Selling power as supplemental income

[bcroe]

The fact that an on-grid solar system (is that the best term? It seems confusing) can "sell" power back to the grid (when there's a surplus) makes me wonder what the down-side would be to putting in a much larger system than your home requires. In learning about an on-grid solar system, I see myriad posts and instructions on precisely picking the exact-sized system for your home's needs. What is the down-side to putting in a system that would produce, say, TWICE your home's needs and selling the surplus back to the power company?

Obviously, the initial investment would be greater than a "perfectly" sized system for your needs but if the system more than pays for itself over it's ~30-year lifespan then doesn't it stand to reason that bigger = better in the long run?

In two years I will be building a home. Space and ability to clear shade-trees will not be an issue. I was wondering if a decent little investment in a larger solar system would be a good (long-term) supplemental income. For example, beyond my calculated home's needs, investing an extra $10,000, for example, in extra solar panels and a larger grid-tie inverter.
Adam

Every area has different rules, and they aren't fixed. A friend in CO at 11,000' gets nearly perfect
sun every day, and gets a check from his power co every month. Clouds will kill return on your
investment in some areas. Surplus KWH can always be used up replacing propane heat (went near
$5 this winter), not very competitive with natural gas. I used KWH to avoid buying propane during
this peak, but its generally pretty hard to break even, let alone make money on solar.
Bruce (not perfect sized) Roe

[peakbagger]

Some states do allow sell back. I believe VT and Mass both have quite good Feed In Tariff programs. The problem is that the rate structures can an will vary as generally the utilities are passing on the costs of these programs to the other ratepayers and at some point the other ratepayers will object most likely diluting the payback. Solar is a long term investment and its hard to plan on a long term payback when the rules for getting paid can change at any time. NH will buy back net metering credits but the amount if based on their aggregate wholesale costs. I expect all of the large solar projects in CA are based on some long term guaranteed paid incentive that last long past the date where the plant is paid for. Most wind farms have similar long term guarantees. I am not aware of any long term guarantees that a small investor can get.

I expect the best investment with solar is to install some sort of money making venture that can use solar power for a product and service that can be sold at a premium if its green.

I get involved with industrial combined heat and power projects on occasion and the best customer is always yourself as the power you produce offsets the retail cost of power you buy versus the wholesale cost you can sell.

[SunEagle]

There are also some companies up in New England that are trying to build "solar gardens". They are in the 50kw to 100kw range made up a specific number of panels or units. They are being introduced for people that want to get into solar but either don't have a good place to install their own system or are restricted by local codes.

People are allowed to invest into the garden for fixed cost per unit. Once the companies have enough investors and approvals they will build the gardens. Those people that invest will then get checks for the amount of energy their units have produced. Of course the price per kWh produced is lower than what the people pay for from their POCO but to them it is an investment in solar with some type of payback.

[bcroe]

Solar Gardens

There are also some companies up in New England that are trying to build "solar gardens". They are in the 3 to 5MW range made up a specific number of panels or units. They are being introduced for people that want to get into solar but either don't have a good place to install their own system or are restricted by local codes.

People are allowed to invest into the garden for fixed cost per unit. Once the companies have enough investors and approvals they will build the gardens. Those people that invest will then get checks for the amount of energy their units have produced. Of course the price per kWh produced is lower than what the people pay for from their POCO but to them it is an investment in solar with some type of payback.

That takes all the fun out of it; just another financial exercise. Bruce Roe

[pleppik]

Well fact is electricity rate hikes have always been much lower than inflation rates.

Solar is already selling below manufacturing price and really no where to go but up. Prices are so low because there are way too many manufactures with inventories they cannot sell. Many have already gone bankrupt.

Sunking:

Electric rates are very local. Where I live, the electric prices have been going up at twice the rate of inflation since 2009. Maybe things are different where you are or at a national level, I don't know.

It's true that modules prices recently dropped a lot more than average, and might not drop much more in the next couple years. But as you know, there is a very long term (30+ years) trend towards lower PV prices which has been very consistent over time. This long-term trend is being driven by improved manufacturing efficiencies, economies of scale, and refinements in semiconductor technology. Other than some year to year fluctuations, I don't see any reason this trend should stop in the next decade or two: the raw materials are cheap, manufacturing volumes are still growing, and there's no law of physics which says this stuff has to be expensive.

So looking ahead to 2020, when our local power company has to fill its solar mandate, there's lots of good reasons to think that the cost of PV relative to grid power will be much more attractive than today.

[Sunking]

Sunking:

Electric rates are very local. Where I live, the electric prices have been going up at twice the rate of inflation since 2009. Maybe things are different where you are or at a national level, I don't know.

Nationally fallen 18 % since 2008 and still falling with Natural gas and coal prices. In my area has dropped 30%

the raw materials are cheap, manufacturing volumes are still growing, and there's no law of physics which says this stuff has to be expensive.

Sure the raw materials are cheap all it takes is sand, silica, and aluminum. But it takes a chit load of energy to turn those raw materials into glass and extruded aluminum, and rising labor cost. Panel cost are selling below manufacturing cost plain and simple. When most of th epanels manufactures go bankrupt, the survivors will raise prices to become profitable again. Right now they are loosing their butts.

[pleppik]

Nationally fallen 18 % since 2008 and still falling with Natural gas and coal prices. In my area has dropped 30%.

Not sure where you're getting the national number from. 18% drop since 2008 sounds too big and wrong, so I looked it up.

According to the EIA, the average residential rate per kWh in 2008 was 11.26 cents, and in 2013 it was 12.12 cents.

Using the BLS Inflation Calculator, 11.26 cents in 2008 is the equivalent of 12.18 cents in 2013. So nationally, the residential cost of electricity has almost exactly tracked inflation since 2008.

On my electric bill in 2009, I was paying about 9 cents per kWh. Last month it was about 13 cents. That's going up a lot faster than inflation, and our utility just got another big multi-year rate increase approved.

[russ]

But as you know, there is a very long term (30+ years) trend towards lower PV prices which has been very consistent over time. This long-term trend is being driven by improved manufacturing efficiencies, economies of scale, and refinements in semiconductor technology. Other than some year to year fluctuations, I don't see any reason this trend should stop in the next decade or two: the raw materials are cheap, manufacturing volumes are still growing, and there's no law of physics which says this stuff has to be expensive.

So looking ahead to 2020, when our local power company has to fill its solar mandate, there's lots of good reasons to think that the cost of PV relative to grid power will be much more attractive than today.

Please explain what additional manufacturing efficiencies are going to be gained.

Your point is a point I have often seen on green sites but it has no validity.

The solar mandates should go away - that is simply throwing good money at the class that can afford to pay. The feds and the states have to borrow the funds to give away.

[pleppik]

Please explain what additional manufacturing efficiencies are going to be gained.

Your point is a point I have often seen on green sites but it has no validity.

The solar mandates should go away - that is simply throwing good money at the class that can afford to pay. The feds and the states have to borrow the funds to give away.

Russ:

I'm not an expert on manufacturing or semiconductor technology.

However, some people who are experts have published a fairly detailed report laying out the technology roadmap for PV and where the expected savings will come from. You can read it here. They're forecasting a per-watt price decease by 2020 of between 0% and 52%, with their baseline scenario being 20%. This is based on technology changes currently in the pipeline, including improved cell efficiency, using less material per cell, switching from silver wires to copper, and a bunch of other things.

Are they right? I have no idea. But at least this is an analysis put together by the engineers and researchers who have to deal with the actual technical problems in the field.

[bcroe]

Russ: I'm not an expert on manufacturing or semiconductor technology.

However, some people who are experts have published a fairly detailed report laying out the technology roadmap for PV and where the expected savings will come from. You can read it here. They're forecasting a per-watt price decease by 2020 of between 0% and 52%, with their baseline scenario being 20%. This is based on technology changes currently in the pipeline, including improved cell efficiency, using less material per cell, switching from silver wires to copper, and a bunch of other things.

Are they right? I have no idea. But at least this is an analysis put together by the engineers and researchers who have to deal with the actual technical problems in the field.

From where I stand, seems like the basic hardware never gets any cheaper. Aluminum, steel,
copper. Racking is expensive, and the wire, no matter how cheap the panels are. Same for
foundations & labor. Saw the same for decades in the computer industry. Semiconductor
performance went up as cost went down. But the wires & connectors & frames holding them
never got cheaper. The only way to really kill cost was custom integrated circuits that suck
almost all the wires inside. Can't suck all the panels in.

Power control was greatly advanced a couple decades ago by power FETs and intelligent controls.
I don't see another advance of this kind coming. You can't miniaturize power equipment.
Bruce Roe

[russ]

Are they right? I have no idea. But at least this is an analysis put together by the engineers and researchers who have to deal with the actual technical problems in the field.

Nope - they are spreading horse stuff - talking where they know nothing. Nothing is on the horizon for big cell efficiency improvement. Bruce went over the other points quite nicely.

[pleppik]

Nope - they are spreading horse stuff - talking where they know nothing. Nothing is on the horizon for big cell efficiency improvement. Bruce went over the other points quite nicely.

You may be right. Or not. Either way we will know in a few years. In the meanwhile, I resolve not to be this guy.

[russ]

You may be right. Or not. Either way we will know in a few years. In the meanwhile, I resolve not to be this guy.

Good resolution - there are too many total fools on the internet. Another site is giving the fuelshark wonderful exposure - basically making sure everyone is aware it is garbage - http://www.greencarreports.com/news/...ng-of-the-sort

Advances will be made but laws of science and physics are usually not broken in the process - at least short term. The power to melt silicon is the power required - that ain't gonna change. Solar PV is nothing like a computer as regards bigger, faster and cheaper all the time.

[peakbagger]

Texas is most likely getting forced into capacity payments very soon so I expect the rates will go up significantly, either that or NERC blinks

http://www.powermag.com/texas-and-the-capacity-market-debate/

I expect the compromise with some utilities is solar folks will have to pay the distribution fee twice and get credit for generation only, which will shut down net metering or the utilities will get to bill capacity and standby generation on their distribution rate.

[bonaire]

Russ:

I'm not an expert on manufacturing or semiconductor technology.

However, some people who are experts have published a fairly detailed report laying out the technology roadmap for PV and where the expected savings will come from. You can read it here. They're forecasting a per-watt price decease by 2020 of between 0% and 52%, with their baseline scenario being 20%. This is based on technology changes currently in the pipeline, including improved cell efficiency, using less material per cell, switching from silver wires to copper, and a bunch of other things.

Are they right? I have no idea. But at least this is an analysis put together by the engineers and researchers who have to deal with the actual technical problems in the field.

By 2020 a couple things should happen. Net metering laws will switch to offering wholesale generation fee payback only. Also, SREC markets will collapse in many states to some degree to match the collapses in PA and OH and many others. The value to a Solar array continues to be the feel-good steps someone thinks they are making in going solar. Many firms like Solar City are convinced that people will be buying battery storage to go along with solar to "balance" the load from the grid and the output from the solar so it does a better job of smoothing the intermittancy of output. The grid cannot rely on solar as a base load generator so they may impose further laws saying large arrays must include battery subsystems to smooth the output from the system. This adds more costs to the system and so will limit new larger installs. Lot of scheming going on but in the end, the grid is highly efficient. Just do your part and conserve usage by using LED equipment where possible. Don't overuse resources and you can save more than what the solar array will eventually pay back. Incentives have driven the market so far. It is just as obvious that we cannot rely on endless start-up incentives to continue on indefinitely.