Solar Panels Never Make Economic Sense, Says Fuzzy Math
John has already talked about some fuzzy math this week in the form of The Manhattan institute's claims that natural gas is greener than renewables. Now the Independent reports that a British organization, the Royal Institution of Chartered Surveyors (Rics) is taking aim at some sacred green cows, claiming that in economic terms, solar panels take 100 years to pay back. The group claims (rightly) that insulation, weatherization and other energy efficiency measures should come before solar. But solar advocates claim that their math regarding solar itself is way off—and they too, appear to have a point.
The biggest bone of contention for solar advocates like Jeremy Leggett—CEO of Solarcentury—is that any meaningful calculation can be made without taking into account future price rises. (The math was apparently based on rates prior to a 30% price hike from utilities that has already occurred):
Jeremy Leggett, executive chairman of Solar Century, complained that Rics' figures failed to assume any rise in energy prices, when a conservative estimate of 10 per cent a year would transform the calculations. In addition, Rics had failed to take account of a number of other benefits - renewable obligations certificates worth £160 a year to householders from next year; reductions in energy consumption of up to 40 per cent for schemes with a meter; the rising payments from energy companies for spare electricity put back into the national grid; and the increased value of an energy-efficient home. He estimated the current payback of power-generating PV panels was 13 years.
Rics countered by saying it had deliberately not chosen to include "ifs" in its calculations. (Though to my mind, the idea that utilities would not raise rates in 100 years is about the biggest "if" of all.) Of course, that's not to say that solar panels aren't expensive, and that cheaper, more cost efficient forms of energy saving shouldn't be prioritized (as Lloyd has argued, insulation should always come before fancy technology), but let's at least base those arguments on real world math. And let's never assume that utilities won't raise rates.