for both cooking and refrigeration we lived modestly well with just six 50 watt panels – and when the hurricane took down the local infrastructure for almost two months, we smiled just a little more.

  10. Tell the sales person you want to see real data for a number of arrays that has been operating for at least a year. I have yet to see data from a real array that will pay for itself in my lifetime.

  11. Let me also add that while you probably have already changed your bulbs to CFLs, in a couple of years, LED bulbs will be available that save even more electricity.

    Thus, saving even more from your electricity bill, making your calculation off of a number lower than $800 kWH a month.

    At the same time, plug-in hybrid vehicles will be available in a couple of years. IF you get one… you will save $200+/month in gasoline costs, while adding about $50/month to your electricity bill, thus once again totally changing your equation in favor of getting the solar panels.

    So, in summary, my advice to you would be :

    1) Wait for LED bulbs (2010), and change all bulbs to that.
    2) By that time, Photovoltaic panels will be cheaper than today.
    3) By that time, Plug-in hybrids will be available, increasing your electricity bill a lot, making your photovoltaic system even more compelling.

    So wait until 2010……

  12. We have to compete with the world’s most advanced solar collectors over here. Which means we lose, unless one breaks out the chain saw.

    Somehow, “save the planet, kill a tree” doesn’t have a great ring to it. Glad you’re in a better spot. Wish I was.

  13. Sir: Fifteen Years? Sorry. Ain’t no way. Your batteries will be dead at 3 years. There will be corrosion, diminishing output from the panels, bird poop, storm damage and many other problems that you don’t have with power from the local utility. You need many more elements in your life-cycle cost calculation.

    You’ll need about a 50% “feel good” factor. Tax credits will give you some of that, but your computations need a lot of work to be useful.

  14. #16 AL is on the grid so he doesn’t need batteries, so their aren’t any parts with a short shelf life. That said, with Nanosolar now coming online with printable solar cells for commercial use, which they claim they can make available at .99 a watt, that would mean 3000 dollars for a 3kw array. Obviously demand is going to outstrip supply for a while so it may be 4-5 years before the price point will drop that far. However if NanoSolar is claiming .99, their cost of production will be about .10 meaning as soon as they get some competitors in that space the cost could drop to .25 per KWH.

    I’ve been looking into solar too, but my cabin is completely off the grid so I will have to get batteries, on the other hand, I’m only about 50% done with construction so I’ll just keep using my generator for construction and occasional other use until prices drop a little lower. I’ll need lower prices, my well water level is at 250ft, it would bankrupt me to install solar at those prices to pump water that deep.

  15. 9% amortization?

    Please. Get a new bank, dude. I’m paying 5% on my Home Equity Line of Credit. Or refi the whole house at 6% or so.

    No way is 9% the right number to use.

  16. I remind you and readers that the numbers that you are using are all “funny money” numbers. They do not reflect actual costs, either society’s or the power companies. Tax credits are just stealing from Peter to give to Paul. The “tiered pricing” is forced by the state: if it was up to the power company, it would be “tiered” the other way, because your first N kilowatts have
    to support the wires that reach your home; additional watts are cheaper.

  17. Northern CA, Los Gatos Area. 5.4 Kw system, $32000 out of pocket after all credits, etc… First year’s results: $78 electric bill vs previous year’s $3000. Looking back at ten years of PGE rate increases, factoring in 7% discount rate to be ruthless, what I could earn on the money, etc…, I come to a 10.5-11 year payback. No battery backup as this adds $4-5K to the cost, you have to replace them every five years, and when the power goes out here, it typically goes out for days at a time: 8Kw gas generator takes care of that.

  18. I’ve never understood why so many people who want to “go solar” sit around and crunch the numbers so much. Is this level of detail applied to every other aspect of your lives?

    When I go solar it will be because I’ll want the following:

    1. A mass-produced plug-in electric car that will be solar powered. It’s the ultimate “bragging rights” against the fake greens.

    2. A trusty backup power source for my home in case of ice storms in the winter or wind storms the rest of the year (plus battery banks).

    3. First one on the block with a really useful toy to power my toys.

    4. When my system installed, I’ll put it all on the web. I’ll help show others how easily it can be done, as well as the costs. I’ll also speak in the area about what I went through to put it all together and why others (particular those with money available) should do it.

    5. (way down the list) A reduction or elimination of my electric bill. One of the last things I want to do is negotiate with the electric company about compensation for contributing to the grid. That is a headache which, in this day and age, just isn’t worth the few bucks you might get from buying a large system.

    I’m not rich, but I have the cash to do it now. I’m just waiting for the mass-produced plug-in hybrids to hit the showrooms.

  19. I’d like to go solar, but the buy in price is just too much for me. No matter how you work the numbers, I just don’t have 30 grand or so to buy in.

    I’d do it if I could put together a system piecemeal. Say buy one panel and hook it into my system. If a have spare cash a few months later, sure another panel can go up.

    As it is, I only full systems from specialty vendors available. Let me know when I can run to my local big box store for a few photovoltaic panels.

  20. I live in an “no-grid” emerging city in Africa where the standard is installing generators if you want consistent power. This usually means 2 gennys (primary and backup, 8 and 4kva respectively). This also means supplying diesel at $1.50 a liter ($6.00/gallon). Diesel supply and quality is never steady and this means trouble for even the best generators. Intense sunlight, on the other hand, we have in abundance. our remoteness means proper genny service is not to par, so solar is really the only way to go. I dropped about $16k on a 4.8 kva system and am tickled about it — silent, steady power enough for my office and house. As it happens, the US makes the best inverters and charge controllers, so I imported from there (at a moderate cost). I was hoping to use the latest in solar panel tech, but it’s a bit too much to ask at this time. When I get back to the US I will absolutely repeat the effort if I live in an area appropriate for solar.

  21. Exactly what is it you are trying to achieve with the PV array? If the ultimate goal is to reduce consumption of oil and coal, this is not the answer. The BP solar panels are made using polycrystalline silicon, most likely, and they will never, ever produce as much electricity as it took to produce the arrays themselves. The rare exception to this is for perfectly sited systems in the sunny Southwest of the US. Los Angeles doesn’t work due to the smog, and much of the coastline is too foggy. That leaves the deserts of So. California, Arizona, and New Mexico.

    As to the magical Nanosolar “printed” solar cells, I don’t believe it. I developed the first thin film amorphous silicon PV cells which achieved conversion efficiencies greater than 10 per cent when I worked for Solarex Corp. Let me tell you, the ability of the semiconductor effect to transport electron holes across a layer boundary is not something you can do with ink or adhesives. This fundamental process is the key to making PV work. I await examples of the Nanosolar material with conversion efficiencies capable of being useful, but won’t be holding my breath.
    Go to their website, and Google search for Nanosolar demonstrated conversion efficiency. I couldn’t find any documented measurements. Sounds like snake oil to me.

  22. What about labor costs to clean the panels (unless their figures account for light absorption by dirty window panes)? Just a few days’ dirt on the glass can seriously cut into the total converted energy. And hard water deposits mean just hosing them off is a no-no as well.

  23. Well, speaking as someone who arranged for a solar system in 2001, let me run the operational economics.

    The system is a 4KW system, with 20Kwh of battery backup. It went in in mid 2001, during the CA brownouts.

    Since then it’s reduced the utility bills by an average of $150/month. That’s _average_. At the height of last summer’s heat, the total bill was only $80 – and that’s with the AC running. So the system, being 7 years old, is right on track to pay off at 15 years. As designed, it’s got a useful lifespan of 30 years. It’s also extensible – we’re looking at adding another 4KW of generation capacity, which would pay off in 6 years at current rates.

    Then there’s the side benefits. When there were power outages 3 weeks ago, nobody noticed. The batteries seamlessly took up the load, and we didn’t notice that the rest of the street was down until we tried using the one appliance (oven) that wasn’t protected by the solar system.

    Oh, and did I mention that the DSL didn’t even twitch? ;>

    Bear in mind, this is in the SF Bay Area, so earthquake preparedness is a real fetish.

  24. Let me get this straight. Under our current set-up, if power goes down, we normally have one crew that comes out and restores power for erverbody. Under the solar scenario, we will each need a repair crew to come to our house and repair the system. We will porbably need annual maintenance to ensure proper operation. Sounds like you will waste a hell of allot more energy under your system. When will people realize that the market will always give us the most efficient(LESS ENERGY) way of doing something, unless distroted by government regulation. No Virginia, there is no Santa Claus.

  25. I have a 2400 sq ft house in Indiana. Its all electric appliances & has a geo thermal heating/cooling system. My most expensive monthly bill was a 180.00 dollar december because of the cold & mass friends coming & going. The average bill was 140 dollars a month. so until costs come way down i dont see me going solar anytime soon.

  26. Always, always, before looking at solar, look at your opportunities for using less electricity by getting more efficient appliances. THEN see how much solar you need. The new appliances are cheaper than the extra square feet.

  27. The grant program is critical to affordability of any solar energy system. Here in Delaware the grant program helps offset 50% of the installation cost of the system. With this program (and another program based on the Renewable Energy Certificates) a small system can pay for itself in about 8 years. A commercial installation is even a better deal due mainly to the fact that the tax credit is not capped. Those systems can pay for itself in less then four years. I know that NY and CT have similar programs.

  28. The numbers don’t add up – you’re listening to a salesman.

    First of all that “cost to me” is a fiction, because they are collecting subsidies from the government to lower that cost. Probably, around $5-10K worth (you can get up to $13K here in Austin).

    Secondly, you can’t consider that the system raises the value of your house at the same time you depreciate it. It’s value is its depreciated value, not an appreciated value added on to your property value. This is a dishonest trick of accounting, in my opinion, but I would love to hear an accountant’s take on it.

    Next, you haven’t taken into account maintenance and insurance. You’ll certainly have to think about hail storms, for example. And you have to wonder what this will complicate next time you go to re-do your roof. The inverter is probably not under warranty for 25 years; how much to replace it?

    Lastly, that “increase in prices over the life of the system” is just a shot in the dark. If lots and lots of people do convert to solar, those costs won’t rise nearly so fast.

    I don’t think the time is ripe yet. Give it five or eight years and I think it will begin to add up.

  29. A couple of thoughts (some of these have been hit by others):

    1> You’re not figuring minor maintenance into the equation. Are you comfortable cleaning the equipment at least monthly? Even if you are OK with taking your bucket of soapy water onto the roof, there’s a cost associated with that. My guess is it would cost $100 or so to get somebody to do it for you monthly. If you do it yourself you need to give some value to your time and a risk premium on bad things happening while climbing ladders.

    2> Another issue is roof maintenance. How much will this cost to deinstall and reinstall if you need a new roof? This cost times the probability needs to be factored in. If your roof is 1 year old the likelihood is small, if you have a shingle roof and it’s 25 years old, it’s very likely you’ll have to do this.

    3> You don’t mention depreciation, only the amortization. I’d guess that the cost of the entire setup needs to be depreciated over no more than 5 years (I’d say 3 is more appropriate). If you want to finance it longer that’s up to you. However as several have commented new technology has a short shelf life. Three years is an eternity in evolving technology. If there’s not a payback by then there probably won’t be ever since you’re now into upgrade decisions.

    4> Lastly, there’s a cost associated with putting things on your roof because of what it does to the roof. The likelihood of leaks increase just because there are more seams, more nails driven from above, and more traffic on the roof. I’ve never seen numbers on this kind of cost, but it has to add something.

    Overall I’m just not seeing the value in your case…

  30. Sir:

    I live in Holland, Michigan and my roof has been covered in snow/ice for the last two months.

    I purchased two solar fed rechargeable battery lights for our entrance way. In the fall not enough energy is generated to keep them lit through the night!

    I don’t know how big a collector I would need to keep them lit.

    I have been purchasing the “very expensive” LED white lights for high light fixtures.

  31. It is too soon to committ to solar. Big changes in economics will occur over the next 5-7 years. We may also see big improvements in battery economics. Storage of electricity would allow you to avoid selling power to the grid at 4 cents and buying it back at 12 cents.

  32. J. Pickens:

    Silicon PV arrays are so 2007. Solar thermal systems are the way to go. Stirling Energy Systems just did a test out at Sandia and got 31.25% delivered to the grid.

  33. If you live in California, expect that top tier pricing to go away. Over the 2010 to 2012 period the state’s utilities will replace 10 million electric meters with solid state units that provide time of day pricing. You’ll find that your solar panels are not producing during peak price periods.

    Also, how come you get to price your offsetting production at retail when every other generator has to price at wholesale?

    A detailed look at what’s behind the solar push and you’ll find huge cross-subsidies from other consumers. Here in Silicon Valley, one sees McMansions sporting solar panels that are paid for by the poor guys renting in the apartment complexes. The tax benefits were calculated to put you on the cusp with the greater fools buying into it.

    Also, the solar cells have a 25 year warrentee? Can you buy asphalt shingles with a 25 year warrentee? That just doesn’t make sense.

    As to some huge price reduction ahead, maybe the cells will get cheaper but the mounting frames, the power control and conversion equipment and the labor to install it all will not. The latter make up a big part of the cost.

  34. Interesting – let me make a fast past and respond:

    PV as a net consumer of energy – I tend to agree that this is a big issue; note that the license on my my Hybrid Civic reads “Eco Frod”. At the same time centralizing consumption – in large factories – and decreasing consumption at the edge of the grid has significant value which probably tips me on this issue.

    The real cost is about $5.5K higher; the State of California has a credit/subsidy program to incent PV solar.

    Re efficiency – we’ve got high-efficiency washer & dryer, no A/C, and a reasonably new fridge. I have a fair number of power tools in the garage, and we have (last time I checked) three routers, a fiber modem, a file server, and three computers in the house. Most of our lights are CF at this point, except the kitchen which is stuck with high-consumption incandescent spotlights. I don’t see a lot of room to conserve, but trust me we’re reviewing this.

    Sure I can depreciate it and add it to the value of my house. That’s how you appraise any improvement. the question is whether to add the depreciated cost of the system to the value, or the capitalized savings in utility costs (note that loan underwriters – if any still exist in CA typically take the utility savings and add it to the allowable mortgage – meaning that the buyer qualified for a bigger mortgage because of the savings. At 6% for 30 years, $80 is about $13.3K in mortgage).

    We have someone wash our windows, including on the 2-story part of the house – every 6 months for $200. Add $100 to wash the solar cells; better still Littlest Guy is almost big enough to get on ladders and earn pocket money that way.

    We have a brand-new 50-year roof. Composition shingles are warranted for that long; I’m comfy that BP will be around long enough to back up the warranty on their cells. Yes, we’ll take some risk from roof penetrations, but we live in LA – not Seattle.

    Also no snow, hail, etc. to block the cells. We do get beach fog summer mornings, which impacts the efficiency.

    Peak consumption in LA is summer afternoons – it’s A/C and manufacturing that kills the grid. That’s when these cells will be the most productive. If we have brownouts, or rotating outages, that’s when it will be. So the cells look good on that front.

    The biggest decision is whether to wait or not, and to see what we can do wrt efficiency. I’m happy to be efficient, but I’m not going to sit in the dark. And if I spend a few grand to help create a market, I might not be unhappy.

    Plus I do believe that the subsidies will go away, and so the new stuff will have to be ~25% cheaper to be equal ot what we have now.

    That’s probably two years.

    We’ll think about it.

    A.L.

  35. 3 years is a ridiculous figure for battery life, too, unless you’re abusing them.

    It would probably be worth doing some other things, too, whether or not you did decide to put in a PV grid–the one commenter mentioned different types of more-efficient equipment like fans. I may look into that myself, now, as I’d never really thought about it except in terms of refrigerators.

  36. I agree completely with several of the above comments.
    Namely, that solar thermal and geothermal heat pumps are the way to exceed energy breakeven. Anybody driving a hybrid or installing polycrystalline PV panels is being the worst sort of pseudoenvironmentalist. You are wasting energy, and sucking up tax subsidies and space in carpool express lanes at the expense of others.

  37. Let’s talk about solar peaks and system peaks.

    Solar insolation and hence PV power output lasts from about 10 am solar time to 2 pm with steep tails on either side. One can shift the peak output by pointing the panels to the west but that lowers the total kWhr output by missing the morning sun.

    A power system in LA (LADWP and SCE) is a summer peaker. Within a summer day, peak loads are in the later afternoon, say 4 to 7 pm. By then, your PV system will at 50% or less. More nothernly utilities like in Washington state or Minnesota are winter peakers. How much PV electricity gets made during a Minnesota peak load at 7 am in January?

    Again, look at the social justice of PV subsidies. For the guys footing the subsidies (ie the real poor, the renters like me, and other non-PV investors), we’re paying you to buy your PV and buying your power at peak rates. For the same money (actually, much less) we could buy nuclear power that’s just as clean if not more so plus works ALL the time.

    Really, what’s in it for me for you to install PV?

    Such is politically correct electricity….

  38. Three things:
    First, the economics of a solar PV system are highly dependent on your geography. A PV system won’t be worth a damn in the NE. In the California – Texas- Georgia axis, it’ll be quite effective. Many of the statements herein about how uneconomic a solar PV system is are not taking those issues into account.

    Second, as to the comments about solar thermal, and specifically Sterling Energy Systems… so what? Sterling won’t sell systems to anyone for an order less than 100MW. How do I know this? I asked them directly last fall. Their production capacity is all choked up producing for the likes of PG&E, SCE, and so forth.

    Third, cleaning: As noted, I _own_ a 4KW system. I have never, not once, in 7 years, cleaned the damn thing, except to go on the roof occasionally to clear leaves during storms. Never had a problem with the issue – rain each winter resets the clean level.’

    Most of what I’m seeing here is theoretical, and is non-realistic analysis based on 2nd/3rd hand data.

  39. this may help you:

    I already installed one. they dont work.

    a 3 kw system actually gives you , yearly, 3000 kilowatt hours. for your house , about 4 months

    at 15 cents a kilowatt, this means you get 450 dollars of electicity. A year

    you are paying 17000 dollars for 450 dollar gain.

    at a 3 percent loan, you lose 60 dollars a year.

    putting in cheaper lighbulbs, buying a better fridge, and insulating your house and maybe adding a skylight and getting a low power computer pays a lot better.

    power usage for pentium 4: about 250 dollars a year

    power usage for a core 2 duo or athlon about half

    the admin may write me

  40. Chuckles,

    I’ve been in the power business 30+years including 11 in the management of a large West Coast utility. I’m highly experienced in understanding state rate structures and utility economics – my focus in my MBA was on the deregulation of the California energy market.

    Your remark about output being closely tied to climate and latitude is correct. My remarks are focused on Northern California, a generally favorable location – SoCal is better but not different.

    A local university built a PV system of about 1.5 MW. They put out a press release saying how great it was and how it cost as much as regular purchased power. I dug into it and found that, no, it wasn’t cheaper, it was just subsidized by other rate payers. In fact its juice came out to cost 55 cents a kWhr and that exclude the land rents in a very expensive real estate market.

    Sorry, but PV is just a politically correct generation system that exists only through hidden rip offs of those without a PV system. The money is better spent elsewhere.

  41. If you don’t have batteries you don’t have a system. This is especially true in California, where electricity is gonna be much cheaper while the sun is up than it is when you need it. If you can’t time-shift the solar power you’ve got maybe half or less of the gain.

    Putting in batteries is a big maintenance issue. “Deep cycle” batteries don’t float worth a damn, and will calcium-up and not be useful when you need them. “Float” batteries won’t deep cycle (if the power goes out, or if you actually use the power) more than ten times or so. The net result is that you’re going to replace the batteries in toto every three to five years. In the good old days this wouldn’t have been much of an issue — you could get back a huge percentage of the batteries’ cost as recycle material. Nowadays you have to pay, in advance, for the recycling, which adds ten to fifteen percent to the cost of the batteries instead of being an offset.

    Regards,
    Ric

  42. bq. Re cost of fabrication … which suggests that’s just flatly not true – the sunk energy is paid back in 2 years (as of ’04 technology).

    I have found the DOE to be less then reliable when it comes to all things to do with alternative energy. From the DOE propaganda sheet Knapp and Jester appear to have the most credible assessment as they “studied an actual manufacturing facility”. Imagine that, an alternative energy study that actually goes out and gets real data instead of making it up out of whole cloth. Their study came up with 3.3 years for the energy payback time. What the DOE propaganda sheet doesn’t tell you is this payback time is only for the manufacturing of the panels. The authors say:

    bq. Excluded from the analysis are (a) energy embodied in the equipment and the facility itself, (b) energy needed to transport goods to and from the facility, (c) energy used by employees in commuting to work, and (d) decommissioning and disposal or other end-of life energy requirements.

    Also not included, but not within the scope of their analysis, is the inverter, shipping to the customer, and energy used to actually install the panels. It seems to me that a similar study would need to be done for the installation company to account for their energy use. In short, the 3.3 years does not include all the energy in the final installation.
    The important number in this study is the energy needed to produce a 1KW panel (5598 KWH). By necessity the authors made a simple, and optimistic, calculation to determine energy payback time.

    bq. To convert to actual days or years, one need only divide by the average solar isolation, usually expressed in kWh/m2/yr, and correct for any performance changes from the rating due to system losses or module operating temperature, which was not included in this analysis as it is site-specific.

    The important issue here, as you will see, is the “module operating temperature”. Look at any solar panel data sheet and you will find that efficiency drops with substrate temperature. Take another 5 % off for inverter losses.

    As it turns out I have data from a 2 KW array (installed in 2003). I calculated the energy payback time for the manufacturing of the panels and system loses to be 5.16 years. The authors assumed an average solar isolation of 1700 kWh/m2/yr. The panels I have data for receive at worse 13% less solar energy. System loses (mostly the inverter) and substrate temperature have a significant effect on performance.

    Taking it a bit further, Moving the 2 KW array to Southern California would expose it to 1.5 times more solar energy. Would it now produce 1.5 times as much energy? Not a chance. The substrate temperature would be higher and efficiency would drop. A while back I used an online solar calculator, at the always optimistic DOE website, to determine how much difference I should expect between where it is now and southern California. The magic number is 1.26. To determine energy payback for southern California I multiplied the panel output by 1.26 and degraded the output 0.7%/year. Energy payback would be 4.1 years.

    As I said in a previous post. Get real data for some solar arrays operating in your area. I have no faith in anything the DOE puts out including their calculators. The fact that real data on the performance of solar arrays is not all over the web, and more specifically at the DOE web site, speaks volumes.

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