Posts Tagged solar panels

Abound Solar is Building Lots of Solar Panels

Posted by on Saturday, 24 July, 2010

Abound Solar is setting up manufacturing facilities with loan guarantees provided by the federal government. The Recovery Act provides funding for construction to several firms which produce solar cells on a large scale. According to the governor of Colorado, the manufacturing plant locations are in Lakewood, Colorado as well as Tipton, Indiana. The Tipton site uses a factory which was originally built to supply parts for Chrysler vehicles.

Abound Solar claims several important efficiency improvements over rival firms which produce solar panels. According to Abound, these panels will last for 25 years and are considered stable. The company claims low costs compared to traditional silicon solar panels, helping the solar panels to be competitive with other types of energy production. Abound claims that these solar panels have an energy payback period of five months. Energy payback periods are different from economic payback periods. An energy payback period for a solar panel is the amount of time the solar panel needs to generate energy to return the amount of power used to construct the solar panel in the factory. Abound claims that silicon solar modules have an energy payback period which is about five times longer, which is around twenty five months. These modules use cadmium telluride coated over glass panels in their construction.

Indiana is supporting construction of the manufacturing plants and is providing tax benefits to Abound. The state of Indiana is offering up to $11.85 million in tax credits and $250,000 in training grants for the facility at the Tipton location. The county of Tipton is also offering additional tax abatement benefits.

This project receives $400 million in loan guarantees from the federal government, as well as any additional tax benefits which the plant is eligible to receive. Senator Mark Udall claims that this project will initially produce panels which provide 840 megawatts of power each year, and potentially 1100 megawatts in the future.

Cadmium telluride has major advantages over silicon solar panels. According to the Department of Energy,
cadmium telluride has a bandgap which closely matches the spectrum of the sun, so panels constructed with cadmium telluride are much more efficient than other materials. EERE claims it can reach an efficiency of 16.5%, and Abound claims up to 13% efficiency with potential to improve in the future. EERE also states that cadmium telluride solar cells are lower cost than traditional silicon solar cells.

Solar Panel Payback Period

Posted by on Friday, 5 March, 2010

I see ads all over the place for solar panels. Many people have mentioned that you can install them on your house and significantly reduce or even eliminate your electricity bill. Even better, it’s possible in some areas to get payback from the electricity company and receive money each month instead of losing it. Receiving a payment from the power company does depend on two things, you need an inverter so that you can send the energy you harvest back into the grid, and you have to have a contract with a power company that accepts this setup. Is it cost effective? Of course it will cost a lot of money up front, so it is definitely an investment that will take years to pay off. Worthwhile? Possibly. Homeowners are familiar with purchases that can cost a lot of money upfront, especially if they end up reducing costs in the long run. What the solar panel buyer wants to ask is what is the payback period? Another way to explain a payback period is the amount of time until the breakeven point is reached. After that, the solar panel owner will make a profit each month with each check from the electric company.

So what do we need to know here? We’re going to separate the initial costs out from the overhead, so let’s figure out the bills we need to pay to get the system up and running. It is a lot easier for me to visualize with some sample numbers, although to shorten the calculations I’d use algebra variables like a, b, c, to make the formulas. Besides, the real numbers will depend on many other factors that are specific to each household, so keep in mind these are just placeholders and don’t represent your real costs.

You record the initial costs first:
Solar Equipment $30,000
Installment Costs $2,000
Permits $2,000
Government Rebates ($10,000)

Total: $24,000

Then you record the cost savings:
For example, let’s say your power bill was $100 a month, and you installed the panels so now you
are receiving $250 a month back from the electric company. Calculate this as an average, as your power usage and the amount of solar power you collect will vary with the seasons.

$250 – ($100) = $350 a month revenue

You’ll also add the depreciation and repair costs here. Repair costs, like the power bill, is an average amount you budget each year. Straight line depreciation is the cost of the equipment divided by how many years it usually lasts if well maintained.

Let’s say the panels last 20 years, and cost $24,000, so depreciation is $1200 a year, or $100 a month.

$50 a month for repairs
$100 a month for depreciation
Total: $150 a month expenses

So a simple payback period would be $24,000 / $200, which would give a result of 120 months, or ten years. It can also be added to the house value for buyers or lenders at cost minus depreciation, as the solar panels do add value to the house. This can be estimated by another straight line depreciation that includes your installment and permit costs in the value of the asset: The total cost is $24,000 and the panels last 20 years, so subtract $1,200 from the value each year until the panels are depreciated to zero.

This analysis doesn’t account for other factors that might show up. It is a nominal calculation, not a real one; if inflation occurs it’s possible that energy prices will rise sharply. Oil resources are limited, so you might be expecting this factor to limit supply and raise costs in the future, I know I am. You’ll also have to consider interest charges, for borrowing the setup costs to be able to get the system up in the first place. It can be a complex calculation with other factors, although these are the most important costs and revenues to consider.