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On Wait, Are You Paying for My Solar Panels?

Thanks for your clarifications, ChipGaul,

Yes, I certainly did not mean to indicate that everybody would have to pay $.2/kWh on their bill (that would more than double everybody's electric bill overnight!).  I get $.2/kWh for every solar kWh I produce and the cost of that is spread over the 65 billions of kWh of load in Maryland! Pretty small impact, indeed.  If you live in Maryland, you are only giving me a fraction of a penny per year :-)

And, yes, the 2% figure is for 2022 and the solar carve-out requirement ramps up to it over time. The requirement is currently only 0.1%.

Stefano

February 18, 2012    View Comment    

On Wait, Are You Paying for My Solar Panels?

James,

Thank you for your post. I wasn't arguing necessarily for or against subsidizing solar installations in Maryland. I think the answer to whether solar subsidies make sense is much less of a clear cut yes/no answer.  Your comment, as well as Geoffrey's comments below, point to good reasons why that money could indeed be better spent elsewhere.  I don't disagree with your points and I get behind high efficiency gas turbines and nuclear plants myself -- incidentally, in my career I have worked on both, at GE Power Systems, and Areva, and still do a fair amount of work in those areas as a consultant.

I am just inviting you and the readers to see additional points as well, which indicate that there may also be a rationale for solar subsidies -- for example, high efficiency gas turbines have little potential to reduce their costs dramatically since they are already down on the learning curve, while the volumes we have seen in solar have indeed driven costs down very significantly and have potential to go further down.

Thanks again.

Stefano 

 

February 18, 2012    View Comment    

On Wait, Are You Paying for My Solar Panels?

Geoffrey,

I agree with you in that I really don't see a rooftop solar installation in Maryland being competitive without subsidies in the foreseeable future (and possibly never).

However, there are much better situations around that could give you that 75% cut, for example a utility-scale installation in a sunny climate: a) utility-scale plants cost about 50% less than rooftops because of economies of scale ($3,000-3,500 per KW instead of $6,000+), b) a sunny climate gives you a significant boost in production; you could have a 25% capacity factor instead of the 15% you get in Maryland, that's equivalent to another 40% cost cut on the capital cost. If you mix in higher electricity prices in some parts of the country (although Maryland is already pretty high), and some further cost reduction potential in solar technology itself, I would say it is possible to get there.

Stefano

February 16, 2012    View Comment    

On Wait, Are You Paying for My Solar Panels?

Geoffrey,

Thank you very much for your insightful comment, even if you are contributing less than my fellow Marylanders :-)

Certainly, on a $ per CO2 avoided, subsidizing solar is quite expensive. Maryland may be particularly bad, but even locations with better resources can see costs over $100/ton.

However, I would think that the main rationale for subsidies is to create volume, which drives down cost, down to the point where subsidies can be taken away. To a certain extent, it has worked out that way, solar costs have dropped significantly and, in some cases (not Maryland) solar is becoming competitive even without subsidies.  Therefore, the hope is that eventually solar will begin avoiding CO2 at no additional cost.  Since Maryland has bad solar resources, the theory is that, once subsidies are taken away, the solar industry will naturally move to better resource areas (already happening even with subsidies skewing the markets).

Therefore, the additional question I would ask is "do we believe solar can eventually get to cost parity with other sources and how long is it going to take?". 

Thoughts?

Thanks again

Stefano

 

 

 

 

 

February 15, 2012    View Comment    

On Liquid Wood, Anybody?

Paul,

There is no question that the logistics of gathering wood as a power supply for fuel are challenging, and that biomass is bound to remain a small piece of the overall energy picture.

However, I am not suggesting to go after twigs/branches on the ground, dispersed over immensely large areas. Rather, it makes sense to use wood residuals only in places where you have a vibrant forestry industry with large industrial landowners (South-East and North-West). In those situations, you can access leftovers from harvesting operations at a reasonable cost ($3-4/MMBtu, including stumpage, loading, grinding, and hauling).That may still be too expensive for power generation, given the high capital and operating cost of a biopower facility, but, if you can use this fuel to replace more expensive petroleum-based products, it may start to be an acceptable cost.

In the South-East, where you have mostly pine plantations, you can get 10+ tons of wood residuals per acre harvested and there are also thinning operations that produce wood residuals. In the Northwest, where you have mostly douglas firs, you can actually get 30+ tons of wood residuals per acre harvested, but the topography may make it more expensive to extract. Closed loop (i.e. dedicated energy crops) is also a possibility, but that may be a little more expensive today ($4-6/MMBtu). There is also urban wood, trimmings, and material from wood processing facilties (chip mills, sawmills, and pulp mills).

I may write a separate piece on biomass supply chain economics, as it is an interesting topic.

Thank you again for your input

Stefano

February 8, 2012    View Comment