Driving On Sunshine, Ctd

A reader writes:

With regard to solar highways, a more inclusive solar policy would be to modify building codes to require re-roofing to be done with solar-collecting roofing tiles. If the homeowner was willing to fund the full cost of the solar roofing, they would own the electricity generated by their roof. Their electric bill would be reduced by using the energy from their roof and they could sell any excess power to the utility company (as is often done today). The twist would be that if the homeowner didn’t want to pay the additional amount for solar tiles and hook up to the grid, a government subsidy could bridge the difference between a traditional roof and a solar one. In that scenario the energy created by the homeowners roof would belong to “the commons” and the homeowner would receive the usual electric bill for all the power consumed by that household.

This method would allow utilities to expand solar service in a very predictable way that allows the business to ramp up production with a real knowledge of future demand. Also, within 30 years, the entire county would be a giant solar collector.

A wonky reader responds to another recent post on solar energy:

Loving the recent focus on energy issues, attacked with the usual vigor.

The Bloomberg analyst has it exactly right: Suntech is the most recognizable, reputable Chinese brand, and the government won’t let it go down. There are certainly a number of other high-quality Chinese manufacturers, but there is a lot of substandard product coming from that country, as in other industries. Given that they’ve just effectively vanquished the U.S.-based manufacturers, it seems crazy that they’d fold now. As long as the U.S. incentive structure holds up (barely, for now) there will still be demand here, and most consumers unfortunately don’t know enough about solar brands to distinguish between the junk and the premium manufacturers. The loss of Suntech’s production share would be significant for the U.S. market.

I also doubt the warranty issues is as big a concern for companies like SolarCity and SunRun. Most of these systems are closely monitored, and they don’t fail terribly often. When they do, it’s more likely to be wiring or the inverter, rather than the panel itself. Since the large installers buy high-quality product, there’s every likelihood that most panels will perform at or above spec for their full warranty life. Many “solar guys” proudly display still-working arrays from the first solar boom in the 70’s. The industry touts a 1%/year efficiency degradation rate but it’s probably often better than that.

One thing that’s commonly misunderstood about solar panels is that once you’re beyond the level of the solar cell itself, a typical PV panel is just about the least complex form of energy generation in existence. They have no moving parts. The panel itself is encased, usually rated to withstand hail or whatever type of weather is appropriate for the region. You could crack one if you kicked it really hard (I never tried), but they’re not what I would call fragile. The only “mechanism” is a wire attached to the back which transmits the current. Some systems have microinverters attached on each panel, but those are warrantied separately, and are more likely to be U.S. manufactured.

I’m talking off the cuff here though, and while having to eat the warranty on Suntech panels might not kill a company like SolarCity right away, it’s just as easy to imagine their already-thin margins getting nibbled to death over time under those circumstances.

The long game here – and this ties into your post from the other day about fracking – is that solar is pretty close to an economic tipping point in the U.S., and it drives solar industry guys nuts when academic renewable energy guys talk about “costs need{ing] to come down”. We don’t need more research; we need more demand. The only way solar gets any cheaper anymore is for guys in harnesses and helmets learn how to do their jobs better. We don’t need another scientist at MIT setting a cell efficiency record, or another “expert” telling the politicians that they should cut demand incentives to fund research. Doubly so for the whole “the sun doesn’t shine at night” bit – how much electricity demand is there in the middle of the night? Solar produces power when it’s needed – the middle of the hottest day in the summer when everyone turns on their air conditioners at once. If energy were priced in real-time, solar would get top dollar. Instead, we have a regulatory regime that effectively guarantees that all electricity is the same price no matter how much is purchased or when.

Even with our distorted electricity market, solar has almost reached grid parity, or the point where solar electricity competes with natural gas-generated grid electricity without subsidies. As long as solar prices declining and the boom-bust incentive cycle doesn’t cause the industry to lose the manufacturing knowledge and economies of scale – again – solar could go pretty big in the next few years. Moreso if we fixed the electricity markets, not just to price pollution but price electricity supply and demand in real-time. The utilities that see this future as inevitable or desirable are the ones pushing smart meters, by the way. Trust me, these things are good for you.

Sorry for the lengthy note; these issues are so often misunderstood, so rarely discussed well. Between school and work I spent the better part of a decade trying to unpack them, before burning out late last year. I have a friend who just spent a night in jail protesting Keystone XL. After working with Congress on energy for four years, I sometimes wonder if guys like him are the only ones making a difference.