"kWh Analytics’ most recent figures place the median annual degradation for residential solar systems as 1.09% and non-residential systems at 0.8%. The report states that over a 20-year asset life, project degradation could therefore be underestimated by as much as 14%, resulting in severaly overestimated performance and revenue forecasts produced within a P50 model."
A solar panel’s performance warranty will typically guarantee 90% production at 10 years and 80% at 25 years. It looks like some panels are going to come up a bit short, but at current solar PV module improvement and manufacturing rates, it’s not a show stopper to have current panels exhibit a bit less longevity than anticipated. Very similar to LEDs with longevity promises that aren’t entirely being kept but are still good enough.
Panels have gotten so much better, I know folks who replaced 10-15 year old panels with brand new panels, even though they were still producing and within warranty. Panels are also entirely recyclable and infra to do so is being spun up.
That’s a reasonable estimate based on architectural shingles, although 15 years is more likely in latitudes with more solar exposure throughout the year (the Sunbelt in the US). Metal roofs last longer, but have a higher initial upfront cost. Huge fan of metal standing seam roofs for longevity (40-70 year lifetime) as well as robust mount support (clipping to the seams) for solar racking.
Yes, there are types of roofs that last a long time. Standing seam metal, slate, clay, concrete, and copper roofs all last a long time (50+ years). Asphalt shingles and EPDM flat roofs last 15-25, cedar shakes can last 30+ years.
The long lasting ones are substantially more expensive than asphalt shingles, 3x at a minimum.
We just had to replace our tile roof for a 20 year old house. I've seen estimates of 20-50 years and I'm sure you can find some that last centuries, just don't buy a tile roof expecting it to do that. There are still Ford model T's on the road today, but we don't tell people that cars last a century.
What was the failure mode of your tile roof that meant it needed replacing? Coming from the UK where most roofs are tile I don’t think I ever saw one need replacing there, maybe a few tiles need realigning. Most tile roofs were the same as the house itself, so over a century for large swaths of the country. The weather is less extreme than in the US though.
"Tile" in the US probably (though not definitively) means "spanish tile" - those terracotta curved tiles. It's not the same as what I remember tile meaning in the UK, which was typically slate.
Also, I spoke with some roofers in Pennsylvania who explained to me the difference between Welsh slate and the stuff from PA ... way less durable because the layers are not as tightly bonded, and then you add freeze/thaw and it just doesn't last as long.
correct, Also the underlay needs to be replaced often and if it's not the tiles can come loose or get damaged. Replacing the underlay requires removing all the tile, which is labor intensive, and then depending on the HOA/owner preferences, you can try to color match damaged tiles or replace the tiles, or replace portions, all of these are done regularly. Depending on type of underlay used, it might need to be replaced every 7-25 years, again depending on the weather conditions and materials used.
I had a house in Phila. with a tile roof, built in 1920. I "replaced" the roof in 1995, and by that I literally mean re-placed: the roofers carefully took all the tile off the roof, put down two layers of 80lb roofing felt, and reinstalled all the tile. They believed that the original was done with only 1 layer of 40lb roofing felt, and that this was the only thing that had actually failed other than a couple of cracked tiles. There was some expectation that the new one might last 100 years before it would need the same process again.
Indeed! However, generation companies bidding on PPAs are in a somewhat different situation from LED lighting customers; if they bid 2% higher than the competition, they lose the deal, and if they bid 2% lower than what they'll actually produce, they build the plant and lose money on the deal. So if the average panel efficiency over a 20-year PPA is 91.0% of the initial efficiency (as this article suggests), but they'd budgeted for 95.4%, that's potentially a huge deal for them; it's the difference between being 2.3% low and 2.3% high.
By contrast, there are very few businesses that will be unprofitable if their LED lightbulbs burn out 2.3% faster than predicted. (LED lightbulbs burning out is a stupid market-for-lemons market failure, but that's a different topic.)
Panels getting better is actually another potential risk for these projects—if, three years from now, low-cost PV modules cost €0.09 per peak watt instead of €0.17 like today, then PV plants built at that point will have dramatically lower costs than PV plants built today, and probably PPAs signed then will also have dramatically lower costs. When plants are built without a PPA, this could result in those plants being "stranded assets" that can't make enough money to pay the interest on the bank loan, like many coal plants today, but even when there is a PPA, the electric utilities and ratepayers (who in many cases are also taxpayers) have strong incentives to find ways to circumvent it, for example through inflation or bankruptcy.
Now, €0.09/Wp sounds like a ridiculously low price; window glass, for example, costs substantially more than that. It's hard to see how PV panels could reduce their raw material use enough to get that low. So maybe it won't happen. Or maybe we'll find a way. (In Derctuo, for example, I suggested that new solar modules could use chicken wire instead of glass, though that might drop the efficiency of low-cost panels from 16% to 15%.)
I don’t think they’ll be stranded assets as a gas plant would be, as there’s no marginal cost for fuel. If the project doesn’t break even, debt will be shed, someone will take a haircut, and the solar asset will continue to produce. We’re only talking a handful of basis points here.
That's a good point. The bank might prefer a haircut to litigating an insolvency, especially if the best-case scenario for the insolvency is that they get possession of the power plant.
By "within a decade", do you mean the start or end of the projects? Hinkley Point C is at the decade mark from its initial announcement and roughly halfway through the decade of its construction.
It's not really squandered away. I am all for postponing nuclear until we can get our shit together and have proper security in place. The workers at the Fukushima plant had a lower salary than McDonalds employees. I don't want that nuclear. I want modular, mass produced, failsafe nuclear plants somewhere in the middle of the desert
there isn't desert spread around the USA. I assume you meant middle of no-where, but often times there are farms spread out in the middle of no-where. 10-15 miles to next structure isn't "far away" for nuclear.
Nuclear power plants require access to cooling water for efficient operation so most desert sites aren't suitable. The type of small modular nuclear power plants you're referring to can potentially be useful for supplying heat and power to isolated facilities but basic thermodynamics tell us they won't work for grid scale base load power.
Being close to a city isn't sufficient. You still need reliable access to cooling water or else the efficiency is quite bad. Not much water in most deserts, although there are a few with rivers running through.
It uses treated wastewater for cooling, and due to rising costs, is seeking alternate water sources (as it requires 40k-60k gallons per minute to meet cooling needs).
It’s continued operation is unsustainable based on water availability in the region. It’s stretching to find process water, so I wouldn’t hold it up as a success story, more as “it works for now, but we’re going to need a Plan B when it is no longer sustainable to run.” Its Arizona, so solar, storage, and transmission are fine replacements when it’s retirement is near.
It's a 24/7 fusion reactor that requires no supervision or maintenance. There are minor energy losses due to its transmission being over 8 light-minutes in distance, but it provides 50% cover of the entire planet 100% of the time.
Oh your talking about wireless fusion power. Yeah, that's cool stuff.
I actually made the same joke about 10 years ago while working for a CPV (concentrated photovoltaic) startup collaborating with Sandia National laboratory.
I was talking to a Sandia researcher who was working on their huge fusion-inducing laser and he was all pumped up about it, then, I mentioned that I really don't know what the big deal was, we already had working fusion power. The joke did not go over too well.
I'm not optimistic that it can be cost competitive without massive government subsidies for construction, fuel production, waste disposal, and/or insurance.
Nuclear energy has a qualified personnel pipeline problem. Even if we ignore all other plausible impediments to widespread adoption.
Hands on training is hard to provide and acquire. As in expensive and not widely dispersed geographically around the world.
Nation states actively pursue programs that restrict the flow of nuclear knowledge and the development of expertise. Particularly flows toward low wage economies.
No, it won't be back here for decades, if not a century, if ever.
Insurance, financing, and NIMBYs.
They're essentially intractable problems that make it cost-ineffective when NG and renewables are cheaper. Why sink billions into something that doesn't have a clear ROI?
not even if we have nuclear plants that can degrade gracefully and could never meltdown? didn't bill gates built one recently somewhere? using some sodium slurry as coolant etc.
Yes people keep repeating this nonsense. Nuclear despite years of subsidies much higher than renewables [1,2] it is nowhere close to economical to build nuclear. And we are not even talking about the unsolved problems of proliferation, long term (~50000 years) storage and risk (another subsidy btw because nobody will insure a nuclear plant). Base load is actually not a problem, you need a large enough grid and sufficient overprovisioning. In fact building a system with only slow base load reactors is much more difficult than based on intermittent, dynamic ones.
It will take more than a decade, because you need a baseline education level of the population to better be able to understand the pros and cons, and to realize that nuclear plants that have nothing to do with energy generation can have far more value to society.
Actually, it turns out that the medicinal value of certain isotopes that we could manufacture at nuclear facilities far outweigh the energy value per fissile event.
This is especially true for cancer destroying isotopes that are many orders of magnitude more effective in terms of precision and kill rate then typical radiation sources used today (or for targeted quantum dot medicines).
Other benefits include potential safe nuclear batteries that would allow an iPhone to last a few years without charge. But these are inventions for future generations.
The weirdly tribal support for nuclear kind of confuses me.
Like, 10 years ago I thought nuclear was an essential part of the future energy mix, just as a sensible hedge against other things not working out. It's maybe been 5 years since that became obviously unnecessary as renewables continue to progress.
My opinion on nuclear hasn't really shifted in absolute terms. It's still much better than coal for example. But the possibility and now near certainty of solar, wind and batteries being better and cheaper has put them way ahead in relative terms. It's renewables that I've been getting new information or confirmation of old information which was speculative in that time frame. Nuclear hasn't really changed.
The people who remain loudly pro-nuclear, then seem in fact to be super pessimistic about renewables compared with me, rather than super positive about nuclear.
As you kind of confirm with your edits, you think solar is inadequate, when I think it is one of the most astonishly successful power technologies ever conceived by man.
How did we end up with such divergent views on renewables if we're broadly in tune about nuclear?
> But the possibility and now near certainty of solar, wind and batteries being better and cheaper has put them way ahead in relative terms.
Cheaper, most certainly, but better, according to what metric exactly? PV has a higher carbon footprint than nuclear. Same for wind if you add storage. Both require at least one order of magnitude more raw materials (mostly extracted using fossil fuels). Land use is also an issue with wind turbines, not all countries can put them offshore. And then there's the geopolitical angle and the huge dependence on China. I know that the nuclear fuel supply chain has its own issues as well, but again the amount of raw materials is relatively small and fuel can be stockpiled.
It's not about being for or against renewables. They have a very real environmental footprint and we're past the point where we can simply disregard that.
The oil industry funds anti-renewable but pro-nuclear efforts[1]. That might seem counterintuitive, since nuclear also competes with fossil fuels, but the fossil fuel industry knows that nuclear plants take a very long time to build. During that time, more fossil fuel plants get built, and the renewables industry struggles and possibly withers.
That creates a stripe of Internet commenter convinced that nuclear plants are the solution and renewables are terrible. They all use the same lines of reasoning, and it doesn't really matter how many times they're refuted because... well, because this is a playbook that has been used many times over.
The very odd belief that nuclear power does not rely on storage and peaking capacity to deliver electricity when people actually want it, at a price they can afford, and without carbon externalities is one of the key things that indicates to me that nuclear support is an irrational tribal thing.
You could easily think nuclear fans live in a parallel dimension where electricity demand is entirely flat and unchanging, so focused are they on the mythical "baseload" to the exclusion of everything else.
> The very odd belief that nuclear power does not rely on storage and peaking capacity to deliver electricity when people actually want it
A desire to only have a day's worth of storage is not a belief that storage is unnecessary.
> I would put anyone who thought that in that box.
> You could easily think nuclear fans live in a parallel dimension where electricity demand is entirely flat and unchanging, so focused are they on the mythical "baseload" to the exclusion of everything else.
The downside of solar is that you'd either need a lot of storage to get through the night, or you'd need geographically-distributed power generation and the ability to move large amounts of power to the other side of the Earth.
I'm kind of surprised we aren't already well on our way to building the latter, considering the potential benefits.
So I fully agree with the factual statement you've made here, and disagree with your unstated implication.
Storage is much more expensive,yes. So much so that building extra solar (and or wind) and just wasting some of the energy when it's above the demand is cheaper overall then storing every drop of generation with batteries.
But how does that impact nuclear vs renewables?
Solar plus batteries is cheaper than fossil fuels (without carbon fees!) in many markets and use cases. And continues to get cheaper. That's an amazing thing that we should celebrate. It pretty much guarantees a solution to climate change even if sensible regulation doesn't get implemented.
Is nuclear cheaper than fossil if you don't include the carbon and pollution externalities? I don't think it is. So the only hope for it (if we assume renewables all stop working tomorrow and we need a plan B) is widespread government intervention.
>Within a decade or so nuclear energy will finally be back.
I find this to be overly optimistic. Even millennials and gen-Z parrot the tired NIMBYism that has characterized all discussion of nuclear power for the past few decades, so that overly-emotional, irrational mindset seems to be alive and well.
Its problems are entirely emotional and political. We could completely solve waste storage, completely solve safety, and we'd still be dealing with the ignorant general public for another couple generations.
What makes you think fusion is feasible at anything less than stellar scale? It's been known about for 80 years or so at this point and still hasn't reached breakeven. No other technology has taken anywhere near that long to even be demonstrated as feasible.
Powered flight, computation, batteries, electric motors, internal combustion engines, rockets, and a host of other technologies have taken >80 years to become industrially useful.
Confined fusion has been demonstrated at Q=0.6, it just hasn't hit break-even yet which would make it industrially useful. ITER should exceed break-even and DEMO should produce power in 2051.
- Powered flight: from first demonstration to commercial application was less than a decade.
- Computation: I know about Babbage and Lovelace, but from the invention of the transistor to practical computing was years to decades depending on how you count.
- Electric motors: similar
- Batteries: don't know the history, probably they were known in ancient times, but it's not like their development was held back by anything, people just didn't have much interest in finding applications for them.
- IC engines: At most two decades between invention and useful work. But probably less by more reasonable definitions.
- Rockets: Again, depends on what you count as successful. But people had working versions pretty fast.
Fusion is unique in that we've known how to do it for 80 years, spent billions of dollars on it and outside of scientific research and weapons have no real applications for it. The only way to make the timeline for others seem similar to fusion is to stretch the start date back to when people imagined being able to do something, e.g. to put the start date for powered flight at da Vinci, but you could do this with fusion too (perpetual motion machines?) and make it begin arbitrarily back in the past as well.
In basically all other cases of technological development precise characterization of the underlying phenomena to commercial application takes a few decades at most.
Edit: Also, those older technologies had the massive disadvantage that materials were much harder to get and of less consistent quality. Fusion research has basically not had these problems.
ITER is generally expected to work, even though it's not an economically practical design. Since ITER was designed, better high-temperature superconductors have become available (Rebco tape), which makes smaller, cheaper designs with higher power density possible. Another new technology is FLiBe, a molten salt used to capture the energy from the reaction.
The MIT Sparc and Arc projects are one group's attempts at coming up with a practical design. They seem to be making steady progress.
I want to write some points, why nuclear probably will not play any significant role going forward:
- In 1000 tonnes of uranium ore, there is 1 tonne of uranium. This contains about 0,7% U-235 used as fuel in most civilian applications. U-235 is used in the fuel in concentrations of about 3-5%. In the end, from a tonne of uranium, you can make about 100 kg of fuel used by a nuclear reactor. This is all used up in about a day in a largish installation. So you have to dig and process 1000 tonnes of ore each day to keep a 1 GW electrical output reactor running. The recycling of the fuel isn't economical unless you have a nuclear military program or want to do some research with various isotopes. That doesn't seem like a huge improvement compared to coal, gas and oil. Nuclear just isn't very clean in this respect either.
- The technology and mentality of how we build actual nuclear reactors is stuck at best in the 1980s. This might change, but there isn't any conceptually new reactor running in production anywhere. Compared to wind and solar, where replacement with better technology is the norm, this is just nuts. Also, wind and solar starts to be competitive to fossil fuels when producing electricity in some cases.
- Solar and wind don't have to produce stable output if the output is very cheap. In such a case, it will be economical to build better transmission lines, motivate consumers to adjust use based on production capacity and finally invest in clever energy storage projects. Good transmission lines (which we will need anyway, because of EVs and other electricity consumers) will spread out the production and load in such a way that the Central Limit Theorem will guarantee something similar to the traditional "base load" https://en.wikipedia.org/wiki/Central_limit_theorem Cheap batteries acting basically as grid capacitors will smooth out most of the peaks in production or demand, which will make the whole thing more economical still. (As we can already see in several places.)
- For winters, long term energy storage from the summer or very good inter-continental transmission lines are needed. This is not a solved problem but we still have plenty of time to think about solutions, but we really should think about them. Just building something conceptually stuck in the 1980s that is more expensive just to ensure we have electricity and perhaps heat in the winter without having to think about perhaps more efficient solutions doesn't seem like a situation we want to be in. We can decommission existing power plants over the next 10-20 years, while we think about storing the energy/ producing energy intensive stuff mostly in the summer or something like that. There is e.g. the possibility to produce ammonia, sodium metal or something else with excess energy that we can transform into electricity in the winter. There is also HVDC lines that might actually connect continents, which would solve some of this as well. There really is plenty of energy in wind, solar, tides/ waves, etc. that we can use. If it is produced at a low enough price, we might be able to throw some even rather substantial portion of useful energy away to transport it to the consumers be it on a different continent and still end up with cheaper power.
It might be more economical to buy storage to have enough for the winter or to transport some form of fuel. I think, the reality will be a mix of all approaches.
- We might do a better job of insulating our homes and more stuff like that to reduce some obviously inefficient use of electricity (e.g. for "just" heating, cooling, drying). Actually making infrastructure better is a good long term investment as it enables new approaches to solving problems and makes the quality of living better for everybody but especially for the less affluent.
- Nuclear is regulated as hell, where wind and solar isn't really all that much. Wind and solar is very flexible, as can be seen in poor bu sunny countries, where solar is a way to have electricity most of the time without having to worry about diesel (or uranium for that matter). Some people have a much better quality of living thanks to the dropping price of solar electricity in their circumstances and they don't have to ask anybody for permission to use solar. They just throw it on the roof of a hut and have enough electricity to power a phone and a battery so they have light at night. They can now communicate e.g. about the price of their produce and educate themselves. These people will not see nuclear or fossil fuels as a solution when they progress into the middle class, where they actually can affect some things e.g. by engineering infrastructure solutions.
- Nuclear always has the risk of a nuclear meltdown, which just isn't an option in large population centres. We humans are just too error prone to be able to reliably design and handle this. Because we are quite risk averse and have all the preventive measures (that have failed multiple times already) the cost of producing nuclear power just skyrockets.
- Finally, if there were no nuclear reactors, it would be even more uneconomical to keep a large stockpile of nuclear weapons or to power attack submarines and other stuff that is made only for the purpose to solve problems by force. Perhaps there is some advantage to the fear of guaranteed destruction but in reality, we just wage wars using ransomware and proxy countries - nuclear weapons aren't useful there at all.
The other uses of nuclear science e.g. in scientific instruments, medicine etc. can be done without nuclear being used to produce electrical power. We will have the current reactors for perhaps at least two more decades, so we have time to think about this even without building any new nuclear power generating capacity.
Not subscribed so can't look at the report, but kinda wanted to look at the report. I was curious if they broke down the source/manufacturer of the panels.
Well, that's not great, but not a disaster either given the magnitude of the numbers. What is interesting is the "lemon" problem that is similar to ones seen all over tech:
> found different BOMs used within the same product code for one manufacturer identified a near-5% difference in potential-induced degradation (PID) between the two BOM combinations.
Different batches within "the same product" can be made very differently, making it hard to buy for reliability since you can only determine this in retrospect. There's probably going to be an "IBM deathstar" or "capacitor plague" issue in the medium term. But it won't be very apparent outside the industry.
“Chronically underperforming” seems a bit overly dramatic when degradation is 0.5% worse than expected.
While tracking field performance is important, that doesn’t really change the equation of solar being cheap energy.
Well, you can look at it that way, or you can say that the degradation appears to be 100% worse than expected. They modeled 0.5% and it seems real world numbers are more like 1% , at least for the installations they observed.
It is a very significant difference in terms of investor returns which are already very low in the base case of p50 and very sensitive to changes in output
But it seems it's hypothetical. As far as I know most of these, in North America, end up in the trash. Which is not great due to the toxic materials used leaching into the water system.
There is some in Europe, we even have an industry association charged with recycling. How much of the old modules are actually recycled, I don't know. Chinese are buying used ones yo resell in developing countries.
There are a few companies specializing in recycling solar panels. It's doable. Depending on the type, the panels actually may contain valuable stuff like silver, aluminium, or copper in addition to harmless silicon. Some of the nasty stuff includes lead and cadmium. However, it's not a given that that just leaks out of the panels. Storing that in an inert form in a landfill might be fine.
I'm guessing the recycling industry will start ramping up in a decade or two wWhen most of the recently installed stuff starts reaching the end of its useful life. Older PV exists of course but there's just a lot less of that. It's one of those things that will get sorted as demand increases and economies of scale increase.
Meanwhile, local regulations are probably a great way to avoid people dumping toxic stuff in landfills. How that's not a thing to begin with is a bit mind boggling. On a positive note, those landfills might be the mines of the future as they contain lots of valuable resources that people discarded.
The firm doing this research also sell insurance that covers solar panel under performance. So while there might be truth in what they are saying, just keep in mind there is conflict of interest here.
This information may encourage more purchases of their insurance product. It's a conflict that is worth stating when considering the information they're providing.
The conflict of interest is that they have financial incentives for you to believe failure rates are worse than they are. Insurance may need accurate assessments for a sustainable business model, but their business model also relies on people assessing risk as higher than their assessment or at least that an accurate risk assessment + overhead fees to assess it is less than my own.
As a consumer, I only want insurance if I think they've assessed the value to be lower than what I'd pay out of pocket to 'self insure.' As an insurance company, I want people the opposite, that reality of risk lies lower than what you think it is, so I can make money. I want a bunch of worried low risk people to pay overhead and marginal fees so my margins are frothier.
Since they're an insurance company, doing this kind of assessment is their core business.. they have every incentive to not over or under estimate it. So you're positing that they have some real numbers on failure rates that they keep secret and some exaggerated numbers they tout publicly? That would require dishonesty at a level that would ruin the company if it was found out, so it seems unlikely they would risk it.
The funny thing with insurance is that if they ever become too good at estimating risks, they will destroy themselves. You don't need insurance if you can perfectly predict the future.
Though I don't think we particularly close to this point, so I doubt they care too much.
It does seem clairvoyance would negate the need for insurance, but that prompts another question: why do you think a clairvoyant person or machine is possible in any way?
Also, if an insurance company had perfect knowledge of future claims by being clairvoyant, they could charge a suitable risk premium to write policies where they wouldn’t lose any money, since they would also know how many policies they would be writing.
> As a consumer, I only want insurance if I think they've assessed the value to be lower than what I'd pay out of pocket to 'self insure.'
I don’t think that’s entirely right — the main value add of insurance is to the rare, mind numbingly expensive events — ER visits, crashing into a RR, house burning down, etc. You’re paying to minimize tail risk, including risk you couldn’t possibly self-insure against in reasonable time (my payments to insurance is not going to reach the value of my home — the bet is whether my home will ever burn down).
Regardless, it’s still a conflict of interest in this case
I agree completely, but there are two common/popular perspectives to insurance value add. One views it as a risk pool for catastrophic events like you describe. Another views it as a service that prices risk for you to help you pay it in installments. OP seemed to be gunning for the second perspective of what insurance does based on language.
However you want to interpret insurance, there's clearly a conflict of interest that the business based entirely around assessing and managing risk publishes information that risk is higher than people thought and they are therefor more relevant as a business than people thought.
You're right that they do have an interest, but I think it is wrong to go as far as if the expected value of the loss is more than the premium then one shouldn't buy insurance.
Consider a risk of losing $200 with probability 5% on an asset of $2000. The expected value of the loss is $10. So under your argument, if the insurance company charges over $10, it's worth it to self-insure. But what does self-insure actually mean? I assume it means keep $200 lying around. If you only keep $10 around then you won't have the money to actually fix the problem, and convert a loss of $200 (say, repair costs) to a loss of $2000. Under my values here it would take over 20 years' of premiums to build up what you would need to save to self-insure!
As a consumer, I pay a premium (literally) to get rid of the risk and cap my expenditures. So in my example, there is some price between $10 and $200 where the insurance company can profit and I still come out ahead because I can take $200-P and do something else with it.
Of course, you are still correct that within the $10 to $200 do have an interest in making you believe that the value of the insurance is on the higher end of the range than the lower.
I'm going to assume you are asking in good faith. From wikipedia: "A conflict of interest (COI) is a situation in which a person or organization is involved in multiple interests, financial or otherwise, and serving one interest could involve working against another"
In this specific case where the firm is publishing research they have funded, there are essentially two interests or activities at play:
A. research to determine the extent of solar panel installation performance or lack thereof
B. selling financial products based on performance
Since interest B would be negatively impacted by a certain outcome from interest A (a finding that solar installation performance is optimal, in this case), that implies the firm's performance of activity A may have been affected in order to reduce negative impact to the firm overall.
We see this a lot in industry-funded research. Its not unusual. For example, recently a lot of airlines have funded studies about Covid19 spread in airplane cabins. To be published in a reputable journal, researchers are compelled to declare these interests in the cover page of their papers. Also, a good journalist will state this somewhere in their piece (normally at the top or the bottom, conventionally in italics).
To your point about competition and rates, that is really not any part of conventions on declaring interest conflicts in academic research but I'll entertain an argument about it here because I don't think the market forces are as strong as you imply.
The idea that a product will be priced perfectly simply does not apply in a niche market such as this. When you are selling a niche product, the market will not be deep enough to force firms into the behaviour you are describing. This already applies to things as widely held as flood insurance where the market is so shallow, that the federal government has to intervene to make it viable. Solar PV Installation performance insurance (not to mention options) is extremely niche.
I think "conflict of interest" is frequently misused. I was taught it describes situations where one's professional/ethical/legal obligations are opposed, such as an attorney representing competing clients, or a board member approving a contract with a company he is an investor in. I realize this is a semantic point.
In this case, I don't think kWh Analytics has any professional obligation to a standard of science or journalism, so there's no conflict.
Yeah I see your point, and I dont think its semantics actually. You would be right to delineate between a legal notion which could imply some kind of tort or liability versus just a generic issue which is merely cautionary.
In this case the authors probably have the latter but not the former (they're not doing anything wrong legally). "Conflict of interest" is definitely the kind of phrase which has a context-specific definition, so I think semantics is probably more important here than it might normally be.
FWIW, I re-read my above comment and I think came off more hostile than I intended. Your point about pricing insurance is a really interesting one and I think a lot of other commentators had good takes. Specifically, someone mentioned how information asymmetry benefits insurers which is worth considering too.
Why is it non sense? Hedging is essential for managing risk and if you can't do that you will end up with less money being invested in solar.
There's a reason why this "nonsense" is widespread across (usually capital intensive, commodity producing) industries, and it's usually not because of speculation.
Definitely a conflict of interest. That said I think all the solar sales organizations/financial models I have seen have been bullish on the performance of solar assets and then refer to the warranties as a backup.
If you are financing a project and the degradation occurs faster but not at a rate of which it gets swapped out on warranty - you want something to cover that financial difference. Also swapping out the asset has costs that aren't covered - so it isn't as simple as it would seem.
It's the same as all insurance products - might need it, might not. At least in this case they put forward some real statistical data. And their comment that residential performs worse than commercial completely resonates given the LOE difference.
They have large tranches of data from large funds that have deployed. While we are at the beginning of mass deployment - theres been a considerable amount of deployment to date that you can model against if you have access to data and then constantly update your priors as you get more information.
I agree that such reports are suspect and one should be absolutely skeptical of such things. I'm not saying this report is incorrect, but we need independent studies to support or refute such claims. Until then, I take it as a "That's interesting, I wonder if it's accurate". There is a definite conflict of interest here. I am fairly certain you would never see a report published by kWh Analytic stating the opposite if it were found to be true. I'd like to read the report, but I'm not registering for it. It's obviously a marketing tool for sales, not a peer-reviewed study.
Sure there is a conflict of interest, but there is also inherent expertise.
Insurance companies are well suited to study this EXACT thing and to come to a very correct answer. Also, if there were an independent expert who arrived at this same conslclusion, wouldn't you expect him/her to monetize their knowledge?
I think you are conflating two things. Insurance companies want to know as precisely as possible to determine their liability. It is the essence of their job.
Now, what they communicate to customers is another thing. I bet they know very well what they are getting into... but I agree they aren't likely to be transparent with you about it.
If one insurance company tries to profit off exaggerated risk, a competing insurance company can offer the same protection at a lower premium and steal their customers. You don't make it in the insurance business by making short term decisions that hurt you in the long run.
That presumes someone takes time to evaluate the claim. Unless you have data already available that the counterfactual is true, it’ll take a while before a competitor appears to test out your claim and existing incumbents might just take your word for it. Additionally, the success of the competitor to eat your padded profits is not controlled solely by the truth.
The only thing worse for an insurance company than deliberately inaccurate statistics is accidentally inaccurate statistics. Anyone who wanted to make a profit selling solar panel insurance would independently seek to determine the failure rate of solar panels. Even if they believed their competitors were 100% honest, it's a value that is likely to change over time and they'ed want a better level of detail (rates for different manufacturers, detailed timing, weather effects, etc) than would be publicly available. Yes, if they just assumed it was accurate they might get lucky, but insurance is the business of not relying on luck.
I think you’re assuming that the cost of paying someone to continually track this and maintain everything is 0. It’s not and therefore the savings would have to justify this cost.
And it costs money for a bakery to bake fresh bread, but it's nevertheless a very safe assumption that they will. Statistics are to insurance what bread is to bakeries.
Normally when companies fund research, there is a slight conflict of interest because they want the public to buy their products and positive research can nudge them in that direction. And that research can be suspicious, and sometimes inflated, but generally the conclusions are directionally correct. And for that reason, I may scrutinize, but do not immediately discard the findings of soy industry funded research on the health benefits of soy, etc.
All that gets thrown out the window when an insurance company funds research. Because insurance companies don't profit from consumers being informed...they profit from information asymmetry. Deliberate exaggeration of risks is pure profit for them.
> when companies fund research [...] generally the conclusions are directionally correct.
I'm not sure I understand why that should be the case?
After all, plenty of research gets handed over to the company that paid for it, who get to decide whether to release it publicly it or not - so negative reports never see the light of day.
* If the research points in the opposite direction of the desires of the research funders it will likely get squashed. Researchers aren't typically keen on putting their name on publications that are pointing to the opposite direction of the truth.
* If the research points in the same direction as the desires of research funders, it gets published. It may be exaggerated, but research that has the correct direction but exaggerated scale isn't quite the black and white ethical dilemma that the former scenario is.
So asbestos companies might publish research saying that the risk of cancer is low, but they won't publish research that says that it is an excellent antioxidant.
This same observation also extends to insurance companies, but with insurance companies, the conflict of interest isn't the direction of research, it is the magnitude of the exaggeration. Because the gap between real risk and the fake published risk is their entire profit margin.
They say people were estimating 0.5% loss of capacity per year. If so, after 40 years, the panels would be running at 80% capacity, which is still well above the point where you may as well replace it, unless new panel efficiency improves a lot.
I’ve never seen anyone claim a solar panel would last 40 years. Something is fishy.
I think what is fishy is the assumption that the 0.5% loss rate per year for new units would not change over time as the units got older. Hazard rates for products are not constant like that -- there is a period when the failure rate increases rapidly after the design life of the unit.
Most solar panels from 40 years ago did in fact last 40 years, though some fraction have broken or clouded. Moreover, the rate of degradation slows substantially after about 20 years. NREL has published extensive studies on this. But manufacturers do not guarantee this (because nobody gets power plants financed with a 40-year term), and whether today's solar panels make it to 40 years is anybody's guess. It's common for manufacturers' ratings to be conservative, but that may have changed as they battle every last percentage point of avoidable costs.
It would be nice to know the degradation rates by panel manufacturer. Jinko Solar, for example, claims they make premium panels. How do the degradation rates compare with other panel manufacturers.
If I remember right, China has been the leading largest manufacturers of Solar Panels in the world for sometime now. And they are not famous for quality. I wonder if they did a comparison based on that factor too?
If this is not just an issue with Chinese solar panels, then it is bad news for the industry. Solar power generation at home will not be economically viable if the solar panels don't perform and last to the 10 years or so that they currently guarantee. Especially when they are already hampered by high battery costs (which needs to be replaced every 3-5 years).
China's been making 50% of all our stuff for a few decades now. From the cheap knock-offs to the actual, high quality things.
China's "not famous for quality" because a lot of people don't want to pay for quality, but they can for sure make quality things.
Several of Huawei's phones had just been declared "the best phone hardware money can buy" by several big reviewers, just as they got hit by US sanctions last year, for example.
China's "not famous for quality" because a lot of people don't want to pay for quality, but they can for sure make quality things.
Sure, and that's what I want to know - are the Chinese solar panels being used in the industry premium good quality ones are the cheaper low quality ones?
For example, Jinko solar's panels have leading conversion efficiency in the industry. I think that many international products that are made in china are low quality is because when international buyers procure from Chinese manufactures they tend to aim for lower costs, which results in lower quality and standards. You pay for what you get. Chinese companies of course will charge more for high quality, competitive and differentiated products. These products require R&D which can only be paid for with margins.
http://www.jinkosolar.com/en/site/tigerpro
Everything I have read from manufacturers who bring their manufacturing back to the US and automate it say that Chinese manufacturing issues has to do with competence and training, and that you have to constantly watch for quality issues.
What does the report actually say about P99 estimates?
That's an estimate of output that should be exceeded 99 percent of the time, so it should be a very cautious estimate.
But it seems weird to specify only P99. Does that mean all the other more ambitious estimates from the same system are fine? If not then why didn't they just say "PV isn't performing as well as predicted"?
I'm trying to figure how that would be mathematically possible but I'm mostly confusing myself.
Someone linked the actual report, so the answer appears to be:
There's greater variance in sunshine between years than some business plans accounted for, so while average performance for a site over time, and solar PV on a nation scale is still as predicted, one individual solar business can go under if they borrow all the money up front and don't plan ahead for having a bad year or two early in the term.
My wife shares the sentiment. To me it’s an acceptable trade off, similar to having gutters installed around the house, or a leech field for a septic, or a pump house.
What does rooftop solar do for roofing replacement costs? Seems like you'd need to get some much-more-expensive labor involved than the usual roofing crew for your typical asphalt-shingle roof, and you'd have to bring them out twice (once to remove, once to re-install at the end). Thanks to hail, I'm very likely to need to replace my roofing at least twice in the lifetime of a solar installation (I'm assuming solar panels are very, very resilient against hail—if not, I guess I'll have to forget about ever doing that, period). How much more likely are roof leaks with rooftop solar? More holes in the roof (for mounting the panels) has got to increase the leak risk.
I asked this same question to solarcity when I had my panels installed 5 years ago. The deal was they come out, take off the panels, store them, and come install them again for $500.
It makes far more sense to have a separation of concerns. By having roofing and solar separate you can address problems with them independently. If you combine them suddenly a problem with one is a problem with the other.
This principle applies to most things in life. Having a dumb TV and a separate internet connected streaming box, a computer with a dumb monitor, an audio amplifier and standalone speakers, etc.
Combining things typically makes their initial setup easier but in the long run they cost more and generate more waste.
If correct, it is quite a large difference from previous estiates: double! But as an absolute measure, does it matter much?
In particular, how much more would anyone pay for a less-quickly degrading panel, or for insurance against its lost performance, given how much less need be paid for its replacement in ten or twenty years?
There is no money to be made in the form of profits or FCF from renewables. Not only that, there is no money to be made in energy which isn't fossil in general. This includes Carbon Capture, storage, and nuclear fission/fusion as well.
Fossil fuels extraction is the best of the industrial/non-talent based sectors, Saudi Aramco basically sticks straws in the sand and oil comes out at 7 dollars per barrel.
Electrons they are all the same, there is not some consumer convenience in using green electrons.
The only success story in terms of marketcap is Tesla, but that company is based on constant lies told by the CEO to keep people energized.
If we manage to solve climate change it would be the biggest letdown ever for the general population: the way this thing is being socially and politically advertised people expect a technoutopian future where all of a sudden rainbows would appear all over the place from cows derriere in lieu of methane. A technoutopian pipedream sold by Musk and the like.
In reality we'd just manage to keep things as they are now, our lives won't change that much.
Tl;dr Long SaaS and fintech, short energy and construction
much of the energy needed in private households and the industry can be covered with solar thermal energy. admitted, it's low tech, but the components are cheap and the efficiency is much higher than PV efficiency
I just pulled my SolarCity contract and it does indeed estimate 0.5% decrement per year (strictly, it's estimates are 1% ever 2 years). So the question is: who looses on this deal? My quick read is that they owe me a refund for any measured underperformance. Has anybody walked this dog out to see what their measurements are?
NREL has a great report on this [1]. The median degradation is 0.5%, average Si 0.7%, but in their report it could be as high as 4%. Typically, they are quite fast at the start then slow down as the panel ages. Because they assess the degradation with a 0.5% number and 1.0% is more typical the bell curve moves up. The expectation is P99 [2] which is the question "What is the chance that we see calculated yields exceeds 99% probability?" depends heavily on how the calculation was done in the first place.
Some other points mentioned that, wild fires reduces the yields with 6% and hail storms damage the PV systems. Interesting work! Value proposition for PV is lowered by climate change impacts.
> operational solar assets are continuing to experience higher than expected rates of degradation, with annual degradation in the field observed at around 1%.
So, after 33 years (12,000 days producing, oh, 10kWh per day = 120 MWh), they'll only put out 2/3 of their rated output? ? Without doing the financial math, already sounds like a damn good investment to me.
And, I'd guess, we'll get better at making them in that time.
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