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Solar is getting more expensive

Avatar for Dave Llorens
Published on 05/12/2008 in
Updated 05/12/2008
Solar Energy Costs

A while back I wrote about people innovating in the web space for solar, where I mentioned how I had a beef with the way the media portrays new solar energy technology. Here’s why:

First, they always understate time frames and cost, and overstate benefits. Read this. It’s just an example, but there are hundreds of these types of articles written each week, and they make my skin crawl. The article leaves you feeling as though a revolutionary startup is going to have $1/watt solar panels on your doorstep next week. They’re not.

  • Will they be able to PRODUCE solar panels for $1/watt at some point? Possibly, some day a long time from now. Will they be able to meet demand and distribution problems on the day they meet that production price point? Probably not. Will they sell them for $1/watt? NO, they will cost more, that’s how companies make money. Will the distributors resell them for the same price? No, or they would go broke too. Will it cost $1/watt for installers to put them in? No, it will cost more. In fact, if the panels were available TODAY, my (totally off the cuff) guess is you are looking at something like $6/watt, turnkey.
  • Will they work on homes? Probably not. Initial applications will be commercial applications with large roofs. Homes with small roofs will need highly efficient panels to capitalize on that space. The best thin film you can get out there at the moment is going to require four times the space to get the same power out of it. That is simply not an option for homes. That is why no one is installing the stuff on houses right now, and it doesn’t look like we will be anytime soon. Ironically, the article makes it sound as though it will be more efficient than current photovoltaic panels, which is ludicrous.

And another thing. We’re in a subsidy sweet spot, in many places, including here in California. The federal tax credit on solar energy, as it stands, is gone at the end of 08′. The California Solar Initiative, our state-wide subsidy, steps down in 30 cent/watt steps as more people install solar. Add that to the rising production costs of solar, this space age product, whenever it comes out, may end up costing you the same as installations do now. And by then you’ve paid another 80 months of power bills.

That’s right, you heard me correctly. Solar is getting more expensive. The price of energy has increased the cost to manufacture solar panels. Additionally, many are made in Asia and must be shipped over, and shipping costs have exploded. Finally, heavy demand in places like Spain and Germany, due to their excellent, forward thinking subsidies has caused a lot of local distributors to ship overseas.

For the company I work for, our products cost substantially more per watt than they did last year, and that trend is going to continue. Are breakthroughs in solar energy technology that allow for much cheaper production that will also work in residential applications going to be employed at some point? Yes. But it’s wayyyyyyyyyyy longer into the future than the media would lead you to believe, and solar energy is cost effective right now. If you get a PV system on your roof, and 15 years later some flexo-thin film product is available at half price, you’ll still have the last laugh, and you will have been energy independent for those 20 years.

Last modified: May 12, 2008

One thought on “Solar is getting more expensive

  1. Avatar for ANNIE ANNIE says:

    1/watt solar panels: A lot of Start-ups are working with new ideas/HOT penny stocks..

    AS: Amorphous silicon also exhibits less thermal coefficient effects when operating in hot climates.

    This means that the power conversion properties of an amorphous solar cell continue to exhibit near 100% potential while other thin film and conventional silicon wafer technologies degrade at significant rates approaching 20% conversion loss potential when operating at normal temperatures of 65 degrees centigrade.

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