On Solar and Solyndra

Getting off the grid is certainly a good thing.

Hi billclausen; Contributing to the grid would be even better.

Ask Spain and Portugal about the economic viability of large scale solar. Spain in particular is bankrupt because of their efforts. We're all for solar. Unfortunately, the economics don't work out yet. It is that simple and even the author knows this fact.
Why we are not pushing for natural gas to create self sufficiency and to help the environment as a bridge to solar etc is beyond me. Natural gas is cleaner, domestically held, and we already have technology to utilize it without compromising anything. I guess it makes too much sense when we can push energy that does not yet work...

italiansurg, I discuss the issue of cost and grid parity in my piece. Did you see that part? As I mention, in some parts of the country we may already be at grid parity for utility-scale solar, including California, when we include federal tax benefits. I also predict that by 2015-2020 we'll be at grid parity in many parts of the country even without tax benefits. Keep in mind that utility-scale solar receives only federal tax benefits as subsidies. There are no state subsidies. Moreover, the state subsidy for net-metered solar is exhausted in many parts of the state already, which is good and bad. It means less support for solar but it also means less support is required because net-metered solar is still growing robustly. The bottomline is that federal and state subsidies around the world have achieved their goal in a demonstrable manner: solar is now at scale globally and close to grid parity. This was the exact purpose of state and federal subsidies and this should be viewed as an incredible success story for wise policies over a number of decades - as well as a scrappy and entrepreneurial solar industry.

Its true the Spanish government has been subsidizing various renewable energy projects (solar, wind, etc). But acccording to recent articles @ WSJ and The Economist, the driving factors behind Spain's recent electricity price increases have been increasing prices in Spain's fossil fuel supply (primarily liquified natural gas), the easing of government electricity subsisdies, and a failure over many years for those subsidies to track real cost of production.

Just because the Spanish govt has decided it can no longer afford to provide subsidized electricity to its citizens doesn't mean it shouldn't invest in renewable energy for the long haul. Eventually the cost of fossil fuels is going to tip the scales and you can't deploy new energy sources overnight.

TamHunt-I did read your entire article. Including where you substituted as proof "anecdotal data", two words that cannot be linked when attempting to prove something other than a rhetorical argument. Nobody ever talks about the loss of funds it takes to put in domestic solar up front vs what that money would be worth after 30 years of compounded interest and simply paying at the meter for what is used.
We were also told that predictable technology increases would dramatically increase the efficiency of solar panels themselves. This has not happened.
It's also interesting that solar is not 24/7 and storage technology has also not advanced according optimistic promises.
Spain's solar expansion is now largely bankrupt in part because they NEVER met projections for revenue. Yes their collapse has other factors, but they did not decide to stop subsidizing energy; their energy initiative fell way short of their "business plan" in terms of revenue.
I'm all for solar, wind, wave, metaphysics, you name it energy. For now it's a nice political statement and the recent debacle in NorCal shows what happens when politics get in front of reason.

"Spain in particular is bankrupt because of their efforts."

In case you hadn't noticed there are many bankruptcies going on right about now. And it is directly related to conservative policies and all the malfeasance, mismanagement and lack of oversight during the Bush administration.

The corrupt banking, insurance and investment corporations had a bit to do with the failures. So if individuals, business, corporations, governments and countries alike are all going along for a ride, budgeting, adjusting and projecting their balance sheets for the future, in the same clandestine corrupt financial scheme, and then fail when the plug is pulled, then the scheme is how you get to all the failures across the the spectrum and globe. It is not the end users fault. Again those going along for the ride are not to blame.

Meanwhile, I'm in a contract to go solar. It will just barely make sense financially because my electric use is low. But long term I will save a couple thousand. But 'finances' were not the motivation. Sometimes to feel good we go out and waste resources on a piece of carbon spewing motorcycle, car or other goodies, of which I've done plenty of myself. But I've been hoping for some time now that this country would have embarked on a fantastic environmental renewal, and on a grand scale. Thinking maybe the next power plant to be built by SCEdison types, perhaps on rooftops of agreeable customers. But we're not there yet. So I've chosen to do it myself.

"Hi billclausen; Contributing to the grid would be even better."

DonMcDermott (anonymous profile)
September 24, 2011 at 6:19 a.m

Nope, I'm sticking to my post. When the grid goes down, lots of people get affected. Individual empowerment is the way to go and solar energy is a good start. Think of what happens when there's major power outages. Well water, growing your own food, and any other idea to get off the grid--whenever possible--is good.

italiansurg, read my piece a bit more closely. I mention one piece of anecdotal data, solely for installation prices in 2012 at the utility-scale. All other data I cite is comprehensive and from official government sources.

As for net present value calculations of solar, you're incorrect also. Whenever I present a proposal for either net-metered solar or utility-scale solar some of the first data points are the net present value and the return on investment. Net-metered solar can make a lot of sense financially, particularly for those with high power bills. Utility-scale solar can be profitable with a decent contract price, but as I mention in my piece we have many contracts being signed in California and other places at prices below the status quo (which in California is the proxy price of power from a new 500 MW natural gas plant, known as the "market price referent.")

As for Spain, you're also mistaken. Spain is still in the top ten global markets for solar, after being number 1 in 2008 and then falling back after Spain adjusted their "feed-in tariff" approach for solar pricing. Spain continues to surge in wind power and is in the top five globally for installed wind power capacity. Spain got a lot of bad press for their botched feed-in tariff approach for solar, but it's been corrected and Spain continues to invest heavily in renewables. So claims about Spain's bankruptcy and ceasing to promote renewables are simply mistaken (usually politically motivated).

As for solar and other renewables being a "political statement," that's for you to judge but my view is that any power source that provides power for 8 million homes currently and is doubling every 1.3 years, such that by 2030 it may provide half the globe's power, is something rather more substantial than a political statement.

o.k. billclausen; retreat to your geodome, harvest the salt from the sea for your molten storage unit, try not to use any public pavement for transport while doing that, from Solvang, and please just try not to go too far into the extreme Kaczynski persona.

I'm just wondering when we're going to get that $550 billion of "stimulus" money back. What a great "investment" that was! Well, as long as it was in the name of "going green", I suppose it was worth it. NOT!!! Hey! Maybe when Obama finishes up this term, he can come here and become a Santa Barbara city councilman or a Santa Barbara County supervisor. With his decision making skills, he'd certainly fit right in. Oh, it's for green jobs? Throw all the money we can at it!

Oops! Sorry! I meant $550 million, not billion. Shoot! That's just a drop in the bucket!

Carlos Wazny; I wish Carpinteria residents would not meddle so much in City of Santa Barbara residents' representation. I don't meddle in Carpinterias' affairs.

Here is a link of 5 myths posted by the 'conservative' Washington Post regarding the $550 million dollar Solyndra stimulus http://www.washingtonpost.com/blogs/e...
You see it was initiated by Bush and key investors were republican. AGAIN incase you're having comprehension problems Solyndra was BUSHs' deal.

Here are a few facts, untainted by self interest or anecdotes, and last quoted by Bloomberg and the NY Times(hardly an anti clean energy publication) a few months ago:
Solar, as of 9 months ago cost $275 per megawatt hour to develop and produce, coal cost $60.
Spain lost 30% of their solar jobs a year ago, now closer to 50% after the government hand outs for solar were partially rescinded.
China, with predatory manufacturing as predicted has taken the bottom out of U.S. production.
Spain indeed is still in the top 10 in producers, although they fell precipitously, but without the 25 year subsidy everyone who invested is going broke because the closer to market rate sales price does not support the land grab and construction cost.

Finally, and this is an anecdote; spend some time in Spain and look at the vast waste lands that have been created by now abandoned and/or woefully underutilized solar farms which was previously undeveloped land. I spend rather a lot of time both there and Italy. They've screwed their own environment by developing roads, towns, water systems, etc. where none existed all in the name of "clean energy".

Hey Don! I was born and raised in Santa Barbara. My kids go to school in Santa Barbara. I work in Santa Barbara. I have a business in Santa Barbara. So Donny, I have a vested interest in Santa Barbara, and it is far beyond your place to tell me not to "meddle". I'll just go right on ahead, doing what I've been doing, because it's creeps like you that are the biggest part of the problem.

"AGAIN incase you're having comprehension problems Solyndra was BUSHs' deal."

Good! Then I guess all of the lefty news organizations can feel free to fully, and thoroughly report on it. Apparently, Obama hasn't done anything in the last 2 1/2 years, because every time I hear about something Obama did, it turns out that Bush really did it.

italiansurg, as I mention in the article the California Public Utilities Commission has approved a number of medium utility-scale solar contracts at below the Market Price Referent, which is the price of power from a new 500 MW natural gas plant. This is the status quo power source for California and it is currently about $105 per megawatt hour. So utility-scale solar can now, according to current contracts, produce power below this price. As I also mentioned these contracts may not result in 100% project completion, but surely some of them will and this trend is clearly going to improve in the future as solar costs keep on coming down.

So your NYT source is simply out of date or wrong (I suspect it may refer to the authorized cost cap for SCE's own solar facilities, also approved by the CPUC, but this is a cost cap not an actual cost and the actual costs of projects under SCE's new program are coming in FAR below the cost cap).

As for coal power, I won't bother going in to the numerous substantial health problems raised by reliance on coal. California and other states are phasing out coal and we rely on coal for only about 15% of our power currently (all from out of state sources). California outlawed new coals plants a few years ago unless they can sequester carbon, which isn't close to being economically or technologically viable.

I'll also note that coal power is currently more expensive in many countries than natural gas power because natural gas supplies have surged and coal supplies remain tight.

As for Spain and Italy despoiling their landscape for solar I've not witnessed this personally and if true it's unfortunate. However, keep in mind that there's nothing about solar power facilities that can't be cleaned up or improved with some effort, and there is no downside to the environment from toxic chemicals, pollution, etc. So whereas fossil fuels (coal in particular) have unmitigable and lasting effects on the environment from CO2, mercury, sulfux dioxide, etc., leading to thousands of quantifiable deaths and sicknesses in the US each year, solar has none of this.

Spain still has a feed-in tariff for solar and other renewables. It didn't disappear after 2008, which is why Spain continues to be in the top ten nations for solar. Rather, they reduced the feed-in tariff rate for solar such that developers weren't receiving windfall profits. Germany's similar, but better-designed program, has been almost singlehandedly responsible for growing solar production to scale around the world as they have been the single biggest market, by far, for the last ten years.

Yes, solar panel production (as opposed to working solar power plants) can have some issues, as we're seeing in China recently, but this is more a result of lax regulations than inherent problems. It seems that China will soon clean up its act with respect to these and similar issues.

I noted that the last numbers I remembered were 9 months out of date and that the cost had gone down due to predatory manufacturing policies of the Chinese. Nothing new here along with the fact that U.S. manufacturing is also vapor ware because of the Chinese
By the way, even though Spain has the twelfth largest economy in the world they also have the highest ratio of unneeded housing stock in the developed world. Essentially, they like us attempted to stimulate their economy with a fake housing market but compounded their mistake by doing the same thing with solar. What have those 25 year government guarantees now been reduced to anyway now that it did not add up...?
It appears that you and I agree that natural gas should be the bridge strategy: cleaner, we own it, it's cheap, and our current economy can easily adapt.
One other possible area of agreement is that when energy storage takes the next techo leap, solar may make sense because we won't be dependent on partial hours and changing sun angles. Plus, maybe we can make a reasonably priced vehicle that will go more than 100 miles before it needs a multi hour recharge. Unfortunately, contrary to political beliefs, billions of dollars have and are being spent on improving storage but the crazy rules of nature keep getting in the way of a simple fix.

italiansurg, I agree with you that Chinese PV manufacturing is perhaps the major problem for US PV manufacturers. However, I don't agree that natural gas should be the "bridge strategy." We've crossed that bridge already and renewables are ready to take up most of the slack. We'll certainly need natural gas power plants here in CA and elsewhere for many years to come to ensure a reliable grid but we have a huge surplus in CA right now, and will through 2020, of natural gas power plants. We have to get to 33% renewables, by law, in CA by 2020 and we won't need any new natural gas backup to get there, according to a recent study by the CA Independent System Operator (the entity that runs our power grid). Rather, we have enough natural gas power already online to balance 33% renewables (which will be mostly solar and wind by then).

As for Spain's 25 year feed-in tariff (what you're calling a government guarantee), the idea behind a feed-in tariff is a long-term contract at a set price. Renewables have a major advantage over fossil fuels in that they don't have any fuel costs (except for biomass). This means, however, that construction costs dominate the equation. This, in turn, means that up-front capital is the key hurdle for completion of renewable energy projects and thus the cost of capital is really important. With a 25-year contract in place under a feed-in tariff (where the utility has to buy the power offered if it meets certain criteria), developer can obtain financing at good rates. So Spain and many other countries are now offering long term contracts under feed-in tariff policies that allow developers to lock in good loan terms. This has led to massive growth in renewables around the world, including Spain. Again, Spain continues to grow very robustly in renewables, including solar, so the only thing that changed was the price paid under new long-term contracts.

The bottomline for me is that we're facing massive crises with climate change and peak oil and renewables are a MAJOR part of the solution to these twin crises. The solar story is an incredibly good story amid global doom and gloom and it's only going to get better as prices drop further, production ramps up, employment increases and installations continue to double every year or two globally.

Tam, really enjoy your insights. I don't know if this is within your region of interests, but who are some of the major Chinese PV suppliers these days (either raw or assembled panels)? I had invested in First Solar awhile back, but with the pricing of crystaliine si-based PV's, they and other folks like Solyndra don't seem to be cost-competitive with their thin film processes. I wonder if this is going to change in the near future or if traditional bulk PV's (which I believe are what the Chinese fabs are focusing on) are going to be king for awhile?

EastBeach, First Solar is still a major manufacturer and is the world's largest thin film manufacturer. You're right that Chinese crystalline panels are leading global prices downward but First Solar and other thin film panels are competing quite well. Last I saw, thin film has about a third of the global market. First Solar production, however, is no longer in the US and it seems with these recent US manufacturing bankruptcies that US production just can't compete with Asian production. For some reason, German PV production is still doing quite well but I don't know how much they subsidize their production.

"Carlos Wazny; I wish Carpinteria residents would not meddle so much in City of Santa Barbara residents' representation. I don't meddle in Carpinterias' affairs." -DonMcDermott-

Yet we in the north county have to deal with restrictions supported by south county residents.

And, as a south county resident, I apologize for people like DonMcDermott. I wish he would take his own advice, and live in a little bubble.

Oh my God, ABCSB! Using The Wall Street Journal as a source of information?! Don't you know that these people don't believe anything unless it comes from a lefty blog or website?!

That's George Bush's fault too.

Mr. Hunt's overview of the trends in the solar industry are on the mark. Whether one is a homeowner or a business, the issue is economics and affordability. While solar will make sense in the very future, people and business still need the cash or economic prospects to install them. Big site installations will make sense first but one should probably focus on the economics without subsidies first because no matter which side of the political spectrum we belong, the raw fact is whether the government will be able to afford to subsidize unless some taxes are established only to go to the debt principle. California engineering and manufacturing capabilities are in a prime position to take advantage of this new industry but I hope that politics won't drive this manufacturing out of the state like CA did in the 70's and 80's. This manufacturing industry can be part of the solution to help the state dig out of the revenue hole.
Big roof sites that I think are ready to exploit solar? Flat roof schools since CA has so many of this 'uninspired' school design. When solar power hits parity, school roof might be ready to generate revenue for school districts.

As for my government place of work in Florida where our electric rae is about half of my hometown of SB, we have 2.2 million square that has been inspected and ready to install solar on about 750,000 square ft once the cost drops. We could generate electricity for about 50% of our $9M per year electric bill. (That's right folks, $9M per year) For a while, we were focusing on energy efficiency projects with a payback of 1 year but now we don't even have the money to attack those improvements.