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The True Cost Of Solar Still Not Well Known

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After years of the cost of solar power being lower than conventional sources of electricity, the truth can still be hard to find.

Case in point is when a local news outfit does a report on solar, the tag line is usually – “Does solar make sense for you?” Now, understandably, news organizations need to remain as impartial as possible regarding any stories they cover (except, of course, when they are getting paid by a company to advertise a product).

However, if the given news organization did some quick math, they’d have to change the question to not if it makes sense but – “Why haven’t you gone solar yet?”

The news example is just one of many that can be used. The bottom line is that there still remains a general lack of awareness of the overall costs involved with going solar and how feasible it actually is.

Here are some basic financial facts about residential solar often not discussed.

  1. The monthly payments on a solar power system are either the same or lower than monthly electric bills for a ten year loan. After the loan is paid off – free electricity.
  2. Solar does in fact add value to a home. Please see this Berkeley Labs report. In fact, its basically a one to one proposition.
  3. Solar actually saves homeowners many thousands of dollars over a long period of time.
Solar Saves $$$

“$15,000?!! I don’t have $15,000!!” This is certainly the response from many when they see what a solar panel system costs. Was this their same reaction when they saw the cost of their home?… “$150,000?!! I don’t have $150,000!!! Of course not, everyone knows that you acquire a mortgage to realize the dream of home ownership. In much the same way, a homeowner can acquire a loan to help pay for solar. (Obviously the $150,000 figure is just an example, home values can easily be more or less depending on location.)

Again, the homeownership analogy is the best one to use to better explain the solar value proposition.

Those that have a full appreciation of the value of home ownership should be able to understand the value of solar power. They share many of the same basic advantages that come with simply owning something. Such as, when payments are done being made, that asset is now owned outright. Unfortunately, quite a few homeowners that have gone solar are leasing their solar panel systems. They will never fully realize the financial benefits of going solar.

It needs to be stressed that the true value of solar is only available to homeowners who OWN their systems outright or through non-leased financing.

Now a reasonable objection might be – “I will most likely move in 7 or 8 years. If I do that I won’t get to experience the majority of savings involved with solar.” Again, solar adds value to a home, so homeowners can get their investment back when they sell.

The good news is that more and more people are going solar. The word is certainly spreading about the massive long term savings made possible by acquiring a solar panel system. That word will continue to spread as these new owners of solar power tell their neighbors all about the benefits of going solar. Hopefully solar misinformation will soon be a thing of the past.

Want more information on the costs involved? Just head to the cost of solar page.

Plans Announced For Large Battery Project In New York

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New York City has just announced plans to replace 2 natural gas plants in Queens with lithium ion battery storage.

In another PV Magazine inspired post, we will take another look at the importance of energy storage in our completely renewable energy future.

The Ravenswood Energy Storage Project will be a 316 MW facility capable of 2,528 MWh of power output. This is enough electricity to provide 250,000 homes with power for 8 continuous hours. The same company that currently owns the existing 16 gas peaker plants is the same one developing this project. This is further proof of the now financially viable energy storage market. The project will be completed in three phases, with the first one coming online in 2021.

New York State Public Service Commission
New York State Public Service Commission

“When complete, this facility will displace energy produced from fossil fuel plants during peak periods, resulting in cleaner air and reduced carbon” – New York State Public Commission Chair – John B. Rhodes. Governor Cuomo is also in full support of the Ravenswood project as a part of his pledge to bring more jobs and clean energy to the state of New York. In fact, the governor’s plans are to have the state’s electricity sector become emission free by 2040. This timeline is faster than any other state.

While this energy storage system will be fed electricity from all sources both green and fossil fuel, the overall net effect is a positive one simply because it is replacing natural gas plants. Carbon emissions will be lower in general. Of course, the state’s goal is to move towards more clean energy production over time, which include 6 gigawatts of distributed solar power by 2025. This is just one part of the Governor’s Green New Deal for the state of New York.

The owners of the Ravenswood energy site have obviously crunched the numbers here. Battery storage represents a more attractive long term investment compared to natural gas. Eventually this transition would become a necessity as fossil fuels are inherently limited. Another bonus for the company is that it is in alignment with New York’s goals of transitioning to a clean energy society. It’s a win-win across the board. This and other large scale battery projects will soon be fed nothing but clean, renewable energy as well.

We can all look forward to many more energy storage projects like this one arriving real soon!

The Big Future Of Small Grids

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The potential, and the need for, microgrids cannot be overstated.

This can be seen as a follow-post to one written earlier this year in January, 2019. In that post, based on a sfchronicle.com article, it was mentioned that utility PG&E was planning a future power outage to help prevent another catastrophic fire from devastating Northern California.

Well, as of this post, approximately 800,000 customers of PG&E had their power cutoff for multiple days. It’s an understatement to say that this has been an inconvenience for people. To think that the utility may have to do this again in the future is seen as unacceptable by many, of course.

What’s the solution to this problem?

That’s right, microgrids! It’s time that we wrest the power back from the country’s massive monopolistic utility corporations!

Courtesy – Switchdin.com

How feasible is a future full of microgrids? Very. This will truly be a win-win situation for all, even for corporate interests. Things will be much more equitable at the same time. Let’s list some of the primary advantages of a more decentralized power setup…

  • Cost Effectiveness: Microgrids will be less expensive through the use of onsite electricity generation. The lack of miles of power lines and grid maintenance will save millions of dollars.
  • Safety and Security: A decentralized grid will obviously prevent situations like the current emergency that is still affecting many thousands of people in Northern California. People will have energy security by not having to rely on a centralized utility.
  • Democratization: More and more homeowners will decide to become their own power companies. Rooftop solar paired with home energy storage systems will offer the ability for people to be largely self-sufficient.
  • A Climate Solution: These microgrids will primarily be solar powered, further supporting our need for a massive reduction in our carbon footprint.
  • Resilience: Many catastrophic problems are avoided by simply not having all of our energy “eggs in one basket.” Whether it’s cyber attacks or Mother Nature attacking, these and other risks will be spread out and not affecting all at once.

All of these great benefits are due to the inherent nature of solar power.

But solar couldn’t possibly provide for all of our electricity needs, right?

Again, to address the solar nay-sayers, a recent National Renewable Energy Laboratory (a part of the U.S. Department of Energy) report shows that the current rooftops in the state of California can actually provide for 71 percent of the state’s electricity needs. That figure just takes into account currently built rooftops. The bottom line is that there’s plenty of space for the solar that we need.

The missing key to this puzzle, energy storage, is about to come online in a big way. The ability for lithium ion and other battery technologies to provide energy while the sun isn’t shining is being proven right now. There’s already utility scale Tesla battery systems being put to use. The raw materials needed to massively scale up battery production are available. Pricing is about to be aligned as well.

It will take time. This will require, without a doubt, a massive undertaking. However, this microgrid future is extremely likely. The advantages are difficult to ignore. The ability to save money and provide for a more resilient energy future will guarantee their development.

We are about to take our first steps toward our Microgrid Future!

The Future Is Electric!

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A future based solely on renewable energy is not far off.

We can and will transition to a society that no longer utilizes the burning of fossil fuels. The electrification of our infrastructure, transportation, and energy needs is currently underway.

Case in point is a story out of Berkeley, California. Berkeley is the first major city in the U.S. to ban the use of natural gas in new construction. There are now more than 50 other cities in California with plans to do the same.

Natural gas was seen as a “bridge fuel” to help us transition away from dirtier fossil fuels. In fact, the recent fracking boom has killed off much of the need for the use of coal fire power plants. Now forward thinking cities are realizing that they can completely supplant the need for natural gas with sources of renewable energy.

The truth about natural gas is that it’s not as clean and safe as many think. The total lifetime emissions from natural gas come from various sources including; drilling, fracking, leaks, and burning throughout from start to end use. There’s also considerable health dangers including asthma, lung cancer, bronchitis, and heart disease caused by both burned and unburned gas emissions.

Electrification of our homes and office buildings will also make our communities more resilient when recovering from disasters. In fact, getting natural gas lines repaired takes about 30 times longer after a large earthquake. In addition to natural disasters, gas lines have been known to explode on their own due to their inherently dangerous nature.

To make it even more clear that this change is both needed and certain, is the fact that it is now cheaper to go all electric with new infrastructure. That’s right, in addition to health and safety advantages, it now makes economic sense to avoid natural gas implementation in new buildings. This is made possible by recent increases in efficiency in HVAC systems, water heating, clothes drying, and high efficient induction cooking.

The challenge that we now face is to make this transition to a clean energy society as quickly as possible. Many older buildings must be retrofitted to this new future in which everything is electrified. While we are phasing out coal and natural gas, we will need massive amounts of new wind and solar power capacity combined with energy storage. At the same time, every major vehicle manufacturer must finally start producing electric automobiles en masse. This has already started with Tesla showing the “writing on the wall” by significantly cutting into other car companies’ sales and market share.

This transition away from fossil fuels has further benefits still. Significant numbers of local jobs will be created throughout this transition. These include enery efficiency, wind, solar, energy storage, and all related project management jobs connected to the implementation of this new energy infrastructure.

Also, as I’ve recently blogged about, power companies will save massive amounts of money by investing in distributed energy systems and taking on more residential solar. This will allow them to avoid costly further investments in large power plants, grid maintenance, and transmission costs. Microgrids are both cheaper and more resilient. Power companies will be able to both save money and provide for a more sustainable future at the same time.

Hopefully the life of natural gas as a bridge fuel will be as short lived as possible. The world is ready for electric everything; homes, commercial buildings, and transportation.

Report Shows Strong Solar Growth Trend

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In a recent Department of Energy report, new wind and solar power capacity additions dwarf most fossil fuels types.

This post is basically part two of the most recent one detailing future solar power growth predictions in the U.S. The basic idea here is that solar has been, and is completely expected to, stay on a growth trend that massively outpaces all fossil fuels.

Case in point is this recent report released by the Department of Energy that shows wind and solar power growing at a pace much faster than fossil fuels. In fact, it shows that wind and solar accounted for more than 500 gigawatts of new energy capacity for 2018. Of course, the natural gas boom is still prevalent, but due to the inherently non-renewable nature of that source of power, it can be expected that it will eventually follow a downward trajectory.

U.S. Department of Energy

Another interesting thing definitely worth mentioning about this graph is the quite noticeable portion of energy storage. An increasing amount of energy storage is being incorporated in renewable energy projects. Battery storage is an undeniably important part of current and future wind and solar installations.

This post is, yet again, inspired by a recent one by PV Magazine USA. According to their research, projected solar growth shows a possible 222 gigawatts of solar and 64 gigawatts of energy storage through to 2023. Of course, it is quite possible that not every single gigawatt of these figures will be installed and it is also quite possible that the numbers will be even larger.

The primary point of this follow up post to the last was to add a few more numbers to the story. There’s plenty of statistical evidence to prove the solar industry’s ascension as a part of the total energy mix in the coming years. It may be easy to doubt any one person’s predictions, but hard data from reputable sources like the Department of Energy are difficult to refute.

The big picture here is that solar power will become a major source of energy much sooner than later!

Solar Power Accounts for 2.7 Percent Of U.S. Electricity Demands

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A recent report from the U.S. Energy Information Administration details the fact that solar power has contributed 2.7 percent of the nation’s electricity needs for the first half of 2019.

This is another post inspired by a recent PV Magazine USA article.

The first half of 2018 had solar producing 2.4 percent of the country’s needs, so this year is a decent 0.3 percent more. As there has been a somewhat slight slowdown in the residential solar market recently, the increase in solar adoption is only 9 percent more this year (preceding years had higher growth rates for solar).

As expected, western states are still leading the pack in total solar capacity. Case in point, California’s solar installations account for a bit more than 17 percent of the state’s electricity needs. Hawaii’s solar capacity covers a significant 14.5 percent of its demands. Nevada is not far behind at 14.1, Arizona at 9.6, and Utah at 8.2.

U.S. EIA

Some noteworthy parts of the U.S. with significant recent solar adoption include Florida, Texas, and parts of the Midwest. It will, of course, take some time for other parts of the country to catch up the total solar power installation amounts of some of the western states.

There are two primary ideas to take away from this story.

The first point addresses solar power naysayers, many of whom claimed that solar would never account for a significant percentage of the country’s electricity needs. Sure, at just shy of 3 percent, solar still has a way to go but it is definitely on the map now!

A second point addresses where we can expect solar to be in the near future. There is every indication that the adoption rates of solar power will stay high. The overall costs involved with solar installations are still decreasing, although very slightly. Word is continuing to spread to both homeowners and utilities alike about how financially attractive solar power is now. Also, the viability of solar plus storage is also something that is looking better and better.

Considering the expected trajectory of the solar power industry, we can look forward to solar accounting for double digit percentages of the nation’s needs in the not too distant future. Investing in non-renewable sources of energy simply does not make sense from financial or environmental viewpoints.

We are still at the beginning of a massive transition to a solar powered society!

America’s First Solar Airport

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Chattanooga, Tennessee can now proudly boast to be the first city in America to have an airport that is 100 percent solar powered.

This story comes by way of a recent CleanTechnica article. According to the article, the city’s airport has been gradually going solar since 2011.

The Chattanooga Metropolitan Airport (CMA) now has a total of 2.64 MW of solar power capacity. The ground-mounted solar panels have been installed on a piece of land that (before the installed solar) was determined to be unusable for regular airport purposes.

Courtesy of Chattairport

$10 million was the total cost for this solar power project. It is expected that the project will pay for itself in less than 20 years, with an expected useful life of 30-40 years. It also includes some battery storage so that the CMA can be clean energy powered after sundown.

This project was done in conjunction with local power company EPB and the Tennessee Valley Authority (TVA). The electricity from the solar system will be sold to TVA. As the local utility, EPB will still be billing the CMA, but at a much lower rate due to the solar power being provided.

If the CMA is now powered with 100 percent solar electricity, why are there any electricity bills at all, you ask?

This situation is very similar to home solar. When homeowners go 100 percent solar, their solar panel systems generate as much energy as they use throughout the year. However, they will not directly use all of the electricity themselves. Some of it gets sent to their neighbors. In this way, the CMA will, throughout the year, generate as much electricity as it uses. Whatever excess electricity it doesn’t use itself will be sent to nearby customers of EPB.

A couple of other noteworthy items concerning this project are that the airport plans on soon becoming completely carbon neutral. It is expected that when they have a total of 3MW of solar installed this will be the case. The second item to mention is the fact that this project was largely funded by the Federal Aviation Administration’s Voluntary Airport Low Emission (VALE) grant. This covered a high percent of the first phase of the project.

This story bodes well for other airports across the country. There are certainly many other parts of America with higher electricity rates, making solar even more financially attractive.

More clean energy airports are definitely on the way!

Tesla Offers Solar Panel Rental Program

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A recent post on solar-power-now.com mentioned that Tesla has yet to aggressively re-enter the residential solar power market after acquiring SolarCity.

Well, the company just announced a new angle to their solar power business. They are now offering homeowners the ability to rent solar panel systems for as little as $50 per month. Homeowners must pay a fully refundable $100 fee upfront and also sign a contract that says that they must pay $1,500 if they change their minds and want the solar panels removed. Currently the program is only available in California, Arizona, Connecticut, Massachusetts, New Jersey, and New Mexico.

Tesla.com

In many ways, this new approach to entering the solar business is very similar to SolarCity’s leasing strategy. Basically, it entailed the company entering higher-priced electricity markets and offering slightly cheaper prices than what the local utilities were charging for power. They would pitch it as a win-win; we install the system for free and you see savings right away.

However, the best value in solar is still in buying a solar power system.

Elon Musk has admitted this in a recent tweet – “With the new lower Tesla pricing, it’s like having a money printer on your roof if you live a state with high electricity costs. Still better to buy, but the rental option makes the economics obvious.”

Basically, purchasing (whether with cash or getting a loan) a solar panel system would save you considerably more money over the long term than renting.

Here’s an example of what the company offers for their program in Arizona.

  • System size – 3.8kw (smallest of the three they offer)
  • Monthly rental – $50
  • Value of Annual System Generation – $700-$900
  • Net Savings – $110-$280

A good deal, right? Sure, savings are more than $100 per year and homeowners do not have to do much or make any real commitments. Instead, many thousands of dollars can be saved over the long term when a solar power system is purchased.

The difference between renting solar and buying is very similar to renting or owning a home. When homeowners buy solar they will have acquired an asset that they will eventually have paid off, much like a mortgage. Solar, however, can be paid off in just a few years.

It’s very apparent that Tesla and other large solar companies are struggling to find ways to convince people to go solar.

There’s still a disconnect here.

Yes, it’s a marketing problem, but it is primarily an educational one. If homeowners were educated on all of the benefits of going solar, primarily the massive financially related ones, more people would. On the other hand, this new tactic might simply be a way for Tesla to start the conversation, make it easy to rent solar, and eventually turn those renters into purchasers once they see the value.

The big picture viewpoint remains the same. Large solar companies like Tesla still need to find ways of lowering their customer acquisition costs. They simply cannot compete with smaller and local solar panel installation companies on both price and service. In all fairness, Tesla did mention a reduction in the cost of their solar panel systems earlier this year. They are now similarly priced with the other major solar panel installers.

As more homeowners continue to get solar installed on their homes, they will have more conversations regarding their experiences. Word of mouth will surely spread about how much cheaper their local solar company is compared to the big solar outfits.

Kudos to Tesla for bringing more attention to their solar offerings. Hopefully the company will be able to expand their customer base while eventually lowering prices as well.

Large Solar Installers Fail To Achieve Profits

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$17 billion.

That was the total revenue of the American solar industry in 2018. It might shock some to discover that many of the largest solar installers in the country failed to show a profit in spite of such a large number. It’s also worth noting that this story pertains to a growing industry.

A growing yet unprofitable industry?

Well, that’s exactly the case. Some of the largest solar companies have struggled to make the numbers work favorably after years of work and thousands of completed installs.

How can this be? Well, part of this story is not particular to the solar industry. Many companies in other industries fail to show a profit for many of their first few years of business.

However, things have been especially difficult and turbulent in the residential solar industry. Case in point is the story of SolarCity. After years of being top of the heap in terms of market share, the company eventually got absorbed by Tesla after years of failing to turn a profit. As of mid 2019, Tesla has yet to aggressively seek solar sales. The SolarCity business model failed.

SunRun is the new leader of the residential solar market pack. Second quarter 2019 financials for the company show them losing $105 million.

Vivint Solar is another major player in the residential solar game suffering from the same problem.

One of the biggest problems for these companies is how much their sales and marketing costs are. Basically, it costs these companies too much money to get more customers. In fact it’s almost a dollar per watt for SunRun. That’s almost a third of the total cost of doing business. This is the definition of unsustainable. The company can actually get an install done for $2.50/watt. Administration, sales, and marketing add another dollar per watt.

Wood Mackenzie U.S. PV Leaderboard

There’s certainly no easy answers for these large installers. They’re all hoping to stay afloat long enough for costs to fall in every category.

What’s the solution for homeowners? There’s an easy answer to this question. It’s simply to do business with a local installer.

Some credit, however, must be given to the major solar companies. They have done much to help spread the awareness of solar, albeit at the same time convincing many homeowners that solar power is still too expensive. (It can be assumed that many people approached by a large solar company didn’t follow up with more research online to discover the actual cost to get solar installed.)

The point of this particular post is not necessarily to disparage these larger solar companies. After all, more solar in general, is a good thing, of course. Also, more solar awareness in general is a good thing too. But when a big solar installer disappears, that doesn’t help the cause.

So while major solar companies will continue to attempt to grow at unsustainable speeds, smaller and more local solar outfits will be able to offer significantly lower prices and much better service overall.

The Full Value Of Residential Solar

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Anyone familiar at all with solar power knows of the contentious relationship between utilities and residential solar.

So far, the situation has been quite apparent; many energy corporations in the United States have not been too happy, and have even discouraged the spread of residential solar power. It’s quite simple, this idea initially represented a loss in revenue and a serious threat to their business model.

However, utilities are finally crunching the numbers and realizing that residential solar energy might actually be a good thing for them as well.

How could residential solar competition actually be a good thing for power companies? Well, in short, it can help them reduce future costs.

grid benefits of residential solar
PV Magazine

Significant ongoing costs for utilities include building new sources of power generation, grid maintenance, and transmission investments. Residential solar can help utilities drastically reduce these costs. Distributed solar also helps utilities gain access to more stable and cheaper energy pricing, especially during summer months.

The largest of these avoided expenditures is the avoided electricity costs. Producing power to sell to consumers is a considerable part of the ongoing cost of doing business for utilities, especially in the summer time when energy prices increase significantly.

All of this bodes well for future residential solar power owners all across America. There are certainly many homeowners who live in states that currently make it difficult to go solar. As utilities in those states start to realize that residential solar can actually help them save money as well, Net Metering laws will finally become favorable for homeowners who wish to install solar panel systems there as well.

It can also be fair to assume that there are many homeowners that would have already gone solar if they knew that it was an idea that was fully supported and encouraged by their local utility. This will help these people make the decision to do so knowing they are not doing anything that is not fully supported by their local power company.

In summary, the full financial value of residential solar goes well beyond the financial benefit to homeowners. Power companies across the country can add more residential solar into their power mix to enable future savings.