$0.55 per watt from SolarCity’s new solar panel
extremetech.com
extremetech.com
To your point about Elon Musk, as a fan of Tesla and SpaceX, I can tell you that at least the customer experience gulf between Tesla and SolarCity is notable. SolarCity is the kind of place where you are teased with $100 gift cards and other silly promotions. As a potential customer, you are juggled among a team of sales people who very aggressively chase the sale. Talking about things like a buy option is a bit "off script" for SolarCity and the answers to technical and contractual questions are vague.
All that said, I too like that they are in the market, providing a mainstream option that appeals to a wide audience.
It's worth saying that this concept of a breakthrough discovery in solar has been pursued and hyped for years, including god knows how many articles in mainstream newspapers and magazines, and yet almost all of the progress which has happened, has been through the economics of increased scale, or with progressive optimizations made by anonymous industrial engineers in China (albeit with the groundwork laid by worldwide materials research).
Also, as far as I'm aware this is the first time SolarCity has been directly involved in manufacturing panels. As you say, they are more about business than technology, but it is interesting to have an installation company going back into the manufacturing process and putting its priorities at the centre. The focus on maximizing efficiency rather than cost per watt makes a lot more sense to an installer than a pure manufacturer - in terms of the large fixed labour costs of putting up scaffolding, fitting a certain number of panels, wiring etc.
Anyway, just to give some perspective, solar panel cost accounts for ~20% of the overall installed cost in the U.S.[2]. So reducing panel prices by this incremental cost doesn't impact the overall cost as much as you'd think. However, every little bit helps, and this definitely keeps the industry on track to meet the Department of Energy's goal of $0.06/kWh by 2020[3]. There's a lot of other players that are focused on driving down other parts of installed costs (soft costs are a huge part, for example), and we're really seeing all these efforts pay off in exponential adoption of solar.
[1]: https://www.greentechmedia.com/articles/read/Will-There-Be-a...
[2]: http://energy.gov/eere/sunshot/soft-costs
[3]: http://energy.gov/eere/sunshot/about
P.S. Obligatory "we're hiring". If you know python, the solar industry is tons of fun!
So where does the other 80% of the cost come from? Maybe we should be figuring out how to cut that instead.
http://energy.gov/eere/sunshot/reducing-non-hardware-costs
It's from 2010, so stuff has shifted since then, but ~50% soft costs, 15% installation labor, 15% non-module hardware, and 20% module. The DOE's really been focused on soft costs (customer acquisition, overhead, engineering, financing, etc.). We recently got a big grant to drive down the cost of getting a customer's bill/usage history for the initial quote, which can impact the overall cost by 5-10%.
Good PR on efficiency and domestic manufacturing helps, as will availability of Tesla's Powerwall (10 kWh battery for $3,500).
I can look in my phonebook and find 500 people to install new electrical wire in my house. I doubt I can find that many people that know how to install solar.. but given a few years, it could/should eventually become fairly common knowledge.
The cinderblock and bent tubes arrangement looked like a fraction of the cost of the welded frames bolted down. Both were in what looked to be formerly a pasture or hayfield. Both were fenced in with a chain link fence, which I imagine could also be cost-optimized.
Why not? Even if you make your own solar panels, you still face an opportunity cost if you use them yourself instead of selling them, and that opportunity cost is identical to the regular old cost everyone else has to pay. So while it would benefit you if you happen to be making them when the price spikes, it wouldn't make you immune to the shortage I wouldn't think.
The Chines companies haven't caused panel shortage in the past. Quite the contrary. They ruined many producers in Europe with their dumping prices.
Little could compete with that, especially once you add in the incentives. Remember there's an immediate 30% tax credit, meaning if you spend $300 on a kwh, your taxes are reduced by $100. So now you're paying $200. Further, you can depreciate your solar in like 6 years, meaning in about a quarter of the lifespan of your solar installation you can reap $300 in depreciation, which you can subtract from your taxable income. So if your effective tax rate is say 30%, then 300 fewer taxed dollars saves you another $100. So now you're at $100 invested for a $170 annual return. And don't forget, you're not just generating energy, you're generating green energy which is certifiable and can be sold as SRECs on the market, which increases your revenue further. Every business in the US would go solar tomorrow and half the coal industry would go bankrupt overnight with more to follow if we saw prices that low suddenly!
Anyway so the prices are closer to 8-10x as much, the figure cited is just the panel cost. It's still pretty nice but it's just an iteration of solar tech like every other that is offset by subsidies dwindling in a staggered design.
For most house installations the panel costs aren't the big deal, the installation and the electrical setup cost more than the panels, and it's really not clear from the article if this is included in the price.
The labor costs, mounting frames, battery/capacitor bank, inverter and all the wiring cost a small fortune, if you want to hook it to the grid for offload you'll end up paying even more because then you need to tick quite a few additional regulatory boxes.
So while I'm sure that these are going to be great panels, and 55 cents per watt for the panel it self isn't a bad price it's not going to be amazing, and this isn't even much beyond the current status of the market if you count in panels in general, for a US made panel that's going to be "revolutionary" for sure but again that should't really give it any substantial merit.
But on the other hand of this is an overall price for a turn-key system this is a huge deal because this is in the orders of magnitude cheaper than the current turn-key price for an installation, which is what makes me think this is the panel price only.
http://www.alibaba.com/showroom/price-per-watt-solar-panels....
Here in the UK battery backed PV on residentials isn't really a thing (it made no sense to store it in a battery when you can sell it back to the grid at a large tariff, however the government just killed the feed-in tariff (87% reduction) so the future of PV looks pretty bad).
Kinda pissed about that tbh as we spent nearly a year working on a product for installers and then the government just kicked the legs out of the entire industry.
The batteries/capacitors you need just for a normal operation are based on the panel and your intended consumption, if you add additional storage it's usually a separate battery doo-dad that just counts as a consumer.
As for the UK solar doesn't make sense here that much in general, the feed-in tariffs in the UK were just bonkers yes you want to set up high tariffs at first to increase adoption but it makes very little sense at subsidizing the tariffs and making electric companies buy it at a large premium.
Indeed, my experience is that there's a lot of aggressive solar selling going on in advance of tailing off subsidies.
Their panel costs are say $1, the other costs (construction team, scaffolding, permitting, inverter etc) are say $4. These are rough numbers, per watt.
You actually lease it from them, so you don't own the installation. You either 1) rent the panels, or 2) buy the electricity from the panels. Either way they try to offer you a rate of your current utility - 5% or whatever. Basically it becomes slightly cheaper most of the time, but not by much, locks you into a 20 year contract, and you get the intangible emotional/moral benefit of 'going green'. That's their value offering. This also means you have no installation risk, if the panels break it's their problem, not yours, so things like guarantees on equipment or who has to pay for repairs isn't as big of an issue.
Alright so as they own the stuff, they get all the subsidies. For one there's a 30% tax credit. Say you install $300 of solar, you can reduce your payable taxes by $100, so the effective cost is $200 by now. Then either the $300, or on the remainder ($200), can't recall, you can depreciate in a few years. Say it's the full amount, and your effective tax rate is 30%, you can now reduce your taxable income by $300, of which you save 30% or another $100. Then you can sell the SRECs, after all you generate green energy which is certifiable in solar credits and can be sold to polluting companies. Prices vary but you could get say $50 on a $300 installation for example. So now you've reduced your effective costs to $1 out of every $6 you spent.
Alright so how much does $5 per watt generate in electricity income? Well most of it goes to the user who pays you a market rate - 5%. So ignore the 5% for a moment, the US average is about 13c per kwh. A typical capacity factor for solar is about 15%, so over a 365 day period you can generate 1314 watt per installed watt of capacity, or 1.3 kwh, valued at a little over 17 cents, take off the 5% and you're left with about 16c rounded down, let's say. So for $5, you get a 16c return, but the $5 after all the above tax credits, depreciation and solar credits might be closer to say $1. So SolarCity could make about 16c on the dollar every year, for a 20y contract. That's roughly a 4% return or so.
So now you have a 20 year cashflow contract with a customer, and you can go ahead and sell that on the market as a security with a 4% ROI. This way they can immediately cash out and be cashflow positive and reinvest the money into new installations. This allows them to scale much quicker than growing organically, and this scale gives them economies of scale, and the ability to buy up other companies, even their own manufacturing (as this article is really about) and beat the competition.
In short, there's not a lot of solar technology going on, i.e. totally different from SpaceX or Tesla where there's real engineering innovation. It's mostly clever business models, securitisation of decentralised utility contracts (solar on rooftops) at locked in prices, heavy reliance on subsidies (a reliance which is decreasing every year as it's forced to do).
Anyway above numbers are pretty rough but it gives a sense of the economics. It's a really tricky industry to get a hold of as people throw around (inc. myself sometimes) tons of numbers interchangeably. Like citing capacity in DC/AC makes a difference but is rarely specified. Specifying costs per watt as module costs, installation costs, total costs etc, is often left out. Ownership changes the economics completely for the different parties etc.
Here you can see a chart for the total costs for some players in the space. Ignore the $3 one, it's their chart :p But you can get a sense of the rough numbers: http://www.freecleansolar.com/v/vspfiles/assets/images/lowes...
The SREC market differs wildly from state to state, hard to put a value on it.
Federal subsidies of 30% are phased by 2016's year-end. The depreciation of a solar installation might be a business-only thing and not applicable to consumer-owned solar (which SC doesn't do anyway), I'm not fully familiar with US fiscal policy as a European. Anyway that's the best I can do right now, hope that helps :)