Solar Gains On The Green Competition

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The living room of my electrician friend Harry Gres was filled with solar panels which were destined for his roof to demonstrate the advantages of his new eco-business venture. In the spirit of Herbert Hoover's campaign pledge of a car in every garage, Harry envisions solar panels on every roof (including garages).

I know very little about solar electric generation, but I was once a very satisfied owner of a 10kW wind energy system back in the (failed) green era in the early 1980s. Wind generation is very visible. When the blades spin on a wind system one can imagine a generator producing power. The whop-whop noise means the electric meter is turning backwards, a beautiful noise indeed. Harry Gres will have a silent 5kW system on top of his roof; the only visual excitement will be to see the electric meter spinning backwards during sunlit hours. Fortunately, here in Minnesota we have an abundance of both wind and sun.

Harry’s excitement about a self-sufficient future was apparent. He explained how in his latest- generation solar system, each panel powers its own inverter, so shade in one area does not shut down production. I did not know that in earlier, typical solar systems the entire grid shut down if one panel was in the shade.

I asked the million dollar question: What’s the cost? Harry explained that you could buy a $50,000 SUV that in 5 years would have little value, or purchase a solar array that would produce electricity for 25 years. I was able to figure out that the system cost 50 big ones. He then went on about how it was not the price, but rather the stewardship of the earth that was important. He also went on about the 30% tax credits which I’m not a fan of for a variety of reasons that are too lengthy to get into here.

I was skeptical about a 5kW, $50,000 solar system, even though I’ve been deeply rooted in the green industry for 25 years. As a customer, I recently built my own green certified home, and back in 1983 I built a net-zero home (it produced more energy than it used) that used wind generation.

As a professional, my business is designing sustainable neighborhoods for my developer customers. When I built my green home there were about a dozen other “green” homes that had recently been built and were on tours or home parades. All of them had elaborate — and expensive — geothermal heating/ventilating/air conditioning systems as part of their green packaging. I decided that spending a few thousand dollars on a highly efficient conventional HVAC system was a better investment than spending upwards of $50,000 on a geothermal design. My $200 natural gas bill for my 3,600 sq. ft. house during one of the coldest Januarys on record proved that I had made the right choice.

Geothermal systems get a lot of buzz. The green certified homes I visited sold quickly at the asking price in a terrible housing market. Most sold for over a million dollars. But a new green home has a low energy bill not because of its geothermal design, but because its emulation of “thermos bottle” construction means that it requires little heating or cooling.

While Harry was giving me the sales pitch on the $50,000 panels I began to ponder: What if those green homes on parade had been designed with solar arrays instead of geothermal systems? Had they used highly efficient HVAC systems instead of geothermal ones, the homes could have come to the market at the same selling price, and then had free electricity.

Wind generation may be cheaper to install, but the chances that you’ll get a wind system approved in your dense neighborhood is pretty much a fantasy, whereas the solar array is likely acceptable anywhere. A wind generator is really cool: Directions are not necessary and guests always have something to converse about. The owner of a wind generator does not have to worry about shadows or cloudy days, only about those times when the wind is calm. Wind can happen 24 hours a day. On the other hand, the solar array does not produce the loud whop-whop-whop sound similar to a helicopter hovering a few feet over your and your neighbor's homes.

The $26,000 I spent in 1983 for the wind generator would be equivalent, after inflation, to spending $54,000 today. So— those who purchase solar systems like Harry’s today will spend about the same post-inflation dollars that I spent in 1983, and they will have the prospect of free electricity.

Given the mindset of the new green home buyer, and the apparent success of those who sell homes with geothermal systems, maybe $50,000 for the prospect of solar electricity is not so farfetched. The more I began thinking about this the more excited I became for my friend's new venture.

Unlike wind power, which can never hope to achieve high volume distribution, solar panels have the potential for high production numbers. Relatively high sales numbers foster competition, which drives research and development for product evolution.

As an example, back in the 1980s I sold $10,000 desktop Hewlett Packard Workstations along with a $5,000 Civil Engineering Software package we developed. For today's market, we developed a $995.00 sustainable neighborhood design software package that works great on a $300 notebook. Comparing the systems we sold in the 1980s to those we sell today at 1/10 the cost is like comparing the Model T Ford to a ZR1 Corvette. Profits from the early adopters of those expensive computer systems financed the research and development that eventually led to the price/performance ratio we take for granted today.

So is Harry onto something?

I hope Harry, his family, and all those who jump in during a deep recession profit greatly from this risk he’s taken on. I hope the day comes when we look up at the low cost energy producing tiles on our roofs and think back to the entrepreneurs like Harry Gres that risked all on a venture to make it possible. That’s the American spirit that we need to get back to.

Rick Harrison is President of Rick Harrison Site Design Studio and author of Prefurbia: Reinventing The Suburbs From Disdainable To Sustainable. His websites are rhsdplanning and prefurbia.

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We could go on and talk

We could go on and talk about solar gains forever, we do have a lot of options today and there will be many more to come. It took me a while to decide whether I should install solar panels on my roof or not and now I am determined to try it, at this point I don't see any disadvantages. I've already contracted a Dallas roofer so there is no way back here.

two ways to improve solar/residential

Your analogy to computing power is very fascinating - and I think that the push for solar energy at the residential level could now will have benefits down the road. But, like you also mentioned, the first costs of these systems are tremendous. Lenders are not currently very eager to fork over $50k for anything attached to the home.

There are two areas where I think the solar-residential industry should explore:

1) Solar collection on vacant property. To date, the only energy-related vacant property project is going on in Pittsburgh. A group called GTECH Strategies is planting biofuel crops on brownfield properties. I think that the scale of raw land vacancy in some rustbelt cities is large enough to consider for the installation of solar panels. I discuss the intersection of energy issues and vacant property opportunities on my weblog. One benefit of this would be that transmission costs to large, industrial energy users would be far lower than conventional coal & nuclear options. Secondly, the sites themselves would boost the local economy by creating a range of new jobs in the design, construction, and maintenance of the solar panels.

2) Reducing the upfront cost with cooperative ownership (aka shared equity). While some people might say this adds a further layer of complication to a topic that's already foreign to most homeowners, I still believe that reducing the first cost of solar energy is the way to achieve deeper penetration into the residential market. For instance, a cooperative ownership model might allow multiple homeowners to share the benefits and costs of solar electricity. If one household moves, it can sell its share of the solar infrastructure to the future occupants or another party. Dozens of possible structures for this kind of ownership exist, and ought to be tested in the residential-solar market.

Thanks for the excellent post.

"Does anyone know where I

"Does anyone know where I can find the feed in tariffs system for renewable energies in Spain? I need as much as possible - (if there is one for this) solar, wind, biomass, hydropower and biofuels, etc.

Feed in tariffs

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