Cheaper Solar Power's Time Has Come

(PhysOrg.com) -- Solar power manufacturers in the US are cutting prices to shift their stock, the government is chipping in with tax credits, and innovative leasing or financing arrangements spreading payments over up to 20 years are being introduced. All of which makes solar power much more affordable than before.

A solar system can cut your electricity bill to little or nothing if you live in a sunny area, but the initial costs of as much as $20,000 have been prohibitive for many people. Even for those who can afford the outlay, it takes around a decade or more for the system to pay for itself, depending on your electricity use and the climate where you live.

Now solar panel prices are falling, with high quality crystalline silicon modules dropping to about $2.40 per watt, or about half last year's price, and the cost is likely to drop even further.

Solar panels generally make up less than 50% of the final cost, since you also have to pay for installation, permits and taxes. Most systems also need an inverter to convert the panel array's direct current output to alternating current. Even so, with the price of panels being slashed, the cost of an installed system that retailed for $9-10 per watt last year can now be fully installed and operating for around $7.50 per watt, even before the government subsidies.

Government subsidies come in the form of state rebates and a federal government investment tax credit to the tune of 30 percent of the total system cost. If you're a taxpayer, these subsidies slash thousands off the cost of a solar system.

The initial costs can still be prohibitive, even with the current savings, and so some solar companies are introducing long-term (15-20 year) leasing and purchasing arrangements that have zero or minimal initial costs, and spread the outlay over a long period. Leasing and long-term payment schemes are proving successful with private homeowners, and with businesses such as Wal-Mart, that want solar electricity without the initial outlay.

If you lease the solar panels, you will pay the solar company each month, but savings are immediate, and can cut your electricity bills by 10-15 percent. If you lock in the rate, over time savings are much greater as electricity prices go up, but the price you pay doesn't.

Resourceful communities are also banding together to buy solar panels in volume, and this can bring the cost of a system down to just over $6 per watt, even before rebates and tax credits. A company called One Block Off the Grid, for example, is organizing homeowners around the US into groups of over 100 to ensure the solar companies give them the best discounts. Signing up is free, and without obligation.

Solar installers will estimate the payback time and savings you will make, but you can do your own estimation at sites such as findsolar.com. Plug in your details in their free solar calculator and they calculate the costs, savings, return on investment (ROI) over 25 years, and the break-even time.

Whether you pay for your solar system upfront, lease it, have a long-term purchase arrangement, or join a community solar group, massive savings are assured. And there's never been a better time to start.

© 2009 PhysOrg.com

   

• gopher65 - Sep 07, 2009
  • Rank: 3.4 / 5 (5)
  6 dollars per watt is *cheap* solar? 0_0 What in the world are they calling expensive solar then?
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• 3432682 - Sep 07, 2009
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  Prices are still above what's attractive to the average homeowner. Stop subsidizing installations, and spend the money on R&D instead. Integrate with solar water heaters.
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• gopher65 - Sep 07, 2009
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  Now solar water heaters, that makes more sense than installing expensive PV panels that will take 20 years to pay off, by which time you need to replace them (I still prefer geo-thermal water heating (heat pumps), since it works even when you've had 3 straight weeks of overcast, but each to their own).
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• jfd5xte - Sep 07, 2009
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  @gopher65: Since a typical US home operates at approx. 1000W (theoretical steady state), then that at $6/W, it would require approx. $6000 in panels to fully power the avg home. Now, amortize that $6000 over some time period. Depending on your local price of electricity, it will require approx. 10yrs to pay back. That's a historical low.
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• Bob_B - Sep 07, 2009
  • Rank: 5 / 5 (2)
  In Oregon, I know some OMMP's grow their own. These costs for electricity would be paid back much faster. One person I know spends about $500 a month on lights and cooling for his 12 plants (grows for 2 or 3 people I think.) That is worth the change to solar, I'd say!
  
  I guess I'll have to send a link to this article so he can see how it will make a difference in his costs.
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• gopher65 - Sep 07, 2009
  • Rank: 2.5 / 5 (2)
  ...1000Watts? Are you nutts? My computer + screen uses ~500 watts (and it is by no means a power guzzeler like some people's). My fridge uses ~400 watts. My freezer uses about 700. TVs, DVD players, stereo systems, amps, microwaves etc each draw a good 5 watts continuously when they're OFF (they're always in standby for instant use). Every light that is in use uses between 14 and 24 watts, depending on the brightness (assuming that they are all CFLs).
  
  That 1000 watt figure is moronic. I live in an apartment and I use more than that. Someone living in a reasonably sized house would be sucking down many times that much on average. My electricity bill rarely tops 40 dollars a month (and 35 of that is basic monthly hookup fee:P). If I'm constantly using more than 1000 watts, how much do you think those people with 500 dollar monthly bills are using?
  
  But even if the average house did use 1000 watts on *average*, you have to look at peek usage, not average usage. Peek is usually several times what the average is (average includes nearly null-energy times like 2 in the morning, so it isn't of particular concern).
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• gopher65 - Sep 07, 2009
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  Also, you're making the mistake of assuming that solar power is free. The energy itself is free, but the collection and storage devices are not, and they don't last forever. So you don't just install a few PV panels and then walk away for 50 years:P. They need replacement at most every 20 years, or sooner, depending on the climate (IE, they won't last long in most of Florida).
  
  You're also assuming that the manufacture of PV panels is pollution free. I assure you, it isn't. It is a truly nasty process. If everyone switched to PV (if that were practically possibly), we'd all be hooked up to oxygen masks, drinking distilled water, and eating our own reprocessed waste, because there would be nothing left living outside due to the side effects from PV production:P.
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• Arikin - Sep 08, 2009
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  Since the manufactures are trying to shift their stock does that mean they are trying new production methods?
  
  Are there any incentives for them to try more efficient panels and productions methods? I mean besides sales pitches of "New and (slightly) Improved".
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• John_balls - Sep 08, 2009
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  Since the manufactures are trying to shift their stock does that mean they are trying new production methods?
  
  
  
  Are there any incentives for them to try more efficient panels and productions methods? I mean besides sales pitches of "New and (slightly) Improved".

  
  Yea, it's called more money.
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• Lord_jag - Sep 08, 2009
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  Where can I get them? I don't see any distributors showing any cheaper pannels yet.
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• RTT - Sep 08, 2009
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  THere are some mis-informed posts above. An avg. house can use about 10,000 watts per day (not 1000). Second, solar panels will only product power when the sun is shining on them (about 4-6 hours / day unless you have a great site for the panels). To offset 10kw then you would need an array of panels that would product the 10kw in the 4-6 hour time frame. That would be a large system and alot of bucks - Period!
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• no1enter - Sep 08, 2009
  • Rank: 4 / 5 (1)
  So when are the solar cells that cost about $1-$0.10/watt going to be available? You know the ones that are able to be printed similar to newspaper? They will really bring costs down.
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• chip_engineer - Sep 12, 2009
  • Rank: 5 / 5 (1)
  @no1enter
  
  I think NanoSolar might be of interest to you. They claim between 10-16.4% efficiency for their CIGS roll to roll PV. That makes this much more comparable with Si PV in efficiency but their pricing is far lower.
  
  Other Si PV vendors who already are having a tough time in this market are forced to dump on the market near $1/W at a loss.
  
  I wouldn't mind buying up some of the stock now and build the rest myself, but Boston weather just sucks for 6 months.
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• chip_engineer - Sep 12, 2009
  • Rank: 5 / 5 (2)
  @gopher65
  
  My numbers from my electric bill for outer Boston. Family size 5, avg house size, annual use 5900 kWh, so continuous rate is 1KW for 16*365h/yr. Heat is by gas. Power includes modest AC, CFLs, couple of PCs, old TV and usual stuff. We aren't trying that hard but maybe I should at 15c/kWh or $74/month almost flat year round. The base is about 10c plus 5c extra for whatever. The mix is half coal.
  
  We are not sucking down many times 1000W, heck we haven't got a plasma TV yet. If people have $500 monthly bills they must be living pretty rich too or heating electric too or blasting the AC max with bad insulation.
  
  My quad core + 2 24" LCDs is ~200W on the Kill a Watt meter. Maybe your 500W includes a wicked game card.
  
  As for peak, if I ever did solar PV I'd not worry about peak at all, leave the kitchen, laundry and other peak loads, future EV on the grid. I'd add extra AC and 12V DC wiring for the base load, move electronics to 12V where possible to skip AC-DC-AC losses.
  
  JJ
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• gopher65 - Sep 13, 2009
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  chip_engineer: There is nothing wrong with supplementing your energy use with solar when the price drops enough for it to be worthwhile (if they can deal with the issues (pollution) that no one ever talks about). Solar provides power during daylight hours, and that is when most energy use occurs. If the issues with solar can be solved (or at least mitigated), then it's a good idea. With such a system you don't even have to deal with the headache that is energy storage.
  
  The problem that I have is with nuts who think that they can slap a PV panel on their roof and then disconnect themselves from the electric grid. Ok, that's cool I guess. They're wrong, but they're not hurting anyon... oh look! There they are protesting against a new nuclear plant. There they are protesting against a new hydroelectric dam. There they are protesting against geothermal too... no one can figure out why, but they are. They hate anything that isn't solar. They're zealots of the worst type.
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• M_N - Sep 14, 2009
  • Rank: 5 / 5 (1)
  I wish some of the posters here would learn the difference between PEAK power and AVERAGE power (the ratings on solar panels are the former).
  
  Also, the difference between kW/h and kW - the former is a measure of ENERGY, the latter a measure of POWER.
  
  jfd5xte, those 1000W panels only produce a PEAK of 1000W - the AVERAGE would be closer to 250W (the sun doesn't shine at night, and the panels only produce their peak power for a very short time each day - assuming it is sunny). That's only 25% of what is required for a house that uses an average of 1000W.
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• Belli - Sep 14, 2009
  • Rank: 5 / 5 (3)
  UL listed 175 watt Solar panels $435.75 ($2.49 per watt)
  
  http://www.everbr...els.html
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• Lord_jag - Sep 16, 2009
  • Rank: 5 / 5 (1)
  The problem is that a real solar system includes far more than just the panels.
  
  http://partsonsal...its.html
  
  A 1.15kW system for your house with a grid-tie system runs $5856 or %5.09/watt
  
  Even the largest system, 16.5kW is $61500 or $3.72/watt, and thats when buying en mass to provide bulk savings.
  
  Solar panels on the roof wont do much if you don't include connections/fusing/charging/inverting systems etc.
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