A new solar PV calculator from MIT's Sustainable Design Lab. Demonstrates (correctly) how Cambridge, MA residents can save money with solar PV panels.
http://www.fastcodesign.com/1670986/infographic-how-much-money-will-solar-panels-save-you
Now to see where these "savings" come form. This MIT calculator is conveniently transparent about these facts.
- 70% of annual "revenues" are a state-level subsidy, the Solar Renewable Energy Certificiate ($6,090 out of $8,902).
- Roughly 60% of the remaining $2,812/year is subsidy. Thought called "utility generation value", this is really the retail value: $2,812 for 22,494 kWh works out to 12.5 c/kWh. The wholesale rate is 4.7 c/kWh in New England (2011 average). This is an indirect subsidy, called net metering: forcing utilities to value PV electricity at non-market rates, like at retail rate instead of wholesale.
- 30% of the cost is a federal tax subsidy (FTC)
What would the finances look like without subsidies? This sample customer
- Pays $101,720, for a PV system that averages only 2.6 kW (22,494 kWh/year)
- Earns $1,050/year selling at market rate
- Sees a payoff time of 97 years
Present value calculations (25 year PV lifetime, 5% discount):
| value or cost | present value | |
| solar system cost | -$101,720 | -$101,720 |
| tax credit (subsidy) | +31,516 | +31,516 |
| electricity value (wholesale) | +$1,050/year | +$15,173 |
| electricity value (retail) | +$2,812/year | +40,615 |
| wholesale-retail difference (subsidy) | +$1,762/year | +25,449 |
| SREC value (subsidy) | +6,090/year | +87,960 |
| All subsidies PV | +$144,926 | |
| Net PV without subsidies | -$86,554 | |
| Net PV with subsidies | +$58,371 |
In particular, in present value terms, the subsidy is 954% of the market value of the electricity being subsidized.
When the Community Application Percentage of Florida (PUCT) assisted set up the guidelines for Florida energy deregulation, they mentioned that "...the industry costs of creation will likely be set by gas-fired creation, and as such, it is appropriate to implement the changes in the rate of organic gas to the whole petrol aspect to keep the level of headroom in the cost to defeat. This understands that organic gas is used by more than 50 percent of energy producing vegetation in Florida.
ReplyDeleteaverage monthly electric bill.