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How much does solar energy really cost?

Rafael Herzberg's picture
Consultant energy affairs, Self employed

Rafael Herzberg- is an independent energy consultant, self-employed (since 2018) based in São Paulo, Brazil* Focus on C level, VPs and upper managers associated to energy related info, analysis...

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  • Aug 19, 2022

How much does solar energy really cost?

For those who request a quote to install a solar system in their home, they receive an offer in which it is shown that the electricity bill with the concessionaire can be practically zero.

The solution is simple. The system is sized so that it produces all the energy consumed monthly.

But... this production takes place during the day, of course. Then the surplus is exported to the public grid, which serves to compensate for the energy consumed from the grid at night. And so the balance is zeroed.

In order for this solution to be viable, it is necessary to have firm plants that produce energy at night.

Thus, the solar solution requires investment in itself, in the firm plant (mainly hydraulic in Brazil) and even thermal plants for when the reservoirs are low.

The solar plant requires an investment on the order of twice the traditional one (in its own and in the firm hydraulic plants)

Bottom line: solar energy is much more expensive even though it is sold as being cheaper. There is a "hidden" cost that is paid by all consumers.

Jesse Nyokabi's picture
Jesse Nyokabi on Aug 19, 2022

Could net-metering be a solution to make the solar cheaper?

Rafael Herzberg's picture
Rafael Herzberg on Aug 19, 2022

Net metering is being used already! It is a powerful tool to account for exports and imports of energy associated with each specific installation. 

The point I bring to our attention is: this: net metering should be associated to a fair criteria regarding the value of the energy transacted. My suggestion is having a $/kW paid by each solar installation as a solution to account for the capacity that is being made available OR setting the kWh rate using the spot prices on an hourly basis. 

When corporate energy users install inside the fence generation (or cogeneration) they contract back up power before their local utility companies using the local electric power grid. It is the same concept!

In other words, the investments made by the power supply chain (generation, transmission and distribution) has to be compensated by the PV solution. 

Another way to look at it. If there is no electric power grid, PV would not be feasible because it only produces during the sunny hours. It meas there is a value here to be recognized.

Julian Silk's picture
Julian Silk on Aug 19, 2022

Dear Folks,

I have had my say, for the most part, on this in The IAEE Energy Forum.  The only point worth making here is that if the day demand is much, much higher than the night demand, then this is not a problem.  The infamous duck curve is coming about because the supply of solar to the grid overwhelms the day demand, which is not that much higher than the night demand.  As the percentage of electricity supplied by renewable sources goes up, this will require storage, and we go back to the battery or hydroelectric or other storage problem.  It is possible to imagine a charge being imposed to pay for the storage, but, so far, this is not politically feasible.

Rafael Herzberg's picture
Rafael Herzberg on Aug 19, 2022

In several locations the regulations call for energy storage for PV installation as a tool to mitigate the duck curve. And this by itself makes solar a lot more expensive. The point - whether politically feasible or not is: there is no free lunch!  PV generates about 100 kWh/installed kW in round numbers. Energy users consume a lot more than that per month - and they have to rely on the grid for the balance. Accordingly - in my opinion - they should pay for it because it is not fair "all others" pay (CAPEX) for it.

Michael Keller's picture
Michael Keller on Aug 22, 2022

Strikes me green energy is effectively an unfunded tax imposed on the average citizen by the government, with a few individuals collecting the “tax” receipts. California graphically displays the abuse, with the average citizen paying truly stunning amounts for electrical energy while the investment class rakes in astounding amounts of money.

Rafael Herzberg's picture
Thank Rafael for the Post!
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