Wednesday, February 18, 2015

Why Solar power systems suck

I have just finished my yearly research into the current solar schemes and system prices, I have come to the conclusion that its a big scam and will continue to be for some time. 

Let me be clear that I am talking about urban, grid connected systems with easy availability of grid electricity.  This is not about remote area power or fridge power (where the quality of the grid is a bit wobbly)

1) Pricing

The pricing model for solar systems is always pitched in comparison to the grid.  The sales people are simply trying to "beat the grid"rather than pricing the systems based on any intrinsic quality of the system.  Usually they are only trying to be "just"better than the grid price.  The other problem is that the way they try to calculate that price is on an upfront cost versus "best guess over time"cost.  This all gets pretty wobbly once you start trying to guess what your usage will be in the future, what the grid price will be in the future etc.  

2) Power output

The models used to predict power output from a solar system are pretty simple.  Amount of sun per day, amount of sunny days for your region, potential output from the panels, decline in panel output over time, time of day you want to use the power.... but you try getting a straight answer from a salesman.  Once you do the math from first principles its not rocket science.  But you also realize just how little actual usable power you will have at any point in time. 

Then you realize just how much power you will be returning to the grid for free; which leads to the realization that you will be buying most of it back at 6 times what you were paid for it.

3) Storage

Storage is the only thing that makes a solar system make sense. But once you look at the additional cost and risk it just gets stupid quickly.

The storage systems that are available are expensive, high risk and high maintenance.  You require yet another box on the wall to manage the storage, which increases system complexity and risk.  Trying to do anything like a gravity battery or hydrogen system is a joke.  There is just nothing viable unless you go for old school battery banks with the associated problems. 

4) Risk

Take 15 different peices of equipment, wire, frames and a connection to the grid and figure out the failure rate of them and the cost to replace, downtime, potential side effects of collateral damage in the event of catastrophic failure, the additional risk of high voltages floating around the house and the general issues of dealing with more trades, small businesses and 15 to 25 year warranties from companies that change their names every two years or only supply under short term contracts....  It's just a massive pile of risks that are difficult to mitigate.  Some are physical risks, some are ecconomic, some are reliability risks.... and they are all your problem once you buy the system.

About the only way that you can mitigate some of these risks is to buy (or add the system to your existing) insurance.  However, as we are again playing guessing games with the future, I think its hard to know if the insurance will actually cover all these issues.  Even if it does now, its possible that this could change at some point during the period you own the system.... yet another risk.  

5) Investment return

Honestly the investment returns I have seen are rubbish.  Depending on how you massage the spreadsheet and how much wishful thinking you inject you can get a flat payoff period somewhere between 6 and 10 years.  IF you play the system very hard. 

If you live in the real world and work outside the home during the day... then you are pretty much screwed.  Unless you can either store or use the power during the day, your ability to recover your initial costs are seriously diminished. The power going into the grid during the day will not be nearly enough to offset what you use during the evening.  

This is yet another risk that is not disclosed in any of the literature that is easily available. Your system dictates your lifestyle.   

The return from the gov rebate or a grid feed rebate is always going to be a game run by the big players.  YOU CANNOT WIN.  There is no interest in making it a fair game. Even if it was, it would still be a game of SCALE.  Big generators will be able to get efficiencies that small players cannot.  The overheads will always push small producers out of volume markets. 

6) Reliable data

Just trying to get hard enough data to differentiate between two products in the solar market is way too hard. It's just bullshit.  You try differentiating between two inverters based on anything other than the published price and the colour of the box... you have virtually nothing to go on.  I have not found anything like an independent testing body any useful data to base a decision on performance.  Even then the sales people will finally admin that once the system is installed they will need to "tune"it to get it to perform adequately.  This may continue for a year or more.  (So for the first year or so of your systems lifetime, it may not work properly.  Should this be part of the product disclosure?  What effect will this have on your payback period?  Does this add more costs?  What is the risk that they will never get it working "adequately"?)   

7) Inflexibility

 Once you commit to purchasing the system and all the associated unknowns... you are stuck with it for the future.... If you have had a look at the resale value of an installed system... unless you sell the house with it installed its going to be alot smaller.  Keep in mind that you need a sparky to extract the system and a way to deliver it to the new owner.  Then you have the loss and liability involved in selling something. (Check consumer law) So, in summary there is no cheap way to change your mind without taking a bath.

Now think about the technology. The panels degrade over time and the inverter is a computer. The batteries do not get better with use.  Everything gets much less valuable the longer you own it.  At some point everything you have purchased will reach a zero value point and you will need to dispose of it.  The batteries are actually the only thing that will have much value at that point as the lead will still get a good price from the scrap metal dealer.  Old panels might be able to be sold as is, but it will take a sparky to evaluate them, so no-one will be buying them on sight.  This will add an overhead to disposal unless you simply sell them for scrap value (about 1kg of aluminum and some steel) or about $10 for a panel that cost you $500 new.

 So, if you look at the system as an investment, its a very rigid deal.  You either stick with it for 15 years or you loose. And your chances of getting any sort of pay-off are minimal.  Your best hope will be to get your money back but after 15 years of indexing at between 2 and 4%... its going to be eaten up either way.

8) Ideological Bullshit

The amount of lying involved in the solar debate is just gobsmaking.  Both lies of ommision and lies of commision.  Once you get past the crap, the only substance left is the ideology.  The idea that in some existantial way, solar systems are somehow better.  They produce less polution (check the production systems and the factories in China, the labour conditions, the social systems that support all this and finally the explointation required to keep the cheap labour) then make the ethical argruments...

From a technical standpoint I like the idea of collecting solar energy, but the technology is just not here yet to store it effectively (hydrogen) and recover it rapidly (fuel cells) without having a massivly parallel system that is outrageouly expensive and a maintenance headache. The inefficiencies in the availible technology just make it impractical.

Hopefully this situation will change over time, but for now, the grid is cheap, efficient, low risk, ethically neutral and very low maintenance.   Economy of scale is very hard to beat.

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