Bishop Hill The FT does solar
Aug 9, 2013 Energy: solar Pilita Clark, the FT's environment correspondent has written a bizarre analysis of the solar power sector. I can't make head or tail of it. Take this for example:
Prices vary widely depending on location but in Europe the average cost of power generated by residential solar PV systems ranges from 151 per megawatt hour to €275 MWh – more than double the cost of power from new nuclear, gas or onshore wind plants, according to IHS data.
However, solar PV systems are now so cheap they still make sense in countries with high power prices – even those without much sun that are cutting subsidies, such as Germany.
The lifetime cost of solar PV power fell below industrial power prices in Germany last year, IHS says, making it cheaper for businesses to install and use their own solar power instead of buying it from a utility. That some have done exactly that explains why even those worst hit by the industry’s woes remain optimistic.
A commenter below the article says that the actual costs are coal €25 and €57 for gas, but even on Clark's own figures, there seems to be a contradiction between "solar power costs twice the alternatives" and "it's cheaper to install solar than buy from industrial generators". Are the margins on industrial power that big?
Reader Comments (39)
What matters is the retail cost of power, which for small users is about four times the wholesale cost, so this could make sense. Unsubsidised solar already makes perfect sense in areas with variable tariffs where the peak charge coincides with summer midday.
Ah, Pilita Clark.
To my shame, she is an Aussie expatriate who formerly worked for the Sydney Morning Herald, the paper that has a "carbon economy editor" and never saw a Greenpeace press release it didn't regard as gospel.
It is currently circling the drain with ever decreasing readership and the parent company's shares have dropped in value by about 75% in the last decade.
Why the FT hired her is a mystery. Have they gone over to the dark side with The Graundian?
In any event the EU seems determined to put a stop to the plunging price of solar by sticking massive tariffs on Chinese panels.
Indeed "the margins on industrial power" are not that big, but the margins on industrial-strength stupidity such as Mde. Pilita represents can scarcely be exaggerated.
"The lifetime cost of solar PV power fell below industrial power prices in Germany..."
Depends on the definition of 'lifetime' (panel life, or investment horizon, or tax depreciation life, etc), 'industrial' (some industries are more favored than others), 'prices' (as in what time of day, how full is the basket of tax breaks, rebates, subsidies, FITs, RECs, zero-cost land leases, etc, etc), and precisely where in Germany.
The solar industry has mastered the black art of renewable prestidigitation.
@Johanna: the FT has been the voice of the soft-left establishment for many years now. They faithfully parrot every passing fashionable stupidity from joining the Euro to carbon trading. (We can make an exception for Gillian Tett though; she saw the derivatives bubble for what it was before the system blew up.)
Thanks, Sebastian. My view of the FT was based on crime novels and spy thrillers of the second half of the C20th, where it was always the citadel of capitalism. No wonder the UK economy is struggling.
Mind you, the Australian Financial Review, owned by the same crowd as the SMH (Fairfax) have adopted a similarly grovelling attitude to all things green. They used to be very much the opposite.
30 years of Cold War espionage never managed to achieve this. Although maybe a bit of succour and support has been offered along the way.
That's the problem with distorting a market with taxes, subsidies, regulations, prohibitions, inducements, claimed external costs, environmental-arse, post endogenous-growth factors, etc, etc.
Call them what you will, eventually you end up with a situation where nobody really understands the true cost of anything. Worse, they don't even understand the price. A bit like mobile phone tariffs. And this situation has been created by governments deceived by, conniving at, or colluding with, apparently dewy-eyed environmentalists.
When you read of 'widely varying....averages...range from...' and 'life-time costs' that are evaluated before one hypothetical life-time has been reached, then you know that you may not like what you find if you choose to dig deeper. Pilita Clark has more ignorance to contribute in this field than most. I wouldn't be surprised to learn that serious financial journalists view it as something of a poisoned chalice.
Does anyone know the MTBF or lifetime of photovoltaic cells?
Not sure about the life of the cells, but according to this DOE report you can expect the inverter to fail 3 to 5 times over the 25 year life of a domestic solar installation.
http://www.nrel.gov/docs/fy06osti/38771.pdf
The words "solar fragmentation" come to mind. Every man for himself.
geronimo asks-
"Does anyone know the MTBF or lifetime of photovoltaic cells?"
The PV cell (Silicon) will last many decades as long as it is not exposed to moisture. The cell typically loses 0.5% to 1% of output power per year due to thermal and UV aging.
The PV panel or module is another matter entirely. Well-designed and sealed panels can work for many decades, albeit with a slowly dropping efficiency. Poorly designed or poorly assembled panels can fail in months due mainly to water ingress leading to corrosion of contacts and leads.
To maximize panel lifetime, do not expose to sunlight, rain, condensation, salt, extreme temperatures (high and low), snow, ice, dust, sand, dirt or excessive wind loads. In other words, store them in an air conditioned warehouse.
When they say "Europe" do they include the Spanish
monopolyconsumption tax on sunlight?"Proving that idiocy truly has no bounds, Spain issued a "royal decree" taxing sunlight gatherers. The state threatens fines as much as 30 million euros for those who illegally gather sunlight without paying a tax.
The tax is just enough to make sure that homeowners cannot gather and store solar energy cheaper than state-sponsored providers. "
http://advisorperspectives.com/dshort/guest/Shedlock-130726-Spain-Taxes-Sun.php
Surely loss of interest on capital, loss of capital growth, depreciation, running costs & above all inflation (£10,000 becomes £18,000 after 20 yrs) negate any so called benefits.
As usual, the prices of renewable energy are calculated without taking into account the necessary backup. For PV on our latitudes the capacity factor is 10%, i.e.only 10% of the time PV installations deliver rated energy, for the rest of the time they produce zero power. This requires 100% backup capacity standing by.
In addition, the variations of PV installations cause havoc on the grid, same as windfarms do. These costs are also not taken into account.The backup plants have to compensate the rapidly varying PV (and wind) power, which means running below maximum efficiency and associated wear and tear.
And finally, the subsidised energy renewables produce makes profitable operation of the backup plants almost impossible, c.f. the gas plants being mothballed and removed in Germany.
The numbers produced by FT are only a very small part of the story.
I assume she is differentiating between the actual cost of energy production on the one hand (being double) and the subsidised price industry will pay (compared of course with the normal power prices incl green taxes)
Solar was my defining moment, the end of the green sunshine dream.
An electronic engineer friend of mine showed me that with current technology, on the sunniest possible day in the UK, a roof full of voltaic panels couldn't generate enough electricity to run air conditioning inside the house. How useless is that?
The most efficient solar panels are free, unsubsidised, install themselves, require little maintenence and store energy for use as needed- trees.
Used to do R&D on amorphous silicon solar cell technology in the early 1980's.
Efficiencies were well under 10% as I recall.
I believe they can get to around 50% now - but the green believers seem to have the strange notion that they can keep rising indefinitely.
The amount of energy you could get from covering your roof in solar cells is never going to exceed the amount of heat you can feel going by into your attic on a sunny day.
Of Pilita's ramblings, I haven't the foggiest notion of what the lass is attempting to say.
Reading through some knowledgeable posts above, I conclude that back in the mists of time, my original thoughts on PV cell panels are unchanged - more useless [if that is possible] than Avian chomping whirlygigs, aka windmills.
Hot air fantasy and massive hidden costs.
Eco-warriors and the greatest political scam of this and the previous millennium - CAGW empties your pockets but doesn't save the planet. The planet suffers greatly actually, in the process of manufacturing polysilicates - which overall is complicated, massively energy consuming and the end product is not perfect - cells made of polysilicates are not that efficient.
Who gains then?
No one really, don't believe the hype.
Well except, the banks and green investment sharks.
Follow the money.
Production cost versus end-point cost.
The Bishop is running out of juice.
That is, new subject to comment on.
Only the old horses are left, to beat.
Why not examine the idea that with all this oil and gas about everywhere perhaps the designation of fossil fuel is wrong and that we have hydrocarbons as primordial material in abundance.
Let's not get carried away here. PV panels can be effective, useful and robust. That's why ocean-crossing yachts will have a good array of them, to keep the batteries charged without having to use up precious diesel. I can get a 130W marinised panel for just over NZ$300 that will keep the batteries fully charged and can survive for many years in a very hostile environment.
For small-scale uses, especially in remote locations, solar power is sensible.If I had a modern house (rather than my heritage villa) I'd consider fitting some PV and water heating panels, though I'd need to do the sums on lifetime cost vs. savings.
PV only makes no sense as a large-scale method of power generation.
@ Gixxerboy Aug 10, 2013 at 2:53 AM
If you go sailing on our latitudes your 130W PV panel will give you 13 W averaged over 24 hours.That means if your average power use is more than 13 W, your batteries will not be kept full without using your generator. You would have to be very frugal with electricity. Better not use the fridge, drink warm beer.
EUROPE PULLS THE PLUG ON ITS GREEN FUTURE.
Benny Peiser, The Australian 9th August 2013.
Europe is beginning to realise that its green energy strategy is dying on the vine. Green dreams are giving way to hard economic realities.
http://www.thegwpf.org/benny-peiser-europe-pulls-plug-green-future/
Good article, on the insane EU drive to impose 'green energy' and the renewable boondoggles on its citizenry, the paucity of effective energy strategy, the idiocy of the carbon floor price - Benny covers all the salient points.
Of course, it is worth repeating - just as the green loons in Germany are beating the retreat - it has to be noted: which western nation is yet transfixed by the green mania? Plus, without a moments hesitation or look sideways at recent failures [Spain, Germany], is lining its own coffin and designing for itself a headstone which will read something to the effect of......
"Here lies the UK, a once mighty industrial nation cut to its knees, captains of industry long sailed on and now Britain is an asset stripped de-industrialized third world economic basket case. Let it be said, The green energy madness did for them, the carbon floor price unilateral economic suicide and arbitrarily set way too high. Consumers made poor, the elite survive but the majority made to be in energy poverty and most of the time in winter darkness and dying. Let it be known - the politicians, the elite, the bankers all 'signed up' to the Climate change Act of 2008 - the day the British nation died."
RIP Britain.
Chilli, Chris A, thanks for the info. Almost all my friends bought solar panels about a 18 months ago on the 44p/kwh FIT and there was much chattering about the money they were going to make out of the FITs and have free electricity. for over a year now there has been complete radio silence on the topic, so I'm presuming the money isn't rolling in as anticipated and the "free" electricity isn't as free as was expected. I know they don't work when the sun isn't shining but one of them told me they don't work if it's too hot. Then I got to think about whole lifetime costs, having been in engineering/research all my career and decided that my instinct was possibly right, that was that buying solar panels was simply paying for your electricity in advance.
Credit where credit is due, Pilita knows that wind energy is a scam: Ill-wind for UK blows some good for other European Groups. (FT, Oct 2012)
Maybe she had a tight deadline and not enough time to research the PV sector properly.
Peterborough City Council has given itself planning permission for a 900 ACRE solar farm on prime agricultural land which it owns. Having heard the chief executive being interviewed on tv and how adamant he was that the income from this development is the 'only way' to fund care for elderly people (?), you really have to wonder a) how they looked after the elderly until now, and b) whether there wasn't some very slick salesmanship (I'll say no more than that) involved in achieving such enthusiasm for this project...
Solar cannot work as a meaningful power source in Germany. The realities of weather and geography do not permit enough sunlight to do what the AGW extremists claim.
Solar can only add to the price while do nothing economically viable to reduce CO2 or reliance onother power sources. And since the Euro-extremsits are busy killing off what does work- nuclear power and fracking for natural gas- coal and imported natural gas will be the only reliable backup fuel.
But the political insiders are profiting off the tax payers and rate payers, so why should they care?
sherlock1,
Think on this: Petersborough is willing to take *900 acres* out of production for an unsustainable soalr fiasco, but will fight to the death to prevent ~1 acre being utilized to develop shale gas that actually doess work. It is so blatantly irrational, in terms of enviro-impact and reason that it raises the questino of what non-disclosed information and influences are leading to the doomed decision to wreck over a square mile of land on a fiasco?
@gixxerboy @Albert Stienstra
I can give you some first hand experience of living with solar panels.
I have a large sailboat, where I am "off the grid" when I am not plugged into shore power. I have 2 large solar panels, a windmill, advanced controllers, a diesel generator, an inverter to make AC for some appliances, and a high-output alternator on the main engine. All of this is there to keep 7 batteries charged enough to power the lights and systems, run the water-maker, and enable me to listen to the radio and connect to the internet. I also have the ability to connect to the grid thru "shore-power" if I am in a marina.
I am a 57 year-old engineer who used to design nuclear power plants, and let me tell you, this is NOT a simple system to manage. My wife cannot do it. People who want to go "off the grid" need to understand that their lives will become quite complicated, and they will have to learn a LOT of engineering to maintain these systems. And they will have to get their hands quite dirty, or else pay a LOT of money to people to provide them with regular maintenance. It is only practical for people like me on boats, or for remote locations when grid power is too expensive. Otherwise, it is just romantic dreaming.
To people who extoll the virtues of solar power, I tell them about my system and then ask them if their 85 year old mother could maintain such a system in her house/apartment? Until it is this easy, it will not be practical.
My experience with solar is a happy one. 100w panel, mppt controller, inverter and a deep cycle battery for my camper van set me back £300. I changed the halogen lights for LED for another £50 and have not had to pay for hook up for a year.
Break even after 100 odd nights is not so much the point as never needing to plug in. I have noticed fewer amps going into the battery the warmer it is though and I do need to get up on the roof once a week to keep them clean but it is proving to be reliable and simple.
@rxc
Thanks, I agree wholeheartedly. I had similar experience on my small 35 ft sailboat.
Ian Sykes says-
"Break even after 100 odd nights ..."
Wow, you must pay a fortune for power hookup on your camper van. 100 days at 100W peak and 5 hours/day of sunshine gives about 50 kWh of energy. Over here in the US that has a total value of about $5.
At USD$540 for the system cost, the 50 kWh of energy comes to about $10.80 per kWhr. Those are some pricey electrons!
I would only change "Worse, they don't even understand the
pricevalue".Ludwig von Mises (1920 - keep the era in mind if you decide to read. Three years after the Russian revolution and during the rise of the National Socialist German Workers Party) ...
I have to say that Von Mises spotted a lot of flaws in 'intervention' long before most. Take this paragraph on the nature of banks. Recognise anything?
Well worth a read.
Anyway, back to the distortion of the energy market. Much the same really, once one creates a situation where nobody can calculate the true cost or benefit of any particular course of action then you are left in the wacky world of decision by some central committee where all actions are valid (for a time). As we are seeing now, rather than admit error on energy policy we end up with an ever more complex web of deceit.
In addition to the distortions you listed let us add STOR, Smart Grid, Smart Metering ... When you get right down to it they are all just sticking plasters covering up the mess emanating from the previous intervention. If one starts with a policy designed by some FoE idiot that you were talking to last night in some south London wine bar then what outcome do you expect?
Every time I see another intervention I'm reminded of a nursery rhyme I was ingrained with way back when.
http://kids.niehs.nih.gov/games/songs/childrens/swallflymid.htm
In short, If you find yourself in a hole then stop digging.
"...Consumers made poor, the elite survive but the majority made to be in energy poverty and most of the time in winter darkness and dying. Let it be known - the politicians, the elite, the bankers all 'signed up' to the Climate change Act of 2008 - the day the British nation died..." --Athelstan.
...just as planned.
Chris Y. Those are some pricey electrons.
Indeed they be, this is Europe and someone has to pay for all those German feed-in tariffs. £4 a night not unusual for a campsite. Don't get me started on propane prices £25 for 6kg.
sherlock1,
"Think on this: Petersborough is willing to take *900 acres* out of production for an unsustainable soalr fiasco, but will fight to the death to prevent ~1 acre being utilized to develop shale gas that actually doess work. It is so blatantly irrational, in terms of enviro-impact and reason that it raises the questino of what non-disclosed information and influences are leading to the doomed decision to wreck over a square mile of land on a fiasco?"
Not if the real aim is to destroy or undermine today's Western World economical and cultural to pave the way for international Marxism?