Solar PV in the US

[santafe2]

While it's still a small contributor in the US, solar PV is no longer an insignificant source of energy. When I started working in this business in the early 2000s US total installations for the year were a few 10s of mega-watts, less than a single average large utility based array today. In 2014 the US is installing more than 1GW of solar per quarter and will likely install twice that in Q4. That works out to roughly enough new solar energy to power an additional million homes in the US each year.

When I started working in this business there was only one market, California. They had a rebate of $4.50 per installed watt. A little more than a decade later that seems like a silly give-away but it got the solar industry off the ground in the US. Today a watt of solar can be installed on a home for $3.00 a watt and much less than that in large utility arrays. In fact, utilities install the vast majority of solar in the US. Just over a decade ago it was California pot growers driving the industry at $10 an installed watt. Two decades ago it was the oil industry powering off-shore oil platforms at $100 a watt and three decades ago it was the government powering satellites at $1000+ a watt.

Maybe we'll be all right. This transition from cheap oil to peak-cheap oil to peak not-so-cheap isn't going to be easy for most but it's beginning to look like we'll find a path.

[aaron]

Re: Solar PV in the US

Do you think the price per watt will drop much further over the next several years or have we reached a relative plateau with current technologies?


Is there such thing as a portable/temporary solar array? I live in a rented house and do not plan to stay forever. There are some silly incentives in my area that make it quiet economical to set up solar.

[santafe2]

Re: Solar PV in the US

Do you think the price per watt will drop much further over the next several years or have we reached a relative plateau with current technologies?


Is there such thing as a portable/temporary solar array? I live in a rented house and do not plan to stay forever. There are some silly incentives in my area that make it quiet economical to set up solar.

Price drops will be incremental from here based on better mounting technology and integrated inverters. The federal 30% incentive is scheduled to drop to 10% in 2017 so installing before the end of 2016 will be a good idea. Because of the cost to connect to your electrical system and to your utility it makes sense to wait until you have your own place.

[Prazak]

Re: Solar PV in the US

Price drops will be incremental from here based on better mounting technology and integrated inverters. The federal 30% incentive is scheduled to drop to 10% in 2017 so installing before the end of 2016 will be a good idea. Because of the cost to connect to your electrical system and to your utility it makes sense to wait until you have your own place.

From a technology and cost standpoint, when would you suggest is the best time to install a residential PV system? Are there any leaps of technology on the horizon that would render a 2015 residential solar installation obsolete or relatively inefficient in late 2016?

[dcarrigg]

Re: Solar PV in the US

From a technology and cost standpoint, when would you suggest is the best time to install a residential PV system? Are there any leaps of technology on the horizon that would render a 2015 residential solar installation obsolete or relatively inefficient in late 2016?

I'm sure santafe2 knows the business better than I. But I have dabbled in it. My 2 cents:

- Now's a good time. Some state incentives are being pared back. The big federal incentive is scheduled to be pared back. Even if prices drop 20% and tech improves production 15% in the next couple of years, you'll probably only break even with the incentives you can get this year.

- The 30% tax credit is big. It doesn't matter which state you are in. Just make sure you actually have the tax liability that year to absorb the 30%. It'll be 30% of the cost after rebates and up-front state incentives. But that still might be 30% of $15k or something for a 4kW system, which is a cool $4.5k. If you're not paying $4.5k after deductions etc., you won't get that whole amount back. You can roll the credit over until 2016, but no word if you can in 2017 once it's scheduled to drop to 10%. And I wouldn't put it past the new Congress to eliminate that 10% too. So I wouldn't count my chickens on it carrying forward after this year. Probably not an issue for most households making $100k+/year. But if you're more middle income, it's worth considering. Maybe try to take a bit more of that small business profit this year if you install.

- State incentives are complicated and varied. But they can make a huge difference. If you're in Massachusetts, it's a no brainer. The combination of SRECs at their current auction price, rebates, tax credits, net metering, sales and property tax exemptions, etc. makes it so no matter where you are on the income scale, you will profit off installation (unless somehow electricity prices fall by 50% and stay low for 20 years), and probably to the tune of $25k. It's really that good. Go just down the road to Connecticut, and you have to choose between RECs and rebates and loans. You might end in the positive. You might not. Odds are better the wealthier you are. $10-20k in the black is the best you'll do there if electricity prices stay on average at around current rates adjusted for inflation.

- Common knowledge around here, but loans can mess up the payback over the long term big-time. A loan at 6% in a state with a median rebate and no REC program and net metering along with the federal tax credit will just about have you breaking even if real electricity prices stay relatively constant. At 6.5% you're in the red. Lower is better. Some states have special financing options or property lien financing at low interest through your town/county. Check details for your state here.

Long story short, we're at a time where many of the states are handing out rebates for a few grand, exempting the system from sales and property taxes, mandating that the utility company by the energy you generate at a reasonable rate, and sometimes handing out additional cash in the forms of RECs (renewable energy credits), state income tax credits, or subsidized loans and at the same time the feds are still giving out a 30% tax credit. There'd have to be a huge price drop and technological improvement to compensate for that.

But the key thing is that it all really varies by state.

Here are some of the quick maps to see what's up where you live. Skip to the last map if you don't want to wade through it all. It's the most important.

Rebates/upfront cash:



Loan programs:



Property tax exemption:



Sales tax exemption:



RECs (These are big. They're just certificates you can sell on the market to power producers that have to procure them by law. But they can add up to a lot of money depending on the state. Don't poo-poo them.)



State tax credits:



Net Metering (Electric company has to buy electricity you produce - sometimes up to a cap)



Property lien financing (if you must - still might be lower rates - check with the town if your state's red here):



Overall PV incentives map (if your state is red, you probably can't lose):

[santafe2]

Re: Solar PV in the US

Now's a good time.

I saw no issues with your observations and links to DSIRE. There is a ton of information at DSIRE but it's not always up-to-date. It's best to find out what's available locally if someone wants solar energy. For example, in 2015 those of us in New Mexico will get 30% Federal tax credit, 10% State tax credit and 4 cents per kWh produced from the state's main utility, (those in smaller co-ops are out of luck on this last one). We also have the benefit of lots of sun so a watt of solar, (properly installed), produces ~1.7 kWh per year of energy. In not-so-sunny New England this is closer to 1.2:1.

There are lots of moving parts in every solar PV installation. You have to understand your list of incentives, what you pay for a kWh of electricity, how much each watt of installed solar PV will produce where you live, what you'll pay per watt to have it installed and what you'll pay net after incentives.

Here are a few more things people should think about:
Any solar installation that does not pay back in less than 10 years, is a sketchy investment.
If you're planning to move in the next few years, your solar PV will most likely prove to be very expensive.
If you're planning to lease your solar PV system, be careful. I've read everyone's leases and I'd never sign one. Good luck selling your house with 17 years left on a 20 year solar lease.
Don't borrow money to buy solar PV unless it's just until your tax rebates come back in April.
Don't pay more than $3.50 a watt for solar. If you are paying more, know why.
Make sure you have a great, mostly south facing site.
Don't wait until Q4 2016, it's going to be a complete zoo as everyone tries to meet the Federal deadline.

And a final note. I like having solar because I like gadgets and I like producing my own power and getting a check from my utility company. For most people, community solar or utility based solar is a better way to go. Large installations cost about 30% less than residential installations and there's zero maintenance for the home owner.

[Prazak]

Re: Solar PV in the US

Thanks to you both for taking the time to share your thoughts.