The state of residential solar power

Lee Phillips
Don't panic, but we will need to generate approximately 15TW of usable energy from renewable (carbon-neutral) sources by 2050 in order to stabilize the atmospheric CO2 concentration. And purely in terms of available energy, solar power has the greatest potential for meeting this requirement.
Solar is “probably the only long-term supply-side energy solution that is both large enough and acceptable enough to sustain the planet’s long term requirements,” according to Richard Perez, senior research associate at the Atmospheric Sciences Research Center at SUNY-Albany. Perez’ analysis includes geothermal, wind, all other significant renewable sources, nuclear fission, and all forms of fossil fuels.
So while wind, hydropower, and geothermal extraction may work well on a local or regional scale in certain areas, today the potential of solar exceeds any other renewable energy source by several orders of magnitude. It’s simply the only contender, besides nuclear power, for a global solution to supply civilization with the massive amount of energy it demands.
On average, the power from the Sun striking the Earth’s surface is 175 W/m2. If we assume that 10 percent of this incident solar energy could be converted to electricity, supplying the energy used by the United States would require covering roughly two percent of the land in the US with solar cells—that's roughly the area of North Dakota. Since this is about 30 times our available roof space, supplying the grid with electricity from the Sun means building large solar farms.
However, that doesn’t diminish the usefulness of some panels on your roof. If you own your home, you have the potential to make your own electricity. You can reduce or eliminate your dependence on the power company—maybe even sell your surplus power back to it, reducing your costs further, or perhaps even turning a profit.
Given the recent change of federal leadership, it's likely a time of great uncertainty for large US solar initiatives. But individual organizations, businesses, and even citizens can still make decisions for themselves about embracing solar to a greater extent. To get a better idea about the current state of residential-scale solar power in the United States, Ars has been looking at the practicalities, the economics, and the experiences of some people who have recently turned their houses into tiny electrical generating stations. Hopefully, even if you live in a basement apartment, you might find the findings... illuminating.

Better than ever

As children, many of us have been fascinated by solar-powered calculators and watches. A few of us may even have received science kits with tiny motors attached to palm-sized solar cells. Generating electricity from light seems magical. Why can’t we run the world this way?
One of the main historical obstacles to a solar-fueled civilization has been the low efficiency and high cost of photovoltaic (PV) cells—the wafers that directly convert photons to electricity. Their efficiency, or, more formally, photovoltaic conversion efficiency, is the ratio of the electric power produced by a solar cell to the power of the sunlight striking its surface.
One of the first photovoltaic cells, demonstrated by General Electric.
One of the first photovoltaic cells, demonstrated by General Electric.
Public domain
These actually have a long history. The first solar cell was invented in 1883 by Charles Fritts, who imagined his solar cells competing with Thomas Edison’s growing network of coal-burning power plants. However, his cells' one-percent efficiency made this grand vision an impossible dream.
By 1954, Bell Labs demonstrated a PV panel to the public by hooking it up to a toy Ferris wheel and a radio transmitter. This device was six-percent efficient, which was a remarkable advance over previous solar cells. It was also a true “panel,” with several individual cells connected together to form a solar “battery.” Although it was still too expensive for widespread adoption, The New York Times was impressed, proclaiming that it “may mark the beginning of a new era, leading eventually to the realization of one of mankind’s most cherished dreams—the harnessing of the almost limitless energy of the Sun for the uses of civilization.”
During the ’50s and ’60s, research on silicon solar cells continued. Small cells began to appear during this period in some toys and consumer devices. By the middle of the decade, efficiency had doubled, but cost was still very high, especially compared with the low price of electricity at the time. A one-watt solar cell would set an early adopter back $300, while power plants were being built at a cost of 50¢ per watt.
By the end of the decade, however, PV cells would prove themselves worthy as a power source for the then-secret embryonic fleet of satellites. The Navy, initially skeptical, was won over when
the conventional battery on the first satellite died in a matter of days. Its solar array kept it alive for years.
The high-grade solar cells used in satellites and spacecraft, although expensive, account for
a small fraction of the cost of these systems, and the relatively low cost of fuel and terrestrial power during the ’50s and ’60s provided little pressure in the direction of reduced costs. Nevertheless, by the early ’70s, solar cells using cheaper materials had been developed to reduce the cost to $20 per watt. This, combined with the energy crisis starting in 1973, created a renewed interest in solar power for Earthly purposes.
The technology was still not ready for mass adoption, however: efficiency was still only in the neighborhood of 10 percent. Additionally, it remained far too expensive.
Today, we are experiencing an acceleration of interest in solar energy, both at the residential level and on larger scales. This is due to several factors coming together: a significant decrease in cost; increases in efficiency of solar cells; an encouraging regulatory and taxation environment; widespread concern over climate change; and significant entrepreneurial innovation.
This new surge of interest comes on top of solar power’s exponential growth over the past 20 years. Prospects look good for that growth continuing. In at least 30 countries, including parts of the United States, energy from rooftop solar power is now cheaper than energy from the grid—a comparison that does not factor in subsidies for solar panels.
Another factor that has helped modern adoption is that many firms market alternatives to the conventional roof-attached panel. Some companies sell more aesthetically pleasing offerings such as solar cells in the form of roof shingles (the result is a shiny roof rather than a roof with panels jutting off). At least one firm offers prefabricated “tiny houses” that are designed to appeal to several types of customers, including a segment that seeks to minimize its carbon footprint. Some of those products come with integrated solar roofs and an option to be completely off-grid.
Elon Musk has recently claimed that his “solar roof” is cheaper to install than a conventional roof, even without taking into consideration its ability to generate electricity. Such a reality would make a solar roof a no-risk choice for new construction.
Finally, homeowners are not limited to their roof surfaces. The same installation techniques can be applied to the roofs of carports and other auxiliary structures, and PV panels can even be erected in fields and backyards.
Remote, low power PV applications are possible—like this water monitoring station in Virginia.
Remote, low power PV applications are possible—like this water monitoring station in Virginia.
By Lee Phillips, CC BY-NC-SA 4.0
Although we're focusing on individual residential solar power, we should mention the growing phenomenon of intermediate-scale PV installations. These are bigger than residential but still far smaller than utility-sized solar generating stations. In a recent drive through rural Maryland and Virginia, we noticed the occasional plot of land planted with rows of solar panels rather than filled with cornfields and cow pastures. And in fact, “solar farms” are growing in popularity as a way for communities to gain some of the benefits of solar power without requiring each individual to invest in a separate rooftop system.
The sight of them interspersed with crops made one irresistible impression. This is just the latest way to exploit the abundant, free energy of the Sun—converting it to electrical power rather than to sugar through photosynthesis.

Dollars and kilowatt-hours

So you want to get in on the solar exploitation. Is it really a good investment?
For many people, of course, there is more to this calculus than simply dollars in and dollars out: the knowledge that you are reducing your carbon footprint is meaningful enough to outweigh purely financial considerations. And for those who make the extra investment in an off-grid, battery-connected system, there can be an extra measure of satisfaction and security in becoming more independent from the local infrastructure.
All that aside, it’s still going to cost money. Unless you can take advantage of a special arrangement with an installer, for most people putting solar panels on the roof is a significant investment. This outlay is offset, in purely financial terms, by the reduction in your electric bill (and sometimes in a monthly check from the power company) to reimburse you for the power that you supply to the grid.
Beyond those general statements, it is impossible to make specific predictions about the finances of residential solar power. That’s because all the relevant factors vary so widely depending on where you live. In the cities with the most expensive prices for electricity, an investment in rooftop solar can be competitive with putting your money in a typical index fund. In places with much lower utility costs or weather conditions that make solar panels inefficient, installation on individual homes may amount to a financial sacrifice (although one that, for reasons above, may be worth it for some people). How much you get back when your panels overproduce also varies from state to state.
Energy researcher Joshua D. Rhodes points out that the average cost of rooftop solar power, taking into account the costs of installation, expected lifetime, and other relevant factors, is now equal to the US average for utility-supplied electricity: about 12¢ per kWh. This may signal a turning point, suggesting that everyone who owns a home, or is considering purchasing or building one, should seriously consider making solar panels part of the equation.
However, these average figures obscure many details. The price of a kWh consumed from the grid varies by nearly a factor of 10 across the country, and the panel installation costs and available sunshine varies widely as well. Rhodes has combined this data on the county level to produce maps that show, in a general sense, where residential solar power may be a good bet for the homeowner and where it may still not be ready for prime time.
The result? There are large regions with both high energy costs and abundant sunshine, such as most of southern California, where installing solar panels may be a good idea. Others, such as Washington state, have poor sunshine and low electric prices, so it may not be worth the trouble.
But this information can go out of date fast. Conventional (silicon-based) PV panels have seen a steady decline in price due in large part to economies of scale, as manufacturing has ramped up to meet increased demand. This process may be approaching saturation, and future cost decreases could depend on research into new types of solar cells or manufacturing techniques, a topic we visit in a companion article.

A real-world example

Nik White lives in Denver, Colorado, has had solar panels on his roof for a bit over a year, and has kept detailed records. He was kind enough to share his experiences with Ars, and they make for an instructive case study.
Nik White’s house with solar panels in Denver, Colorado.
Nik White’s house with solar panels in Denver, Colorado.
Nik White
Nik White tracked the output of his solar panel system and found that it generated a total of approximately 3,400 kWh of electrical energy over the course of the first year of operation. During this period his home consumed roughly 4,200 kWh, which is 800 kWh more than the Sun provided: this excess amount was supplied by the grid.
The utility charges .13¢ per kWh, so the bill for the 800 kWh would be $104. However, the electric company is also required to credit the Whites a “performance payment” of .03¢ for every kWh that their panels produce. This is an incentive, required by law, that is intended to offset the cost of solar panel installation; similar incentives are available in other states (see below).
The total performance payment amounts to 3,400 × 3¢, or $102. Therefore the Whites' electric bill for the year was a net $2. Without the panels, the electric bill would be 4200 kWh × 13¢, or $546, so the Sun provided ($546 - $2) $544 of value over the first year.
As White points out, the return of $544 divided by the installation cost of $7,672 (after the tax rebate) amounts to a 7.09 percent return on investment (not including the interest on the installation loan), which compares favorably with investment in an index fund. Since utility costs generally increase over the years, the savings will also increase even with some deterioration in panel efficiency.
As for the performance: “I honestly don't think about the panels much," White says. "They are always on, maintenance free.”
The White household’s modest electrical consumption (half of the average for their region) is partly due to the fact that before installing the solar panels, they invested in efficient technologies to reduce their power requirements. He estimates that the return on investment for LED bulbs and efficient appliances is far greater than for the panels themselves.
Perhaps more important than the financial calculations is that the White family’s solar panels put a tiny dent in the fact that Colorado produces 60 percent of its energy from coal. He describes that result as the “best of all.”
In addition to their house, the Whites spend significant time traveling in their RV and have outfitted it with its own solar panel system. Naturally, this is an off-grid system with battery storage. They estimate that not being tied to the grid makes the RV system 2-to-5 times more expensive.

A potentially useful case abroad

Before you consider a rooftop solar installation, you should figure out your available surface area and the average amount of sun it receives. This will allow you to determine if it’ll produce sufficient power to make solar worthwhile. Local installers can also make these estimates for you, but of course these parties are motivated to generate business. So, it’s generally a good idea to have a sense of what to expect before you talk to them.
Project Sunroof is a website from Google that, given your address, will combine knowledge of your roof area with local weather and shade data to attempt to calculate the economics of a rooftop solar installation on your house. While it might be useful as a first rough estimate, or to compare several candidate homes if you’re buying, the project is still in its early stages—it’s not yet able to do detailed analysis. For example, the site considers your entire roof area to be available, whereas local ordinances and practical considerations are likely to eliminate a substantial fraction of it. And at the time of writing, there are a limited number of addresses that return results from the system.
An example of an unconventional exploration of solar power, one that is undoubtedly beyond the reach of the algorithms used by Project Sunroof and similar tools, has been pursued by Kris de Decker,
who writes the online publication “Low Tech Magazine” from a home office in his apartment near Barcelona, Spain. He recently decided to conduct an experiment in powering his office exclusively with solar panels. Although our focus here is mainly on the United States, his results are instructive. After all, Barcelona’s average insolation of 1,700 kWh/m2/year matches the US average.
With no access to the roof, de Decker was forced to turn to his windows. Fortunately, they are ideally situated, facing south-southwest and unshaded by nearby trees or structures. But the small array of panels that he could fit on his windowsills was not quite sufficient to power his office.
He was able to increase his solar output by building a mount for his panels that allows them to tilt, allowing them to be angled to receive maximum irradiance from the Sun (see the photograph). This is a strategy followed by industrial solar farms, but it's usually not available in a typical home installation, where the panels are simply fixed to the roof. de Decker increased the average yearly yield by a bit less than 10 percent by making regular adjustments to the panel angles, but the advantage is greater than one would think. That’s because the increase primarily came in the winter, when it is most important to get every watt possible out of the system. In these months, the tilt could provide a factor of three over a horizontal panel.
de Decker's solar-powered home Decker's solar-powered home office.
Kris de Decker
More significant was his conversion of his office to a 12-volt DC system. Solar panels produce DC (direct current) electricity at various output voltages, with 12 volts being the most common for small panels. This is convenient for powering many of our electronic devices, such as laptop computers, which run on 12 volts DC. (When you plug your laptop into the wall, the 120-volt, AC power is typically converted into 12 volt DC by the power brick. Energy is lost in this conversion: you can easily feel the waste heat on the transformer.)
In order for a typical residential solar system to integrate with the household circuits, its DC output is sent through an “inverter” and transformer that converts it to the 120 volt, 60-Hz (in the US) power that our appliances expect. Instead of transforming his panel output and wasting energy in the process, de Decker transformed his devices, modifying them to use the 12 volt DC from the panels directly. In most cases, this just meant using a different power cord. The result was a 40-percent energy savings and was a very significant factor in the success of his solar-powered home-office experiment.
Solar panels being installed in Massachusetts.
Enlarge / Solar panels being installed in Massachusetts.
Benjamin Meyer

Two more from the States

Our final case study is courtesy of Benjamin Meyer, who lives in Massachusetts. As might be expected, the New England climate situation is not ideal, and the panels are often covered in snow. Nevertheless, over the course of a year, they generated more electrical power than the house consumed. The Meyers responded by installing an air conditioning system and other electrical appliances, increasing their consumption to match their generation. Now, five years after installation, the panels have paid for themselves when you take into account performance payments and federal and state tax incentives (see above).
“I rarely have to think about the panels," Meyer told Ars. "The biggest experience was getting them installed and turning them on for the first time and watching the meter go backwards knowing that you are not paying anything at that moment for electricity. I am guessing most everyone that has panels can tell you about that moment.”
A solar roof in California.
Enlarge / A solar roof in California.
Dan Birken
Across the country in San Francisco, another case study was generously provided to us by Dan Birken, a software engineer. His rooftop solar panels have been providing power for about a year. He describes his outlay as “not the best use of capital,” but adds that “I didn't buy the system because it was a good investment, I bought it because I wanted solar panels as long as it wasn't a horrible investment. It is fun to generate your own power from the Sun.”
Birken estimates that his rooftop solar system saves him from $900 to $1,200 per year, including the performance payments from the utility company for the power that his system provides to the grid.
The Birken house ran into a common regulation, forbidding solar panels to encroach within 36 inches of the crest of the roof—you can see the result in the picture here. This regulation is in place to allow firefighters a foothold at the roof apex, but it reduces the small available space on the Birkens’ roof even further. Popular solar energy calculators (such as Google's Project Sunroof) that attempt to estimate the generating capacity of one’s home based on factors such as roof area often omit regulatory details like this.

An offer you can’t refuse

There is no doubt that utility-scale solar installations are far cheaper, per kilowatt-hour, than residential ones. In fact, the cost to supply electricity generated by large-scale solar plants has recently reached parity with, and in fact dropped slightly below, the cost from gas-fired plants.
One of the attractions of a small install, however, is the possibility of scoring significant subsidies to offset the price of rooftop solar power. At the moment there are some incentives built into the US federal tax code that make residential solar power more attractive. Current law applies a 30-percent tax credit for the installation of solar energy systems; this lasts until 2019, after which it decreases, disappearing in 2021. Because this is a credit, it amounts to a net 30 percent discount in your cost of installation with no upper limit—that's a substantial incentive. It applies to solar water heaters (see below), with some conditions, and to any PV panel system.
This tax incentive has already had a large stimulating effect on solar panel research and development as well as residential adoption. While it’s currently scheduled to go away, previous tax incentives with expiration dates have been extended. The declining credit schedule in current law will be revisited by Congress every year, so there’s a chance it too will be changed.
In addition to the substantial federal credit, incentives are written into the tax codes of many states, although these vary widely. For example, New York State has a 25-percent tax credit, while New Jersey has no tax credit; but New Jersey has a sales tax exemption for solar hardware, as does New York. Other incentives vary by state and sometimes by locality. These include property tax exemptions, which exclude the increase in the assessed value of your newly solar-outfitted house (which will be higher due to its attractive new solar panels) from the resulting increase in property taxes. There are also some places with performance payments, a direct, mandated payment from the utility company per kWh generated by your panels. Finally, there are rebates on the cost of solar equipment and installation, also mandated in regulations and usually paid by the utility.
It can be difficult to navigate, or even discover, the full array of incentives offered in your state and locality by the government, utility companies, and private installers. North Carolina State University hosts an incentive database, organized by state, that can help with this chore; it covers all renewable energy technologies, not merely PV panels. If you are in the unusual position of being able to choose where to live and have already decided to go solar, you can even refer to this ranking of state solar incentives to take advantage of the optimal financial environment.
The tax incentives described above are attempts by the federal and state governments to encourage more widespread adoption of solar energy. This is part of an established policy of using the tax code to influence behavior in socially desirable directions (for example, attempting to increase the rate of home ownership through the mortgage interest deduction). Toward the end of the Obama administration, the White House even announced a new, wider initiative to promote solar power. Although it’s difficult to penetrate the government-speak in the announcement and attach a specific meaning to many of its sentences (let alone to predict if the new administration will feel similarly), the general idea seems to be to create grant opportunities to fund community-level solar power installations, especially in lower-income areas, and to strengthen tax incentives to make individual solar power more affordable.
Another kind of incentive, of a sort, was recently enacted by San Francisco. In a true example of an offer that you can’t refuse, that city now requires all new buildings to be outfitted with some type of solar power system.

Coping with the dark

Let's state the obvious: solar panels do not generate power at night, nor when covered in snow. Yet we generally desire access to electricity 24 hours per day, every day. For solar power to give us that, we need a way to store excess energy generated during sunny times and draw upon the stored energy when we can’t generate it.
Large solar farms operated by governments or utility companies have a variety of energy storage strategies available and can choose one best suited to their environment. They can store excess solar energy as gravitational potential energy by pumping water into elevated tanks or reservoirs and reclaim it by allowing the water to fall through turbines. They can compress tanks of gas or springs, or they can use chemical energy, either in the familiar form of batteries or using a more sophisticated process, like splitting water to produce hydrogen that is burned when the Sun goes down.
The only practical, self-contained solution for the homeowner on that list is the electrical storage battery. However, the capital cost and extra maintenance of a battery system is, at the current state of technology, significant. As a result, most people decide to install a grid-attached system and forgo running everything with their home-grown electrons. This allows the homeowner to sell excess generating capacity to the electrical utility during the day, while drawing upon grid power at night or any other time their panels aren’t producing.
Using the grid as energy storage not only makes PV panel installation cheaper and simpler, but it lets the system pay for itself faster, as many states require the utility to pay the homeowner for power fed into the grid. One drawback is that during a local blackout, when you might want the power most, the rooftop system will shut down for the safety of workers who may be repairing the lines.
If you do want your own storage, batteries are an obvious choice, typically the common lead-acid battery found in cars. Recently, however, Tesla Motors has adapted the lithium-ion battery technology developed for its electric vehicles to serve as a sleekly packaged power backup system for the home. This device, branded the “PowerWall,” is designed to work both as energy storage for a rooftop solar installation and as backup power in case of grid blackouts.
Improvement in battery efficiency and the drop in battery cost is just as important as improvement in solar panel efficiency for off-grid residential solar power. If recent improvements continue, we may see these installations become more popular. And if the market share of electric cars continues to increase, their batteries may become a dominant energy storage and demand-leveling system—after all, everyone who owns an electric car has already invested in a large battery array.
The new Powerwall 2.
The new Powerwall 2.
Tesla’s recent purchase of the energy company SolarCity is part of a strategy (one viewed with considerable skepticism in the financial world) to become a vertically integrated firm that supplies solar power, a system for storing it, and vehicles that consume it, with the vehicles potentially becoming an integral part of the storage system. Industry analysts project that by the year 2020, there will be 70 GWh of electrical storage available in the form of the batteries inside Tesla automobiles—not including cars from other manufacturers.
Tesla is already so heavily invested in the SolarCity project that they will have installed, in 2016 alone, more battery storage through this one company than the entire United States installed in 2015. The company intends to produce a “smoothly integrated and beautiful solar-roof-with-battery product that just works, empowering the individual as their own utility, and then scale that throughout the world.” Since the Solar City purchase, Musk and his company have announced plans or recent technical achievements that are in line with this vision, including advanced inverters and solar roofs.
As is probably abundantly clear to those who have read this far, the story of residential solar power is complex and constantly changing, due to the rapid pace of research and the ever-shifting regulatory landscape. But technology and economics have evolved to the point where we can say, confidently, that rooftop solar power now makes good sense if you own a home in a sunny part of the country... that is, unless local politics erect too many obstacles.
For those in less hospitable climes, the purely rational case is harder to make. But you still may be swayed, nevertheless, by the prospects of gaining a measure of independence from your local power utility and by joining the vanguard of citizens striving to take some responsibility for their personal contributions to our planet’s looming climate problem.

The state of residential solar power Reviewed by Bizpodia on 23:32 Rating: 5

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