To determine if the crown was pure gold, all Archimedes had to do was find a piece of pure gold that displaced the same amount of water as the crown and compare the weights of the two. If the crown was pure gold they should weigh the same.
It is this revelation, the story goes, that prompted Archimedes to leap from his tub and run naked through Syracuse shouting
"Eureka! Eureka!"(from California State Website)
In a previous post about the psychology/economics of solar power, I claimed that since purchasing solar power isn't nearly as common as comparison shopping for a car, it's predictably more difficult to compare the "value" of electricity that comes from fossil fuels vs solar-based, than it is to compare the "value" of, say, a Pinto to a hybrid Prius. In car buying, people quickly understand why they pay more for one car or another: quality, reputation, status. I'm obviously saying the traditional, fossil fuel-based power is the "Pinto" of electricity. So, if solar, clean energy is the "Prius" of electricity, what's the price comparison between the two? Specifically, let's compare traditional vs. solar electricity in terms of dollars and cents, and you can judge if it's "worth it" to you.
Traditionally, critics have claimed solar is too expensive; but they come at it from the wrong perspective: the perspective of the utility company, not the small consumer/prouducer of solar power. They say that solar electricity costs about 20-25 cents/kWh for the utilities to produce wholesale(which is accurate these days); whereas, they can make electricity from coal, gas and even wind for 4-9 cents/kWh. So, the market argument goes, without huge subsidies, utilities shouldn't try to produce solar, since they can produce other forms of electricity much more cheaply and charge consumers less. The market from the "supplier" side says solar is too expensive to sell for a profit.
But let's look at it from the consumer/small solar prouducer's perspective. We have to look not at wholesale, but the RETAIL price of electricity or what the utility charges on your bill. Remember, we want to know if it makes sense for a small consumer to produce solar electricity, even if the utility says solar is "too expensive" for them to produce and resell to consumers. When we the consumers make the comparison we should start with how much fossil or traditional electricity costs us at home first: in California, its about 14 cents/kWh. So, using THAT price, we can compare it to how much it will cost us to produce our own solar electricity.
[The following paragraph is the main point I have corrected, here, in a subsequent post]
[So, how to calculate how much a solar power system will cost you to install, and the important part . . . PER kWh, so we can compare it to the 14 cents/kWh electricity currently costs us at home? To make it easy, lets say a 2 kW solar-panel system (I should have said "AC" here) will meet all your electricity needs. The final cost would be about $10,900 after rebates. ($18,500 -$5,600(CA rebate) - $2000(fed tax credit).]Well, maybe it's too expensive for utilities to centralize it and make a profit off it, but its not too expensive in the long term for we little consumers to install our own distributed power stations on the roof, and sell it back to the utility. We, today, can be producer/consumers of solar electricity.
And I understand the problem of putting 20 years' worth of solar energy on your roof, and then selling your house 5 years later. It's not a problem: you could easily demonstrate to the new buyer the "value" left in those solar panels you're going to sell them, and build that in to the resale value of the house. They'll be happy to pay a locked-in 22 cents/kWh for the next 15 years as their neighbors' utility rates continue up at 6% per year!!! And that's being conservative: you could increase the selling price more if you include the 6% per year increase in electricity prices in the resale price of the panels' electricity, because down the line, the new owners will be selling their solar power back to the utility at these increasingly higher retail rates.
Solar is not as expensive as we are lead to believe, especially in these days of increasing gas and oil prices, decreasing solar prices and increasing solar rebates. I think we're in a sweet spot for solar.
Please send me your criticisms comments via the "comments" link below, or to firstname.lastname@example.org.
Categories: solar, energy, green, sustainable, EconomicsOfSolar
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