### Image Credits:

1. Noah Manning

1.
May 21, 2010 11:58 AM ET

Cost of PV
by Daniel Ernst

Martin,

I plugged your \$275 figure into the Consumer Price Index Inflation Calculator:

http://data.bls.gov/cgi-bin/cpicalc.pl

Adjusting for inflation (or loss of purchasing power), it comes out to \$727.58 in 2010 dollars (USD).

That's almost enough to purchase one of SolarWorld's 230 watt panels here:

http://www.wholesalesolar.com/products.folder/module-folder/SolarWorld/S...

Here's another way to look at the numbers. You paid \$8.33 / watt in 1980. Using the inflation calculator, the SolarWorld 230 panel is selling for \$1.30 / watt in 1980s dollars.

The cost of PV has certainly come down, but I think it's safe to say it will never be cheap.

Value? Now that's a different topic . . . .

Regards - Daniel

2.
May 21, 2010 9:54 PM ET

Actually, PV is already cheaper than "conventional" electricity
by Gary Gerber

Daniel - you say that "it is safe to say that solar will never be cheap". Let's do the math:

Today, in California, we are installing complete PV systems for homes in the range of \$6.50 per peak watt. That is BEFORE any rebates or tax credits. If these newer, improved modules perform as well as the older Arco module that Martin tested, and we can expect 40 years of good performance from them, then my calculations using PVWatts shows an annual production of about 1,500 w-hr per peak watt of module (this includes all of the derating factors, such that I would expect 0.82 Wh per Wp).

With a 40 year life, a new module today would then be expected to produce about 60 kWh of power over its lifespan (or more). That means that the cost/kWh is \$.11, which is over 30% LESS than the current annual cost of residential electricity in California!

No need to use the inflation calculator, since I think that we can all agree that the 30-year histroric 6.5% annual inflation in the cost of electricity is comparable to the alternative (but higher risk) option of investing that money in the stock market or bonds. Call it a wash.

Add to this equation the 30% tax credit (a small subsidy compared to the historic subsidies that fossil fules have been receiving for decades) plus the state rebate, and buying PV is already FAR cheaper than renting power from the local utility, and only widening the gap further every day!

REgards,

Gary

3.
May 22, 2010 2:04 AM ET

Cheap Solar
by Daniel Ernst

Gary,

You can't compare the inflationary cost of electricity and PV systems to investing money in the stock market (or any investment for that matter). That's a logical fallacy.

With the purchase of a PV system you can expect a capital payback, albeit a long one. Right now it's 30 - 50 years, depending on your installed cost, location / solar insolation, and local cost of electricity. We may expect energy costs to rise in the coming decades, but so did the majority of people in 1980. Fact is, electricity prices went down over the next 20 years. See p. 13 here:

http://www.eia.doe.gov/emeu/aer/pdf/perspectives.pdf

An investment implies that you're laying out some cash now with the expectation of MORE cash in the future; that's your cash or capital PLUS interest. If you can provide data on a PV system with a positive cash flow, then I'm all ears. (Whether you choose to risk investing your money in the stock market is another issue.)

If PV systems were cheap, then everybody would have one (or two, or three, or four), including your local utility. They are expensive. Period.

California's Levelized Energy Cost study puts Solar PV at the top of the list, behind only wave energy and Proton Exchange Fuel Cells. See p. 7 here:

People that choose to install PV systems usually have other incentives or reasons besides \$\$\$. That's where the subjective part comes into play - and whether or not they see the value in purchasing 30+ years of renewable electricity. I can't call PV systems cheap, but I can probably agree with you on their value.

For those that do make that leap, Martin's test is another example of the technology's durability (a rather amazing one at that).

I'm curious about what you meant with "complete PV systems." Are these whole house systems? Are they for net-zero or near-zero homes? Martin recently noted that there are less than 10 net-zero homes in the country. Given the mild climate in California (coastal areas anyway) and the CA state rebates / subsidies, I am surprised we don't hear about more net-zero homes from CA . . .

Cheers,
Daniel

4.
May 26, 2010 7:14 PM ET

The Cost of PV
by Carl Mezoff

In his calculation, Holiday should also take credit for part of the defense department expenditures that would be saved if we did not have to buy our oil from the Saudis, and for part of the cost of the cleanup of the Gulf of Mexico due to our reliance on "cheaper" oil to generate electricity.

5.
Jun 3, 2010 7:46 AM ET

payback
by scott

I live in Kansas and a group of power companies are wanting to build a 4 billion dollar coal plant to serve 200,000 customers. That is ( rather easy math ) \$20,000 per customer.

I'd venture to guess that giving 200,000 customers a \$20,000 PV system would be a whole lot better for the environment than that 4 billion dollar coal plant.

But of course there is no profit except for the PV sellers.

6.
Jun 4, 2010 6:15 PM ET

Old panels
by Jim

I have two old panels similar to the Arco panels, but mine have an Exxon brand label. I purchased them in 1988 and though the use has been off and on, I think the portion that has shown the greatest wear is the PVA backing where it has been abraded while being stored. They still crank out the power.

Great article Martin.

7.
Jun 7, 2010 4:56 PM ET

re;cheap solar
by Ian

Right now in Ontario, that's Canada, you can "invest" \$100,000 for a 10kW feed-in system and receive \$0.80 per kWh produced. That pays you back in about 100 months or 8 years and the 20 yr contract will work out to about 8% return. try: http://microfit.powerauthority.on.ca
If todays panels are up to the task then they are a pretty good risk free investment.

8.
Jun 10, 2010 12:32 AM ET

Cheap power?

If we knew the true cost of running the grid, solar and other alternatives would win hands down. When we talk about energy costs it doesn't include all of the free tax dollars, incentives and tax breaks that the big producers enjoy. OUR tax dollars! Then there's the costs associated with the pollution and clean ups of the messes they leave!
I would love to see THOSE numbers!

9.
Oct 26, 2011 9:06 PM ET

nice article
by Joseph Ford

Some renewable energy skeptics I know often posit, without any evidence, that PV systems will wear out before you can get a simple payback out of them. It's heartening to know that someone has taken the effort to put this to the test and show that 30-year-old equipment still has a good service life ahead of it. Likewise, life-cycle testing is great and all but I'm glad someone had the foresight to buy a solar panel 30 years ago and subject it to some real-world testing.

10.
Oct 27, 2011 5:48 AM ET

Response to Joseph Ford

31 years now, and counting...

11.
Aug 28, 2012 2:25 PM ET

PV wear-out -- Response to Joseph Ford
by Tim Rowledge

@9 "Some renewable energy skeptics I know often posit, without any evidence, that PV systems will wear out before you can get a simple payback out of them."
I've seen this as well. I'm reasonably sure they're mis-quoting an ancient study relating to solar panels installed on early satellites. The panels were very expensive back then, very inefficient and not exactly easy to service. The old nonsense about NiCd batteries having a memory seem to date back to much the same period - that was (mostly) an issue of inadequate battery management techniques and a very steady cycle (i.e. orbits) of use.

12.
Oct 17, 2012 4:35 PM ET

"You can't compare the
by Eric Dymond

"You can't compare the inflationary cost of electricity and PV systems to investing money in the stock market (or any investment for that matter). That's a logical fallacy."

It's pretty standard decision analysis practice to compare the return on an investment (in this case purchasing solar panels) to an alternate use of capital (investing in the stock market).

13.
Oct 22, 2012 7:38 AM ET

Edited Oct 22, 2012 7:40 AM ET.

They don't make them like they used to...or do they?
by Robert McClellan

When I renovated my cabin in 1991, I bought a number of different kinds of CFLs to try them and see what the different spectra were. I bought some Panasonic 23 watt long tubes and some Phillips in floodlight configuration for about \$35 apiece. One of the selling points for CFLs is their longevity and those did not disappoint. With the exception of those that have failed when dropped or cranked at 220V (I connected the generator improperly during the ice storm), the rest are in use today, 22 years later. Today's CFLs cost far less, but don't seem to last more than a year or two.

Why am I talking about CFLs in the discussion of PV? I'm wondering if those first ARCO panels were overengineered and may not be a good predictor of performance of today's panels. I have 8,400 watts of PV on my roof and when I first commissioned them in October, 2006, they regularly maxed out my 3 2,500 watt inverters, something I have not seen since. Perhaps there's just an initial drop in performance or perhaps the panels have accumulated enough dust and dirt to reduce their high end performance. I don't notice a significant drop in energy output, but I do always wonder what they will be doing in 20 or 30 years.

14.
Oct 22, 2012 8:17 AM ET

Response to Robert McClellan