The Future Has Arrived: Solar Panels Now Pay For Selves in 16 Years, Not 22 Years!

Sign me up! The NY Times reports on big big gains in solar paneling:

The price drops—coupled with recently expanded federal incentives—could shrink the time it takes solar panels to pay for themselves to 16 years, from 22 years, in places with high electricity costs, according to Glenn Harris, chief executive of SunCentric, a solar consulting group. That calculation does not include state rebates, which can sometimes improve the economics considerably.

More here.

Hat Tip: Alan Vanneman, blogger and movie critic extraordinaire.

Comments

[Rimfax]

So, if you live in a high electricity cost, high rate of sunny days, no shade, low installation contractor cost, and low procedural cost of external modifications area you stand a decent chance of recouping the cost of installing a solar panel before it breaks or is obsolete. Got it.

[Sandman]

Ahh... so nice to help Mr. Hare with a $23,000 subsidy he can use to buy more cars.

He owes me at least one ride to the airport.

[Rimfax]

Sorry, I forgot:

..., but not without federal and local subsidies.

Got it.

[Paul]

I haven't read the article... do they pay for themselves in 16 years down from 22 years because of an increased government subsidy? I thought most of these solar installations took 100 years to pay for themselves, so the justification was that you were doing it for love of Gaia?

[Paul]

Shit, I just read the whole blog post... yeah, subsidies. Wake me up when the nightmare is over.

[Nipplemancer]

now if only they could shave off six years without taxpayer funds, that would be great.

[R C Dean]

I do plan to make the Fortress Dean (currently in the scheming process) as electricity self-sufficient as possible. Where I live, we get sun and wind. Probably in another 5 years, when construction will likely occur, this will be much more feasible.

And if I can get any tax subsidies for anything I do, I will most definitely cash that check. By then, though, I expect the government's finances to be so hideously bad that subsidies will be only a fond memory.

[Hazel Meade]

according to Glenn Harris, chief executive of SunCentric, a solar consulting group.

Why don't they just reprint the press release?

[?]

They did.

[Joe M]

Wow. I'm having the strangest feeling of deja vu...

[Neu Mejican]

So they pay for themselves halfway through your typical mortgage.

This calculation, of course, ignores a lot of issues with design that can make them pay off much sooner when they are part of a more integrated remodel that improves efficiency in other ways.

[Untermensch]

so the justification was that you were doing it for love of Gaia?

If only that worked. All of the calculations I see people use to talk about how great they are for the environment by using these things ignore the energy inputs required to make these things and the negative externalities created in making them. When you count those things into the picture, the payoff time gets pretty high and, if you use them for less than that amount of time, you've actually done more harm than good.

Sort of like Shikla Dalma had a thing a few years back arguing that the Prius was actually one of the most environmentally wasteful vehicles because of the extraordinarily high energy inputs needed to make it and the fact that it lasts about half as long as a typical conventional drive-train vehicle before the drive train dies, so you effectively double those energy inputs per mile. Shikla even argued that the Hummer was a better environmental deal than the Prius. What the Prius did, though, was push the negative externalities to China (where the drive train was manufactured) so that they weren't visible to the consumer.

[Paul]

This calculation, of course, ignores a lot of issues with design that can make them pay off much sooner when they are part of a more integrated remodel that improves efficiency in other ways.

but is that really the panels paying themselves off, or the fact that you used that new fancy double-insulation in your walls and half your house was built underground?

I think I know what you're saying, but then you'd have to calculate how much the remodel was. Ie, if I make upgrades to my house to make it more energy efficient, solar panels aside, if the remodel cost me $15,000, then there's going to be an ROI equation on the remodel. Then you add solar panels, that just goes into the overall calculation. So I guess I don't see how this is spun into a faster payoff.

[Monkeeheadinsouth]

meh

Read Karl Hess

[Paul]

Shikla even argued that the Hummer was a better environmental deal than the Prius.

I believe that study was soundly debunked. Yeah, it sounded great, and it raised some good questions, but I think overall, the hummer over the life of the vehicle, from cradle to grave costs more.

But that hasn't played out with other technologies. Ethanol is still believed to have more input than output. Wind farms as well.

It's hard to calculate exactly what the inputs and outputs are, which is why a free market is so important. With a free market, the price points and costs act as the signal as to how much energy and resources you're putting into something vs. what you're getting out of it.

If it costs more for Wind energy than it does oil, there's a good chance it's because the wind farm uses a lot of energy to maintain itself: Offices and facilities to run the farm, trucks driving around to maintain them, factories using energy to build them. I've always said that if you can't run a wind farm, and all of its manufacturing, service and maintenance with wind energy, then you're probably doing more harm than good.

[swillfredo pareto]

The electric bill on his 7,000-square-foot house and garage has typically run $600 to $700 a month, but he expects a reduction of 40 to 80 percent.

Maybe a guy with 7,000 square-foot-houses shouldn't be the poster boy for government handouts.

[Chinny Chin Chin]

Shush, swillfredo.

'Tis the season when folks praise a dead millionaire politician for foregoing a life of luxury to work for the people. We can absolutely find room to praise a guy for subsidizing his mcmansion.

[ransom147]

Maybe a guy with 7,000 square-foot-houses shouldn't be the poster boy for government handouts.

RACIST!

[I, Kahn O\'Clast]

Here in New Mexico we have reverse metering through which the electric company buys electricity from your solar panels. Given that days are peak hours, you can have a situation where you draw on the power company at night when its cheap but sell it to them when it is dear and make some money on the prospect. You also get to avoid some of the costlier parts of the solar system such as the batteries...... We get our panels to pay for themselves faster.

Before you scream "socialism", my understanding is that the utility likes the scheme because it puts off having to increase generating capacity and will be a way to have "green" power in place for all the upcoming carbon rules, etc etc etc.

[Craig]

Maybe a guy with 7,000 square-foot-houses shouldn't be the poster boy for government handouts.

Or for the Environmentally Conscious Friends of Gaia.

[Joe M]

Before you scream "socialism"...

Not sure why would scream that. Sounds like a nice market mechanism in action. Am I missing something?

[ransom147]

joe m, maybe he has a public utility.

[Joe M]

Okay, but the actual concept reminds me of toll roads that charge more during peak driving hours.

[iamse7en]

That headline is just freakin' hilarious.

This is why I love Reason so much.

[Rich]

And when our solar panels have paid for themselves, the gov't will pay *us* to trade those clunkers in!

[matth]

"A ton of production, mostly Chinese, has come online,"

So, indeed, it's not just handouts - we're exploiting cheap labor in China to lower the costs. And here I thought that maybe there had been a technological breakthrough.

Wait, are these some of those "green jobs" that we keep hearing about?

[qwerty]

And when our solar panels have paid for themselves, the gov't will pay *us* to trade those clunkers in!

Can I trade in my "clunker" house and get a new one with solar panels? How much is the subsidy?

[Jeff S.]

"So they pay for themselves halfway through your typical mortgage."

Wrong.

"This calculation, of course, ignores a lot of issues with design..."

Like what?

"...that can make them pay off much sooner when they are part of a more integrated remodel that improves efficiency in other ways."

Like what other ways?

[Rich]

Can I trade in my "clunker" house and get a new one with solar panels?

Nope. Gotta get an algae farm.

Greener, don't ya know?

[I, Kahn O\'Clast]

Socialism on Reverse Metering: Well it is a "public" utility and the reverse metering is a law passed to do something "good" for The People but it just happened to end up working well for both sides of the deal.... I would like to think that a free market might have resulted in the same, but we just don't know if it would have been proposed....

[Joe M]

Ah, you didn't specify that it was a law. I guess I could've inferred it from your description. Still, I'm sure the electric company did some lobbying to protect their interests.

[prolefeed]

So, under the most favorable conditions possible, and with heavy government subsidies, you can expect to have a 0% rate of return on your investment for 16 years, and then a 6% rate of return for however many years left before the panels quit working.

So after inflation, you would have a negative rate of return over the lifetime of the panels.

Is this about right?

[jtuf]

I don't include government subsidies when calculating how long it takes solar panels to pay off. If I ignored other people's financial contributions to my purchases, than I would say that my undergraduate education paid off the day of my graduation party. Spending $80,000 to get a $100 check from grandma is not exactly good economics.

[Joe M]

jutf, you may have hit on something. All these pols graduated from extremely expensive colleges, and probably all got checks from grandma, and thought they'd made a sound investment because of it. It explains so much.

[Joe M]

Damn dyslexia...

[creech]

You all should have heard the Phila. Eagle's owner's wife nattering on and on last night about how their "Go Green" campaign was doing its part to save the earth. I know: how about foregoing the carbon footprint of 65,000 fans who drive to the fricking meaningless pre-season football game?

[Johnny Longtorso]

What the Prius did, though, was push the negative externalities to China (where the drive train was manufactured) so that they weren't visible to the consumer.

Externalities!! Externalities!! Where are Chad and/or Tony?

I know: how about foregoing the carbon footprint of 65,000 fans who drive to the fricking meaningless pre-season football game?

They're just there hoping for a chance to boo Santa.

[P BBrooks]

I wonder how much it costs to hire a platoon of accountants and consultants to navigate the rules regarding these subsidies.

[Juice]

Most solar panels last about 22 years.

[solar panels]

I believe that they will come to 10years soon.