Solar

[JRM]

You just can't make this stuff up:

 

https://www.cnbc.com/2018/05/09/california-approves-plan-to-mandate-solar-panels-on-new-homes.html

[Investmentacct]

You just can't make this stuff up:

 

https://www.cnbc.com/2018/05/09/california-approves-plan-to-mandate-solar-panels-on-new-homes.html

. Sure and you wonder this change would be coming out other than California. Sure. New world moves forward. Old world worries about oil prices. It's choices we make create the future, business and money.  You can debate day in day night. EV / Solar theme is real.  Drive in few California cities, or spend few weeks to realize.

[Cardboard]

California does bring innovation but, it all comes from the private sector and not from the dictatorship in Sacramento.

 

If solar panels make sense, people will adopt them as cost savings. No need to impose them. When that is done, it is typically some kind of corruption or abuse.

 

I would think that this will end up in front of the Supreme Court and be taken down. It infringes on individual rights and choices while not doing anything for their safety or otherwise.

 

On safety, and CO2 if you want, the government over there should focus instead on bush fire prevention, better means to extinguish them or control and not giving constuction permits to build houses into forested areas. Obviously, common sense is something that many lack over there especially those in power.

 

Cardboard

[Liberty]

If catalytic converters in cars were useful, people would just voluntarily add them in as options.

 

If coal plant particulate scrubbers were useful, coal plant operators should just be left to voluntarily install them.

 

When you can externalize your costs to the rest of society, life's good.

 

Defaults matter, all behavioral studies show this.

 

There are a lot of things that are good for people and that make sense for them but that they don't do because of inertia/ignorance/etc. In think that in a very sunny state, where power is relatively expensive and where solar panels will actually reduce a house's monthly cost of energy by more than it increases the mortgage payments while also providing benefits to society at large, it's not a bad idea to make it a default (with exceptions for when it doesn't make sense). Just like having smoke detectors/banisters on staircases/breakers in the electrical box installed by default in new houses is a good idea even if they make sense and everyone should, in theory, add them in if they were not a default.

[Cardboard]

Obviously arguing with you Liberty is and will be a waste of time unfortunately.

 

Catalytic converters, smoke detectors and other examples you provided do provide immediate and visible benefits to human health and safety while at home solar panels do not.

 

Regarding solar panels in a sunny state, I would definitely look at them to see if there was a cost advantage for me to produce my own power vs buying from a utility. I find very odd the need to mandate such thing if it is so obvious for people to go that route based on what you mentioned.

 

You also mentioned that power is expensive in California. Why? Isn't the sun shining as much at the utility plant vs at home? If it is so good, you would think that developers would rush to build solar power plants, use economy of scale and deliver that power at an attractive price point to consumers.

 

So instead of forcing home owners to purchase and develop their own power system. Is there not something else going on here?

 

Are they going to mandate people to grow their own vegetables also?

 

Cardboard

[JRM]

As has been stated before, what is the carbon footprint to manufacture solar panels compared to the alternative (over the life of the panel)?  The same argument can obviously be made for batteries. California is getting out of the carbon-free business of nuclear power for electricity generation with the closure of San Onofre and the imminent closure of Diablo Canyon. 

 

Are subsidies not enough to coerce people to switch to solar in California?

[Munger_Disciple]

I live in California (I have roof top solar and drive an electric car) and here are my two cents on this "order":

 

I think this is bad. Already buying a home is out of reach for most of Californians due to very high cost of building a home here and this will increase the cost. And it will lead to more homelessness which is already a huge problem in virtually every city in CA. Already many in the middle class are leaving CA due to high cost of living and this cannot possibly help matters. BTW it costs almost 50c/KWh during peak hours in the summer to buy electricity in CA due to the renewable energy mandates which are really a tax on people and hit poor and middle class especially hard.

 

You can never do just one thing in economics. I predict this will make income inequality worse in CA. 

[LC]

Catalytic converters, smoke detectors and other examples you provided do provide immediate and visible benefits to human health and safety while at home solar panels do not.

 

Cardboard

Oh come on, are you serious? How many instances should I cite where energy production or building companies have routinely failed to enforce safety procedures/equipment which have "immediate and visible benefits to human health and safety"?

 

 

I find very odd the need to mandate such thing if it is so obvious for people to go that route based on what you mentioned.

Is it so obvious? People are lazy, stupid, cheap...there are so many reasons for people not to do things which "make sense" for them.

 

[Liberty]

As has been stated before, what is the carbon footprint to manufacture solar panels compared to the alternative (over the life of the panel)?  The same argument can obviously be made for batteries. California is getting out of the carbon-free business of nuclear power for electricity generation with the closure of San Onofre and the imminent closure of Diablo Canyon. 

 

Are subsidies not enough to coerce people to switch to solar in California?

 

I'm pro nuclear, btw.

 

The life-cycle analysis for solar PV is much better than for the current mainstream alternative, which is natural gas (new coal plants are not being built, hydro is rarely built, and nuclear isn't being built). Gas never gets in positive territory when it comes to carbon footprint while PV gets there after a few years and then stays positive for a few decades. But the idea is that as the grid becomes cleaner, the manufacturing plants that make the solar panels also run on clean energy, so the maths gets better and better over time, which isn't the case for fossil fuels.

 

I'd be fine with removing all subsidies for clean energy if we also removed all subsidies for fossil fuels, and idealy could somehow retroactively remove past subsidies for fossil fuels (direct and indirect, like military protection for oil routes and such, which amount to hundreds of billions). But that's not looking like it's happening.

 

There's a huge double-standard going on. People are quick to look into the impact of building batteries (which can be recycled, the materials aren't destroyed, unlike when you use fossil fuels) and solar cells, but they don't hold other things to the same scrutiny. They'll complain about relatively small subsidies for new technologies that are in the steep part of their cost decline curve, while they rarely even think about decades and decades of large subsidies for old industries that are mature and don't need any help.

[LC]

Some may find this interesting:

 

A HISTORY

& STUDY OF ELECTRIC

VEHICLES AND THE

OIL MARKET TODAY

 

https://cdn2.hubspot.net/hubfs/4043042/Commentaries/2018.Q1%20Goehring%20&%20Rozencwajg%20Market%20Commentary.pdf

[rb]

I live in California (I have roof top solar and drive an electric car) and here are my two cents on this "order":

 

I think this is bad. Already buying a home is out of reach for most of Californians due to very high cost of building a home here and this will increase the cost. And it will lead to more homelessness which is already a huge problem in virtually every city in CA. Already many in the middle class are leaving CA due to high cost of living and this cannot possibly help matters. BTW it costs almost 50c/KWh during peak hours in the summer to buy electricity in CA due to the renewable energy mandates which are really a tax on people and hit poor and middle class especially hard.

 

You can never do just one thing in economics. I predict this will make income inequality worse in CA.

Ok, first the 48 cents peaking price is insane. But taking a look at the pricing structure it looks like your price per kw is not just energy but a blend of generation and transmission. So it's trickier to compare.

 

Regarding the order. For someone who is not from California this is a really interesting experiment. In the summer esp in California most of the electricity usage would come from running the ACs to keep the house cool. The main source of heat bringing the temperature up in the house is actually not the ambient air temperature but solar radiation hitting your house. Solar cells would not only generate power but would also block/absorb that solar radiation and your house wouldn't heat up as much, in turn you won't have to run the AC as much and save on that 0.48/kw energy costs. If the order goes ahead I hope they can do some sort of measurement/statistic so that we can quantify the effects of this radiation absorption are.

 

Regarding the effect on housing costs. You are correct that on the margin this will add to the cost of houses. Though if you have 0.48/kw peaking rates I think it should be a positive NPV project. But I don't think that whether the order goes ahead or not it will have any impact on housing affordability. The dominant driver of housing (un)affordability in California wasn't that your houses got more expensive to build. It was something else. Home ownership rates in California cities is shockingly low. Maybe it's real estate investors playing monopoly with your housing markets.

[Munger_Disciple]

rb,

 

You are right that roof-top solar panels reduce the temps by 2-4 degrees, but you would still need AC. You are also right the IRR goes up because the electricity you buy is $0.50/KWh. It would be even higher if the cost per KWh (to buy) is $5.00/KWh.... So you get the gist.

 

Poor and vast majority of middle class in CA do not have solar so they bear the significant increases in electricity prices. They are also the ones to suffer from increased housing costs. You are also letting off the politicians in CA off the hook easily. Their regulations are at least partly to blame for the lack of affordability in CA. If you live here, you will understand better.

 

The utilities are also trying to screw solar customers. They just moved the "peak" rate time from [11am-6pm] to [4pm-9pm] because they know very well you don't produce much solar energy in that period. State regulators approved this. If you want to avoid this new "peak" period, you will need to install battery storage in your house to "time-shift" your own production (which of course will result in more costs).

[rb]

MD,

 

Yes you would have still have to run the AC. But you would run it less because you don't have to use the extra energy to overcome those extra 2-4 degrees or whatever it may be. So there are savings there.

 

I didn't take it easy on the politicians. I actually tried to avoid talking about them. As I said I'm not from California, so your politicians, your problem sort of thing. I just said that from where I stand it'll be an interesting experiment to watch. I can empathize with what you are saying though. Bitching about energy costs is a favorite pastime up here in Ontario as well. Though our rates aren't that high - my peak rate if 13.2 cents (CAD) per kw. But I also pay about $40 a month for transmission so all in comes to probably around 20 cents per kw.

[rb]

Incidentally I've found this:

 

https://www.electricitylocal.com/states/california//

 

It seems that at $88 for the average bill you guys don't actually pay that much overall. Average consumption per household at 573 kw also looks really low for a hot place like California. Maybe you go do in fact have a lot of private solar?  :-\

[LC]

I pay $75-100/month but I'd love solar panels. I get a ton of sun but would be able to blast the AC more, leave exterior lights on, not be captive to utility companies and complicit in whatever externalities they cause powering turbines with natural gas or whatnot, etc. etc.

 

But I'm also a vain fool who is holding out for solar tiles because I don't want a bunch of panels on my roof, and I usually DIY these types of things so I need time to learn how to install and run it in my spare time. So I'm happy to wait a few years.

[Liberty]

The hottest days tend to be the sunniest, so solar panels produce the most when demand for A/C is highest. That's a nice benefit.

[Liberty]

https://arstechnica.com/science/2018/06/report-world-trending-to-hit-50-renewables-11-coal-by-2050/

[Liberty]

I've always found it interesting to look at predictions of solar growth vs actual, and how it's always under-estimated:

 

https://steinbuch.wordpress.com/2017/06/12/photovoltaic-growth-reality-versus-projections-of-the-international-energy-agency/

 

 

[Liberty]

This is cool:

 

https://www.bloomberg.com/news/articles/2020-05-25/-sunshine-to-asia-power-plan-moves-forward-with-cable-contract

 

"Sun Cable project, backed by Atlassian co-founder Mike Cannon-Brookes & Fortescue Metals’ founder Andrew Forrest... plans to export power from a giant solar farm in Australia to Singapore via a 3,800km undersea [high voltage DC] cable."

[lnofeisone]

This is cool:

 

https://www.bloomberg.com/news/articles/2020-05-25/-sunshine-to-asia-power-plan-moves-forward-with-cable-contract

 

"Sun Cable project, backed by Atlassian co-founder Mike Cannon-Brookes & Fortescue Metals’ founder Andrew Forrest... plans to export power from a giant solar farm in Australia to Singapore via a 3,800km undersea [high voltage DC] cable."

 

That's damn impressive engineering undertaking. If I remember correctly, the longest high voltage line is about 2k km.

[JRM]

This may be the record for the world's most expensive extension cord.

[Morgan]

This is cool:

 

https://www.bloomberg.com/news/articles/2020-05-25/-sunshine-to-asia-power-plan-moves-forward-with-cable-contract

 

"Sun Cable project, backed by Atlassian co-founder Mike Cannon-Brookes & Fortescue Metals’ founder Andrew Forrest... plans to export power from a giant solar farm in Australia to Singapore via a 3,800km undersea [high voltage DC] cable."

 

Holy cow that's incredible.

 

--------------------------------------

 

I'll add some about my experience with a personal solar power system. I've been thinking about putting solar power on one of my apartment buildings to cover the laundry machines, hallway lights, and fire alarm system. When we run the electric furnace in the basement the bill skyrockets so I haven't been planning to cover that. We also renovated all of the basement into apartments and the tenants pay the heat, so the furnace issue may be a moot point now. Anyways, it's always been too expensive to make solar panels worth it, but in 3-5 years when I redo the roof, I'll reevaluate the prices. As soon as it's economical, I'll probably do it. If it goes well on that building, I'll add it to the others as well.

 

I have another building where I pay the utilities, but I'm not going to add solar to cover the cost of electric there. Separating the utilities is a much better investment and also aligns incentives properly. People use less energy when they pay for it.

[meiroy]

https://www.edie.net/news/10/UK-smashes-solar-generation-record/#:~:text=Solar%20use%20in%20the%20UK,11%20consecutive%20days%20without%20coal.

 

"Solar use in the UK broke an all-time peak generation record on Monday (20 April), accounting for almost 30% of UK electricity demand, with the UK also operating for more than 11 consecutive days without coal.

 

At 12:30 on Monday, solar generation reached a peak of 9.68GW, according to the Sheffield Solar live PV generation tracker. The previous record was set at 9.55GW recorded on 13 May 2019. At the time of the peak, solar was meeting almost 30% of UK electricity demand.

 

Generating conditions are currently favourable, in part due to lower than usual levels of pollution as a result of the coronavirus lockdown."

 

--

 

Yes, Singapore is a tiny little city island but that cable idea just seems bizarre.  Maybe it's a political decision as they do not want to be excessively dependent on Malaysia? Still...

 

 

[scorpioncapital]

I'm surprised uk has enough sun light for solar. I thought it was a sunny area kind of energy generation.

 

Nuclear in theory is much more efficient and powerful than any renewable we know of , only runner up is hydro and that's like 39 percent peak capacity vs 93 percent for nuclear. Nuclear is not unclean energy and it is not renewable in theory but it sure has a long runway with it's efficiency. And if we ever figure out nuclear fusion , I don't know if solar will not be a very diluted energy source. As for valuations many of these stocks trade at almost tech and biotech valuations. Seems a bit mad.