I’m intrigued by the idea of solar power, as are many people. Pointing solar panels toward the sun and simply harvesting energy–what a cool concept! So last year I looked into having solar installed at my house and made appointments with representatives from two companies to come out and bid on the project. One was SolarCity, the national firm headed by Elon Musk, and the other was a local company with a good reputation.
My major requirement for both companies’ bids was that I wanted a system that gave me access to the power I generate. That sounds like a natural, right? You have solar panels on your roof or in your yard, just feet from your home. You’d think you should be able to use the power they generate. Well, you’d think that, but that’s not always the case.
For years, most solar installations have been designed to be grid tied–hooked to the electric grid–and dependent on net metering requirements that obligate electric utilities to buy the resulting power. Basically, you install a generator on your property and sell juice to the electric company, but draw your own power for home use from the same grid as everybody else. In a blackout, despite the solar panels on the roof, your refrigerator stops humming just like everybody else’s appliances. You might have a plug or two available to you on the installation, but that’s it. And, of course, once the sun goes down, the panels don’t generate anything. Your installation lowers your bill, but it gives you no added independence.
So, I asked the solar salesmen to bid me on some storage capacity so that those panels on my roof would benefit me directly, not just as a bill-lowering measure. SolarCity had just included Powerwall batteries–basically Tesla car batteries–in its line. The local company had two battery vendors to pick from and offered me a couple of options.
To cut to the chase, there are no solar panels on my roof, a year later. The local company’s bids were very well-considered, very flexible, and between $30,000 and $40,000 based on some variables. From that I’d be able to subtract tax credits, but that’s a big chunk of change. SolarCity’s bid came in just shy of $40,000, and I wasn’t convinced that its battery installation would be worth a damn, because my research on Powerwall capabilities turned up information entirely at odds with the salesman’s vague assurances. The lion’s share of that cost was the batteries; the panels themselves were roughly 30%-40% of the overall expense, but they alone didn’t do what I wanted.
When I said thanks but no thanks. The local company rep was very understanding. The Solar City guy tried to guilt trip me with the following text message.
X from SolarCity here… don’t want to bother you but I did some more research into the politics of solar in AZ since your accountant thought that was what you should base your decision on. It turns out there are laws in place on both the federal and state levels that protect solar consumers after they go solar. There is no chance, according to precedent, that your contract with APS will change after you go solar. They are putting out confusing scare tactics to try and stall people until next year when rates will be higher for new customers. I have a letter directly from APS that they sent to existing solar customers explaining the grandfathering contract which promises NO INCREASE FOR EXISTING CUSTOMERS. So if you want to do the right thing for your sons future… and set a good example… please get back in touch with me so I can show you the APS document which guarantees you are protected when you go solar for the life of your equipment. Thanks for reading!
If you want to piss me off, try convincing me to give you $40,000 as an expression of love for my son.
But what was the SolarCity guy talking about?
He and I had discussed not just the price, but the fact that the entire basis for making a net metering arrangement pay for itself depended on legal requirements that power utilities purchase power from people who install panels, and assumptions that the details of the arrangement will remain largely unchanged for two or more decades. He’s right that the contract itself is unlikely to change, but there can certainly be added costs in a market in which the buyers are all unwilling and actively lobbying to change the law. A market made by politics can be unmade the same way, and I didn’t want to get stuck with a legacy system based on old legal arrangements–especially since the batteries required to give me some actual energy independence add so much expense.
Why are the batteries so expensive? Well, battery technology has made incremental progress over the years, while the panels themselves have improved by leaps and bounds. Much of that is just technological reality. You can’t make a breakthrough happen. But in the case of solar power the incentives have been legally crafted to encourage grid-tied installations with little thought to storage. The law has crafted a model that depends on an artificial market at the expense of allowing the natural development of a market that would take advantage of solar power’s natural ability to create electricity where it’s needed (which is both convenient and an attractive prospect at a time when there’s growing concern over the power grid’s vulnerability to deliberate attack).
Tellingly, when Britain reduced subsidies, new installations flatlined, demonstrating how artificial the market is.
Letting the solar market develop naturally would encourage installations based on its strengths–perhaps a greater focus on battery research–and weaknesses alike. Weaknesses? Yes, a big part of the battery cost in my bids results from the need for oversized storage to accommodate the startup load — often three times the running load — for appliances designed with a grid-tie in mind. If you build a home and install appliances that start slowly and run smoothly — say a small well pump that continuously feeds a cistern from which water flows downhill into a home rather than a larger pump that runs intermittently to a pressure tank — you reduce storage needs. But if you create artificial incentives for a different kind of market, that potential is likely to be overlooked.
Unlike the SolarCity rep, the local company rep was actually a bit apologetic with his bid. He told me that he knew the market was changing and that he thought they’d lost valuable time during which they could have worked to develop a different sort of market by relying on the net metering requirements. I really wish I could have given him my business.
But instead, I installed a generator tied into natural gas. It just makes more sense for my current needs, no matter how cool solar power looks.
JoelSeptember 2, 2016 at 4:23 pm
Bummer. I could give you the name of a contractor I know who does off-grid solar applications. He can also do grid-tie, but it’s not his specialty. Using batteries that aren’t technically cutting-edge, you can have off-grid power that doesn’t require fuel for a fraction of that $40K.
But if you already have the genny you’re probably good.
J.D. TuccilleSeptember 3, 2016 at 2:30 pm
That sounds promising. I’m still interested in installing solar and a battery backup. But my ready cash went on that generator, so it’ll be a while before ai could follow up.
HenrySeptember 5, 2016 at 6:45 pm
“A market made by politics can be unmade the same way.”
That’s the crux, with which I agree 100%. I’ve started planning for solar electric three times in the past 15 years, and every time, I’ve abandoned the project because it doesn’t do what I want without relying on the continuing success of somebody else’s rent-seeking.
The big catch-22 is that the regions with the highest solar availability also have the highest refrigeration requirements, and solar is infamously lousy at powering those.
Solar hot water, on the other hand — I can’t recommend that enough. A mature technology, simple, entirely independent of outside cooperation, and produces immediate results.