[Vwdiesel] Payback on Solar and Other Alternate Energy Projects

[Keith Family]

A little off topic but Loren has to be careful in some of the 
numbers being thrown around for paybacks.

Homepower Magazine (www.homepower.com) has been a leader for 
years in advocating solar/wind/hydro alternate energy of the 
renewable/sustainable type.   Sometimes to a fault.

Some of the conclusions they have come to in time are:

1. Hydro (if you can do it) provides the quickest payback 
timewise despite being the most expensive (and most difficult to 
arrange) alternate energy project.   Paybacks on hydro projects 
are typically 2 to 5 years.

2. Wind is next with licensing/permitting/siting difficulties 
currently increasing as government has discovered a backlash from 
abutters.  (Bird cusinarts of the air as they're affectionately 
known.)  Paybacks on wind projects are typically 5 to 10 years.

3. Photovoltaics are the least cost effective.   Paybacks 
typically 10 to 20 years.

Richard Perez and his group at Homepower periodically survey the 
alternate energy landscape.   Currently they feel that the most 
ingenious and frugal photovoltaic/wind installations are able to 
produce electricity at about $0.15 per kwhr.   This analysis 
includes the current time values of money, marketplace costs, 
availability and lifespan of equipment and maintenance costs. 
But this, despite a near head to head equality with grid sourced 
electricity, they feel is NOT typical with typical solar/wind 
installations running more on the order of $0.20 to $0.25 per 
kilowatt hour with the price being higher the more solar is 
incorporated in the mix.

It was about this time and perhaps as part of the same article 
that Richard Perez indicated that should the efficiency of solar 
panels double, no one could afford to build a conventional power 
plant.   There is some hubris in this statement but it's probably 
fact.

Now inherent in this analysis above is a severe LACK of analysis 
as to payback.   In fact, the numbers they're citing are a 
payback equal to the life of the considered equipment.   But 
their mindset and analysis shows that profit beyond the payback 
period is NOT what they're in it for.

Another myth that a later issue of Homepower debunked was that 
solar panels will not generate the power in their lifetime 
necessary to make the panel.   Perez & company analysed this 
aspect too and found the energy payback on a solar panel was 
about two years - but that's only the power/energy necessary to 
produce the panel itself.

I'll have to admit I'm kind of on the fence regarding solar 
energy generally.   While attractive, unlimited, and perhaps our 
"last" energy source, the price of the magic to make it happen 
still makes it cost prohibitive if you're into return on 
investment.   But the worm is turning in this regard as oil 
production appears to be peaking worldwide.   We may all live 
long enough to see solar as the power source of choice.

Best,
Joe