We’ve always advocated energy efficiency as the cheapest solution to reducing carbon emissions, fighting climate change, and having a more environmentally friendly house. And it’s true: energy efficiency should be the first priority for anyone looking to save money on utility bills and reduce their impact on the environment.
But one component of our argument seems to have changed. We've typically argued that home solar PV systems, while sexy, aren't generally a cost-effective home energy solution. While we believe that efficiency solutions like insulation and air sealing should always be the first step toward home energy savings, it appears as if home solar PV systems are making great strides toward cost-effectiveness.
Solar Electricity is Now Cheaper than Grid Electricity in Many Parts of the Country.
We were tipped off by the good folks at Green Building Advisor yesterday that the cost of a typical solar photovoltaic system has dropped to about $4.50 per watt here in Maine. (And Maine, you may know, isn’t a particularly sunny state.) That’s down from about $8.00 per watt in 2010, and works out to about 14 cents per kWH, which is 15% cheaper than grid electricity. And that’s before tax credits.
As Thompson points out in GBA, we still have a financing problem: PV systems require an upfront investment that buying electricity from the grid doesn’t typically require. But that’s a policy question. The simple fact is that solar power is rapidly becoming affordable.
To Make it Even More Affordable, Reduce Your Demand First!
To reduce the amount of that upfront investment, t’s important to keep in mind your total electricity demand before running out and buying a home solar system. If you can reduce your home’s total energy demand before investing in solar, you can vastly reduce the amount of money you’ll need to invest in that system upfront. Check out our “Getting Started” series for information about how to reduce your home’s electrical demand.
In the mean time, we think it may be worth checking with your local home energy auditor to determine what the best steps are for reducing your home’s energy demand, and, perhaps, moving toward renewables, in your area. Let us know what you find out.
This is a big deal, and one worth celebrating. Cheers.
Comments
Leasing a solar system is another option in some areas. A friend of mine leases her panels from a local solar power company, and sells her excess power back to the utility. She claims it will cost her less in the long run than if she had purchased a system. Of course, one needs to make sure to do all the math accurately before deciding. And, as you point out, minimize demand first, through efficiency and conservation practices.
Posted by John Poole on Oct 27, 2011 5:21pmThis article leaves one thirsting for more information. What type of PV panels? Sourced from where? Installed how and where? What sort of energy storage? Capital costs amortised over what period? That could make a big difference to me as a pensioner - I might die before I had recouped my capital outlay. There should at least be links in the article where one can find the relevant information.
Posted by Francis Banks on Oct 28, 2011 11:20amHey Francis,
Thanks for the comment. The Green Building Advisor article mentioned has much more extensive info. There's another more in-depth article at Grist as well.
I am admittedly no expert in the residential solar field, but the fact that more and more people are finding residential PV systems to be not only cost effective, but economically beneficial, I'd call a huge step in the right direction. Of course, whether it's a viable option for any business or homeowner will depend on all the factors you mention on top of financing, incentive and energy cost variables.
Your point about sourcing is well-taken, too. Low-cost Chinese manufacturing is one of the main factors driving prices down, which raises far more additional questions about externalities than we'd be able to cover here. Still, if cost is the primary concern, it's dropping nonetheless.
Thanks again for the input,
Will
Posted by Will on Oct 28, 2011 2:19pm