Althouse: "The Hole in the Rooftop Solar-Panel Craze/Large-scale plants make sense, but panels for houses simply transfer wealth from average electric customers."

May 18, 2015

"The Hole in the Rooftop Solar-Panel Craze/Large-scale plants make sense, but panels for houses simply transfer wealth from average electric customers."

"Most people buy rooftop solar panels because they think it will save them money or make them green, or both. But the truth is that rooftop solar shouldn’t be saving them money (though it often does), and it almost certainly isn’t green. In fact, the rooftop-solar craze is wasting billions of dollars a year that could be spent on greener initiatives. It also is hindering the growth of much more cost-effective renewable sources of power."

Subscription needed for direct access to the WSJ, but you can Google some text and get a workable link.

57 comments:

I'm Full of Soup said...: The only people who buy these things are true blue tree huggers and people who can't do basic arithmetic and people who can't connect to the grid.; 5/18/15, 10:31 AM
Gabriel said...: The generation of electricity is strongly affected by economies of scale. Generating your own is an expensive luxury that takes a long to pay off.

If it's your own money, do what you like, but once there's tax breaks and subsidies and mandates for utilities to buy your power, now it's everyone else's business.; 5/18/15, 10:33 AM
Michael K said...: I will just repeat my comment from the WSJ article.

The whole "green" thing is a scam. Why worry about who gets more or less when it is all wasted money ?; 5/18/15, 10:34 AM
Anonymous said...: AJ it does make economic sense. Not on an operating basis, but because it mines tax and rate subsidies.

The Nut graf: The primary reason these small solar systems are cost-effective, however, is that they’re heavily subsidized.

all renewables about about tax shifting from the rich to the poor, to the advantage of the lawyers...; 5/18/15, 10:36 AM
Skeptical Voter said...: I've got a friend in my neighborhood who's spent $135,000 (net f tax credits) on rooftop solar panels, and has achieved that Nirvana where his net annual payment to our local electrical utility is $0. He's not paying for the grid that ships power to him at night, and of course he's not counting the amortization of his $135 K "investment" in his rooftop solar panels. But by goobers his electricity is "free".

He sincerely believes he's saving the world. He also hates the Keystone pipeline and Canadian Tar Sands believing that, if they continue to be developed, the world as we know it will end.

In short--he's a useful idiot--but a fellow with relatively deep pockets.; 5/18/15, 10:37 AM
Gabriel said...: I bought a hybrid. It's because my wife wanted an SUV and I wanted something with better mileage.

There were no tax credits or subsidies for me--don't know if Toyota was getting any.

So the hybrid SUV gets slightly better mileage than the Matrix I commute in. It does not really save us money, when you factor in the extra expense, we could easily have afforded to pay more for the gas for the non-hybrid version with the money.

The point is that we weren't fooling ourselves about what we were doing, and we weren't getting paid to do it.; 5/18/15, 10:45 AM
Unknown said...: I've had that opinion piece printed on a bumper sticker and I expect that soon opinion will begin to shift, here locally at least.; 5/18/15, 10:45 AM
Rusty said...: Gabriel said...
The generation of electricity is strongly affected by economies of scale. Generating your own is an expensive luxury that takes a long to pay off.

Not only that but the grid has to adjust it's output to compensate for the influx of small suppliers in a given area which may lead to brownouts in other areas. In short. They are costing everyone else.
But, shit. The Environment!; 5/18/15, 10:56 AM
sparrow said...: I dispute the idea that large scale solar projects are actually good for the environment: they are bird killers. One in NV is estimated to have killed 3.5 K birds. They are good for sound sincere/feel good political campaigns, but that's about it.; 5/18/15, 10:59 AM
Brando said...: "The only people who buy these things are true blue tree huggers and people who can't do basic arithmetic and people who can't connect to the grid."

Not necessarily so--think of solar panels as a hedge against possible electricity rate increases. If the fit hit the shan big time at some point over the life of the panels, it could more than pay for itself.

The main reason I drive a hybrid is to only fill up half as often (you don't want to be low on gas when driving through slums) but also I prefer getting a lot of years out of a car. While gas prices are low now, it's not unusual for there to be spikes and owning a car for 10-15 years means you're likely to experience a few.

I don't think any of this is "green" though because the environmental cost of making new cars and solar panels probably outweighs the energy savings.; 5/18/15, 11:05 AM
Anonymous said...: He sincerely believes he's saving the world. He also hates the Keystone pipeline and Canadian Tar Sands believing that, if they continue to be developed, the world as we know it will end.

Course if he lives in Calif, his night time power comes through a long extension cord with lows of line loss (because you can't build those any evil plants in CA) from a Coal plant in Arizona run by Navajos, who are happy to dig coal and make CO2, because you know, this First peoples are so in touch with Gaia. Alternately, since john Ford stopped making westerns, good jobs is hard to find out there...; 5/18/15, 11:06 AM
Levi Starks said...: It's my understanding that with current manufacturing technology, the amount of energy required to produce a solar panel of a given number of watts is equal to the amount of energy the panel will produce over its lifespan.
Solar panels do make sense for off grid applications where the cost of bringing in power is excessively high.
The average person is much better off to take steps to reduce their electric consumption. That's the gift that really keeps on giving.; 5/18/15, 11:10 AM
Eric the Fruit Bat said...: Maybe a solar panel on your roof works like lamb's blood on your doorframe when there's a meltdown at the nuclear plant.; 5/18/15, 11:12 AM
Mikec said...: The article in the WSJ also uses some funny numbers. He says that the Ivanpah installation, the largest in the world and situated at the highest solar energy in the US, will generate electricity at 13 cents/kwh. I'm thinking more like 18 cents/kwh even if it meets it's energy conversion estimate, and so far it's energy conversion is 40% lower then design. Then the article states that California will credit solar electrical generators at 17 cent/kwh. But that 17 cents includes the fixed connection charge as well as the energy charge. Maybe California does that, but other state would be so foolish.; 5/18/15, 11:13 AM
MadisonMan said...: An acquaintance lives in MD -- and there is a company there that will install panels on your house, but you have to buy back the energy from them (I think for 10-20 years), and the company sells any excess to the Electric Company. But the company does all the install for free, and they also assume any risk for breakage. Solar City is the company maybe -- I can't remember, but found that by googling.

I might consider that if it were done here.; 5/18/15, 11:13 AM
Anonymous said...: MM, read the fine print. That particular Ponzi scheme depends on existing tax preferences at the state and Federal levels be reauthorized every 5 years or so.

Failing that a couple of the parties will take a bath.

which depends on the fineprint...I bet it's the consumer...; 5/18/15, 11:29 AM
Michael K said...: "Solar City is the company maybe -- I can't remember, but found that by googling.

I might consider that if it were done here."

I have read that selling such a house is a big problem.; 5/18/15, 11:35 AM
Mike (MJB Wolf) said...: Hmmm. Government subsidies distorting a market? The devil you say! Next some asshole will try to tell us there's no free lunch.; 5/18/15, 11:40 AM
Smilin' Jack said...: "But the truth is that rooftop solar shouldn’t be saving them money (though it often does), and it almost certainly isn’t green. In fact, the rooftop-solar craze is wasting billions of dollars a year that could be spent on greener initiatives. It also is hindering the growth of much more cost-effective renewable sources of power."

Oooh! Oooh! I want one!; 5/18/15, 11:48 AM
JackOfVA said...: Dave Jones of EEVBlog has two excellent video reports on his Sydney Australia solar panel installation, with plenty of technical detail and cost analysis.

There are likely fewer places in the world more favorable for solar power than Sydney; perhaps southern California or southern Italy, where there's ample sun, expensive electricity and warm winters.

The most recent video is at

http://www.eevblog.com/2015/03/16/eevblog-724-home-solar-power-system-analysis-update/

The original installation video is at

http://www.eevblog.com/2013/06/16/eevblog-484-home-solar-power-system-installation/; 5/18/15, 11:56 AM
rhhardin said...: Solar panels are pretty cheap, somewhere around $3 a watt the last time I looked, for small panels, before subsidy.

The trouble is that the utility has to supply full backup and transmission costs for night and cloudy days, as if your solar panels did not exist.

So your payments don't pay off the utility capital costs any longer, which amounts to free riding on people who do.; 5/18/15, 11:58 AM
rhhardin said...: If you get enough home solar panels, the entire grid goes unstable and shuts down. It can't handle large scale variations that solar panels will produce.; 5/18/15, 12:00 PM
cubanbob said...: Skeptical Voter said...
I've got a friend in my neighborhood who's spent $135,000 (net f tax credits) on rooftop solar panels, and has achieved that Nirvana where his net annual payment to our local electrical utility is $0. He's not paying for the grid that ships power to him at night, and of course he's not counting the amortization of his $135 K "investment" in his rooftop solar panels. But by goobers his electricity is "free".

He sincerely believes he's saving the world. He also hates the Keystone pipeline and Canadian Tar Sands believing that, if they continue to be developed, the world as we know it will end.

In short--he's a useful idiot--but a fellow with relatively deep pockets.

5/18/15, 10:37 AM

Unless he lives in a hot climate area and has a large house-say 5,000sq foot or more that would cost an average of a $1,000 a month in electric bills in which case he would recoup his money in 11 years (and not counting loss of investment income from the $135,00) before he finally goes into the black then he is truly an idiot. Its amazing how otherwise sensible people can become so irrational when fixated on an idea. The power of vanity. By the way you mentioned he spent $135,000 net of tax breaks and or credits which makes the problem only worse and transfers part of the foolishness on to others.; 5/18/15, 12:04 PM
lgv said...: I have looked over and over at solar panels. Even with subsidies, it is a terrible investment even if they never wore out or had a useful life of 100 years.

The scam is that they market it as xx% savings on your electricity bill, but that isn't a return on investment percentage. If you cut your $400 utility bill to $200, you get a 50% savings. Awesome! If it cost you $135,000 and the panels last ten years, then your annual return is negative 11.%. Not Awesome! If the panels lasted forever and had no maintenance costs, the return will max out at 1.8%

It is a wealth transfer from smart people to stupid people who want to feel good about themselves.; 5/18/15, 12:08 PM
rhhardin said...: I ran summer air conditioning with a 50w panel.

The air conditioning consisted of a 12 inch diameter hose running down the basement stairs to pick up basement floor cool air, and a 12v fan blowing the result on the computer chair and me.

It was more humid than regular a/c air but did the trick.

It hasn't been hot enough in recent years to go to the trouble. It's the great global warming pause.; 5/18/15, 12:16 PM
Anonymous said...: The air conditioning consisted of a 12 inch diameter hose running down the basement stairs to pick up basement floor cool air, and a 12v fan blowing the result on the computer chair and me.

Reminds me of all the Leftists that made fun of GWB's heat sink geothermal installation at his ranch.

bunch of water pipes buried 10ft deep. Whether it's 115 or 15 on the surface of Texas, it's 55 degrees at 10ft down.; 5/18/15, 12:23 PM
Hagar said...: Living "green" is an expensive hobby.; 5/18/15, 12:28 PM
SteveR said...: Science, engineering and economics.

Hey, how about those Billboard Awards?; 5/18/15, 12:30 PM
Fernandinande said...: AJ Lynch said...
The only people who buy these things are true blue tree huggers and people who can't do basic arithmetic and people who can't connect to the grid.

Plenty of the last around here, but generators are more popular than solar.; 5/18/15, 12:31 PM
Anonymous said...: Rooftop panels will electrocute firefighters in a house fire.; 5/18/15, 12:40 PM
MadisonMan said...: @Drill - yes -- you'd have to make sure that the benefits continue even if the subsidies that drive it are withdrawn by the Government.; 5/18/15, 12:57 PM
Anonymous said...: Rooftop panels will electrocute firefighters in a house fire.

I imagine at the point where the PV wire's insulation succumbs to heat and flames, the panels would likely have fallen through the compromised roof long before.; 5/18/15, 1:03 PM
Kyzer SoSay said...: I've got a friend in Upstate NY who makes a living selling solar energy systems thru Solar City. He says the money is good, but he also has to work exceptionally hard for that money.

Wouldn't want to trade jobs.; 5/18/15, 1:09 PM
Sigivald said...: Want clean, "renewable" power?

Support nuclear power plants.

Anything else is ignorant posturing.; 5/18/15, 1:15 PM
Etienne said...: This comment has been removed by the author.; 5/18/15, 1:21 PM
Etienne said...: This comment has been removed by the author.; 5/18/15, 1:22 PM
Michael K said...: "t is a wealth transfer from smart people to stupid people who want to feel good about themselves."

Look up Socialism in a dictionary and it should say that.; 5/18/15, 1:24 PM
Sammy Finkelman said...: By the same token, it doesn't pay for utilities to encourage conservation.

If we are going to say it could cost them 5 cents a kilowatt hour to get new electricity and they lose 17 cents when customers don't buy.

Maybe it matters exactly how much conservation you get.; 5/18/15, 1:49 PM
Krumhorn said...: That's odd. I had been led to believe that if we elect lefties to govern us, we get smart gub'ment 'cause them'ens is sich smart fellas.

- Krumhorn; 5/18/15, 2:04 PM
Michael said...: If only the zealots had to rely on rooftop solar panels for all their electrical needs. No selling back to the power company, no cheating. Solar. Power. Period.

They could get the panels for free for all I care so long as they could not under any circumstances use power other than that generated by the panels.

Their zeal would evaporate. Because it doesn't work.; 5/18/15, 2:36 PM
Michael said...: It is a wealth transfer from stupid people to rich people. It is a sanctimony transfer from smart people to stupid people.; 5/18/15, 2:39 PM
MadisonMan said...: I just wish they'd make a solar panel that could withstand Oklahoma hail storms...

Yes -- that's one benefit of that Maryland company scheme for the homeowner: They assume the risk for something like hail or errant baseballs.; 5/18/15, 2:47 PM
Peter said...: "Net metering" is such a scam.

The utility is required to buy power from you when YOU want to sell it (even though you may have none to sell when the utility actually wants to buy it).

And (of course) the utility is required to sell you power whenever YOU want to buy it (not necessarily when it wants to sell it).

And then it has to pay you retail price for that power (even if, at the time, it doesn't actually need what you're selling).

The utility has obligations, both to buy and to sell, on demand. The solar user has rights, both to buy and to sell, on demand.

"Net metering" has a nice populist tone ("Stick it to the greedy utilities!"). But it's not the utilities that get stuck paying for this very one-sided deal, it's the utilities non-solar customers.; 5/18/15, 2:58 PM
Anonymous said...: This is all moot until we fix the power storage (IE: Batteries) problem. We just don't have a way to shove all the energy we create during off hours into a solid battery yet.

Which is why I think batteries are the real invention of the future. When you can power your home for a year off of a AA sized battery, then we'll be in the midst of the next technological revolution.; 5/18/15, 3:11 PM
Todd said...: eric said...
This is all moot until we fix the power storage (IE: Batteries) problem. We just don't have a way to shove all the energy we create during off hours into a solid battery yet.

Which is why I think batteries are the real invention of the future. When you can power your home for a year off of a AA sized battery, then we'll be in the midst of the next technological revolution.

5/18/15, 3:11 PM

That type of energy storage density is (if possible at all) quite a ways off. Nano-tech has improved storage density 5 to 10 fold (should be seeing them hit the market within another couple years) but there is also lots of big money in ultracapacitors, don't forget about them!; 5/18/15, 3:47 PM
n.n said...: Wasting the environment somewhere else (e.g. China) in plain sight or here under the cover of sympathetic environmentalists, JournoLists, and political investors. There are neutral, renewable drivers, but low-density "green" technology is toxic, disposable, and disruptive on large scales.; 5/18/15, 3:47 PM
Anonymous said...: Above comments about subsidies and net-metering are correct. I'll add the SoCal-Desert Cities-Palm Springs localization:

The Progressives set up residential rates to favor small users, and the presumed rich with larger houses pay a marginal rate 3-4x higher than base rates, so highest charge might be 35-40c per kwh. By installing just enough solar to cut off those peak rates, you recover some of what the Progressives stole, and since this is one of the best places in the world for sun, and the power is generated when it's needed for AC, the system has not collapsed as yet. Rich people installing solar are pulling down electric company revenues, so the first effect has been an increase in rates for poor people and minimal users. "Subsidies" on both sides -- direct credits for solar installs plus escape from the tax on high use -- mean a home install on your Palm Springs mansion pays for itself in five years, and after that you're shafting the other ratepayers.

It never makes economic sense to install tens of thousands of tiny systems, each requiring maintenance and cleaning, when there is plenty of land for a big facility and an already-built local grid. But Progressive politics means waste and political decisionmaking instead of economic.; 5/18/15, 3:59 PM
Bad Lieutenant said...: Why not divert energy into operation of Fischer-Tropf plants and other systems for conversion of hydrocarbons into more useful forms? If you process coal without burning it, not only do you avoid smoke and ash, which includes such components as uranium, but presumably these elements could be safely and profitab ly harvested. Turn cellulose into alcohol. Operate refineries. Think how this would drop those prices. No? Right now the only idea they seem to have is pumped storage raising water levels for hydro. Ok as far as it goes but it only goes so far.; 5/18/15, 4:20 PM
Paul Mac said...: If a small sliver of what has been poured into solar was poured into much safer, cleaner, larger scale and more achievable technology like molten salt reactors we'd be much better off. Heck more good has been done for the environment has been done by the switch environmentalists oppose to replace coal with natural gas than all the impact of amazingly inefficient 'renewables' (solar, wind).

Movement is starting to happen grudgingly in the right directions but it is definitely slowed by marketing friendly but ineffective alternatives.

This is much like if we spent half the focus and money we do on cancer on infectious diseases we know how to eradicate we'd have many more already gone the way of smallpox.

But pink and green have fundraising value and real solutions to problems often do not.

Solar and cancer research have value certainly, however orders of magnitude more efficient and safer nuclear power and eradicating common killers like malaria, measles, and polio would have much more.; 5/18/15, 4:21 PM
Bob R said...: I buy the premises of the article. Basic back of the envelope calculation: if it costs more, it isn't saving energy. However, I've seriously thought about getting solar panels. Our house is perfectly sited, and they are throwing money at solar. I can tell all my tree hugger friends that I'm stealing from their grandkids and laughing all the way to the bank.; 5/18/15, 6:22 PM
Fred Drinkwater said...: A few years ago I was part of a group of investors looking at a wind-power startup, making megawatt windmills intended for use in places like the big warehouses in the California central valley. It was looking good until some mean person pointed out that we would really be investing in the stability of the California legislature, at which point everyone walked away.; 5/18/15, 6:24 PM
Gabriel said...: @lgv:the scam is that they market it as xx% off your electric bill

A wood stove salesman demonstrated a stove to an Irishman, telling him he'd save half his fuel costs. The Irishman bought two, reasoning he would need no fuel at all.; 5/18/15, 8:53 PM
David said...: Sammy Finkelman said...
By the same token, it doesn't pay for utilities to encourage conservation.

Not true. The utilities have to build or buy less new generating capacity as a result of conservation. Saving or delaying these costs are very strong incentives for the utilities to encourage conservation.; 5/18/15, 9:09 PM
Anonymous said...: "The only people who buy these things are true blue tree huggers and people who can't do basic arithmetic and people who can't connect to the grid."

I'm no tree hugger, I can do much more than basic arithmetic when it comes to math, and I installed an 8-panel PV system on my roof several years ago. Capital cost $14K (that's nearly $1800 a panel, far more than the actual panels cost). State and Federal tax credits $9K. Net cost to me $5K. Pay back period 4 years. The reason the payback period is so short is because electrical power from the utility company here costs 35 cents per kWh. That's right, 35 cents per kWh. Our monthly electrical bill used to be more than $170. The monthly average is now typically less than $70. Would I have installed my PV system without the tax credits? No, because the payback period would have been 3 times longer, over a decade, and we don't expect to live in our current home that long.

What's absurd about the current technology is that each PV panel generates only about 200+ watts, enough to power no more than a couple of light bulbs. As for the net metering plan, contrary to what the article wrote, we do not avoid paying the utility company's fixed costs. We avoid only the variable costs. By law, we are billed the same monthly home owner's fixed costs as every other utility customer.; 5/18/15, 9:41 PM
Unknown said...: This comment has been removed by the author.; 5/19/15, 1:22 AM
Unknown said...: This guy has a poor opinion of solar panels (even if his math is off):

Solar Panels and Carbon Credits; 5/19/15, 1:26 AM
Unknown said...: Adding Solar Panel to your home can make your home more green and it can also significantly reduce you utility bills.

Solar Panels
Home Solar Las Vegas
Residential Solar Energy Systems Las Vegas; 12/11/15, 8:56 AM