Following is a letter I wrote to a friend in local politics, in response to their concerns on the economics (or lack thereof) of solar home systems:
Solar power costs $10/watt, just for the equipment (panels, controllers, batteries, etc.) I have heard of people spending a lot more than that once they get the equipment installed. Any time I hear someone claim that they’ve installed solar power for less, I know that they’ve left some costs out of their figures. For comparison, natural gas generating stations universally cost $1/watt anywhere in the world (I built three 10MW gas generators in Bangladesh in 2000 for about $0.80/watt.) Large coal-fired power plants have historically cost even less; for example, Deseret’s 400MW power plant that serves Dixie Escalante REA cost about $0.65/watt (for power plant, mine, and railroad.)
The example that I mentioned in our last meeting was for a typical customer of our electric cooperative, of which I’m one. My home is all-electric and I use an average of 1500kWh per month. To replace that amount of energy with solar power, and assuming that the co-op's grid remains available for me to use to offset my time of consumption vs. my time of generation (I use electricity in the dark but would only generate when it’s light,) I would need to install at least 9,000W of solar panels (which would generate about 1225kWh/month.) That amount of solar panels would require 910 square feet of my roof or yard, and would cost me at least $90,000 if I installed them myself. Then, if I could get both the federal and state tax credits of $2,000 each, I would only need to finance $86,000. If I could get a second mortgage on my home at 5% for 30 years, I’d have a monthly payment of $462 for the solar panels. OR, I could just buy that much energy from the co-op for $71.54 and save the extra $400 per month.
Please let me know if you have any other questions or concerns on this or anything else in the power business.
The example that I mentioned in our last meeting was for a typical customer of our electric cooperative, of which I’m one. My home is all-electric and I use an average of 1500kWh per month. To replace that amount of energy with solar power, and assuming that the co-op's grid remains available for me to use to offset my time of consumption vs. my time of generation (I use electricity in the dark but would only generate when it’s light,) I would need to install at least 9,000W of solar panels (which would generate about 1225kWh/month.) That amount of solar panels would require 910 square feet of my roof or yard, and would cost me at least $90,000 if I installed them myself. Then, if I could get both the federal and state tax credits of $2,000 each, I would only need to finance $86,000. If I could get a second mortgage on my home at 5% for 30 years, I’d have a monthly payment of $462 for the solar panels. OR, I could just buy that much energy from the co-op for $71.54 and save the extra $400 per month.
Please let me know if you have any other questions or concerns on this or anything else in the power business.
Note: the photo above is a 100W installation on a relatively upscale home in the jungles of Bolivia, from one of my past projects.
