Is going solar really worth it?

Hmmm... very interesting article about the full cost of domestic solar power. I've been interested in how much it would be, and here's one (fairly extensive and thoughtful) take on that. Perhaps it's for these reasons that the trend has not caught on.

Feb 15th 2008

Going solar is a luxury few can afford

IT'S not easy being green--nor is it cheap. With the best will (and
some of the most generous handouts) in the world, solar power still
makes little sense for the average homeowner, even in sunny southern
California. Under pressure from his environmentally conscious
ten-year-old daughter, your correspondent has spent the past week
talking to experts around the state and running the numbers to see if
he could reduce Mayhem Manor's carbon footprint.

Solar power ought to be the answer. The house faces south-east, lacks
trees or other shadow-casting obstructions, and its flat roof offers
ample space for a sizable solar array. At 720 feet up the hillside, it
is well above the "marine layer" (the locals' fancy name for morning
fog) and gets about 300 sunny days a year. So what's the problem?

It's not even as though the place gobbles electricity. When the house
was being rebuilt five years ago, the new roof came with over a foot of
thermal insulation. The floor-to-ceiling windows along two sides of the
structure were replaced with double-glazed "low-E" glass (the sort that
blocks infra-red radiation), and thermal linings were included in all
the exterior walls. Even during the summer, the air conditioner usually
stays off.

Admittedly, the architect went overboard on lighting. Fully
illuminated, the house demanded seven kilowatts of raw lighting-power
before fluorescent lights replaced thirsty tungsten filaments. Overall
electricity consumption is now a reasonable 8,300 kilowatt-hours (kWh)
a year.

Given the local utility's rate of 10.8 cents per kWh, that adds up to a
modest $900 for the year--or just $2.50 a day. At those prices, solar
energy simply cannot compete with juice from the local power-station,
even with California-level subsidies.

The problem is that solar-energy technology has been improving
incrementally, but its costs have been falling slowly.

If solar cells had abided by Moore's Law, they too would have halved in
price every 18 months or so--and we would all be running our homes on
sunshine. But getting photons from sunlight to dislodge more and more
electrons in semi-conducting materials like silicon, and so generate
electricity, is harder than building a better microchip.

The first solar cells--built more than a century ago--had conversion
efficiencies of around 1%. Since then, their efficiency has doubled
once only every 30 years--a veritable snail's pace compared with the
speed of microchip development.

It was not until the 1950s, for instance, that America's famed Bell
Labs stumbled on a way of boosting a solar cell's conversion efficiency
by "doping" its silicon with certain impurities. It then took another
50 years to raise the efficiency to nearly 20%.

The performance of solar cells has picked up recently. But that's only
for the most exotic cells used in space. Today's satellites have solar
panels based on thin films of gallium arsenide that boast efficiencies
of over 35%. Meanwhile, in the laboratory, exotic "quantum wells"
promise photovoltaic conversion efficiencies of 45% or more.

But the solar panels used in space cost millions to make and last for a
decade at most. Back on earth, the only ones affordable enough to be
used commercially are early models based on crystalline and amorphous
silicon with efficiencies of around 15%.

And even these aren't exactly cheap. Sanyo's 200-watt module, one of
the better panels used by the industry, offers 17% efficiency and costs
$1,500 retail.

As a rule of thumb, the industry reckons that a solar panel capable of
generating one kilowatt of power at peak times will average roughly 20%
of that over the whole day. In other words, every kilowatt of installed
capacity should be good for 4.8 kWh of daily consumption--or around
1,750 kWh per year. By that reckoning, Mayhem Manor would need 4.8
kilowatts of solar capacity to be able to generate the amount of
electricity normally consumed from the grid.

Unfortunately, that ignores all the losses that occur between the sun's
rays striking the solar array and that direct current being converted
into alternating current to run the house. Such losses can easily mop
up 25% of the solar panel's output. So, better install at least 6.4
kilowatts worth of solar panels on the roof.

Here's where going green gets tough. At today's prices, your
correspondent would have to stump up $48,000 for the solar panels
alone. Add the cost of the switching modules, the power controller, the
fault protector, the DC-to-AC inverter and the service panel--not to
mention the installation charges and the contractor's profit--and the
final bill could easily come to $65,000.

What about incentives and tax credits? That depends on where precisely
you live and how effective an installation you have. To get anything
like a full grant in your correspondent's neck of the woods, the array
would have to be facing due south and tilted at an angle of 34 degrees
to the sun. The first might be possible; the second would definitely
not. At best, Mayhem Manor would qualify for about $12,000 worth of
local assistance plus a $2,000 federal grant.

Borrowing the balance at today's interest rates would mean repayments
of roughly $600 a month for ten years, even after setting the interest
charges against tax. And all that just to feel good about saving $75 of
electricity a month. Better to buy a couple of tons worth of carbon
offsets each year for $70 and have done with it.

(c) 2008 The Economist Newspaper Group Limited. All rights reserved.

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