This is a really cool website
http://www.caiso.com/TodaysOutlook/Pages/supply.html
Breaks down energy production by type. Renewables generated almost 90% of the total energy (during the day) yesterday, and Solar is doing particularly well! As I hinted here, I am not sure that installing solar panels at home (in California) saves the earth.
The Global Picture
Around 10 years ago, I was into renewable energy and was curious about energy in general (e.g. this , this). I remember being fascinated by Stanford's energy institute seminars and future projections of the cost of energy. Stanford has saved slides and videos of the weekly seminars for the past 14 years (Go Cardinal!). As an example, here is a presentation from 2009 that said solar energy cost around 30 cents / kWhr and I vaguely remember discussions that suggested that the cost could reduce by a factor of 5-10 over the next 10 years. I will admit that I was somewhat skeptical. I've not followed this evolution as closely as I should have, but I recently looked it up, and have been amazed. See the plot below
This is simply remarkable! All the curves are interesting, but let's focus on PV (i.e. Solar panels). The associated report from the International Renewable Energy Agency (IRENA) is fascinating, and has a lot of detail (see fig 1.3 for instance), but the relevant takeaway is that solar energy sold at big auctions averages around 4 cents / kWhr. Note that the range for fossil fuels is 5-15 cents/kWhr!
The report says that this year "up to 1200 gigawatts of existing coal-fired capacity would cost more to operate than new utility-scale solar PV would cost to install". Of course, numbers are numbers and IRENA may or may not be biased in its accounting, but the conclusion is straightforward: Solar is in the same ballpark as fossil fuels and is extremely competitive.
Clearly, energy generation is going to change in a big way, but I also wanted to see what Solar panels can do for me, now. I've attached the breakdown of my electricity bill at the bottom of this post, but effectively, I pay 15.5 cents / kWhr + $11/month.
Average monthly usage : 400 kWhr. Daily : 13 kWhr
Average monthly bill = $80
From the internet, I can infer that a 3 kW solar system will generate about 13 kWhr per day. Let's be conservative (Michigan!) and say that it takes a 5 kW solar system to do the job. The cost of the 5kW solar system seems to be $14,000 (with 30% federal tax credit).
For reference, here is a friend's 10kW unit which cost him only $24,000, and here is his energy production in March (March was brighter than average). He easily generated 30kW-hr/day in March! In Ann Arbor!!!
These numbers are great : a 10kW panel gets you 1 MWhr/month in Michigan, 1.25 MWhr/month in San Francisco and 1.4 MWhr/month in Arizona. Not as big a difference as I would've imagined!
The bottomline is that we can breakeven in less than 15 years. This doesn't account for the fact that you can sell electricity to the grid (in which case, we could breakeven in say less than 10 years). I've ignored things like financing, but the 10 year number is quite reasonable.
Let's work out some numbers on the 5kW panel:
The cost of the solar panels is about $2800/kW-installed.
Conservatively the panels will generate about 24 MWhr/kW-installed of energy over its 25 year lifetime
Thus, conservatively, buying the panels is the equivalent of paying 11 cents / kWhr.
Note that we are currently paying 15.5 cents / kWhr.
Our utilities provider buys back excess energy at 8 cents / kWhr.
Local vs Global question
It is obvious that solar panels make (and has made for the past 5-10 years) economic sense at a personal level. However, since utility providers themselves are going to integrate much more large scale renewables into the grid, I am not super sure whether it is going to make sense (from a tree-hugging perspective) to install solar panels @ home say 10 years from now. But that's a good problem to have. Another BIG question is how to recycle/ dispose these panels.
Interesting times.
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My Electricity bill
Power Supply Capacity Charge 433 KWH @ 0.045000 $19.49
Power Supply Non Capacity Charge 433 KWH @ 0.041760 $18.08
Power Supply Cost Recovery 433 KWH @ 0.003220 $1.39
Delivery Charges Service Charge $7.50
Distribution 433 KWH @ 0.066110 $28.63
LIEAF Factor $0.91
Other Delivery Surcharges $2.56
Residential Michigan Sales Tax $3.11
Total Charges $81.67