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Is it economical to install a solar power system (photovoltaic) for a new home?

Assume you will live in this home for the next 30 years, you're in California where the sunlight is plentiful, energy costs are high, and the government is offering rebates. You run the numbers, and as long as the cost of the system is wrapped into your mortgage, you are saving cash from day one. Ta-da! It's good economics, right?

Not so fast. Economists consider all alternatives, and one of the alternatives is to wait a few years and then add solar power to your home, when the systems are likely to be far more efficient and much less expensive. If you wait, you run the risk of losing any government rebates, and there's an economic penalty for not wrapping the cost into your original mortgage. But waiting still makes sense if the new system is twice as efficient.

If you add those considerations to the uncertainty of living in the same place for 30 years, the possibility of energy costs from the grid coming down (it could happen) and the weekly maintenance of the solar panels (you need to hose them down if it hasn't rained lately), it's hard to justify installing solar power.

My new home will have solar power. It was a city requirement. I plan to brag about it to people who are passionate about the environment and bad at math.
 
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Jul 1, 2011
The energy that reaches the Earth from the sun is enormous. The total reserves of energy that is stored in all of Earth’s reserves of fossil fuels like coal, petroleum, and natural gas are matched by only 20 days of sunshine. http://www.cap-cap-cap.com
 
 
Aug 22, 2009
Good,
Solar energy is the best way to utilize the energy from solar system .
This is cheapest and risk less.You can open your own business .
Thanks
http://Groupe369.com
 
 
Aug 16, 2009
It's probably a lot easier to turn off the lights when you're not using them.
 
 
0 Rank Up Rank Down
Aug 13, 2009
There's been plenty of news about systems ready to market to businesses from now and ready for the small consumer over the next couple of years, that lower the cost of solar energy production sharply. Accounting for some delays and underperformance it still seems likely to me that photovoltaic panels and solar heating systems will be economically worthwhile pretty soon, and should be worth researching again in a few months to a couple of years. That's what I think.
 
 
Aug 13, 2009
Solar power is good, and should be made more widely available. But the best way to do that is to make it in orbit. It is now technologically completely feasible to build a Solar power satellite in orbit and transfer the power to Earth via microwave. The initial costs are huge, but it will pay for itself very quickly.

Whilst Earthbound power panels can only really generate electricity half the day (and maybe less at certain times of the day, depending on where you are!), Space-based Solar Panels are in direct (unfiltered) sunlight 99% of the time.

 
 
Aug 12, 2009
One promising avenue of exploration is the use of magnifying lenses above solar panels to intensify the rays of the sun, increasing the efficiency of the solar panels by a factor of about seven from only 11 or 12 percent to well over 75 percent. The problem is that the extreme heat causes the silicon panels within the solar cell to expand and crack. This can almost certainly be overcome, however, by use of microscopically thin silicon wires produced by nanotechnology. Because the wires are so thin, they can tolerate the extreme heat produced by the magnifying lenses and expand without cracking. Although not yet commercially available, they hold tremendous promise for the future.
 
 
Aug 12, 2009
Scott,

You wrote "[First, you can negotiate for a lower car price if you forgo the low 4% loan rate and pay cash. So the 4% rate on a car is equivalent to a higher rate. Second, home equity loans are typically higher rates than first mortgages. -- Scott]"

I don't think is necessarily accurate, as my strategy when buying a car is to negotiate the price first, then focus on how it will be paid for. If you negotiate saying you'll pay cash, then switch to financing once the price is agreed, you won't pay a higher price for using the financing. At least, that's my understanding and experience buying several cars (never one that was in high demand like your minivan). I know there are ads, "$1000 off OR 1.9% financing", but I wouldn't accept the either-or premise.

Can you negotiate a lower price for solar panels?
 
 
+2 Rank Up Rank Down
Aug 12, 2009
the intersection of "people passionate about x," "people bad at math", and "people with disposable income" is what makes the world go round.
 
 
0 Rank Up Rank Down
Aug 12, 2009
What would have been the fine for not installing the solar panels ? You should also factor that into the total cost calculation. I would have rather paid a modest fine and not have to worry about hosing the panels.

On a related post, check out this cool website that went online last week : www.fixtheclimate.com .

A
 
 
0 Rank Up Rank Down
Aug 12, 2009
Here's one way to assign some value to the intangibles:

www.greentelemetry.com

(If you don't want to do the survey, you can just scroll to the bottom of the first page and click "Survey Results").

If you buy even part of this argument, the payback on solar panels starts to look really good.

 
 
0 Rank Up Rank Down
Aug 12, 2009
To those that say with this reasoning he will say in 5 years "I'll just wait 5 more years":

If you can estimate how long you will live in the house, and estimate energy cost and savings by installing a solar panel now as opposed to in a few years (which are estimates anyone should make when considering home improvements), then there IS a mathematical point at which it is cheapest to install solar panels. It is simple calculus.

I agree with what some people are saying: it is the assumptions (and not the economics) that is the hardest part of the equation.
 
 
0 Rank Up Rank Down
Aug 12, 2009
Hmmm, by that logic, I don't see why you should ever own a computer, or car, or any of the many things that depreciate in value over time.
 
 
-1 Rank Up Rank Down
Aug 12, 2009
I read a report a little while ago (and no I cannot find it again :-) ) that if every home/office/building installed a photovoltaic solar system (including the battery stack), we could turn off every power station. Sounds like the "perfect" green option. I wonder if the numbers stack up?
 
 
Aug 12, 2009
"being good at math is not as important as establishing the right assumptions"

Great way to put it!

I always get annoyed at people who sprinkle math onto bad data and think it makes the results accurate.

I saw one person calculate that NASA's launch escape system would subject more than 9Gs on the astronauts, killing them.

Correct math, but exceeding 9Gs doesn't actually kill you. It just makes you pass out if you go too long, which kills you IF you are a fighter pilot with a Mig on your ass. Astronauts have survived waaaay more than 9Gs in aborts.

Most people have heard of a "9G limit" though so they don't question the reasoning.

Anyway, waiting is only more economical if you actually buy it when the efficiency goes up.

Alternatively, you could just apply the same reasoning in 5 years when the solar panels are more efficient, and then just put it off indefinately.

"They'll be better later" is just a way to put something off indefinately unless you've actually decided how good is good enough.

Have you?

It looks to me like at the start of the post you summed up current photovoltaics as immediately beneficial. How else do you define "good enough"?
 
 
+1 Rank Up Rank Down
Aug 11, 2009
It seems that al you arguments against installing solar panels have been washed away by commenters who know what they are talking about:
- solar panels will not be twice as efficient in a few years (that is, if you ignore the BS stories)
- there is next to no maintenance required, including rinsing down
- if you plan to move within the next 30 years, your house will sell better due to the solar panels
- energy costs are likely to go up, not down

So being good at math is not as important as establishing the right assumptions.
 
 
-1 Rank Up Rank Down
Aug 11, 2009
Maybe you could just install sprinklers on your roof for hosing the panels.
 
 
+1 Rank Up Rank Down
Aug 11, 2009
Do you get a choice of solar? Passive solar water heating is cheap and pays for itself fast. Solar cells are the most expensive and of dubious economic and environmental value in the long run due to their high cost and the rare metals and high tech they require. Chinese farmers are creating passive solar water heaters out of old bottles.
 
 
Aug 11, 2009
the economics of things are funny.

I did some quick figures on converting an old Honda Super Cub scooter to electric a while back, including maintenance costs, conversion costs, and cost per mile for electric vs gas.

You never make your money back, nor does the scooter ever become inexpensive to operate as an electric vehicle. The $ per mile isn't bad, but the upkeep on the electric components including charging station and batteries just continues to be overhead.

even if you drove the converted scooter 500,000 !$%*! (not likely), the cost is still excessive and the benefits, aside from reducing co2 emissions, are minimal.

The overall effect is that, for a scooter with mileage in excess of 120mpg, you're better off NOT going electric, at least at this point in time.

I have the feeling this is the case in a lot of conversion situations.
 
 
+1 Rank Up Rank Down
Aug 11, 2009
I would be concerned about reliability. A friend, who is in the business of installing solar panels, says that he is starting to get customer complaints about panels failing after a few years. Yes, the bad panels are under warranty but he says the failure rate worryingly high.
 
 
+3 Rank Up Rank Down
Aug 11, 2009
You claim to be an engineer but when it comes to energy you are distressingly far from being detail oriented. In this case, the idea that efficiency will double in a few years is completely unsupported yet you pose it as a reasonable alternative, leading your readers into believing it will happen.

I think you have swallowed the unfortunate idea that Moore's law means everything gets better exponentially faster. What it really means is that transistors get smaller. Unfortunately, solar energy gets very little benefit from smaller transistors.
 
 
 
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