Solar installation costs will keep on dropping

The Skagit Valley Clean Energy Alliance will be sponsoring a new Solarize program this year, to help facilitate and accelerate the installation of new rooftop solar generation systems throughout Skagit County. When final details are available, I’ll write a whole column about this year’s Solarize program, including details on how you can participate, starting with a no-obligation analysis of your home by one of the pre-selected participating contractors.

In the meantime, though, we’ve gotten the bids from the contractors, and they had exciting news. Installed costs will be up to 16% lower than they were just last year – as low as $2.35/watt before tax incentives - a little under $5,000 for a 3-kilowatt system, after a 30% federal tax credit.

It’s not necessary to install enough solar panels to power your whole house to make good use of a new solar installation. For instance, it may take 10 kilowatts of photovoltaic (PV) energy to power your house, but only 3 kilowatts to power your car.

A 3-kilowatt PV system in La Conner can be expected to generate about 3,300 kilowatt-hours of electricity per year. A typical new all-electric car, driven 12,000 miles/year, uses about 3,300 kilowatt-hours of electricity a year. Adding a car charger to a house typically costs $2,000 to $3,000.

A typical new gasoline or diesel internal combustion engine car, driven 12,000 miles/year, uses about 472 gallons of fuel. Fuel here costs about $4/gallon, so an internal combustion engine car costs about $1,900 a year for fuel alone, plus around $100 a year for two oil changes, or $2,000/year total for costs that inherently aren’t incurred with an electric car.

So, adding just enough solar energy to your home to fully power an electric car, plus the car charger, would cost about the same as four years’ worth of gas and oil. After that, your fuel would effectively be free for the life of the solar system.

By the time a new solar system is 30 or 40 years old and needs to be replaced, the cost of solar panels is likely to have fallen very substantially again, and the price of fuel is likely to have gone up again.

Solar panels are a manufactured product. Tariffs targeting manufacturers in certain countries, and various supply chain issues, can drive solar prices up during any given year. However, over several years, the performance of solar panels goes up and their costs come down, due to competition that drives improvements in manufacturing technology and mass production. This trend has been underway for decades. There is no reason to believe it will stop any time soon. Solar power – and batteries – will inevitably become less and less expensive.

Oil is a discovered product. The price of oil has to go up in the long run. Newly discovered oil has to be produced from more and more remote and expensive locations, like deep offshore or northern Siberia, because all of the less remote locations in which any significant oil may exist have already been developed. Enhanced production techniques (including fracking) used in less remote fields are more expensive than conventional production. Either way, oil producers that want to get a reasonable return on future oil will have to do so by relying on ever-higher oil prices.