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Solar panels for electricity generation

I would like to decide on putting in solar panels to reduce energy costs.

I have read about the next generation solar panels not being to far off.

Question: Would it be better to install current solar panels or wait for the new type that will be coming shortly?

Asked by John Alberti
Posted Aug 26, 2014 2:28 AM ET
Edited Aug 26, 2014 7:10 AM ET


24 Answers

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We have been told by marketers and manufacturers that "the next generation of photovoltaic panels is not far off" for about 40 years. Some of these announcements are hype, and some of these announcements contain a grain of truth.

But none of these announcements should prevent you from investing in photovoltaic panels now. In fact, many experts predict that the current prices for PV modules may represent a low point in the price curve. Prices may begin to rise soon, as tariffs on Chinese modules kick in, and world-wide shortages begin to be felt.

Answered by Martin Holladay
Posted Aug 26, 2014 7:08 AM ET


I second Martin. I've been designing and installing Solar PV systems for 8 years now and, like fusion, the breakthrough in solar cells has been "just a few years from commercial release".

We have indeed seen the bottom of the price curve to PV modules due to the tariff on Chinese modules, and the current module shortage (our pricing has already started to increase). But that may be a short term trough. I'd expect modules prices to go back down in a few years. But since the solar modules are no longer the price driver that they once were (on smaller systems we see labor costing more then the solar modules in some cases) system prices should not rise more than a few % anyway. This is only my opinion though, I'm not a market analyst by any means.

Invest in a solar PV system now, the costs will not be changing significantly in the next few years, and if your grid is powered by mostly coal, expect your utility rates to increase as the dirtiest coal plants are closed down and replaced by natural gas.

Also, do not get sucked in by installers boasting that they use the most efficient solar modules in the industry. Focus on the system cost compared to the expected production of kWh. That tells you who is offering the most COST EFFICIENT system, which is what matters when talking about a product that produces energy.

Answered by Daniel Young
Posted Aug 26, 2014 11:01 AM ET


Modules in the ~20% efficiency range are available now at reasonably competitive pricing, but you're still paying a 30-50 cents/watt premium for them over commodity 15% efficiency modules.

While recent laboratory innovations with stacked cells of perovskite PV (reaping power from the blue part of the solar spectrum) stacked on silicon PV (reaping power from the red/infrared part of the solar spectrum) have a theoretical efficiency well north of 30% on up to even 40%, nobody in the industry is anticipating them to become commercially viable (let alone widely available) in the next 60 minutes, or even the next 60 months.

The anti-dumping tariffs will not dramatically affect the cost of residential scale grid tied solar. Module pricing has been under a buck a watt for awhile now, and it likely to be under 50 cents/watt in a couple of years. But in the US the hardware is no longer the cost driver of the grid tied installed price- it's mostly "soft costs". The US average price for residential grid tied solar in 2013 was still north of $4/watt, whereas in Australia it was about $2.50/watt, and in Germany about $2/watt.

It's not as if US labor is dramatically more expensive (or less efficient) than German or Australian labor- a large fraction of the soft cost is in "customer acquisition", the marketing/bidding/advertizing costs to the solar company, along with the permitting & inspection process in the US, which isn't very uniform or streamlined, often involving multiple local regulators/government agencies, and the local utility to boot. In Germany installers are pre-qualified by the regulators & utilities, and can usually just install the system and mail in the paperwork to the relevant stakeholders/regulators, without having to pull a permit or get an inspection.

That said, there is room for cost reduction on the hardware installation front too. In the US a lot of $50-100/hr rooftop labor can be replaced by $15-25 factory labor using pre-wired racking system. Speculation by some is that Solar City's recent acquisition of Silevo (a ~20% efficiency cell & module manufacturer) had more to do with being able to pre-rack panels in a factory to streamline the installation project. They are (apparently) building a large manufacturing facility in Buffalo NY for manufacturing panels using Silevo's higher efficiency process, but it will be a couple of years before that happens.

With plenty of room to dig away at the soft-costs prices for grid-tied solar are still falling pretty fast in the US, but it's not clear that waiting is the right thing to do. The 30% federal tax credit is scheduled to drop to 10% at the end of 2016. Going into 2016 there is going to be a bit of a rush on solar which will prop up the pricing for the short term, and it may even be difficult to get panels unless a lot more worldwide production comes on line by then. India is in the beginnings of a truly major solar push, and have even dropped anti-dumping tariffs at the same time that the US is imposing tariffs.




US grid-tied PV is likely to hit ~$3/watt in the US before the end of 2015, despite the market issues surrounding panel pricing & availability, but probably not much below that. I've seen quotes locally (Massachusetts) in the $3.70 range as of Q1/2014, and it's probably been fading a bit since that time.

By 2025 grid tied PV will be the cheapest form of energy of any type, but by then you won't be able to net-meter at retail. Currently something like 43 states will allow you to just spin the meter backward, but as more PV goes up, that eventually becomes a cross-subsidy where non-solar ratepayers are stuck with the full cost of the grid, and the PV owners become freeloaders. At current penetration rates PV owners are usually still providing more value than they are getting from the grid even when net metering, but when more than 10% of all ratepayers have PV, that won't be the case. Buying in now and being grandfathered into net-metering at retail may be a better deal for the PV owner than waiting a several years until grid tied PV pricing hits a buck a watt, but only compensated at the grid wholesale spot-market price for the power they are putting onto the grid. When 25% of all ratepayers have PV the spot-price of power in the middle of the day will be pretty close to zero. That day is coming, and when that day arrives the economics of battery storage on your side of the meter may be looking favorable too, but the clear simplicity of net-metered power may still be worth locking into in the near term, while it's still available.

Answered by Dana Dorsett
Posted Aug 26, 2014 11:52 AM ET



I never dreamed that I would get such wonderful help and so quickly. I am appreciative beyond words.

Last night was my first time on Green building Advisor, I am new to the protocols that should be used in these discussions. I saw no way to say thanks besides using the post a new answer box.

I have another question along the line of solar panels: My home has roofing that faces west and east. I know ideally you want to install panels facing closer to southwest.
What is the best advice for somebody in my position?
Should I place some panels on the east facing and some on the west or is there a better solution?
If it is at all possible I would like to install these myself. < crazy idea?

Thank you so much.

Answered by John Alberti
Posted Aug 26, 2014 6:46 PM ET


IIRC if the roof pitch faces even 1 degree north of due east or west it won't qualify for some subsidies (not sure if that is true of the federal tax credit) This means you may have to use angled racks rather than making the array co-planar with the roof lines, which presents some aesthetic issues (and will often cost a bit more due to the messier racking system.) Due south delivers more annual energy output than southwest facing, but you can still be quite a bit off of due south and still reap reasonable returns.

If you have to make a choice of east vs. west, west facing would be treating the utility company nicer, since that produces more power during the afternoon air conditioning peak than east-facing panels. But unless you're compensated for the output by time of day, or peak grid load, east facing panels will be at lower temperature (==higher efficiency) during their peak output range, and will deliver slightly more total output. (The exception would be in areas where morning fog/clouds are common.)

If you solicit some proposals from a few solar companies I'm sure they'll be able to sort out those details a bit. Don't expect a lot of hand-holding, but they should give pretty good estimates of the annual output to expect from their proposed system design.

You can get a pretty good idea of which pitch delivers more power using this web-tool, which uses massive amounts of satillite data to measure the amount of sunlight hits your roof:


(You can even sign up to have solar companies solicit your business based on their satellite survey.)

Answered by Dana Dorsett
Posted Aug 27, 2014 10:51 AM ET


The solar industry is weak and non-competitive. And to top it off, we are experiencing the greatest boom of US oil and gas exploration, distribution expansion and refinery expansion in history. The US is now self sufficient in oil and more gas is soon coming to market. Why frig with solar when you can frack for gas and oil.

No industry can be strong when it relies on government subsidies to make prices competitive with alternative sources of energy. As long as the business model depends on government, no significant market will develop.

Answered by flitch plate
Posted Aug 27, 2014 11:59 AM ET


Flitch, near me every government entity, towns, cities, firehouses, etc is getting huge arrays of solar, HUGE. The leasing guys are having an easy time selling to our 2 year elected officials 20 year contracts that fully protect the leasing guys and give the liability to the dumbos buying. Cleaning panels, insuring panels, insuring rate savings, lots of clauses... lots and lots and lots off clauses.... 20 years locked in clauses... by 2 year elected dumbos.

Should be illegal for a contract to have a term that is longer than the term signers term!!

Answered by aj builder, Upstate NY Zone 6a
Posted Aug 27, 2014 12:14 PM ET


Solar PV is competitive without subsidy going up against propane and heating oil, when leveraged with heat pumps.

The unsubsidized world price of PV (as opposed to the US price, burdened by soft costs related to advertising and excessive permitting/inspection costs) is running just about par with the average residential retail rates for electricity in the US, and less than the retail rates in high-cost areas. By 2020 grid tied PV will be cheaper than the residential rates almost everywhere in the US without subsidy, which is why utilities are attempting to throw up roadblocks such as even more excessive specification oversight, permitting & inspection (and usually losing, due to over-reaching.) When the permitting is streamlined and the process more mainstreamed, the US price should be able to match the current sub- $2/watt (without subsidy) average cost Germans now pay.

A bill was passed in the CA legislature just last week to basically clear the decks of the utility & government heaped-on paperwork that has been adding cost without benefit (which is the opposite of a subsidy) to the solar biz: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=2013... http://www.latimes.com/business/la-fi-solar-permits-assembly-bill-201408... It hasn't been signed yet, but it is expected to be.

The notion that PV is going to suddenly disappear when the 30% tax credit or other subsidies go away is just pipe-dream for merchant power generators with peaking plant assets to protect. The utilities are right to be concerned. Utility scale PV will continue to be cheaper than new gas-peakers, even at the current near-record low gas pricing- pricing that is below the cost of production.

Natural gas is currently being sold at below the cost of extracting shale-gas, which only works financially due to the liquids-fraction of those fracked wells (the propane & butane), which sells at a higher price, and the tax & other subsidies for gas exploration. On an even playing field unsubsidized wind power would knock the socks off unsubsidized gas-peakers, and even beat combined cycle gas powerplants (though not as badly.) Large scale gas-grid expansion leveraged on the backs of electricity ratepayers (as has been proposed for a project in MA) is a kind of subsidy too, which only tips it even more in favor of distributed PV on the ratepayer's side of the meter.

Once PV is below the cost of the bulk-block retail pricing of electricity, way electricity gets sold at the retail level will have to change, lest the grid go out of business. Hawaii's utility is on the brink of bankruptcy from this due to inadequate planning on both the utility & regulators' parts, at only ~10% of ratepayers with PV. In South Australia they're at about 23% and climbing, and are expected to do just fine, but in Western Australia they're even worse off than Hawaii. Rate structures HAVE to change, subsidy or not! The restructuring of rates is discussed in some detail (but not so deep into the weeds you'll get lost and starve to death) here:


But the notion that the recent and ongoing expansion in the gas & oil biz going after tightly bound sources like coal seams, sand & shale isn't subsidized or that it is a cheaper way to make electricity than PV on a completely level unsubsidized playing field isn't necessarily as well-founded as one might think even today, and certainly won't be in another 10 years. The infrastructure and backup requirements for large centralize power plants are higher than for distributed PV, and the pipeline infrastructure requirements for converting other large thermal plants to run on cheap frack-gas are also quite large.

The energy biz in the US and elsewhere has long had the heavy hand of governmental steering, and the PV & wind boom are no exception. But at the rate the cost of PV is falling nothing is going to be cheaper than PV in remarkably short years, whether the US tax credit subsidy goes away at the end of 2016 or not. The expiration of the US tax subsidy will be just another blip in the logarithmic decay curve, a curve that has seen 95% reduction in system cost since 1980, with a few bumps here and there due to material shortages & technology breakthroughs, but still a pretty smooth curve. The small grid-tied system cost in the US has dropped from about $8/watt in 2004 to about $4/watt in 2014, and we know with certainty that contractors in Germany are making a decent living charging only $2/watt. The buck-a-watt frontier isn't really that far away, which will have a lifecycle cost half that of any other new generation source, and will be competitive even against the marginal operating costs of legacy thermal power plants.

So, sure, "No industry can be strong when it relies on government subsidies to make prices competitive with alternative sources of energy.", not even fracked gas.

Full disclosure: My brother-in-law is in the gas & oil exploration biz, with projects from Zimbabwe to Alberta. A coal seam gas project he explored in Oregon in the past decade is currently parked due the fact that the liquids-fraction is too low to make it profitable at the current market price of natural gas, despite the fact that it is dry enough to be directly pipelined, and there is a pre-existing pipeline within easy striking distance. Yes, gas is currently cheaper than cheap, but it's not going to be a cheaper way to make electricity than PV in another decade.

AJ: It's pretty clear that a lot of towns have absolutely no business being in the power generating biz, no matter how cheap the lease terms appear on first blush. But that's not to say homeowners making lease or long term financing deals are insane. PV is pretty low maintenance, but that's not the same as NO maintenance.

Answered by Dana Dorsett
Posted Aug 27, 2014 5:30 PM ET


For sure, Dana. But solar has to be substantially cheaper, not equivalent in $/watt to be competitive. The government participation needs to be regularized and hidden like it is with gas and electricity so the home owner is not tied up with paper work and intimidating complications of both administration, confusing and fearful selling and promotional methods, and of course a strange infrastructure and power plant with hardware to maintain and manage.

It will have to be turn-key, hassle free, and carry equivalent going-in, capital costs to other core systems in the house (same with wind). It’s still too exotic and you can’t pick it up at home depot. Once the banks get into it, and the system is a design decision like choosing between a furnace, mini-splits or boiler, it will have a chance.

Answered by flitch plate
Posted Aug 27, 2014 5:59 PM ET
Edited Aug 27, 2014 6:03 PM ET.


That's just it- PV WILL become substantially cheaper than everything else, especially when some or all of the distribution & transmission costs are avoided by having the power produced on-site. It's bankable right now with subsidy, and won't need the subsidy to be bankable in just a couple of years.

At the utility scale PV is competitive with gas peakers (and more bankable) right now, even in cheap-electricity states, due in part to the fact that the cost of the power for the next 20 years is known, whereas gas peakers have substantial fuel price volatility risk that needs to be hedged. (Nobody is offering 20 year fixed price gas contracts to utilities.) This has proven out recently even in Minnesota, which has some of the cheapest rates in the lower 48.

The big innovations that have driven the PV industry in US as much as the subsidy has been development creative financing, which is continuing to evolve. Most of the big vertically integrated solar companies have created separate "yield-co" companies for securitizing the revenue streams of their leased or financed PV. http://online.barrons.com/news/articles/SB500014240531119043295045800805...

It's already more bankable than most people realize, and destined to be even more so in the near future.

Answered by Dana Dorsett
Posted Aug 28, 2014 12:33 PM ET


Flitch Plate: It looks like subsidy or not, Austin Texas is sticking with solar for new generation capacity, as a hedge against natural gas price volatility:


Hitting a 20 year contract price of $50/MWh with PV in Texas in 2014 requires some amount of subsidy, but, $70-80/MWh deals have been inked this year without subsidy in other parts of the world. By 2025 $50/MWh will probably be a middle-of-the road or even on the expensive t side for merchant grid-scale PV. The only real advantage gas plants have on PV is that it's dispatchable power, but the value of even that feature is going down with the ease of implementing demand response and the falling cost of distributed grid storage.

The gas fired power biz isn't going away any time soon, but it's pretty clear that new gas plants won't be the cheapest way to get electricity over the lifecycle of a new plant, which increases the financing risk/cost for new gas plants. In Texas cheap wind has been cutting into the capacity factors of existing fossil plants, even though (unlike the rest of the US) electricity demand is still rising there. Year on year improvements in wind technology in lock step with year on year reductions in the hardware costs means wind too is soon to be (an in some instances already) capable of flying without subsidy.

Answered by Dana Dorsett
Posted Aug 29, 2014 1:48 PM ET


I have been recently looking into solar since my roof is in need of replacement. I always said I would take the leap after the new roof is installed. Does anyone have recommendations for finding a good installer/designer that work in NH? Solar city does not work in NH yet and I have contacted RGS already.

Answered by terry grube
Posted Aug 29, 2014 6:05 PM ET


Dana ... What about a different paradigm: free solar panels, installed, grid tied everywhere. Instead of a commercial model (money back and credits for surplus; selling systems), just have every reasonable space (i.e. roof) used to supply a collective, state managed supply that drives prices down instead of making money from a fundamental need (electricity).

I don’t think there will ever be permission (allowance) for solar to be priced much below the $/watt and $/BTU prices of the other competing forms of electricity generation. There is contradiction in the principles underpinning the two forms of production and valuation in the current model: grid-tied private energy production is a business model and playing the fields of commerce; whereas independent energy production is not a commercial enterprise, not competing in the same regulated big money economy and so subject to a different set of regulatory principles and aims (with different risk and outcomes). Independent non-commercial production – i.e. not grid tied - is going to be kept competitive but not more attractive by price fixing the systems (hardware and available efficiencies). Private commercial production on the other hand will have to be controlled and regulated so as not to skew the fundamentals of market management/investment/utility regulating.

Answered by flitch plate
Posted Aug 29, 2014 8:02 PM ET
Edited Aug 29, 2014 8:04 PM ET.


Back to the point!

Yes, you do need the modules facing south to reap the profits. Unless you have a nice looking thatch, cedar or slate (or non toxic recycled content slate like ours) roof, a good solar rack system can look progressive and better than any asphalt shingled roof. Face it, architects don't get it. They build a nice looking (albeit a usually wasteful home) and put toxic and ugly shingles on the roof. Go with solar as I have for two homes since 79'. You'll be progressive and seen as a forward thinking and environmentally conscious person who owns a smart house.
Be proud of what you are doing for the future of our country and the world and enjoy a vacation with the money you don't pay the utilities.

Nothing beats cash on hand for all the years we've had solar. No utility bills. Why let billionaires who are trying to poison us play with your hard earned cash? Be the world you want to see (yah, ok that's Gandhi's).

Cheers, PK

Answered by Paul Kuenn
Posted Aug 30, 2014 7:30 AM ET


Dana's long, detailed replies on the future of PV solar always leave me feeling happy and optimistic. I sure hope he's right.

Answered by Malcolm Taylor
Posted Aug 30, 2014 11:36 AM ET


Thank you everybody that has contributed to this discussion. It has been informative and fun to glimpse into the future and dream of a time when we electricity actually becomes affordable.

DANA mentioned something regarding the positioning of the solar panels. That was if the panels are facing even one degree north of east or one degree north of west that you wouldn't qualify for some of the subsidies. I imagine that for every degree south of east or west that the panels become more efficient. I would like to ascertain just how much more efficient a totally south facing solar array would be. I have considered adding on to my home in the past and now am trying to conceive of a way to make the roof point south on the addition.

I am not a rocket scientist and can not think of a way to gain an understanding of the possible cost benefits of building an addition and purposefully put a large segment of roof area facing dead south. It seems as if you would benefit both from south east and west if the roof pointed due south.

Any thoughts on these maters would be greatly appreciated.
Thank you all again,

Answered by John Alberti
Posted Aug 31, 2014 12:32 AM ET


Q. "I imagine that for every degree south of east or west that the panels become more efficient. I would like to ascertain just how much more efficient a totally south facing solar array would be."

A. The answer is easy to determine using a free online calculator called PVwatts. You can enter any value you want in the "Array azimuth" box. The default is 180 degrees (south), but you can alter the value and see how different azimuth values affect the output of your PV array.

Answered by Martin Holladay
Posted Aug 31, 2014 5:04 AM ET


Thank you very much Martin,
The link you provided enabled me to get a pretty good idea of the difference between 91 degree PVA verses the optimum degree setting of 180. It appears that annually I would get about 215.00 more than at 91 degrees.
I also enjoyed looking at the map because it shows the various elevations worldwide.

Answered by John Alberti
Posted Sep 1, 2014 8:10 PM ET


I ran across this tracker article yesterday explaining single(east-west) and dual axis (north-south) tracking of the suns direct beam (which accounts for 90% of solar energy) vs diffused sunlight 10, an efficiency loss of up to 75% in the morning and evening for fixed units. Dual axis does not show much of an ROI. I would think in regions with limited sun days compared to the wild, wild, west with alot east-west tracking would show an ROI? I do not know if there are smart panels these days to offset the losses, or the cost and payback period of the Heliostat (moving mirror) or moving collector.

I'm in discussions with a midwest developer about developing energy efficient communities which may make more economical sense, homes with low utility loads and a common area grid or non-grid tied PPV array on ground pods vs roofs. Payback through special taxes going to the developer vs city for not only PV, but renewable water, common sewer, etc... Homeowner get tax deductions, not credit, in either case I don't think will make or break the bank and future of PV. I guess I better get that one in front of the local code council too and stay informed on all this. I seen community PV in CA often.

Doesn't make sense to me for the IRS to have a 1 deg north tax credit exempt rule when the sun has 46 degree angle of incidence tolerance.


Answered by Terry Lee
Posted Sep 2, 2014 6:20 AM ET
Edited Sep 2, 2014 6:45 AM ET.


Thank you Terry Lee,
I do live in the wild wild not so wild anymore west and yes we get more than enough sunshine.
I would like to understand better the difficulties involved with Doing it yourself installation. It seems that if it were possible to install it and leave room for expansion that conceivably many more panels could be afforded. Then later when improved panel efficiency becomes available to install more. I did look at some systems sold on Ebay but I am hesitant to jump right in and buy some.
I would like to find out which panels and or systems currently available are the most efficient and the easiest to install.
I would appreciate any more guidance on this subject.
Thank you so much to all who have contributed to this discussion.

Answered by John Alberti
Posted Sep 2, 2014 6:45 PM ET


John, your thread has been very informative. Your question answered to the level it can. Now you need to do your due diligence, use the calculator's, get with the companies, look at east-west or single axis tracking cost, look at the installation where you plan to mount, look at code and state regulations to determine if and what you can DIY, look at grid tied vs battery storage, look at grid cost, look at pay back period, current electric usage, etc, time to get into the details and make a decision that is best for your situation, do not wait get started, you can add more later. Good luck! .

Answered by Terry Lee
Posted Sep 3, 2014 7:22 AM ET


In addition to PVwatts, NREL has a freebie financial sanity checker tool. It includes not only the output based on orientation and pitch, but the local cost of power, local subsidies & penalties (such as utility fees tacked on to solar PV owners), etc:


Answered by Dana Dorsett
Posted Sep 3, 2014 10:47 AM ET


John- just remember to be careful if you try to install pv yourself. As soon as the light hits the pv panel, it makes electricity, so you are working with what amounts to live current. Don't get shocked and fall off the roof!

Answered by stephen sheehy
Posted Sep 3, 2014 3:32 PM ET


Thank you for your responses and the warning! I had a Homer Simpson vision come to mind being shocked.

I am thinking of starting off with a small amount of solar panels and do it in such a manner that I would be able to add to it later. It seems that would enable me to learn and understand before I expand.

I am curious to know if this seems like a good plan or short sighted.

Thanks to everyone for your participation in this thread. I have learned quite a lot as a result of the thoughtful responses. I think that this Green building Advisor community forum is wonderful. It has been a pleasure from the beginning which was when I posted this initial thread on 8/26/14.

Answered by John Alberti
Posted Sep 3, 2014 5:09 PM ET

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