What Will Make Solar Take Off?
Our house in LA where we spent two and a half months this past winter has a solar panel on its roof. That panel generates enough electricity to heat and cool the house and charge the Tesla we own so that when I’m driving around LA, I’m using non-carbon based energy to get around. I would bet a lot of electric car owners in Southern California charge their cars with solar energy.
I have told this little tidbit to many people since this winter because I feel like its a glimpse into the future. And the reaction I often get is “that is awesome. I want to do that.”
If electric cars are the future, will they also be the thing that finally makes solar take off? Or will there be some other catalyst?
The economics of solar has always been challenging. Ten year paybacks are not the path to rapid adoption. I believe that the cost of solar has come down a lot and that might reduce the payback times but energy costs have also come down a lot too so I don’t know if we’ve really seen payback times decline that much.
We don’t invest in cleantech at USV so I am not particularly well versed in this topic. But instinctively it feels to me that wide adoption of solar is inevitable and we just need a catalyst to make that happen.
Maybe that will be electric cars. Or maybe it will be something else. I’m interested in what folks here at AVC think about this question.
Comments (Archived):
If financing is the issue, then the business to get into is to finance these installations, no? A bit like the drone story, where you get into services instead of hardware.
There are a bunch of crowdfunding services specifically for solar installations
Would love to know more about the crowdfunding services for solar installations.
Great Planet Money episode about Solar financing a while back: http://www.npr.org/sections…
http://www.netenergytes.com/ Saw this company the other day. It allows people to arbitrage energy. Run A/C at night to fill up battery at cheap rates; power a house during the day when rates are expensive. Very different than Tesla lithium ion tech which degrades over time (and has to be replaced after ten years) Intellihot.com re-engineered the water heater.The largest problem with solar is storage, and the degradation of energy as it travels distances to be used. Another problem is the subsidies. If it had to compete on even economic footing, I think innovation would happen sooner. Here is a way to fund clean energy if you believe in it: https://publicgood.com/org/…
My father, who was an electrical engineer, was telling me back in the 90s that batteries were the hold up to clean energy. When everybody can afford a battery that will power the house or business for an extended time it makes solar (or wind or whatever) a lot more practical.
Fred, you ve been to Israel. just look up anywhere. not a single house or building without a solar panel (or very rare). i believe this has to do with 2 factors: social awareness (many people don t even know it s possible) and government initiatives to makes those products affordable. I tend to think #1 is the most important.
Great observation Ouriel. I’ve always wondered how Israel had so many solar panelled houses dating back to when I was there as a kid in the 70s. Solar is not new, right?
There’s 300 days of sunshine there per year! Same as in Lebanon. My uncle had solar in his house there since the early 80’s.
That certainly helps
absolutelu not new indeed. This started decades ago. Mostly because producing energy in Israel was a challenge in a new country and cost has always been an issue. there is also a reason why the first ever electric car project of significance started there (Better Place): it was not successful as Tesla for many reasons (including the lack of control on the battery value chain) but there is a strong culture of “everything electric”. There is also a collective acceptance in Israel do to their unique geo strategicall position that the less dependant on gas the better.
Interesting. I wonder whether there isn’t comparatively as much oil or natural gas under Israel as there is under it’s neighbors.
israel is not known for being a oil country..specially compared to middle east neighbours. that being said they do have a lot of sun…
There is natural gas under the sea bordering Lebanon and Israel, and in other parts of the Mediterranean.
How about Wind and Geothermal? It seems that Wind is growing the fastest.
Wind seems to be popular for commercial power generation. Lots of environmental issues plague it (disrupts birds and bats) and there are people that believe the wind turbines don’t look good, but I beg to differ. I think wind turbines are functional public art. The Kennedys managed to delay Cape Wind in Massachusetts for a long time because they didn’t like the idea of offshore wind near their compound in Hyannis Port.
Wind is much more constrained by geography than solar. In the longer-term, solar will overtake wind. Almost all new generation in the US in 2014 and so far in 2015 is solar, wind, and natural gas. Here is FERC’s latest monthly report, which has totals for 2014. Solar was 680 MW and Wind is 633 MW for 2014. See page 4. http://www.ferc.gov/legal/s…
Wow. so much activity. thanks indeed!
The cost of electricity in NH is high enough and the cost of solar is low enough that there is nearly a net even formula for most folks (not including heat). As our power prices continue to rise I think that will be the tipping point for many, myself included. Our rough timeline is to convert in the next 3 years. A contractor working on my land just had his own solar delivered this week. My neighbor has it powering portions of their home. Batteries may just be the final leg in the stool needed for many of us.
Elon Musk’s Powerwall with brilliant dry wit: “”We have this handy fusion reactor in the sky called the sun. Okay? You don’t have to do anything…It just works.”* https://www.youtube.com/wat…
The year after UBS I joined a VC; I was the first hire outside of the 3 founding partners. We focused on renewable energy.One of our first projects was to raise £25 million for a battery company founded by some British PhDs who’d relocated to LA ten years’ prior.I saw Musk’s presentation and went, “Now THAT is innovation.”He’s the founder I most respect amongst his peers (Page+Brin, Zuckerberg, Besoz et al).
Except his ion wall is lithium based, which degrades over time. According to a battery engineer I know, by the time the wall is ready to pay for itself, it’s time to replace it.
Presumably shouldn’t this improve over time? Apple batteries are lithium based and they degrade but not nearly as bad as they used to.
True. Its constraint is indeed lithium’s degradation. Replacement means Tesla’s business model would be similar to Apple’s = recurrent revenues from fans.Interestingly, there are developments in materials science about what happens structurally to make a chemical “switch” from being a conducting material to an insulating one, and vice versa.So it could be the case that a hybrid plastic that conducts (and doesn’t have lithium’s reactivity and, therefore, degradation) is being worked on in some obscure R&D lab.
Solar is popular in Connecticut, and that popularity is growing exponentially:http://trendct.org/2015/05/…Electric cars are also increasingly popular here. We have Tesla Superchargers available on highway rest stops and at popular gathering stations, and I think we have regular chargers in most major towns and cities.I think people decide to take the leap when they know someone else goes through the experience. No catalyst needed here, it’s happening :).
Fred what are your thoughts about wirelesscharging? More specifically wireless power at a distance. Iread about company U-Beam using ultrasound technology to charge a phone from15-20 feet away.
Nucurrent.com is wireless power. It works spectacularly well. They license the tech to anyone that wants to incorporate it into their manufacturing process.
Don’t you need to charge this on a pad of some sort?
put the antennae in a device, and in a surface. works without wires. Think beyond computer equipment. Think about anything you plug into a wall.
I don’t know enough to be intelligent on the topic
at $60 oil and $3 natural gas, looking at economics alone, does it still make sense? i know it’s a big if, but if cheap natural resources is the new norm, i imagine the financial incentive for mass adoption will be VERY slow
My home energy costs have gone up, not down in the last few years…retail vs wholesale might be the underlying factor.
does solar eliminate or change the distribution dynamics vs. “old” energy?
I think it does… Unless I’m misunderstanding your question.
In Connecticut we use a lot nuclear power: https://www.dom.com/corpora…
I wouldn’t be surprised if the Tesla home batteries have more impact on solar adoption than their cars
Chicken-egg problem really.
I forget where I read it, but the electric grid is to solar/battery tech what the telephone landline network is to the mobile phone. IOW, with more adoption of alt energy, and therefore less dependence on the existing electric grid, the electric utilities stand to suffer from less income over an increasing cost of infrastructure.
I think that battery power in the home, combined with more efficient home appliances allows the energy grid to be unbundled.
Yup. And that will pose a problem for the utility company that owns the grid. Will they diversify and offer high speed internet over their lines? I’ve heard of some companies working on that; but nothing of late.
Hi Fred,I co-founded one of the nation’s largest residential solar companies, Astrum Solar, which we sold to Direct Energy, a subsidiary of British Gas in July 2014. The adoption of residential solar is growing at a tremendous rate 50% CAGR driven by companies like Solar City, Astrum, NRG, Vivint and others. The payback for solar is driven by cost to install which is somewhat fixed nationally with minor local variations and the income the system produces which comes in the form of a 30% federal tax credit, avoided cost of power for what the system produces and any other state and local incentives.When we started Astrum in 2009, the cost to buy an average system was $7.50 a watt. Today it is closer to $3.50 a watt. The change driven by drastically lower polysilicon prices, manufacturing scale and innovations in driving down soft costs like customer acquisition and project management. Over that same period electricity prices have actually increased in almost every key market in the US. Note that solar competes against the cost of fully delivered residential electricity, not the wholesale price of natural gas or oil. In many markets, the commodity cost of power is well less than half of your billed cost do to transmissions and distribution charges which are rising dramatically as the grid ages.In California, purchasing a system probably has a 5-6 year payback and the equipment is warrantied for 25 years.Also, solar companies either directly on balance sheet like SolarCity or through partnerships with specialty finance companies offer 0 down leases and loans where you get a solar system for free and you pay for it monthly, but your monthly savings from having solar is actually greater than your monthly principal and interest payment.The biggest thing holding back the adoption of solar is lack of customer awareness.Solar is a great deal and anyone with a suitable house and a credit score above 650 in CA, AZ, NM, CO, MA, MD, CT, NC, NH, NY, DE, DC, NJ and a few other states where power prices are high and or incentives are good could do solar and save money on day one.Solar and other distributed forms of power are going to be massively disruptive to the traditional utility model but it’ll happen over a longer period of time than the disruption cellular caused to landlines.Love your blog and happy to discuss more if you are interested.Josh
I hadn’t been following the progress of solar and am very encouraged to read this!I’m a condo owner in a mid-rise building and so can’t make a decision quite so easily and unilaterally to put a solar panel on the roof (or, for that matter, electric car chargers in the garage). But this gets me thinking about potentially bringing the subject to my HOA.If anyone has navigated this road, or has any suggestions or advice for this kind of situation, I’d be interested in learning more.
We looked into it at an office condo several years back. And that was a building that is spread out, not 20 stories high. In a mid rise building (what you are asking about) there isn’t a great deal of roof space per tenant. We couldn’t even justify the cost and payback (and pain) on a 1 story building where each unit has pretty much it’s own roof. Plus the HVAC is up there and there are roof and maintenance issues it just wasn’t worth the trouble (iirc) for what the gain is.
Prices have plummeted in the last several years, the economics might make more sense today.
That’s unfortunate. Makes total sense though. Thank you for the reply.Still curious about the possibility of garage chargers in multi-tenant(/owner) spaces. It seems to be taken for granted that you can charge a Tesla in your garage but in this type of building that isn’t a given at all…
charlieok, there is an emerging class of entrepreneurs offering offsite solar for those of us constrained by condo and apartment realities. Cloudsolar has gotten the most press: http://www.gocloudsolar.com/
“The biggest thing holding back the adoption of solar is lack of customer awareness.”- What are some ideas for solving that dilemma?
Consumer awareness is never the cause for failure if the value of the solution is right.Consumer awareness will always fail if the solution, the pricing, the positioning is a mess.
if the value of the solution is right.Exactly.
OK, but in this case, it seems like the solution is here, but more education is needed.
I think that social proof and “incentives” with this is what is needed. Education doesn’t cause immediate action and impulse.Ever see the spread of decks in the suburbs? That didn’t happen as a result of education or advertising. It happened because of social proof and keeping up with the Joneses and the idea that if you had a deck you could relax and socialize with a barbecue. (So there is even an alcohol tie in oddly enough..)
The trick here is the jump from Education to Trial is a steep one. You can’t “try it”. You’re either in or not, and you need to yank something out to replace with the new stuff. Maybe, it’s easier to incorporate in new homes going forward than retrofitting old ones. If I was building a new home today, I would try to make it totally self-sufficient from an energy point of view.
You can’t “try it”.Which is interesting of course because with decks in the suburbs you could “try it” since you simply use someone else’s deck first. They invite to a barbecue (or you are not invited and watch and get the idea of the value. )Maybe, it’s easier to incorporate in new homes going forward than retrofitting old ones. A good point so you have to ask yourself why the major home builders are not doing this at scale. The reason most likely is it won’t help them sell any more houses. That is pretty much the only reason that they would do so (other than some tax credit by the government as motivation).
yup. old systems die hard.i wonder if part of the reticence on the part of governments is a potential loss of tax income. if you’re self-sufficient on solar, you don’t have a monthly bill where x% is the service tax.
Hi William,You are right you can’t “try it”Also, I got a quote some years back and would have saved a small amount (at that time) per month, but realized I would be comitted to staying in the house to get payback.
This is where i believe Musk and Tesla are aiming in the right direction – making solar “sexy”, or at least desirable with fast cars, sleek futuristic battery packs etc. I reckon the movement will start as a rich mans club (like cell phones did), until it isn’t anymore.
Equally as possible that the solution in how it is presented and priced is so obtuse, the customer service process to get information from utilities so painful that education without repackaging is of no value.
this.I have reviewed solar for my home every year for the last three years in Northern Virginia. Each year it got less expensive. Each year I had to work HARD to get solar companies to reach out to me. This year, the honest to god payback period is 12 years…AND I use a Chevy Volt in that equation (90% gasoline avoided). 12 year payback period remains a Non-starter.
I’m ignorant and in the city, not a lot of applicability.But this still sounds like a product issue first, not a marketing one.Do know that I see panels everywhere here as part of public works for signage. Commonplace so cost and portability have to be there somewhere.
I agree. It’s product in that actual panel installation is where the project dies due to cost/complexity. Regarding signage, perhaps it pencils out for them since they can avoid the cost to physically run new power lines to the signage.
Consumer education is a nice thing to say but you’re just basically talking about a nationwide sales organization. You’re talking about sales. That’s done one deal, one call, one contract at a time. There’s no fast way to do this. This is atoms on rooftops constrained by credit scores, construction crews, and cloud cover. There’s no fast way to do this. It’s not a website.
Governments are already providing incentives to switch to non-oil sources, so they could run campaigns.Also, industry coalitions can run campaigns, like “Got Milk” or “Staying fit” campaigns.
Governments are not going to do a Get Solar campaign because that would be naturally an ad against Get Gas. The gods on Mount Exxon would not be pleased.
exactly.
That’s part of the difficulty: most consumers don’t have the background to evaluate the value of the solution. And increasingly, nor do the people selling solar. When you go from 5,000 hours to 600,000 homes in a short time period, there has to have been a massive expansion in sales force. And this isn’t a qualified sales force. A met a SolarCity rep two weeks ago who’d been working for Enterprise Rent-a-car four months earlier. Guy was nice, but didn’t know a thing about solar. Not that anyone needs to know as much about solar as I do to sell it, but there are some basics that should be covered and are generally lacking.Solar isn’t that complicated, but it’s definitely a process, and there are a lot of misconceptions people have been building up since the 70s that need to be overcome.
With all due respect not a very compelling argument.It’s never the consumers job to be smart enough to understand what is being sold to them. It’s our job to speak to consumers in their own language. If we don’t it’s either we are not capable or the solution isn’t viable.You would certainly fire your sales exec if they complained that they were growing to fast to do a decent job and were sending untrained car salespeople out to sell solar components.I’m sure you understand what I’m saying.
Definitely understand. My comment wasn’t an excuse for slow solar adoption. It’s more addressing a fear of expanded solar adoption – people are signing up for some BAD deals that they think are good. And they’re being sold them by sales people who think they’re good (cause they’ve been trained that way and don’t know any better). So, I’ve given up my dislike for the SolarCity sales reps, cause they don’t know any better, but I don’t like who SolarCity is using their brand strength to fleece people. Creates a big opportunity to steal deals from SolarCity (I’ve never lost a deal to them), but I feel for all the people who don’t get a second/qualified opinion. I realize that’s their problem, but I’d like my industry to self-police on consumer protections better than they do.
Awareness snowballs. A beachhead of early adopters become the model for the next wave, who become the model for the next wave, etc.The Tesla might be a super-catalyst in that it combines four early adopter communities: car nuts, tech nuts, energy nuts, and bling nuts. So the chance of hitting critical mass–getting to the early majority stage–is much larger.Once that inflection point is hit the most important catalyst of all kicks in: social proof from people you know.
Thanks Josh. Such a helpful and informative comment. Do you have any idea what might be the catalyst that changes consumer awareness? Could electric cars be that catalyst?
I don’t think that the issue is “consumer awareness” I think it’s “human nature” and perhaps to a minor extent “social proof”.By Josh saying “The biggest thing holding back the adoption of solar is lack of customer awareness.” that implies that it is a marketing problem. If it were a marketing problem don’t you think that it would be fairly easy to solve?Isn’t this a bit like saying “the biggest thing holding back a new football league is ‘fan awareness'”. If that were the case money could just be dumped into solving that problem.People, everyday people, are totally happy with their gas cars. The prices are good, they are reliable, there is a mature and developed and easy to understand network of dealers, service, fuel, repairs and so on. The only benefit that electric has is fuel cost and that fuel cost comes with a great deal (currently at least) of drawbacks. The environmental benefit is not enough reason to take on the pain that comes with it (once again, currently we are nowhere near a tipping point and may never reach that point).Let’s face it you aren’t driving a Tesla because you are concerned about the fuel costs. You are driving it for different reasons.
Human nature, attention span/limited mental energy/time, and capitalism and profit system which help dictate what people see and hear… yup.It could be a marketing problem though, you are competing against a massive status quo – it’s hard to change people’s behaviours – especially if a nation is heavily “locked down” in debt, or even if they’re “locked down” in dis-ease and sickness.I’m guessing Fred’s driving it for the convenience. Not having to stop at a gas station is pretty cool and reduces friction.
I’m guessing Fred’s driving it for the convenience.I don’t think that is the reason at all. There is little that is inconvenient about having to fill up a typical car that can go 400 miles on a tankful ever so often. You pull up, fill up and drive off and have plenty of choices. In no way is avoiding that worth the drawbacks of electric. Can’t say I’ve ever heard anyone complain about getting gas for their car (as opposed to complaints, say, about traffic).Fred is most likely driving electric because it’s acceptable and applauded in his peer group and/or it is some “party in his brain” by being green or something like that.To wit:And the reaction I often get is “that is awesome. I want to do that.”Or maybe he likes the acceleration of the Tesla, that seems to be a big point with some people.
i like that it doesn’t take gasoline
So why does it matter to you that it doesn’t take gasoline? What is the problem that you have with gasoline I guess I am missing that piece.
Its carbon based energy
It takes a lot of carbon to make solar panels. Melting silicon doesn’t just happen. See my comment above. I am very bullish and believe in them, but they are not carbon free
I also wonder if the calculation of “carbon” even takes into account all of the carbon. Such as carbon used by people getting to the factory to melt the silicon and so forth. Or to build the factory.Reminds me of when you hear of a certain startup saying they are creating jobs. One job created is quite possibly 3 jobs lost at another company.
My issue is that this is the polarization of things and I see this all of the time. I have friends say: My Telsa is carbon free.No it is not.That is not to say it is not better than an alternative, but lets not bullshit one another.
To paint with a broad stroke now, liberals tend to be very fuzzy about these things. Ok maybe that’s not a liberal thing but there should be a word to describe people who are non cynical or skeptical and think things are exact when they are not.Which is part of my meaning to when I say “I don’t give a thought to things like this”. It’s all bullshit to me but I’m glad others are doing the heavy lifting and believing of the bullshit.The world is full of irony. How carbon friendly is it when 30,000 cops attend a funeral for 1 fallen cop?
More than the carbon, the key metric you have to focus on is energy return on energy invested (EROI) – if you have enough energy, carbon is not a problem with capture, sequestration, etc. – which for now is seen as too costly. Solar is around EROI of 10+ (assuming 2 year energy payback and 20 year life, which is an underestimate) – with potential for at least two or three doublings. When you have enough secure, reliable energy, all sorts of other issues are also readily resolved such as water, food, transportation, education, … (I’d recommend Richard Smalley’s talks on the subject.)Energy is at the core of everything we do.ps. first step in getting Si is coaxing C to take the O2 from SiO2
I guess I am the odd man out on this blog in that I don’t give any thought at all to things like that.
I live in a condo. I got a special dispensation to use a 110v outlet for our Volt but something like the Tesla is not doable. Solar is completely out of the question. I seem to recall you weren’t able to get your Tesla until your condo in NYC installed a charger.About 60% of the US population lives in multi-unit dwellings (see: https://nmhc.org/Content.as… and are, therefore, largely not in control of their own fate regarding solar and EVs. If we want both solar and EVs to be adopted en masse, figuring out how to enable this 60% of the population to charge will be needed and incentives given to building owners to transition to solar.
There’s a potentially strong contender to Tesla, and that’s hydrogen powered cars, like the Mirai that Toyota is readying, and at a much lower price point.http://www.climatechangedis…
Just check where the hydrogen comes from…much from carbon based natural gas. Not that it is as bad as coal or oil, but still carbon based with emissions that drive continued climate change.
Several things to keep in mind about Toyota’s strategy.1) A hydrogen fuel cell vehicle is an electric vehicle that has an onboard generator that happens to be a fuel cell.2) Tony Seba from Stanford has done excellent work detailing the supply chain and efficiencies of fuel cell vehicles and why they will always suffer a huge penalty over pure electric vehicles. Video at the end of this post is worth watching.3) I’m not sure where you are getting your data on cost points of the Mirai. They are currently so expensive that you can only lease them and only in California. Very similar to the EV1, which puts fuel cell tech 15-20 years behind electric vehicles in general.4) With all that said. Toyota just announced a “breakthrough” in fuel cell tech. Seems kind of odd to me that this is being taughted as a breakthrough worthy of a big press release. Tells you something about how long the journey remains to mass production hydrogen vehicles.https://www.youtube.com/wat…
Te article suggests that the state of California will subsidize these cars. I think we should think of the station of the future which would include electric & hydrogen fuel charging, no?
William, I suppose that is possible. However, all of the studies so far show that the vast majority of EV owners charge at home and at work. From a smart grid perspective, that is exactly what you would want because that is when the cars are stationary and can become part of an intelligent grid, which is constantly taking and putting energy to keep everything balanced. Also, unless you can generate the hydrogen on-site, it will always be less efficient and more costly than electricity because of the challenges of moving and storing all of that hydrogen around.
Thanks for explaining this. I’m learning.
Your welcome and thank you for following the thread. If you are interested in delving in a bit further, here is an excellent three-part series comparing EVs to Hydrogen vehicles:Part 1, Part 2, and Part 3
Great, thanks!
Most people don’t know what they want until you show them a better way.
All the companies marketing solar were or are startups with limited marketing budgets. As the companies and industry has grown and bigger companies have entered the space through acquisitions marketing budgets have increased and the industry is growing.But to solve a marketing problem you usually need $$$$.
What is the sweet spot of the market whereby you could state (other than “owns a Tesla”) that a particular homeowner of a certain profile would be a target for the marketing and likely to adopt and install solar?For example “house is 3500 square foot, price at about $700k, monthly utilities currently run $450 per month located in where there is sun x days per year” and so on. And if so what would the actual pitch be?
Best demographic is something like this:homeowner 40+ years oldhouse of at least 2,000 square feetcombined family income of $100k (although could be lower depending on geography)credit score of 650+Most people go solar to save money primarily and have secondary emotional triggers:1) everyone hate their utility2) energy independence3) national security (people with a military background are exposed to solar on deployments and make great customers)4) clean energy/green5) technology adopters (engineers love love solar)6) Libertarian/get off my lawn (see the utility as another form of government, amazingly a less efficient form)The average solar customer is middle class, not super wealthy. Wealthy people don’t need to save money on their utility bill, they usually go solar for another reason.
Thanks and very interesting.For sure some of your points explain perhaps why this hasn’t taken off. (At least with me).I don’t hate or even think of my utility as any kind of a problem.They supply energy and the cost to me is fine with respect to what I get and the reliability. I am not an engineer but I like to tinker but this thing is on the roof and there is nothing to tinker with. I am not a libertarian and don’t see the utility as any form of government. I don’t really care about energy independence (I have other fish to fry..). Not military.Has there been any survey where it has been shown that “everyone hates their utility”? Not something that I have ever run into. At all. I have run into “Everyone hate Comcast” of course. And I don’t even know if that is actually true. Just that people are very vocal and whine a great deal sometimes.If you are correct, this definitely explains why this has not taken off. The reasons that you have mentioned don’t really relate to benefits but rather emotional points which only a small part of society most likely even thinks about. This is not “weight loss” or “cancer cure” by any means.
Most people go solar to save money. I am guessing you and most readers of this blog are fortunate enough that we don’t really care whether our electric bill is $300 or $250 a month or whether next year it goes to $320. We’d all rather pay less, but the $50 or $100 a month doesn’t have life altering consequences for us.But, the average middle class American cares very much. For them saving $50 a month by going solar is the difference between sending a kid to college or not, or going on a family vacation every year or not. And utility rates are rising. So your wages are rising at less than 2% and utility costs especially in California and East Coast are rising much faster than that. It can be scary for a lot of folks, especially people getting ready for retirement when they are living on fixed income.The average solar customer can save over $20,000 over a 20 year period (assuming increasing electric prices), which to 90% of the country is substantial. And they can do it without ever going out of pocket because they can financing the system.
if you can save 20K over 20 years, your ad campaign should read, let the sun pick up the tab of your kid’s or grandkid’s to their first year of college….let the sun pay for your funeral 🙂
first one is nice.
But by the same argument, the average potential middle-class customer is risk averse and is not going to put down several thousand dollars to save $50/month. He/she doesn’t have that kind of cash flow and if he did would compare this to other investments. With all the variables in play, why is this better than the stock market ? There is nothing sure about when the sun shines, how often things break down, etc. If this is such a sure thing, why doesn’t the seller take the risk and simply sell the electricity at a lower price to the consumer ?
I agree with the point that this is more than just a consumer awareness problem. If that’s all it was, given the enormous potential upside, huge marketing dollars would have poured in and would have fixed that problem in a heartbeat. I think the bigger issue is that, as noted by Josh in several posts, currently solar isn’t economically advantageous without government incentives that are only available in a small number of states (I think that’s right, if I’m reading the posts correctly). When the economics work, and work dramatically, without the government incentives (which I hope is almost inevitable with decreasing solar costs vs increasing traditional energy costs), adoption will soar.
It’s usefulness that is the catalyst. That’s why you invest in platforms, and not generally features. A platform has multiple features and amplified values that come with that. Elon Musk is building a platform. Sure, the features all existed beforehand – but now someone is putting it together into an easily consumable, understandable, marketable way.Of course economic benefit has to be there by default, to compete with the status quo, however someone like Elon who has a platform – and not simply features in mind – will gain all of those efficiencies and then can return the majority (minus the ROI/profit) to people/consumers.People still haven’t disrupted the most important piece yet of our lives that needs disrupting, most aren’t even aware of its importance – however the signals and awareness towards seeing it as a problem is growing.
Thanks Fred. I think part of it is moving through the early adopter curve. Most consumers (especially older ones as you need to be a homeowner to go solar and homeowners skew older) don’t like being first to do something. We used to see that once a home or two in a neighborhood went solar, more would quickly follow. But it takes time to get the first few. By frame of reference in 2009 there were probably under 5,000 homes in the entire US with solar and as of the end of 2014 there were over 600,000 and estimates are that there will be over 1 million by the end of 2015. So the growth is there, just starting at a small base.I think electric cars could be a huge catalyst. I don’t have any scientific data, but anecdotally, people with Teslas, Leafs etc. go solar at a pretty high rate. The nice thing with solar is you have no fuel costs or variable costs. You buy it and it produces free power for 25+ years. So imagine buying a Tesla and prepaying for your gasoline for the next 25 years at a rate cheaper than the current cost of gasoline.Home automation products like Nest and other tools help as consumers start actually focusing n their energy usage. Alarm.com has toyed around with solar partnerships and integrating solar into their home automation suite.Another big driver will be energy storage. People will want the Tesla battery. I see adoption playing out similarly to solar.For the first time power and energy in the home is being made cool (batteries have been around for a while, they were just clunky and never packaged right like Tesla is doing, more science project than consumer product) and you can save money doing it and that is going to open up a huge market.Also, we are starting to see more solar partnerships with larger brands. SolarCity works with HomeDepot, my old company got bought by a company with 6,000,000 customers every year in the US. SunEdison and NRG are ramping up in the space. Folks like Comcast are starting to get into retail power and demand management (not solar yet). But as bigger brands get into the space with much more reach and large customer bases, I think that will help tremendously.But there is room for innovation in the marketing side of the business and companies that have shown the ability to acquire solar customers effectively (average customer acquisition costs can be around $4,000-$5,000 per customer) are usually bought up by larger players for nice multiples.If anyone has a good idea, would be happy to discuss it.
(average customer acquisition costs can be around $4,000-$5,000 per customer)Is there a breakdown of how that $5000 is being spent to acquire a customer?
I don’t have a good current breakdown, but the money would get spread out over the following:1) lead generation cost (adwords, radio, D2D, direct mail, etc.)2) sales cost (commissions, salaries)3) marketing and sales overhead (including inside sales)4) system designProbably 50% in lead cost and 50% everything else.
Seems like (and maybe this is obvious and already done) to be an opportunity for someone to operate an independent company with sole purpose of educating and qualifying leads. If in fact that is the cost to acquire and how it is done now. Seat of the pants seems that if you have even $2500 to play with (I will take half of your number) there is money for someone to go knock on doors and cut all that admin overhead much of that lead generation costs. Independent contractors in other words. Or maybe some kind of tie in with roofing companies whereby they offer the solar after they are called out and after they win the bid to replace someone’s roof. Likewise even if you have to take a loss on install in a housing development to get an early adopter (and I did say “loss”) you will then have a showcase to get others to do the same in that development.
Some folks have gotten into the space with a background in D2D alarm sales (Vivint and others) and mortgage sales (Paramount which Solar City bought).Market penetration is below 1% and lots of room for smart marketing folks in the space.Roofers and other problem solution businesses (electrical, HVAC) have historically been awful at selling solar because they are used to problem solutions sale with very high close rates. That is not solar. There are also not a lot of large residential roofing or electrical companies. The businesses tend to be hyperlocal.
I like all of your comments in this thread, but I really like this one as it shows understanding of the sales process.One question, the IEEE says it takes roughly two years to payback the carbon used to make solar panels, and the amount of environmental impact can (and that really depends on regulations which is a third rail around here) be very significant. http://spectrum.ieee.org/gr…Any realistic thoughts on this???
Solar is not entirely carbon free power as the production process of the equipment as you note is industrial and dirty. But nothing is perfect. It’s certainly better than coal and nuclear and other sources when it comes to environmental benefits.
Philip, the solar industry as a whole has likely paid-back its cost of production. Here is an analysis from a few months back: http://thenextturn.com/sola…Here is a key quote from that article: “Thanks to the steady declining energy required to manufacture and install PV systems, the energy payback time (EPBT) for solar PV systems has shrunk dramatically from a high of almost 50 years in 1970s to as low as 0.5 year for parts of the world where sunshine is plentiful, as in the US Southwest.”The beauty is a solar installation will generate energy for well over 20 years and if its EPBT is only a few years (or less in some cases), that creates for a huge positive balance. So, I think it is better to think of the energy budget of solar as the cumulative installed base, rather than an individual installation.
It says it takes roughly two years except in places like AZ. I read the professional engineers article cited.
Fair enough. Let’s stipulate two years. Every solar company I’m aware of warranties their panels for 20 years. Effective life is at least 30 years from what I’ve read (probably longer). So, worst case each panel is net energy positive for at least 18 years and probably 28 years or longer.
Those companies exist, that educate and qualify leads. Even if one didn’t want to use them, it would be super simple to buy a list of home owners in select zip codes and email them, target them on FB, and wherever, constantly extolling the virtues of a switch.But it’s a sales channel issue – if Certain Source (one of those lead companies) called Solar Co. up, Certain Source would never get past the secretary.
The tie-in to roofing companies already exists. Check out http://www.solarsitedesign…., as they created an app that allows relatively untrained personel to do a site survey while they are already at the house. I believe they’ve gained traction with Sun Edison and some other large suppliers. I like how they state “Our proprietary business process is designed to reduce the solar industry’s customer acquisition costs by up to 50%.” There’s that 50% everyone is talking about.
Isn’t there an industry association that can run a Got Milk style campaign? Need higher level awareness before getting into leads. I would follow that with Advertorials in print and online media. Big blast.Is there a Solar Energy Awareness Day? Or Alternative Energy Awareness Day?
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I think you may be taking this too many steps ahead. This isn’t a product/company marketing situation. It’s basic public education and awareness. You’re not changing perceptions. You’re spreading some knowledge about something new.I thought the Got Milk campaign did work initially and increased sales many years ago.
you are right.my apologies.
no need to apologize my friend…it’s just a discussion 🙂
There is SEIA, Solar Energy Industries Association, but its funding doesn’t even come close to comparing to the funding of larger and more established organizations like milk, meat, oil etc.One of the challenges with national media is only about 15 states make sense for solar today financially. Give it another 5 years of lowering costs and increasing power prices and another 20-25 states will open up.
We got marketed to in upstate NY.The Solar Co had a kiosk at Home Depot staffed by an attractive man and woman. They called my kid over with candy, and we of course went over to see what was happening. We filled out a form, and got called twice and emailed three times.They did zero online marketing, which honestly wouldn’t be hard for them to have done. It would be a trivial matter to target me with ads.So – the cost is A) some candy B) a kiosk C) two part-time staffers and D) some pamphlets.
The firm that likely did this is BrightCurrent. Instead of each firm negotiating with retail stores individually, they get whole retail channels setup, manage staffing and lead generation/chase, and sell the customers to the larger solar firms. It has lowered acquisition costs and is growing. The DOE’s Sunshot program now is quite focused on soft costs and you are seeing more and more specialty firms focused on data qualification of leads, innovative B2C marketing approaches, and more point-of-sale and direct marketing approaches over the straight sales approach that dominates the industry. CAC is coming down, slower than panels, but it is still lowering and as installation and financing become a commodity business, it is a huge business opportunity for startups to cut their teeth in solar.
Thanks for all of your comments here. That’s a lot of customer acquisition $ to play with.
All good points, Josh. Thanks. A couple of questions still linger1. If solar were that good and cost-effective, why did it start flourishing only recently although innovated decades ago ?2. You, quite like any other marketer, talked only about the pros of going solar. What are the serious downside of solar’ising ? What can possibly go wrong adopting solar methods?When I asked the same question to Tesla he was stumped, the reason is no one knows how Tesla would hold up to itself after 30,000 mile run. So your estimate of 25 year run is only a guesswork as tesla cells have a very short lifespan.
Teren, solar started making sense a few years ago because European governments launched subsidy programs (first Germany, then others) which incentives adoption and led to scaling and massive costs decreases. Sometimes subsidies are necessary to kickstart markets. In just 5 years the amount of global subsidies for solar and in the US has dropped substantially but the market keeps growing.There really isn’t a downside to going solar. The technology has proven in the field to last for more than 25 years. Solar doesn’t need batteries like a Tesla which have a much shorter lifespan.
To the ‘why not decades ago’ question, please also remember that solar technology has advanced tremendously over these years, and continues to. Efficiency gains on capture and cost dwarfs the same-period efficiency gains of traditional energy, especially carbon fuels.Agree that downsides are not terribly real. If you have it, it works. Your carbon footprint shrinks, fix costs amortize steadily, variable costs vary downwards.But there are challenges, amazing companies currently trying to solve the issues of energy storage and variable flows into power grids.
Looks like subsidies, not electric cars, are the catalyst for market penetration.
So when I, as a marketer, signed a new solar contractor to a $1,000/mo. marketing contract — and then delivered five new legit leads in the first month… you’re saying maybe that was undervalued… by as much as $24,000…Live and learn.But Josh, is there any way solar could become more of a plug-and-play DIY project, and that could catalyze growth in this space?
Josh is right; an increase awareness and advances in marketing are required. And he would know — his company Astrum Solar got started when the payback equation for solar was less compelling than it is now, and they grew very fast in large part by doing marketing better than anyone else in their region.I’d stop short of saying that consumer awareness will be THE catalyst, but it is one of the major requirements (along with the marketing to increase awareness). Consider what this Yale study ( http://bit.ly/1AdUzmp ) reveals: the adoption rate of residential solar is most impacted by proximity to other installations. A DOE official alerted me to this data, which was corroborated by studies in CA, TX, and UK, and which Josh observed in practice. When people see their peers installing solar, it increases mindshare (an aspect of awareness) and makes it more likely to enter one’s purchase consideration. But this is perhaps a slow path. Investments in marketing can accelerate the adoption effect of visibility seen in the Yale studySolar is only 1% penetrated, and the vast majority of that 1% is in distant fields, deserts, and on flat commercial rooftops where people very rarely see it. In spite of compelling cost savings, financing options, environmental benefits, and people’s positive feelings about solar (70%+ report liking solar), a very small portion have purchased. This is the way of the adoption of new things — even when everything lines up to support a purchase decision, there are psychological barriers to action. Awareness is one of those barriers. Sure, everyone is aware that solar exists, but solar occupies very little mindshare, it is not “top of mind” (a very highly correlated measure to future growth). That takes reminders, and reminders take money. This is why there is a Tide car in NASCAR. Except perhaps in a few states where SolarCity is spending a lot money, people don’t have solar top of mind.Beyond awareness, the solar industry needs people to understand the benefits of solar, how to buy, and how to select a provider. The huge cost-per-customer-acquired in residential solar is evidence that these elements of purchase consideration are underdeveloped, as are the marketing methods employed. Total industry advertising scale, and time, will help. As a benchmark, the auto industry (75 years older) spends about $1300 per car sold on advertising (durable good, similar order of magnitude cost as residential solar), and a total of over $35 billion.Someone else on this thread mentioned Got Milk and the potential for the solar industry to create a similar industry-wide program. I’d love to see such a program, and have both calculated it’s NPV and worked on how it might be structured. But it is difficult to get it going. Voluntary coalitions of industry members are challenging to manage and get to scale. This is why programs like Got Milk and 26 others in agriculture are literally created by acts of Congress — there is legislation in place to compel funding of the program by commodity producers. Maybe this could be done in solar, but there are many other lobbying efforts with priority. My first hope is that the momentum in solar, combined with the competitive and margin upside from better marketing, will create the conditions for bigger and better marketing investments. And that will be a catalyst for the wide adoption Fred mentioned.
Fred, this my first comment after years of reading your blog and the great comments. Thank you for creating such an amazing community.I own an EV and am a huge advocate of solar. I think both EVs and Solar suffer the same problems so I don’t think EVs themselves will be the answer to solar. Both require individuals to go through a significant cognitive process as both break many of the foundational premises we’ve lived with for decades. I think they will both evolve together and increasingly break into the consciousness of the public.In my view, the catalyst for both will be when we, as a society, tip from denial to acceptance on climate change. Both EVs and solar will then become tangible decisions individuals can make to take action and powerful tools cities and governments can incentivize.I believe there will be a catalytic moment when society makes this switch. Hurricane Sandy came close, but it wasn’t enough. The drought in CA has the potential to be that catalyst. Bill McKibben’s divestment movement is gaining momentum and could help turn the social tide from apathy/denial to action. When more people are writing articles like “The awful truth about climate change no one wants to admit” one on Vox a few days ago, EVs and Solar adoption will truly take off: https://www.vox.com/2015/5/…
Keep the comments coming Don. You are good at it!
I think the catalyst has to be economics. “Climate Change” is such a political argument. Even if you believe in the science, the way the argument has been put forth so politically for so long, the nature of the bell curve means less than about 25% of the population would take action solely for the sake of climate change and most of these people likely don’t have the $$$ to spend on clean energy given the current economics. The middle group is really too indifferent to be motivated to get off their wallets en masse. And the people at the other end of the curve will disagree for the sake of disagreement.
JM, I disagree. We do not live in a purely libertarian world where all things are measured against each other purely on the lowest cost. Society makes moral judgements that inform economic decisions or policies, which in turn affect price comparisons. The problem with climate change is you can’t see or feel it at an individual level on time scales that matter to a single person. That unfortunate reality gives us, society, an excuse not to act and economics is very often the excuse we use.If an oil company’s pipe burst and was dumping sludge on your lawn, you wouldn’t say “well, it costs more money to fix the leak and clean it up than to just leave it broken.” No, you’d fix it (or demand it be fixed). There will come a point in the not too distant future when we realize that emitting CO2 at the concentrations we do globally is exactly the same as that open pipe spewing sludge onto your lawn. At the moment society truly makes that connection, it will no longer be about “economics” and it will be about action (and a lot of debate about what that action should be).If the catalysts I mentioned in the post above aren’t enough, what might it take? For slavery, it took a civil war to resolve the moral equation. Hopefully, climate change will not require a catalyst of the same level. Chris Hayes published an excellent analysis showing what the cost was to eliminate slavery and compared that to what it would take to wean our society from fossil fuels. Its hard to summarize his work so I encourage you to read The New Abolitionism from April 2014.
I was trying not to wade into the morass that is the Climate Change debate. Rather, I was pointing out that because the debate has become so politicized, people’s viewpoints and willingness to take action are now informed more by their political view than societal view. Right or wrong, it’s the reality.As an example: from your comments, it’s clear you believe strongly in the effects of man-made climate change. And, based on this, you want society to broadly implement things that you believe will make a difference. No judgement here – just summarizing your perspective. Have you moved your home completely off-grid with solar panels yet? Is so, how much did it cost? If not, why not?
JM, You are correct that the issue of Climate Change is highly politicized and that opinions are clearly formed by ideology. That is sad because the physics and science is so well understood. I am putting real money behind my assessment that the science is solid and investing in businesses that operate with that fundamental model driving their business plans. Time will tell whether that was wise (and lucrative) or not. It has been a great ride so far. I would be happy to compare notes with anyone who’s investing strategy is built on a premise that climate change is a hoax to see who does better in the long run.Fred asked us what would lead to the greater adoption of solar. My view is that the answer will eventually be the realization by society that fossil fuels have to stay in the ground. Personally, I’ve reached that conclusion and am doing what I can to reduce my carbon footprint. Everyday more people and business are reaching that same conclusion. Unilever was the latest. Once you reach that conclusion, solar power invariably becomes central to your strategy. Two resources to see what the divestment movement looks like:1) GoFossilFree’s Divestment Commitments2) The RE100: “The world’s most influential companies commit to 100% renewable power”
See today’s (may 18th) editorial page of the WSJ for a well written different take on solar panels
The percentage of solar electric power generation vs the total is still very small. 0.45% as of the end of 2014. It will never be a primary source of energy until it does not need Government subsidies and friendly state government that increase the cost of traditional electric power generation. AS was the case with Solyndra government picking winners and losers just translates to the most well politically connected company gets the loot. They are not in the solar power business they are in the government subsidy business. There is no reason why Solar can not be competitive once the costs come down But until then it is asinine to p-away money on it that is not going to get it to the point of it being realist AS A SOURCE of electricity outside of off grid apps.
It would seem that the biggest thing holding back adoption of solar is 100% uptime. That is a tough status quo to knock out of the box.Fred needs to jump in a dead Tesla how many times before he is unhappy? 2?In places that are not desert ecosystems, that has to be the hurdle.
“Note that solar competes against the cost of fully delivered residential electricity”I’m curious what this means for developing economies around the world. For places without a robust, pre-existing grid, there’s a huge capital expense for implementing traditional grid systems. It seems both logical and efficient to roll out a decentralized system of solar-based power.
It is kind of tricky. Most developing countries use diesel based power generation and the cost is absurdly high. But solar is intermittent (only power when it’s sunny) so it doesn’t solve the full problem. Solar plus storage does.That being said, the upfront cost to deploy solar can be high. People end up hostage to pawn shop style diesel cartels in the developing world.
Thanks for the reply, Josh. Very helpful.
Cost.The Tesla Powerwall, if Tesla’s kwh usage predictions are correct (one big debate is that they might be off IRL — by a lot), will pay for itself in about 2 – 2.5 years, depending on average kwh costs in your state, your home’s usage, etc.Yes, there will be a Calc for that.
I could see the Powerwall being the impetus for greater solar adoption.
Read this week The Ecomist ‘Crystal clear’http://www.economist.com/ne…
I’m the CTO of Principal Solar, currently building the largest solar farm east of the Rockies (www.principalsolar.com/news…. At 98 MW-dc our total cost is under $1.77/W and costs have declined 30% annually since I started 10 years ago.Anyone who doesn’t think solar is inevitable is not studying the economics that are happening at the leading edge of this business.The tipping point will be time-of-day pricing at electric meters. Most people pay one flat rate for electricity, an artifact of the days when your meter was read manually once a month. The utilities, however, pay different rates for power generation based on the time of day and season. Now that utilities can inexpensively use networked meters to record your usage every minute, market-based economics will cause utilities to pass their cost structure down to consumers in order to effect their demand behavior. In California, some customers have 4 different billing periods daily and prices can range from $0.04/kWh from 12a-6a up to $0.25+/kWh from 12p-6p. Here in Texas, Oncor offers “free electricity on nights and weekends” (midnight to 6am) to reflect that the large amount of night wind power in West Texas has occasionally driven the wholesale spot price below $0 (wind gets a production tax credit, so they can pay to put power on the grid and still make money).When you pay > $0.25/kWh between noon and 6pm, when most solar generation occurs, your payback is measured in months not years. Utilities recognize this trend, so they are adding large-scale solar to push down their daytime and summer generation costs.We use our “Marketing” budget to study questions like this at http://www.principalsolarinstittue…, if you want to learn more.
I buy this economic argument but it strikes me as somewhat complicated to understand for the average consumer
I couldn’t agree more Fred. Costs are coming down which is necessary, but not sufficient. I work with Richard Kauffman and Governor Cuomo and we are changing the regulatory landscape and incentives as well as improving consumer protection channels to enable the transition to happen faster, smarter, and cheaper. That’s still just a necessary piece but not sufficient. Things need to become simpler and seamless for customers. We don’t need customers to understand energy or care about the environment. We need to sell them what they want, which is maybe lower power bills; maybe they need home healthcare services and therefore want the resilience that comes with solar and home storage; maybe they want independence; maybe they just want a cool powerwall and the latest tech. Whatever it is that people want, the market players need to make it seamless and easy for the customer to click on a button and say, “sign me up!” Richard and I and everyone on our team want to hear from people in the market to know what we can do to help the private sector succeed at that.
Whatever it is that people want, the market players need to make it seamless and easy for the customer to click on a button and say, “sign me up!”Well if you own a home “seamless and easy” is placing an order on Amazon (where your cc info is prestored) and the product is delivered by UPS or Fedex the next day or two. Seemless and easy is showing up at a car dealer and buying a car on the lot and driving away with it. [1]Getting a solar system installed on a roof will never be seamless and easy. Why? Because it involves contractors, installation, questions and potentially financing (my guess is the average person isn’t writing a check for this ..)Taking my other comments into consideration (re: pain and suffering of doing anything at the house) if it were simply a matter of writing a check for $10,000 and I could get over the way it looked on my roof and my other questions, I might do it. Maybe Maybe not definitely.But home improvements are never easy and never just a matter of cost and/or benefit.[1] Note that most people do this, they don’t order because it isn’t “seemless and easy” and there is no immediate gratification that way..
Yep, you didn’t see Steve Jobs or Elon Musk talking about how cheap thier tech was, they talked about how cool thier tech is.
I’ve been readying A VC for about a year and enjoy thediscussions. I haven’t posted before but this topic really hits home. Our startup (Sierra Smart Systems) is working on ‘near carbon free’ urban transportation using electric cars (Josh is right– you can’t get totally carbon free, but you can get close).All of the discussion here has been thought provoking, but Kate’s point ‘we need to sell them what they want’ is key, I think. I would counter just one point: that ‘we don’t need customers to…care about the environment’. A significant portion of the population does care about the environment, so if you can give them what they want (faster, or smarter, or more convenient, or cheaper, etc), and make it green in the process, it seems you’d have a winner for a significant share of the market.One thing we’ve learned in developing our business model is that instead of investing in solar panel infrastructure, you can purchase renewable energy for a surprisingly reasonable premium to conventional energy prices. This is true in an ever-growing number of cities in the US. If you’re looking at procuring energy for a fleet of electric cars where you can aggregate and meter your renewable energy purchase, the added cost of ‘near carbon free’ energy becomes a fairly small piece of the overall business case.Once you have electric vehicles powered by renewable energy, you have to package this ‘near carbon free’ mobility into a product that is ‘what they want’ as Kate stated. That’s what we’re working to develop.Looking forward to more interesting topics and discussion here.
Most consumers will just keep paying their electricity bill. There will be no noticeable “solar tipping point”. But the percentage of their electricity that comes from solar will increase from the current miniscule level (outside of Cali) to around 35-50%.In the very sunny southwest (CA, NV, AZ) you will see residential solar with a penetration level similar to Air Conditioners, and the “consumer choice” question will have about the same level of difficulty. Every new home will have solar panels included as part of the builder options.Outside of that area (the other ~45 states), solar will be one of the power generation sources that you think about as little as you think about nuclear, coal, gas, wind, and hydro today – you just flip the switch and as long as you paid your bill the lights come on.I don’t think the same outcome will occur in Phoenix (~2200 hours/year sunlight, lots of land and heat) and Boston (~1600 hours/year) once subsidies expire.
But time of day pricing is already widely available, no? We have that already with Ontario Hydro in Canada.They even tell you how your consumption compares to your neighbors aggregate in your monthly bill.
Just curious why do solar companies so often trade on the 2nd tier pink sheet OTC market while the rest of tech trade on the more reputable first tier (NYSE NASDAC)
Ok, but you’re talking about selling to the grid as opposed to selling directly to consumers. These are different markets.
We also rented a home with solar and loved it. I agree solar adoption is inevitable. What’s needed: 1. The bundling of better batteries to lower hardware and efficiency costs. 2. Companies like solar city require a 15-20 year contract for free panels. As cost of panels comes down, you are stuck paying a high kWh fixed rate and if you sell your home you are responsible for the balance of the contract. This is a fail that will cause contract defaults or lack of adoption. – need cheaper and quicker recovery costs on the consumer side for hardware or more flexible kWh pricing from companies.
electric cars are powered primarily by coal.battery technology could make solar viable at scale but it is so far off.
agree, that’s why unbundling is the way to go. Each home with their own battery system that they charge when they decide to charge it
This is a false generalization. EVs are currently powered by their local grid (or on-premise solar if you’re fortunate). So, two points:1) Unlike a traditional internal combustion engine (ICE)-powered vehicle, an EV evolves with the grid. When the grid gets cleaner, the EV gets cleaner. Whereas the ICE vehicle can never get cleaner.2) The US electrical grid’s dependence on coal varies widely by local. States like Wyoming are almost entirely powered by coal, where as an EV in LA would emit very little CO2 from the electricity it uses. This NYT article does a nice job explaining it: http://www.nytimes.com/2012…
how much cleaner can the grid get? 15% of global electricity consumption comes from renewables. what’s the path to getting that higher? the IEA estimates it’s going to take at least 25 years to increase that number by 4%.combustion engines are getting cleaner all the time. look at emission rates from cars back in the 60s to those today. related to that is improvements in fuel efficiency.
Kidmercury, There is no reason at all that the world’s electric grids can’t be 100% renewable. As I mentioned elsewhere in this thread, Hawaii has committed to a 100% renewable grid and others are on their way. The operative market sectors to get us there are renewable generation (wind, solar, biomass, etc), grid storage (e.g. Elon’s PowerWall is just one of many examples), and a “smart grid” to put make it all (see this 2014 smart grid year in review article). It will happen.No matter how clean an ICE gets, it is still burning fossil fuel that was extracted and refined. Tony Seba gave an excellent presentation comparing what is possible with ICE and electric vehicles. ICE vehicles cannot compete in the long run with an electric vehicle powered by a clean grid (or micro grid).
Coal is unfortunate and should go away in the long term. But much more efficient then non electric cars generating their power individually.
On a related note, solar power has transformed the lives of many people in Africa.http://recode.net/2015/04/2…Solar panels have become a commonplace sight in even relatively poor villages. Without power, mobile phones are useless. In the past, it was difficult to get reliable power and it was expensive. With solar, getting power is convenient and best of all, free. It will only encourage more people to use mobile and internet more. This is super exciting.
Down in Asbury Park, I often drive by a particular office building parking lot where the cars are kept nicely shaded by solar panel holders. Now, that’s multi-tasking. I often wonder what made that project possible.Here’s a 3D-printed tree that makes and stores its own solar energy – functional and pretty!http://3dprinting.com/news/…There are backpacks with solar panels on them to store energy for charging cell phones and laptopshttp://www.voltaicsystems.c…I always figure these things haven’t taken off like crazy because they must not quite work as advertised. The prices on the backpacks, for instance, aren’t out of reach for average people. So what gives? What doesn’t everyone in tech carry one?Why do more people desire an Apple Watch than one of these backpacks? Does solar have a marketing problem? Is it not sexy enough? Maybe we need to get The Avengers into solar.Maybe what we need is Oprah: “You get a solar panel roof, and you get a solar panel roof, and you…!”
I always figure these things haven’t taken off like crazy because they must not quite work as advertised.Yep and a corrollary is that anything that needs to be hard sold or pushed has some inherent drawback that prevents easy mass adoption from kicking in. And example is the fact that they will pay you to sit in on a presentation on buying a time share vacation home. If it wasn’t a shiester thing, they wouldn’t have to do that. They have to (I am guessing) use all sorts of manipulations and rationalizations to allow you to think you are making a smart decision.It is not the “low hanging fruit of opportunity” as I like to say. Which is what business is pretty much about. Generally you ride the wave of the moment and the best man wins.Notice how other things that “took off” were obvious and didn’t need to be highly pimped.- Fedex overnight delivery.- Fast food- Fax machines- Home Phones- TV sets- Cell phones replacing land lines- Playboy Magazine “Entertainment for Men”- The Internet- Domain Names on the internet (vs. IP addresses)- Porn on the Internet- Movies on your laptop…and so on.
When I watch people jockeying for power outlets at Starbucks and the airport in order to charge their devices, I can’t help but feel that BYOP (and/or ubiquitous power) is in the same class as, say, cell phones.
If it’s not obvious that is by design at Starbucks since they don’t want people hanging around and tying up tables which is already a problem as you note. [1][1] This was actually something also used by McDonalds and their “uncomfortable benches” so that people don’t linger there anymore than they need to.
I am not sure but have been told the battery / batteries for solar at home don’t last quite as long and the price is quite high, but I have been considering this for some time nowMichellehttp://excellentprinting.co…
Isn’t there someone at Google saying that Solar will be universal and dirt cheap by 2025? There are others who laugh at this, who knows. But, what would help a lot is some consistent tax policy re Solar.
My observations on the topic:a) To date only countries/regions with a strong political/government mandate and corresponding transfer of taxation from dirty to clean energies have deployed at scale – Ouriel mentions Israel, another well documented and better case is Germanyb) As Josh eloquently describes the cost per KWH generated is decreasing but this is a misleading cost. The cost to assess is in terms of what ends up being consumed/used – that’s the one where the Tesla battery comes to play by improving 2 to 3 x that cost vs “grid” based energy delivery. Yet due to decreasing other energy production costs Solar is still more expensive in majority of the US according to this great post on Medium by Dan Steingart (a real expert!) https://medium.com/@steinga…c) Yes solar including battery should be a primary way to equip non-grid equipped regions. The challenge there is that in poor emerging countries apparently the #1 issue with this is not cost but theft and associated gang violence etc.d) in the US/California, according to a friend who also has a solar install business two other big impediments to traction seem to be that consumers do not value long term savings (other US data corroborate) aka solar is not “instant” gratification and if you go the 100% financing route which most do – it does create a lien on your house and affect somewhat resale value or at minimum adds some friction to handover the rest of the financing etc.My take is that the last set of consumer challenges could be offset by integrating Solar as part of the upcoming Smart Home revolution – once Solar is just one of the part of making the house intelligent, then I think the value prop changes dramatically IMO. My $.02
Who can predict what the exact catalyst will be? But you’d think that Elon Musk’s giant battery plant in the Nevada desert will play a role.
dunno fred but been a lifelong believer.my first paying job as a writer was as a stringer for Citizens for a Solar Washington a long while back in seattle.when i live outside of the city, there were many options to act. in urban life, choices are few to support this that i know of.
Seems to me that it is close to a non starter in an environment like Manhattan or Brooklyn at least with multi family housing.You have only one roof for all of the people (whether it is a 5 story walkup or One57 [1] So there is less of a benefit for each occupant and more people that in theory need to agree to a decision. Not to mention that at housing costs in NYC utility cost wouldn’t seem to be major relative to other occupancy costs. After all most people who own a home and are the sole decision maker and beneficiary don’t go down this path (currently).And how many people would want to replace that nifty roof deck with solar panels? Not going to happen, right?[1] http://www.one57.com/
Hi Fred: we’re all in this together. Under the same sun. And that’s the key: It’s timefor the power of the Sharing Economy to disrupt Solar Power. A peer to peer Solar SharingNetwork like the one we’re building at http://www.yeloha.com could radically disrupt solarfinancing and remove the barriers that today disqualify 92% (!!) of the USA’s113 million households from even thinking about going solar. @fredwilson:disqus , your panels powering the house and car during the summer are the way to go. But as I mentioned to Nick G the other day, what excites us at Yeloha is the other 10 months during which your panels could have generated electricity for others who’d love paying for it (ultimately financing your other 2 months while at it)
Electric cars. I’m counting the days until I can buy a $35k Tesla, a $10k solar panel array, and never have to buy gasoline again.
Buy a Toyota Prius now, it’s not all or nothing.
Broad carbon taxation is always a big driver – see EU for example. But the storage problem seems to me to be the biggest thing holding it back. Coal and oil can just sit there for 1000 years and still be as useful as they were the last 1000 years.
And the reaction I often get is “that is awesome. I want to do that.”I don’t have that reaction at all. I have little interest in “that”. I think “I don’t want to have unsightly solar panels on my roof” and “I don’t know how long I will even be in the current house I am in” and “my electric bill isn’t a pain point (it’s maybe $350 to $400 per month average year round) and “I’ve got enough issues with contractors and planning for simple household things so why do I need to put something else on my plate?”.And the above is even before I get into the unanswered questions in my mind (as a consumer) such as “how much more will it cost to redo the roof if there are solar panels up there?” And “what are the repair and maintenance costs”. “What is my homeowners deductible and if a panel or panels are damaged by tree branches what is it going to cost to repair that?”. And so on.
You prefer pollution?
and charge the Tesla we ownThe acceleration on the Tesla would be fun I guess (although I like engine noise) however I can’t get by the idea of having to ration my use of power in a car. I don’t want to have to think about it in the same way that I hate when my cell phone gets down to 40% and I have to start to restrict my usage and “not take as many videos” and so on. When I am in the office or at home that isn’t an issue. But when I am out in the wild it is.Having a gasoline vehicle means you have practically unlimited and always available fuel (which you can take on quickly which is important) so you don’t have to worry about how you drive and/or what appliances you use in the car that use power (such as the air conditioning).I just took a 220 mile trip in my car and got caught in a few traffic jams. But I didn’t have to think “where will I fill up” or plan at all. (And my car only has a 350 mile range). I knew there was gas everywhere and as long as I got a tank before I left (or even if I didn’t) there would be a million places to get gas up and back from the destination (even with that destination being somewhat in the sticks).
Public charge stations are more than plentiful here in the Northeast. Over 300 in CT alone. Lack of places to fill-up is more of a flyover country problem.
Habits can change – and some would argue your gasoline habits should change. It’s all about habits.
It’s all about “grid parity”, the point at which solar is actually as cheap or cheaper (and equally or more convenient) than traditional sources of energy (in this case your wall AC outlet). That’s the bottom line because that’s how the vast majority of people actually make decisions about energy consumption.The economic analysis done on residential solar, in particular, is almost comically miscalculated. In addition to assumptions of energy inflation at about 7%/year (which is historically inaccurate), there is usually no accounting for the time value of money (the opportunity cost in this equation) in payback analyses, making the 10 year payback a stretch. Even at 10 years solar is a tough sell when considering that any given consumer can’t have much confidence in payback numbers and must consider the additional opportunity cost of technological advances in energy over the next 10 years. Plus, solar isn’t particularly convenient, especially when compared to their current and seamless access to electricity.Like most catalysts for change with human behavior, there won’t be one until the new option is a no-brainer. With unclear payback timelines, mixed information, cheap and easy current options, and an inconvenient process for solar instals I think it’s going to be a long time before we see real “grid parity” for solar…
If elan musk can make it hip (vs an economic argument) to own a tesla why can’t he (or someone else) do the same for solar panels?
You cannot improve your probability to reproduce (dating) with a solar system like you can with a Tesla. Also, there are no grin inducing G forces involved, nor is solar a mobile social proof demonstrator as is a Tesla.
One reason is that solar panels generate a commodity, while cars are hired for all sorts jobs other than transportation: status, fun, thrill, comfort, luxury.. Otherwise, we’d all be driving Toyota Camrys. The beauty of a Tesla is that most Tesla owners have them because it’s one of the coolest cars you can get – it has a beautiful design, staggering performance, and it’s good at a being a car too. That it’s “green” is a secondary benefit. And because it’s a luxury vehicle, it dodges the idea that it needs to pay for itself and the other pure economic calculus that people apply to low-cost EVs, so Tesla can actually make a profit (along with selling carbon credits to the big auto manufacturers) which afford them the ability to make infrastructure investments like the Supercharger network that give them a brand and performance advantage over their other competitors.That was a lot of words to say that there are luxury cars, but there isn’t really luxury electricity.SunPower is an American-made solar panel that has made a relatively successful attempt at being the luxury solar panel (they make the most efficient/powerful panels on the market), but that just makes the energy they produce more expensive. I’ve seen Yelp reviews of SunPower customers where they actually stated “Some people want a Toyota where others want a Lexus”. So, some people want to overpay, if only to say that they did. But I don’t think that addressing that market niche moves the dial on getting us from 10% to 100% renewables!
While the cost of solar has declined significantly, so has the cost of its competitior (natural gas produced grid power).Once natural gas bottoms, solar will take off. We’ve been in a cheaper grid and cheaper solar phase for so many years, more expensive grid with cheaper solar is the ignition point in my view.Natural gas monthly: finviz.com/futures_charts.a…
Thank you for bringing up the subject! I strongly believe Tesla has an energy strategy, and that the electric cars are just the Trojan horse for Solarcity solar-powered services and products. Electric cars unless considered as a commodity (at very competitive prices/ usage), like Autolib service in Paris (roughly 190 EUR/ month for 2-20mn rides per day), will not be adopted by millions of Americans tomorrow, neither the day after tomorrow!Besides, solar energy has been facing the same issue for years (like for other renewables)…subsidies have created an artificial pricing mecanism for a free energy source (transformation to electricity and accessibility costs set apart), and the electricity grid is decentralized countrywide (in the US).So the real question lies in people ability to adopt new ways of transportation (easier in large urban centers, luckily most densely populated), and in utilities to sell solar-powered electricity for the service offered to consumers, instead of the solar-electricity on top…but I am not an expert in renewables!
It’s money, Fred. I would love to trade my car for an electric but the cost is so far out of my budget and the same with adding solar panels. The critical mix for any new technology has to include finance. We had to learn how to make steel in such quantity and quality at the same time we learned how to design steam engines to make railroads possible. The secret sauce was find a way to pull that much money together to finance that long a ROI. Same for solar. Someone will have to figure out how to finance the package and not the individual pieces. That is a package of car and solar charging as a single product with financing that brings the payments down to what the average person ($50,00 GROSS income) can afford. That means the package cost has to be around $25,000 plus average fuel costs).
Laude05, Patience, my friend. I’m personally tracking three primary dates regarding EV adoption. Your time will come sooner than you think. There should be at least three vehicles that meet your criteria by summer 2018 (The Chevy Bolt, an upgraded Nissan Leaf, and the Tesla Model 3). Somewhere around 2021/2022 we should see complete cost parity at initial purchase if current battery trends continue and circa 2025 a huge percentage of new vehicle purchases should be EVs. By 2025, I predict that over half of new vehicle sales will be some form of EV or PHEV.
Fred – two Tesla cars – East Coast and West Coast?
Yes
I have no problem with this and I would do the same.But it is a total irony. Juxtaposed against a desire to be green. Likewise having multiple houses.
dont think fred ever mentioned being green as a top priority.
You wouldn’t want to try and drive one back and forth across the country.
Economies of scale is one tipping point factor, which Elon Musk is working on.Another factor is the looming pressure of global warming – which is a positive pressure because of the two-camp dilemma which otherwise has no nation’s government and business interests caring about any other group; though of course we’re all one-in-the-same.Another is the sharing economy, along with governance that will guide resources in a healthier manner towards benefiting and increasing the quality of life of all – and not suffocating them which our current capitalistic model is allowing for.They are minor changes and easy to explain, though I haven’t seen anyone describe the holistic aspect anywhere yet. Until all pieces are recognized then the systems can’t be properly managed with noticeable positive impact — those gains that we would see would simply be absorbed by some other system that we ignored carelessly – or for some – with bias – willfully.
I think the economic argument from the consumer side is the wrong argument with respect to widespread adoption. Price-per-watt and time of day pricing are things the consumer doesn’t understand and may not care to understand. The real catalyst to widespread adoption probably will be the utilities themselves spurred by companies like Solar City. The key number is the amount of defections to solar/batteries that any particular utility can before their business model is endangered. After that you’ll see the usual entrenched dance where they try to compete by using regulators but that has an inevitable clock on it due to citizens. No politician wants angry citizens who vote on a bread-and-butter issues. Those voters vote and tell their friends to vote. It’s a quick way to lose your job. When the utilities business model is endangered due to solar and batteries and they run out of regulatory tricks they’ll push their own consumers onto the solar model and become electricity management companies in conjunction with some electricity creation.
Solar Energy Panels + Efficient Transmission + Storage Batteries + Water Purification is the future for infrastructurally challenged regions as well. Layer in Mobile Data, and Drone Delivery / Personal Aerial Transport in the last mile and you don’t need roads. My thoughts for the world 15 years out.
I think the tipping point will be when solar panels can be made either much smaller or made to look like nice roof tiles. Right now they are huge and a bit of an eyesore on beautiful homes.
I’ve noticed that in both the US and Canada there are companies offering to install solar for “free”. I think the US offer is “… and we’ll sell you your power for cheap” while the Canadian offer is :… and we’ll give you a cheque every month”.Seems to me, solar is starting its count-down, but just needs to achieve scale before it takes off.
If I were starting an electric car company from the ground up, I would offer a package that included a residential solar panel, installation, and energy management services. Bundling could work.
A cost that is competitive THE US government is the largest user of electricity in the world. The cost of making solar cost competitive is estimated to be $100 billion for the semiconductor fab to make solar cost effective. No one is going to invest $100 billion into that fab that might just be made obsolete even before it is finished. A $100 billion dollar contract with the US government would do it. Unfortunately the Obama Admin Is more interested it helping Obama’s friends than make solar work
I think it’s soon been seeing a massive pickup on the twitter feed on batchnotes on solar
Developing countries with no grid infrastructure that have significant investments in solar could provide the impetus.
this is a space where government policy can make a huge difference in what looks like market pricingthe interstate highway system privileges cars over mass transitthe lack of a national railroad system — see france, china, japan — privileges cars over trains.subsidies for coal and oil artificially lower the costs of fossil fuels; from the military budget to more direct transferstax credits for solar for homeowners and landlords were once policy; they could be again; and for businesshttp://en.wikipedia.org/wik…A 2011 study by the consulting firm Management Information Services, Inc. (MISI)[23] estimated the total historical federal subsidies for various energy sources over the years 1950–2010. The study found that oil, natural gas, and coal received $369 billion, $121 billion, and $104 billion (2010 dollars), respectively, or 70% of total energy subsidies over that period. Oil, natural gas, and coal benefited most from percentage depletion allowances and other tax-based subsidies, but oil also benefited heavily from regulatory subsidies such as exemptions from price controls and higher-than-average rates of return allowed on oil pipelines. The MISI report found that non-hydro renewable energy (primarily wind and solar) benefited from $74 billion in federal subsidies, or 9% of the total, largely in the form of tax policy and direct federal expenditures on research and development (R&D). Nuclear power benefited from $73 billion in federal subsidies, 9% of the total, largely in the form of R&D, while hydro power received $90 billion in federal subsidies, 12% of the total.A 2009 study by the Environmental Law Institute[24] assessed the size and structure of U.S. energy subsidies in 2002–08. The study estimated that subsidies to fossil fuel-based sources totaled about $72 billion over this period and subsidies to renewable fuel sources totaled $29 billion. The study did not assess subsidies supporting nuclear energy.The three largest fossil fuel subsidies were:Foreign tax credit ($15.3 billion)Credit for production of non-conventional fuels ($14.1 billion)Oil and Gas exploration and development expensing ($7.1 billion)
hawaii is interestinghttp://en.wikipedia.org/wik…Hawaii’s imported energy costs are three times higher, and will soon be close to four times higher[1] than the mainland, so Hawaii has motivation to become one of the highest users of solar energy. Hawaii was the first state in the United States to reach grid parity for photovoltaics. Its tropical location provides abundant sun energy.Hawaii has a renewable portfolio standard of 40% renewable energy by 2030. Hawaii had almost 200 MW of grid-connected photovoltaics in 2012. 16 MW of PV were installed in 2010, 40 MW in 2011, and 109 MW in 2012.[2][3] The largest solar project in Hawaii, the 12MW Grove Farm, opened in July 2014 on Kauai. It has 45,000 panels on 67 acres of land and can provide 5.5% of the island’s electricity.[4][5]The electrical grids of the Hawaiian islands are each separate and relatively small. Issues of overbuilding distributed solar in some areas has led to issues and HECO has made connecting to the grid more difficult, leading to layoffs among the solar installation industry.[6] In 2014, there were over 40,000 rooftop systems, over 10 percent of customers.[7] On August 31, 2014, during daytime hours, 57% of power on Kauai was from renewable sources.[8] A proposed grid interconnection between Oahu and Maui would allow more renewable energy.[9]In 2012 a typical solar system in Hawaii paid for itself in only 4 years, and returned a profit of over 4 times the cost over its life.[10] Hawaii’s 35% ($5000.00 Maximum) state tax credit is the second highest in the country, behind Louisiana.[11] Hawaii offers a feed-in tariff, but it does not meet the normal definition of a feed-in tariff, as it is less than the retail cost of electricity, and is therefore simply a Power Purchase Agreement. The Oahu Wind Integration Study[12] released a report detailing the impact on the Oahu grid and found that 500 MW of wind and 100 MW of solar power could provide Oahu up to 25% of its electricity while eliminating the need to burn approximately 2.8 million barrels of low sulfur fuel oil and 132,000 tons of coal each year.[13]
Actually, Hawaii just signed into law a mandate to be 100% renewably powered by 2045. https://www.greentechmedia….
http://www.forbes.com/sites…Google is putting in $300 million in to a $750 million fund forSolarCity to install solar panels on 25,000 residential roofs this year, the two companies announced today. The fact that Google is backing solar or residential solar installations or SolarCity’s projects in particular isn’t new.What’s more interesting to me is whether we will see Google — and other institutional or corporate investors — hurry up and set up more tax equity funds before a lucrative tax break is set to end next year.
Price.
As the co-founder of Sistine Solar, I am clearly biased. But, there many things holding solar back, as others have mentioned are:1. long payback period – this is getting shorter every day 2. consumer awareness – most people don’t know too much about solar3. lack of simple and transparent business model: only recently has the $0 down leasing model been implemented and its popular.The one thing no one mentioned is DESIGN. Our company makes high-efficiency solar panels that look like people’s roofs and blend in with the natural home aesthetic. For solar to “take-off”, panels must be appealing. Its the same philosophy that Apple and Tesla have followed.If solar continues its amazing growth rate, only 2% of homes will have solar on them. How do we get to 100%? Form + Function.
I deliberately built my home in a neighborhood without a home-owners association to avoid being prevented to install solar for aesthetic reasons. So it is (n=1) not an impediment for me. I do like the idea of nice appearance, but I will not pay an efficiency or $ premium for it. Is there such a premium in your offering? Just curious for my future consideration…
Well, if I read your first statement, it seems that solar was at least an impediment to choosing a location to live. HOAs all over the country are banning solar based solely on aesthetics.Since we are adding value to the homeowner & neighborhood and since we also need to make a living, we charge a premium to traditional solar. The upshot – you can still go solar with our color-matched panels for $0 down and a discount to your current electric monthly bill, guaranteed for 20 yrs.
And, Tesla’s PowerWall announcement is game-changing for solar. Amazing news for solar enthusiasts. With affordable battery storage for your home, who needs traditional generators for backup power anymore.
You’re close: it’s batteries (it’s not a coincidence that Tesla is selling de-coupled batteries now). If energy is de-coupled from the energy grid for general use, having solar on your roof or anywhere you can makes a ton of sense. If you can’t easily do that, it doesn’t make sense.The “electric cars” use case is just an application of batteries and a great one – but this is really about battery technology, utility, and broad use cases. It’s coming though!
Here’s a free-market theory. Looking for feedback on why its foolish :Could it be that the best thing that could happen to Solar is a way for consumers to sell energy directly to their peers. AirBnb for energy. Unclear how to make that happen (batteries, tax credits on your electric bill etc.) but I’ve watched martketplaces like Etsy, AirBnb, RelayRide increase adoption rates by Makers, Apt owners, and Car owners respectively, and I suspect that as economists say “incentives matter”.Give the consumer better incentives, and they will buy solar. Let me (a non-solar consumer) buy cheaper energy from “AirEnE” (Energy and Environment?) and I’ll probably do it. Its a subscription business with very low churn rate. So long as AirEnE can find supply, it can sell energy. Finding supply will become the constraint, and it’ll drive solar adoption as well as any number of other alternative energy sources (wind etc.)The cap on price will always be what the local energy company (ConEd charges) but there’s probably ways to underprice that market knowing you’ll make it back in the long run.There’s probably a million other reasons I’m not thinking of (the grid, reliability etc.) but my basic argument is – make it an income source, rather than just savings, and you will rapidly accelerate the mass adoption of solar.
Fred, I think the answer is in your question. For wide scale adoption (i.e., outside of wealthy folks who like the cool or feel-good factor), it’s a 4-5 year payback instead of 10. Simple as that. Its no accident that the states with the highest installed base happen to be those that already offer the best payback times.So what reduces the payback time? (without financing tricks)Another thing to consider is there’s essentially a free option to wait, and when the price is falling fast (depreciation), you’re better off waiting.
Great blog and very interesting discussion topic! (note, I am in the solar industry and therefore biased)First, why aren’t more people going solar? Well, they are … from 2009 to 2014, solar PV installations grew at a 60% CAGR, and yet there is still less than 1% market penetration nationwide (note that markets like Hawaii are nearer to 13%). Frankly, it would take years and years to put solar on every appropriate rooftop in the US even if everyone signed up for it today.During the period referenced above, early adopters chose to go solar first driven by social influence and then by sheer economics (not solely to be green).See:http://www.washingtonpost.c…The study found that the installation of one additional solar photovoltaic rooftop project within the past six months in a given area increased the average number of installations within a half mile radius by .44, or almost one half.To understand why someone would or would not go solar, you must understand the value proposition:1) Solar makes economic sense in about a dozen states. What makes for a good solar state? High electricity rates (13cents/kwh +), an incentive program above and beyond the federal 30% ITC, and/ or very high insolation as in states like AZ. Every year, new markets/states have opened up (and will continue todo so) with the falling costs of solar, rising utility electricity rates and new state incentives.2) In the 12 states referenced – let’s call those ‘good’ solar states – customers who choose to put solar on their roof can buy a solar system for an upfront cash investment of ~ $20k for the average home (5kw) receiving a 30% federal tax credit of $6k (net-net $14k out of pocket) which in states like CA or NY results in a 5-7year payback depending on assumed electricity rate inflation. Alternatively, customers can lease their system or sign up for a PPA (power purchase agreement) whereby the solar company installs the solar system for free, the homeowner doesn’t own the system, but simply pays for the amount of power that is generated from it. I typically try and explain this as an energy contract for 20 years, with fixed electricity rates at a discount to the utility. For example in Norcal, our typical customer will pay PG&E roughly $.23/kwh, but if they switch to solar with our PPA, they pay nearer to $.17/kwh or approximately 25% savings.3) You get to minimize (and all but eliminate) your relationship with your beloved utility. Remember, utilities call their customers “Rate Payers” and for most, paying your electric bill every month to the utility is an unsavory act.Bottom line is that solar is cheaper and cleaner vis a vis the utilities in those ‘good’ solar states and that’s got the utilities scared, very scared, so much so, the utilities are fighting it tooth and nail. The average consumer doesn’t hear a lot about this conflict, but it is happening, and if the utilities are scared of 2 guys and a truck stealing their best customers away, then you’ve got to believe the solar value prop is awfully disruptive.http://www.washingtonpost.c…So why doesn’t everyone sign up for solar today (in the good solar states) if its less expensive power and the value proposition is as I described it? My thesis is two fold:1) Going solar is hard. Pressure sales tactics, confusing quotes, takes time to install it, and customers often shop around, so multiply the hassle factor by 3x. Its just not a good consumer experience!2) Old fashion FUD. Fear, uncertainty and doubt. There are still loads of objections and a very serious education process to be had. Does solar really work? What if I sell my home? What if utility rates go down? Will my roof leak? Do I have to maintain it? Will I really save money?To put a finer point on it, if you could call your utility and with one phone call get a 25% discount on your electricity rate immediately, wouldn’t you? As an industry, we need to get as close to this scenario as possible and I will say we are getting much better at marketing, selling and installing the product so I believe in short order, the consumer experience is going to drastically improve.So what’s next? What will influence a more main stream consumer? At the moment, there is a very intriguing trend with the confluence of solar, energy storage and smart home technology, and that is you can now generate your own power, store it and manage your home more intelligently. These three technologies are just beginning to be sold together, and as a bundled product offering, the value proposition is truly remarkable.Just as hybrids/EVs are replacing combustion engines, Netflix/Hulu are replacing traditional cable and cell phones are replacing land lines, so too will solar and the connected home replace your utility.Joe Bonorepower.solaruniverse.com
Additional sales confounders:1. Byzantine Local Zoning/building codes and permitting process2. Additional Real Estate taxes3. Individual becomes an “utility operator” or must outsource operational management – probably at a monthly fee4. Discovery that in most cases Solar does NOT provide backup power during grid outage.5. Too much jargon. “net metering”, SRECs, tax credits, TOU (time of use pricing).I WANT solar, but the reality is that one must nearly be an engineer class individual in order to efficiently and effectively evaluate to Net benefits vs cost in capital, time and risk.It would be interesting to know the demographics of those who are “first-in-neighborhood” adopters. Why not discover and target those demographics and then provide incentives/benefits to them as a leading wedge.
Fred, thanks for making this a topic of discussion. It’s high time clean tech come into the discussion…worthy of USV exploration and investment. Leaving an inhabitable Earth for future generations is dependent on reducing the dependency on highly intensive carbon based energy.
elon musk building solar panel factory; that could move the needlehttp://www.takepart.com/art…
Ladies and Gentlemen of AVC;Solar panels on rooftops and EV are a show really, neither one of them is carbon free. In fact, EV emmit more CO2 than regular cars once you include how toxic are the EV batteries.It takes an enormous amount of energy to produce Hybrid and EV batteries, and it takes equally huge amount of energy to recycle and junk them.The energy for producing the batteries and recycling most likely comes from fossil fuel.On a net basis when you consider the whole cycle from car production to junking it there is no reduction in emission level.You are just transferring who emits the CO2 from one party to another. Either the consumer who owns the cars or EV and Hybrid car makers.Also, EV makers are not efficient, they need credits and all kind of gimmicks.Please do not drive hybrid or EV cars.You are basically subsidizing crony capitalism and corpirate welfare.If Tesla and other EV makers have good product the consumers and markets will judge. Let them swim or sink.
If you are going to claim that solar and EVs are worse off for the environment than fossil fuels, please include some backup. This audience would appreciate it. And, it might be worth it to read a bit more before jumping to conclusions. This is a good start: http://www.chgeharvard.org/…
Fred,, a sensible post from you after quite a long time. Your previous posts have been so annoying
Samsung about to enter the auto market too: http://business.financialpo…
I don’t pretend to be well-versed in solar either, but this is my favorite chart that explains why solar is going to be radically disruptive. http://www.businessinsider….
I LOVE solar. Deeply. Waiting to go off grid here in NYC.Love the GoSun solar grill as summer approaches.http://www.gosunstove.com/Love solar roads.http://www.solarroadways.co…Solar gravel.http://www.coregravel.ca/co…Solar ivy.http://solarivy.com/I want solar window shades. Solar tents. Solar everything.So over oil and gas and their other costs besides pollution.
Space. For energy and mining. Also it doesn’t hurt that internet hosts in space can’t be easily seized by corrupt officials and they don’t need cooling.We’re just too busy navel gazing, obsessed with the next quarter.https://en.wikipedia.org/wi…The only real question is how we bridge the gap between this silly form of capitalism, and how we push some actual innovation to get on with what’s next.
Storage.Latitude.It is staggering how much more efficient solar gets as you go south. When I was sailing across oceans I was basically 100% solar in southern latitudes. The difference in output of the solar array on my boat between San Francisco and Hawaii was quite significant.
Fred, for a good laugh read:http://teslaclubsweden.se/t…Also, and I’m guessing you know this- in NY and many other states you can choose your energy supplier thanks to deregulation in the energy sector. You can choose an all renewable energy source, and put your money towards renewables instead of the coal fired power plant (at roughly the same cost). This is especially important for city dwellers who don’t have a place to put solar panels, but want to put their money where their mouth is.http://www.poweryourway.comLong time reader, first time commenter.-Zak
Is new construction still a hurdle? I believe it used to be the case in CA that if you want to lease the panels you need to show the previous year’s electricity bills — the number of panels is then based off of your power usage.Could very well be a solved problem at this point. If not, do large homebuilders partner with solar firms to have the panels already installed when the first owner moves in?
Fred:Thanks for posting this article. There are many great minds working on solutions to drive down the next generation of solar solutions to compete against fossil fuel generation. We have all just started and it is a big playing field. Here is a great read on Forbes on the 5 companies (including our company: http://www.SolarSiteDesign.com) that won the SunShot Catalyst Program (sponsored by the US Department of Energy) last week and are collectively focused on driving down soft costs in the solar industry: http://www.forbes.com/sites…
Bummed to be late to the party on my favorite subject, but here are some thoughts to add. @disqus_2uZv7eRSWd:disqus has done a great job of painting the broad strokes. I was one of the founders of Solar Mosaic, the first crowdfunding site for solar projects back in 2010, and this is all stuff I have lived and breathed for the last five years. @fredwilson:disqus we met a couple years back in Irvine and I threw about the idea of “a utility that you love”. Still haven’t brought it to reality, but here are some of the things that make it tricky.One fundamental thing is that no one has bought a powerplant in the last 100+ years. Except for a wind mill for grinding grain or pumping water, power generation has been a primarily centralized process for a long time. So, there’s often a steep learning curve for the consumer. This is something they have NEVER THOUGHT ABOUT. God forbid they hear some “$0 down, act now while the government is buying you solar panels” pitch before speaking to an actual professional, cause odds are good they’ll fall for a pitch that is not in their best interest.As has been discussed accurately, in many of the comments, is that it’s the solar company’s job to make it easy for the customer. This is absolutely true. And the technology, process, costs, and benefits can be relatively straightforward. But since this is primarily home construction, customers get multiple bids and are told a different story by every vendor. Each bid has a different sized system, different components, different production estimates, and a different “pitch” that’s been given by the salesman. Lots and lots of intentional mis-information makes it very difficult for the typical homeowner to feel like they’re making the right choice.Pricing for a turnkey residential system has fallen rapidly and is now in the $3.50/W to $4.00/W range. Using simple math, after a 30% tax credit, 20-year life, and moderate production of 1.4 kWh of energy per watt of power, the energy from this system will cost only $0.08/kWh. That’s significantly less than anyone in CA pays for electricity, and is increasingly true across the country.The growth of solar over the last 5 years has resulted in a relatively mature industry with well-understood (by the industry) costs and increasingly ubiquitous and commoditized technology. Many people talk about the “efficiency” problem and are concerned about whether they’ll have out-of-date technology, but if the solar installation you install today makes all the energy you need, it will never be obsolete. It does its job. Sure, it could be smaller and more efficient, but efficiency in the solar world generally comes at a higher price, so there’s little to be gained by waiting.Third-party financiers like SolarCity, Vivint, SunRun, etc remove a big piece of risk by financing the systems on behalf of their customers and charging them for the energy produced by the solar on their roof at a discount relative to their utility. A large percentage of the solar built in the last 5-6 years has been under this model. This model hinges on the 30% federal tax credit and accelerated depreciation afforded “commercially owned” solar installations. This federal tax credit is scheduled to fall from 30% to 10% in 2016, so the lease companies are increasingly offering loan products to fuel this transition.Begin rant/fears:This brings me to some things that concern me as solar grows and grows. SolarCity, for example, is one of the most well-known names in solar, and is selling one of the worst for the customer solar products I have ever imagined. Their “MyPower” loan is offered to customers at a base price of $5.10/W (45% over market), for which they do the customer of the favor of financing it with a 30-year loan (!!!, this is 20-year technology) that has a 2.9% annual increase in the loan payment. They are smart enough to know that the customer really only understands what their monthly payment is, so they sell to that. They’ve stretched out the loan term long enough, and with an annual escalator (common in solar leases but I’ve never seen a loan that did that) so that even though they’re massively overcharging for the system installation, the customer’s monthly loan payment is slightly less than their current utility bill. To me, the ends don’t justify the means when it comes to a product like this. It’s embarrassing to be part of an industry whose LEADING COMPANY would sell this deal to 100s of unsuspecting homeowners every day. It makes me feel horrible for the people who’ve signed up for this “service” because they think that Solar City is trustworthy and a reputable brand. @disqus_Awy3Cl8ObF:disqus, this is the sort of thing I was referring to in my other comment – people’s lack of energy and financial literacy leaves them very susceptible to bad deals like this.Solar loans make me nervous because even though there’s a new $20K powerplant you could buy for your house that saves you money and is great for the environment and actually pays for itself, if you finance it with debt there could be some unexpected consequences. Picture the typical credit application: assets, liabilities, mortgage payments, utility payments. When you take out a loan for a solar installation, you might be zeroing out the utility payments field, but you’re adding a similar amount to your monthly debt liability. So, what happens when this solar customer goes to buy a car, and they can’t get the loan cause they financed their solar and that puts them over the industry-standard debt-to-income ratio? That’s a damn bad PR day for solar.There are many other red herrings for solar that make people think they need to wait:1. It’s too expensive (cost has come way down, many financing options)2. It’s not efficient enough (if it generates the energy you need, it’s efficient enough)3. Batteries are too expensive (you don’t need batteries, especially if your utility has a net-metering policy. Tesla’s Powerwall product offers almost no economic value to any residential customer, even in high energy priced CA. The only real value is as a back-up for when the grid goes down, which is more of a security decision than an economic one).But solar is great. Every sunny roof should have it. Ideally, we’ll be able to own solar on each other’s roofs soon, and break the coupling of consumption and impact. We can’t go it alone. We all have to work together to re-imagine our energy system with renewables – it’s too inefficient if we all defect from the grid.
There are some great comments in this thread. I love hearing about Josh’s experience.I have been in this industry (retail electricity) for a long time (since 1998). While the industry is de-regulated, there is no price transparency. Information does not flow freely between the markets (suppliers, utilities, etc.) and customers (whether they are businesses or residences). It is awfully difficult to evaluate options with no forward view of costs or pricing. It will be a lot easier for customers to evaluate options once they have access to clear, transparent, unbiased information. There are a number of people working on this problem (full-disclosure, I am one) but it is not solved yet.
We have ten solar heating panels on our roof here in the Bay Area. They keep our outdoor pool a pleasant 85 degrees for 6+ months a year, with only a small cost for electricity to pump some water from the pool to the roof twice a day (gravity returns it to the pool after it warms in the panels). We installed them in 2011 for about $4,500. So, even with that prepaid cost, plus small electricity cost, we enjoy a heated pool at a fairly low cost per day — and it’s clean energy.
I think you’ve already seen the catalysts solar needed and those catalysts were government subsidies and innovative financing models.The best analog for today’s solar industry is the chip industry. They have very different cost curves (performance/cost improvements happen much more rapidly in the chip industry) but the current/future opportunities revolve around developing services/apps/products enabled by cheap solar hardware.Solar might appear to be a nascent industry because you don’t see solar on every rooftop, but it’s already a $15B+ industry in the US and a $75B+ industry globally. Last year the US installed the equivalent of 1 nuclear power plant on residential rooftops all across the country. For those not familiar with the scale, that is HUGE. And that’s only 1/7 of the total US solar industry.One issue solar faces today is that it still doesn’t pencil out for a majority of home owners. That’s why you don’t see Solar City operating in all 50 states. But incremental decreases in cost combined with increasing traditional energy prices will gradually open new markets and drive adoption. I know, it’s not very sexy or earth shattering.There are actual downsides to solar adoption. Carbon intensity of production is definitely NOT one of them because the carbon payback is 2 years and the lifetime is 20 – 25 years (as mentioned in other posts). Grid stability is a major issue though because the grid is a just in time delivery system. If an entire neighborhood or a large solar installation gets covered by a cloud, another generating system has to kick-in and replace that lost electricity. In most places, natural gas plants kick-in to save the day. This isn’t too big of an issue today because natural gas is readily available and relatively clean and cheap. But long term, we’ll have to incorporate energy storage into the mix. This is where batteries come in.Just like solar 5 to 10 years ago, batteries don’t pencil out in a vast majority of situations today. California is leading the charge in subsidies and Hawaii has been pushing hard for energy storage because its grid simply can’t handle more renewables without a back-up to kick-in with renewables fall off. These will be the first real markets for batteries.The Tesla system will initially be a toy for upper class Californians who want a few hours of back-up when their power gets knocked out. Long term, it may turn out to be a solution for backing-up short term drop-offs in solar. But it will still have challenges cost effectively storing enough energy to run all night long and completely replace fossil fuels. That will likely take significant scientific/materials innovations. There are folks working on this and I imagine Tesla is one of them.
Overall, solar remains under 1% of the energy generation mix, but if you look at percentage of eligible homes, it varies dramatically from utility to utility. For example, I recently spoke with a PG&E analyst who surmised his utility was already at 10-15% market penetration. The party’s just getting started in states like Louisiana or the Carolinas.So depending on the utility, market penetration is either still firmly in “early adopter” territory, or on the cusp of hitting the “early majority” zone on the customer adoption curve.In order to identify a catalyst, it would be important to first identify barriers to entry for early adopter and majority customers. Two barriers I see are education and eligibility.Education.First and foremost, most homeowners have no idea what their energy bill and consumption is. The bill arrives monthly and they pay it without question. What the heck is a kilowatt hour (kWh)? Energy over time? As a concept, it’s not outwardly intuitive. Furthermore, on a per unit basis, I’m paying tens of cents, so it doesn’t seem like much.Therefore, all solar sales pitches inevitably start with some explanation of what the bill is. Making a comparison to an analog like $/Gallon helps wrap people’s heads around the unit pricing. Explaining and/or showing historical rate increases gets people upset. As does pointing out the fact that they have no alternative to a monopolistic utility. By providing context, we can then provide a cheaper alternative.Of course, if you get into any solar company’s sales funnel, you will be educated. So the question is, how do you reach more people in the first place? Any broadcastable method of energy education or a campaign that increases solar awareness would be useful. I saw someone suggest a “Got Milk?” style campaign; that’s a good idea and something that probably needs to be tackled at the industry level. An AOL style mailer campaign with a little solar irradiance meter or small panel would be cool and could probably be tackled by the private industry (credit to @sustainablejohn for that idea).Eligibility.The lead market is increasingly difficult to reach as 650-700+ credit homeowners are targeted by the major solar companies. These companies are bidding up adword keyword prices and also leads from lead vendors, raising the barrier to entry for new players. Ultimately, the demographic is finite and it’s competitive market, leading to a limited supply of leads and high demand on them. Lead gen is the latest battleground in the race to vertical integration (e.g., SunRun’s recent acquisition of CleanEnergyExperts).So, how do you increase funnel size, and avoid the already heavily targeted demographic? Find new demographics to sell to! Easier said than done, as this depends on policy, but there are two new promising products in the pipeline.We have seen tremendous growth in PACE (Property Assessed Clean Energy) products in CA. Essentially, your county or city will purchase the system upfront, and the homeowner will pay them back via the property tax. This product removes the credit requirement by basing eligibility on the debt-to-equity ratio.Something that is extremely promising, although extremely nascent, is virtual net metering (VNM); that is, running your meter backwards by purchasing solar power offsite. This would removes the homeowner requirement, leaving only credit requirement. Of course, this dramatically increases the total addressable market, although the novelty of it means no one has figured it out yet.Simply bolting established acquisition models to these two new demographics could move the needle significantly as there should be less competition in these emerging markets (for now).Punchline: Help people understand their current predicament, and find new products for new demographics in order to catalyze growth.My background: I’ve been interested in energy since ’08, received my MS Envi Sci in ’11, and have been working in solar since ’12. Held a variety of roles at One Block Off the Grid, later acquired by NRG Home Solar, before co-founding a new sales-as-a-service solar company, Siviniti in ’15.
Here in Florida, the “Sunshine State”, it’s not possible to install solar on home or small business. Simply put, Duke Energy owns the politicians. http://www.wsj.com/articles…
The below article helps explain why simple maths and ROI wont answer the big picture questions about viability and competing against other sources of energy. http://www.smh.com.au/envir…
According to data from 400 local building departments, solar panel installations have been doubling every two years, for about the last 10 years: http://www.buildzoom.com/ch…If the trend keeps up, which I believe it will there may be no catalyst necessary beyond what already exists.
I’m a big believer in nuclear for baseload generation. The disasters are never fun but not nearly as destructive as the aggregate damage coal generation has done to miners, along with its environmental spillover and health effects. However Millstone will eventually shut down and I think regulatory issues will make it so that it is not replaced. Solar is our future.
Irony! Seems like any shade-providing or rain-proofing structure is the perfect place for solar panels. Every gas station should install them 😉 Playgrounds/parks seem like a great opportunity.
I don’t mind stopping every 80 miles to charge; typically I drive under that in a day and recharge overnight. When I take a longer trip, I’ll stop, check email, etc for the 20 minutes it takes to fill up. I rarely drive more than 150 miles one way (NYC and DC are both around 130 miles from the land of good and plenty)What happens if you leave the “land of plenty” and then get into a traffic jam in the “city that never sleeps”? Or even in Philly (as I did recently when coming off the NE Ext. of the PA Turnpike) it was bumper to bumper when hitting the Blue Route? [1]I don’t mind stopping every 80 miles to chargeYou realize that you are unusual in your temperment, right? By the way what happens when you travel and more people have electrics and there is a wait before you can even wait your 20 minutes? How is that going to scale. They haven’t even scaled that with the well oiled machine of gas where you often have to wait on the turnpike or a corner gas station.[1] Quick quiz. Do you know why they call it the “blue route”?
unlike a gas car it doesn’t idle–it uses energy when you drive. My last two cars (both Porsche’s) do the same thing. The engine turns off when it is idling. It seems to make about a 2.5 miles per gallon difference. On the hybrid (which they give you as a loaner when you are in for service sometimes) when you hit the gas it’s electric then the engine starts up at about 6 or 7 miles per hour. But that model is way more expensive for that capability doesn’t make a lot of sense other than as a feel good thing.quiz–something aboutHint: They could have called it “NIMBY” (Not in my back yard). Was proposed a long long time ago, all these affluent communities fought it and they had to make so many changes to the plan in order to appease the various constituencies. Not the same as when you plow through a poor community. [1][1] Pink Houses lyrics: “There’s a black man with a black cat Livin’ in a black neighborhood He’s got an interstate Runnin’ through his front yard You know he thinks that he’s got it so good”
Every now and again I get it right.
it typically won’t be the choice of the electric driver. coal produces 39% of the total electricity supply. coal production worldwide is increasing.
Ha! I thought the exact same three words about the Kid when I read that comment. Its good to have naysayers around though
it’s not “up in the air.” explore the path to increasing the availabillity of renewable energy. how do we get to 100%? it involves something liek putting solar panels on every square foot of property and forcing china to sell the 90%+ of the rare earth minerals market that it controls (vital to production of panels and batteries needed for solar) at below market prices. all this assumes current rates, and ignores the potential for increasing population or increasing energy needs for things like water desalination.you can dismiss viewpoints you don’t like as being pessimist, though it does little aside from reveal an aversion to boundaries imposed by economics, mathematics, and physics.
we’ve had this conversation repeatedly, but i guess it depends on how you define an optimist. to me, anyone who ignores 9/11 truth because it is “too scary” or “there is nothing they can do about it” is the real pessimist. those who see painful truths as opportunities are optimists. but of course it is all a matter of perspective.
For your reading pleasure. 350+ pages from rare earths to pathways to 100%: MIT’s The Future of Solar Energy (the team included the now Secretary of Energy), May 2015. One of my favorite graphics from the report is attached. It shows how EIA has dramatically underestimated the growth of solar year after year.
sure, EIA is often wrong. i cite them because it’s hard to find someone “official” to cite that can appear to unbiased.the MIT study admits solar has a higher levelized cost of electricity without subsidies. if you drill deeply into this point it will reveal solar as being economically unviable at scale.
i’ve cited numerous studies and facts before, though you ignore them.it is actually very simple, it all boils down to power density, or power per unit of land. http://theenergycollective….solar has low power density, so to work at scale, you need to plaster the whole world with panels. even then it doesn’t work when you realize the raw materials needed to produce that many panels are not available in infinite supply, but if you disregard that point, you are still left with the conundrum of how are you going to enforce this on private property and on hard to panel-ize structures, and even if you could force this through, how long is it going to take and how much is it going to cost. batteries increase effective density which is why there is some promise there, but that is no secret as batteries have been understood to be the key issue by many for probably decades.dense forms of energy are environmentally friendly because have the truest minimal footprint, and they are better economically because land costs money, and becuase they don’t paint you into a corner of committing all land everywhere to energy generation.this is why the whole situation is mathematical and obvious, and should be treated as such.
I don’t think solar being “unviable at scale” is the conclusion of the authors. They describe in clear terms the challenges faced by solar at scale but they don’t conclude it is not possible. Quite the opposite. They lay out a roadmap of research and strategies necessary should policy makers want to achieve that goal. I’m unclear as to your position. What is your assessment as to what the primary source of power for our society will be in 50 years?
Since when is DIY hassle-free? Check out home depot’s solar panel selection: http://www.homedepot.com/b/…. They will even ship to your house.
I’m sorry kidmercury, but your math is based on the incorrect initial conditions and assumptions.Raw materials needed are indeed close to infinite: Si is the second most common element in the crust of the earth – and currently mined at 5-6 million metric tons/year. Take 10% of that, and use 5g/Wp of Si use for current panels (which can be reduced by 100x readily) – you get 100GWp/year panel production. For reference, US electricity generation capacity is 1TW (about 25% of world total).It is not power density, but Energy Return On Energy Invested (EROI) that is the key metric. There is more than enough roof-space and other real estate available to generate the required/desired electricity. 1MW utility scale installation requires 5 acres with current technology, how many acres do you need?Also, electricity is the highest value form of energy – it is the easiest to convert into all other forms of energy, and as Andy Grove put it, it’s “sticky”.Also, money is not the solution – energy is.I’d highly recommend you watch this:https://www.youtube.com/wat…To answer Fred’s question:Turning point is going to be when a “whole home-energy management” service is available. Home heating/cooling costs are usually 3-5x of other electric loads, using micro-co-gen for heat and simultaneous electric output, with a small battery (Tesla’s system is a perfect fit) would be a great solution. You don’t need to store day’s worth of electricity, actually managing the spikes (heaters, motors turning on, etc.) and providing grid support functions are much more valuable (>$0.30/kWhr) when you consider you are preventing gas fired peaker plants from being turned on.A ‘virtual utility’ will then manage individual households and commercial installations, generating, storing and selling energy under the optimum conditions, providing a ‘profit-share’ back to participating households, consumers. If you want to opt-out, you can individually manage your electricity storage/sales with your own algorithm but then you will not have access to the system wide profits.There was a comment above about “everybody hates their utility” – this could be the one that everyone loves.A quick note about utilities – large European utilities lost over half a trillion Euros on their market cap, there is potentially a big disruption coming down the pike.(http://www.economist.com/ne…And E.ON, one of the larger utilities split into two last year.http://www.bloomberg.com/ne…
i disagree that power density is nto the most relevant metric, but let’s go with your point and say that EROEI is what matters (i do not dispute its importance). what is the cost, in both dollars and energy, of extracting all that silver? what is the cost if getting all the rare earths that would be needed for the whole solar value chain? the numbers vary, which is part of the problem in having such a conversation, but i believe the cost is far higher — which is why these projects are not economically viable and thus cannot sustain the kind of growth many anticipate.
hopefully it’s primarily nuclear-based in some way. if it’s solar, we’ll need an enormous breakthrough in battery technology. or, we’ll need to all agree to use less energy (which means a lower standard of living and forced population control).energy is a big problem/opportunity that needs to be addressed and needs focus. that is why i enjoy the subject and am passionate about it. unfortunately, i think we’re on the wrong path in a number of ways.
Energy = survivalExcess energy = civilization- Silver is not a necessary material input, there are silicon solar cell designs using copper or other metals instead.- Cost of the silver (or copper) is included in the $0.50/Watt panel production cost the Chinese manufacturers claim right now, at over 50GWp/year production capacity, which is ramping up to much higher numbers as we speak.- Which rare earths are you talking about? How about the rare earths needed to support the value chain of ultra-deep off-shore oil and gas wells, building the world’s largest ship to extract and process natural gas off the coast of Australia, maintaining the infrastructure for extraction, processing, delivery and combustion of hyrdocarbons? (which by the way is solar energy that was captured eons ego, distilled in a geological refinery for many additional eons, and we are sucking out of those formations and using at an unsustainable rate).If you are thinking about long term economic viability, you have to include physics and biology in your framework: energy and material balance. No matter how you assign net present value or use other constructs – they have no meaning if humanity is no longer around.
rare earths are needed for all energy production, but you’ll need more for solar, because of its low power density and greater reliance on batteries for storage (where rare earths are needed as well).pick whatever metal you like, the concept is still the same: the cost of extraction, in both dollars and energy, is going to go up as the easy stuff has already or is in the process of being extracted.widespread solar is especially unsustainable if you consider humanity’s needs precedent, which i do. if we believe things like water desalination may be necessary for human survival, and that the population may continue to grow and we should allow this process to occur without explicit intervention, than solar becomes even less viable because of its low power density.
There hasn’t been a new nuclear power plant that’s come online in the USA in decades. The cost of nuclear is through the roof since Three Mile Island and Fukashima raised the bar even further. The NIMBY problem of the waste is almost insurmountable. Japan shut all its nucs down after Fukashima and is just now thinking about bringing some back online but is focusing most of its effort on solar and other renewables along with conservation. Germany is divesting itself from Nuclear. The EIA chart below confirms that Nuclear still provides a very healthy amount of our base load but it certainly isn’t increasing. Thinking it will be the primary source of energy going forward is fantasy. Chart below is from EIA’s energy. See this link
new nuclear reactors were approved in the US in 2012. china will lead the nuclear revolution, though.germany imports electricity from france. guess what france relies on…..in spite of the bright signs, i don’t dispute that nuclear has obstacles, and that those obstacles might not be overcome. i only suggest that if those obstacles are not overcome, energy consumption per capita will have to decline, and humanity puts itself in a perilous situation in which progress as we’ve come to know it may not be possible.
What rare earths are you talking about – specifically around solar power value chain and storage?What specific function is that rare earth performing – and tell me why that function cannot be performed, maybe by using slightly more energy, by some other material configuration?When you extract a mineral resource and use it – it is not used up. It can be re-used and recycled indefinitely, if you have adequate energy resources – even the carbon cycle can be completely regenerated. When people talk about batteries being wasteful because it is like burning up a very precious and limited resource, evaluate the full picture with energy and material balance in mind (current an future).Please understand what you are being told and what you are telling other people – this is the mentality of scarcity. We can’t do this because there is not enough of that, so we need to keep doing what we’ve been doing – very reminiscent of the stories in Jared Diamond’s Collapse and other books.We are an incredibly resourceful species, and will do incredible things – and we are also very irrational, if we get cornered and start thinking (and believing) that this is a zero-sum game.I will concede that there is a physics limit at total power dissipation of 1000W/m^2 at the surface of the earth (total area), but we’ll have many other problems before we get there.Water desal may be very helpful, and again, key ingredient there is energy. Current methods are very productive but take more energy than desired – what if you had more energy?