Revised 10.27.09

Correction: After a phone discussion with Dr. Howard Horne of Stonegates at 9:52 AM on Oct 27, 2009, I was informed that my numbers, derived from the reporter Adam Zewe in his article were incorrect.  The request, on my part to Dr. Horne, was that I be supplied with the truthful numbers by his organization so that I could correct the record.  I was informed that any numbers discussed in my telephone conversation with Horne were confidential and I respect that. No new numbers or calculations are introduced into this blog. The originals remain. I offered to accept the correct numbers and restructure my calculations and this was rejected. This is now an essay in circular logic such that the numbers—hence the calculations on actual costs--are now unknown but resides in the newspaper’s record in the public view.

The facts are thus hidden from view even though the newspaper reported that this project was subsidized by both state and federal monies. This is apparently now the kind of ‘transparency’ that we live under in the Obama Administration.

As such, there is no way to assess the facts and my calculations are summarily retracted in this particular case. However, the view that solar systems are efficient enough to ‘save’ people money is still bogus. There is no way to ‘save money’ by producing electricity without government subsidies because the current costs of such systems outweigh any financial benefit. But, maybe there are special circumstances that might permit some installations to make substantial savings that either bend the laws of physics or draw from the tax base. Who knows? I was just commenting on the news. But, being from a scientific background I wonder if this kind of project can be cost effective and here are alternative views on this matter:

Here are some expert opinions:

“ScienceDaily (Feb. 22, 2008) — Despite increasing popular support for solar photovoltaic panels in the United States, their costs far outweigh the benefits, according to a new analysis by Severin Borenstein, a professor at the University of California, Berkeley's Haas School of Business and director of the UC Energy Institute.”[1]-- Cloudy Outlook For Solar Panels: Costs Substantially Eclipse Benefits, Study Shows

“"Solar photovoltaic (PV) is a very exciting technology, but the current technology is not economic," said Borenstein. "We are throwing money away by installing the current solar PV technology, which is a loser."

“In his January working paper, "The Market Value and Cost of Solar Photovoltaic Electricity Product," Borenstein also found that, even after considering that the panels reduce greenhouse gases, their costs still far outweigh their social benefits.”

“The bottom line, Borenstein argues in his paper, is that solar PV panels are not ready for widespread installation. Rather than subsidizing residential solar PV installations, as many states do, he favors more state and federal funding for research and development.”

"We need a major scientific breakthrough, and we won't get it by putting panels up on houses," he said in a recent interview on campus. "It is going to come in the labs."-- Cloudy Outlook For Solar Panels .”[2]  [Emphasis is mine in all quotes.]

One more: A current cost analysis for private homes:

“At the time of this writing, the installed cost of solar panels runs between $7 to $9 per watt, so a 5 kW system would cost on the order of $35,000-$45,000 and an 8 kW system would be anywhere from $56,000 to $72,000.  Many utility companies are offering incentives with some subsidizing as much as 50% of the cost of the system.  Even so, a system that generates an average of $73 of electricity per month would take a long time to pay for itself even if you could get it at half cost.  For example, a system that cost $18,000 would have a payback period on the order of 20 years.  The panel cost today is around $4 per watt and the extra cost that brings it up to $7 to $9 installed is to cover the installation labor and the electronics needed to tie it into your existing electrical system.”[3]-- How much does it cost to install solar on an average US house?

I went to Home Depot 2-3 years ago to price such a system for my home. The ‘average’ cost for a house my size was $14,000 installed which would save me about $500 per year on electricity according to the salesperson. This, obviously, would require a 28 year payback plus extra years if financed and is complicated by the fact that such systems couldn’t last more than 30 years so this system is a financial disaster.

The numbers are bleak and mystical. There is no way that solar panels can produce electricity at any reasonable cost and those who advocate such systems are either in the sales end of the business or want to make profits off energy ‘credits’ such as Al gore. I must agree with Professor Borenstein in that solar panels are not cost effective.

Here is the original blog analysis now retracted for lack of the proper information.

The Crusade to Lower Carbon Emissions at any Cost and the Political Rejection of Fiscal Rationale

Abstract: It appears that a solar panel scam has just consummated in a retirement home in a glitzy area of Delaware. The numbers shown in a newspaper article and the projected savings expected do not appear to be yielding anything positive for the residents barring the use of imaginary numbers and chucking in a little fairy tale logic.  Apparently, the good citizens thought they would save $19,000 per year on their electricity and now it looks like they will pay twice that in extra costs for that ‘saving.’ I am sure this makes sense to some green activist but I admit I missed the savings. I need help in this analysis.

The frantic crusade to quell the levels of carbon dioxide[4], now considered as nasty a pollutant as DDT, mercury or capitalism tempts persons with perhaps ordinary cognitive skills to buy into phantasms. I think this is fraudulent and a rip-off but the numbers need to be confirmed. The author of this piece was e-mailed for amplification but no reply as yet. I will update this blog if and when I get a reply from the author Adam Zewe. Here is an example from an upscale retirement home Stonegates[5] in Greenville, DE. It has 200 residents according to the website below in the footnote and just spent a great deal of money on a solar panel system that promises to save them money.

“The Greenville retirement community recently installed the First State’s largest private solar panel system atop four buildings, said Ken Hilback, director of plant services.”-- Stonegates installs First State’s largest solar system By Adam Zewe Community News Posted Oct 26, 2009 @ 08:02 Adam.zewe@communitypub.com

“The panels are expected to produce 14,000 kilowatt hours of electricity a month, reducing Stonegates’ carbon footprint by 200 metric tons and saving the community $19,000 a year, Hilback said. [Emphasis is mine in all quotes.]

The entire system cost $970,000, he said, but grants from the state paid for 25 percent and federal grants covered an additional 30 percent.”-- Stonegates installs First

Now, we might ask, if we were concerned about the financial features of this project, just who is saving how much from this project. Ignoring, for the moment, the federal and state grants we find:

My trip to a mortgage calculator on the Internet[6] indicates that for a $533,500 loan [the total less the grants] at 5% the 360 payments would be exactly $2,968.62 per month. This works out to $35,623.44 per year and the residents think they are to save $19,000 per year? Actually, this appears to cancel their expected savings and add an additional $19,000 to their costs.  Each of the 200 occupants would pay $178.12 per month, on average, just for the solar panels.

If we insert the government ‘grants’ and other fluff we can wonder how much of the remaining $436,500 has been borrowed or printed by the federal and state government. They are both broke.

I must be confused here so could somebody clarify some of this?

rycK [a 5^th generation Californian in exile]

Comments to: ryckki@gmail.com