[HN Gopher] Solar is a market for (financial) lemons
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Solar is a market for (financial) lemons
Author : Timothee
Score : 52 points
Date : 2024-01-27 20:02 UTC (2 hours ago)
(HTM) web link (pluralistic.net)
(TXT) w3m dump (pluralistic.net)
| vegetablepotpie wrote:
| This is a well written article, that makes the point that rooftop
| solar is good, but a market based approach to roll our it leads
| to anti-social outcomes like scammers installing substandard
| systems consumers pay through the nose for.
|
| Still, I would like to see some solutions articulated. Should we
| be promoting solar installation by non-profits? Direct government
| financed solar installation? Or abandoning rooftop and promoting
| community solar?
| philipkglass wrote:
| Larger scale ground mounted solar looks like it will always
| beat rooftop solar in terms of energy produced per dollar of
| investment. There are some cases where rooftop solar can save
| money by eliminating the need for a grid connection altogether
| (remote rural properties) but that's a tiny market compared to
| current suburban-focused rooftop solar businesses.
|
| Ground mounted solar has the following benefits over rooftop
| solar:
|
| - Much less permitting overhead per megawatt of capacity
| installed
|
| - Safer and faster installation process (no risk of workers
| falling off rooftops, uniform rows of panels are easier to
| install)
|
| - Lower hardware costs for inverters (since the units are
| larger)
|
| - Easier to orient panel installation for optimum sunlight
| gathering, so a unit of capacity generates more electricity
| each year
|
| - Easier to clean panels regularly, so a unit of capacity
| generates more electricity each year
|
| - Possibility to use single axis sun tracking mounts for
| panels, so a unit of capacity generates more electricity each
| year
|
| Rooftop solar has the following benefits over ground mounted
| solar:
|
| - No additional consumption of land
|
| - Slight reduction in transmission and distribution costs,
| since more electricity is generated directly at the site of
| consumption
|
| These benefits are comparatively minuscule. A least-cost,
| fastest-progress plan for decarbonization would have the solar
| component heavily weighted toward large scale ground mounted
| projects. The additional money that would otherwise be spent on
| rooftop solar is better invested in all sorts of other things:
| wind farms, battery storage, insulation retrofits, heat pump
| replacements for gas heating...
| ldbooth wrote:
| Generally agree, though let's be real that transmission and
| distribution losses for ground mount solar are not slight,
| they are in the 30-40% range, like all utility T&D.
| philipkglass wrote:
| That's much too high an estimate, at least for the United
| States:
|
| _How much electricity is lost in electricity transmission
| and distribution in the United States?
|
| The U.S. Energy Information Administration (EIA) estimates
| that annual electricity transmission and distribution (T&D)
| losses averaged about 5% of the electricity transmitted and
| distributed in the United States in 2018 through 2022._
|
| https://www.eia.gov/tools/faqs/faq.php?id=105&t=3
| kwhitefoot wrote:
| That's just outright false. Where did you get it from.
| lancewiggs wrote:
| Rooftop is generally on site. Ground is generally in large
| arrays owned by power companies. Being on site and owner-
| operated means not incurring the expenses of lines and
| various markups (sometimes extreme) from power companies. And
| it means being completely independent of the power companies
| who have different incentives.
| conductr wrote:
| Conversely, you're entirely responsible for maintenance and
| system upgrades/replacement on a per household basis which
| people won't budget for
| bobsomers wrote:
| - No additional consumption of land These benefits are
| comparatively minuscule
|
| I think that benefit is significantly less minuscule than you
| make it out to be. For rural installations, sure, but in high
| density areas the cost of land can be absolutely insane, and
| those high density areas tend to have high power demands just
| due to the density of humans that live there.
|
| You can put all the ground mounted panels out in the
| countryside hundreds of miles away from the density, but high
| power transmission lines are also expensive and dangerous to
| maintain. Generating the power right where it's used
| completely eliminates a problem which has serious negative
| consequences like wildfires.
| toomuchtodo wrote:
| At some point, we're going to have to learn to eat the cost
| of HVDC transmission. You can move GWs of power with
| conductors of reasonable size and complexity (both
| underground and undersea), if you can get the right of way,
| and there are no technical limitations on length besides
| line loss.
|
| https://www.nationalgrid.com/sites/default/files/documents/
| 1...
|
| https://europacable.eu/wp-
| content/uploads/2021/01/Introducti...
| roenxi wrote:
| To add some other points - rooftop solar being the future is
| untested. Most of the installations were done in an
| environment where solar wasn't really commercially viable and
| people were trying to push water uphill with a shovel. Which
| can be done, mind you. There are cases like Germany where
| they seem to have done a lot of damage to their own energy
| supply.
|
| But now that solar seems to be a viable option it is unclear
| what the equilibrium point is. For coal, it didn't make sense
| to give everyone a generator. Even coal-powered fireplaces in
| homes turned out to be noncompetitive for heating, which is a
| bit of an unexpected outcome. So since rooftop solar is
| dangerous to install and comes with a maintenance burden as
| well as presumably increased risk to consumers, it might
| still turn out that the best approach is a big centralised
| solar farm with huge economies of scale. Keep maintaining and
| using a distribution grid.
|
| Grids are expensive, so it could shake out either way. But I
| don't think the public knows what will happen yet.
| freetime2 wrote:
| Having the ability to generate electricity in the event of a
| power outage is another benefit of rooftop solar.
| jokethrowaway wrote:
| I don't see how you can say government subsidies are a "market
| based" approach
|
| Why not try to just NOT create incentives and let consumers
| choose?
| sufimalang wrote:
| That's just the nature of western capitalism.
| collaborative wrote:
| I got my roof mounted solar by saving for 3 years, getting
| multiple quotes, and going with what I thought was sensible. At
| current rates it will pay itself off in 9 years. It's not a great
| investment but also good for the environment. I wouldn't
| recommend borrowing for it. Just save for it if you can
| Retric wrote:
| Good luck finding a 25 year bond with even close to that rate,
| risk profile, that also pays after tax returns.
| toomuchtodo wrote:
| I have solar on all of my properties (primary, secondaries,
| rentals), but there is a lot of peril in the residential solar
| install market. Below are some of my observations on the topic
| from my experience.
|
| You can install on asphalt shingle roofing, but I don't
| recommend it; unless aligned with your roof replacement cycle,
| you're going to be paying thousands to remove and reinstall the
| system (racking and panels) to reroof when the time comes.
| Install solar on your roof if the roofing material will outlive
| the initial solar lifetime (~25-30 years). I love standing seam
| metal roofs for this, as there are friction mounting systems
| where you do not need to penetrate the roof to mount the
| racking and PV panels; $$$ but worth it imho. If your roof is
| coming up for replacement, do not install until replacement has
| occurred.
|
| Installers are fly by night (lots of sales->subcontractor to
| install relationships) and it is very likely they won't be
| around to maintain the system; the only mitigation for this is
| to find a vendor who is also a roofer or some other business
| that can buffer from the cyclic nature of residential solar
| (cyclic from PV panel commodity costs and government
| incentives). If you're capable, get certified by the inverter
| manufacturer to get installer access to your system (Enphase
| University [1] or the like).
|
| Get multiple quotes from installers [2] (a coop buying org is
| also a great option if available in your area [3] [4]), compare
| on equipment and price per watt. Research what your
| interconnect agreement with your utility looks like. 1:1 net
| metering is best, everything else less so. Net metering vs
| something else will govern system sizing and panel
| layout/direction. No batteries unless your grid is unreliable
| and you have the economic tolerance for it, or there are
| generous incentives from your state and utility. No PPAs or
| leases, they are economically inferior with the cost of systems
| having fallen so much and can make a property transfer
| transaction more difficult. As you mention, borrowing for this
| is economically inefficient unless you can get a long duration
| loan at something like ~3%.
|
| It is a great equivalent of an after tax bond return as Retric
| mentions, but you must do your homework [3]; it is not turn key
| unfortunately.
|
| [1] https://university.enphase.com/
|
| [2] https://www.energysage.com/
|
| [3] https://www.energy.gov/eere/solar/articles/purchasing-
| power-...
|
| [4] https://www.solarunitedneighbors.org/the-ultimate-solar-
| co-o...
|
| [5]
| https://www.reddit.com/r/solar/wiki/homeownerguide#/c/purple
| nostromo wrote:
| > I wouldn't recommend borrowing for it.
|
| Not necessarily. Just run the numbers.
|
| I installed rooftop solar during low interest rates. I could
| have paid cash but my loan payment is less than the power bill
| it replaced.
| a1371 wrote:
| Highly opinionated article void of facts. Reaching the conclusion
| that the government should install solar, not seeing the fallacy
| in that argument. Governments are also optimization machines that
| connects the opinion of voters and interest groups, to action.
| What they spend on is not based on objective good, it's based on
| what the public opinion is that year. Most people would rather
| money going into low income housing and fighting homelessness. So
| the system will end up underfunded and that's assuming if the gov
| is efficient. I say that as a socialist, if the market is bad,
| regulate it.
| civilized wrote:
| Well-covered ground in public choice theory
| https://en.m.wikipedia.org/wiki/Public_choice
| jokethrowaway wrote:
| I love how the author blames the market and then goes on to
| explain the government created subsidies in the first place.
|
| If you let the market do his thing the growth would have matched
| exactly what consumers wanted.
|
| We also had some moderate subsidies in my EU country but we
| didn't get fast salesmen and crappy products. The quality was
| reasonable. I suspect this happened because the subsidies were
| not large enough to warrant the business model.
|
| We, the middle class taxpayers, just gave a bunch of free money
| to the people who own houses and who were smart enough to buy
| solar panels - which happened to be quite rich already.
| ChumpGPT wrote:
| I dreaming but man would I like a solar system that I could roll
| out like a 20 x 60 carpet in my backyard and connect it to a
| system to provide power or charge a battery pack. Otherwise fixed
| installation is to costly for me.
| kwhitefoot wrote:
| Surely the fault is in the scammers not the market.
| crabmusket wrote:
| Compare America's federal rooftop solar subsidy scheme (the ITC)
| to Australia's (STCs):
|
| The ITC is a tax credit, which means only households with a large
| tax bill will be able to benefit. And they'll not benefit up-
| front, but only after their next tax year.
|
| STCs are cash rebates which actually reduce the up-front cost of
| purchasing solar.
|
| The ITC is based on the price of the system, which incentivises
| higher prices.
|
| STCs are based on the kW size of the system, according to a
| formula intended to estimate the system's energy production over
| its lifetime. It's a very rough approximation of course.
|
| (Not directly related, but the amount of STCs awarded also steps
| down annually until in 2031 no certificates will be awarded. This
| policy has remained remarkably stable over the last several
| governments.)
|
| The ITC looks to this foreigner like it was intended to ensure
| that solar must be purchased on finance. It's not "government
| subsidies" that are the problem, it's subsidies that may as well
| have been designed by banks.
|
| EDIT: Australia's market is by no means perfect, and we also have
| our share of financial shenanigans. But it's much better than
| what I've seen of the US market, and our prices are drastically
| lower.
| theptip wrote:
| > The ITC is a tax credit, which means only households with a
| large tax bill will be able to benefit
|
| Can you explain your working here? Pretty much every home
| owning household is going to pay $10k of taxes, say.
| crabmusket wrote:
| That's a fair point, I hadn't run the numbers on that. It
| being a significant problem was just based on having read
| articles on the US market over the last 5-8 years and not an
| in-depth analysis, so I can't cite any of them in particular.
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