Why does home solar energy cost so much in the United States?

by on January 10, 2018 at 1:03 am in Current Affairs, Economics, Law, Science | Permalink

Here in the land of technology leadership and free-market enterprise, American regulation has more than doubled the cost of solar.

The regulation comes in three un-American guises: permitting, code and tariffs — and together they are killing the U.S. residential market. Modernizing these regulations, primarily at the local and state level, is the greatest opportunity for U.S. solar policy in 2018.

To highlight the opportunity, let’s look at Australia, where nearly 2 million solar systems have been successfully and safely installed.

As of early December, installed costs in the main Australian markets were at $1.34 per watt, compared to $3.25 per watt in the U.S. What does that difference stem from?

In Australia, there is no permitting process. You simply lodge your request for interconnection online and go install it. The figure below highlights the relative mass of valueless work required to satisfy current city-level bureaucracy in the U.S., which adds between two and six months to delivery time and 47 cents per watt of cost directly to the installed system. That’s more than the cost of the panels themselves!

…the U.S. National Electrical Code dictates a best practice that more than doubles the installation time relative to Australia, and adds incremental hardware expense — together adding 49 cents per watt to the cost of solar. There is no discernable difference in the quality and safety of solar installations overseas relative to the U.S.

…There are no tariffs on imported hardware in Australia because it’s obvious to all that the jobs in solar are in sales and installation, not in manufacturing. That’s another 21 cents per watt in the Australians’ pocket — and a thousand dollars back into the economy per system sold.

And because solar is so much cheaper, as well as faster and easier to buy, it’s also much cheaper, faster and easier to sell. Acquisition costs in Australia average $400 per installed customer, compared to $2,500 in the U.S.

At lower cost and without the two- to six-month wait time and all of the permitting complexity, cancellation rates are minimal, compared to an average of about 30 percent for reputable U.S. companies. How many other electronics purchases do you know of that take up to half a year to be installed? That’s another 42 cents per watt of lower solar costs.

From Andrew Birch, there is much more at the link, read it and weep.  Via Felix Yates.

1 Bryce January 10, 2018 at 1:33 am

“…let’s look at Australia, where nearly 2 million solar systems have been successfully and safely installed.”

Does that make Australia… a galaxy?

2 clockwork_prior January 10, 2018 at 1:40 am

“A long time ago in a galaxy far, far away….”

Because as so many commenters here point out, rooftop solar is just a complete waste of time and money except in science fiction fantasies.

3 Borjigid January 10, 2018 at 8:17 am


4 mickslam January 10, 2018 at 10:51 am

Rooftop solar really is a waste. Not only that, home solar is hugely ugly.

In less than 10 years, utility solar/wind will be so inexpensive, people will be paying money to remove ugly solar panels from their house.

Are there any other utilities that we deliberately make visible on our homes? Plumbing? HVAC?

Not only that, most people live in urban areas. Rooftop solar doesn’t work in most cities, certainly not in Chicagoland or New York.

Rooftop solar is not a solution that could possibly work for most people.

5 Floccina January 10, 2018 at 11:16 am

I think this is correct. it will be a long time before all that is needed for home solar is reliable enough to that it’s better to do on home rooftops owned by the home owner than at or near the electric company owned by the electric company.

6 Floccina January 10, 2018 at 11:22 am

Modern cars are incredibly reliable but it tool a long time to get there.

7 JWatts January 10, 2018 at 11:34 am

It’s not really about reliability as it is about cost. It’s expensive to place solar panels on a roof and imposes significant future costs. Houses have to be re-roofed every 15-30 years. It’s just far easier and cheaper to put the solar panels in open fields.

8 Steve Sailer January 11, 2018 at 3:15 am

I’ve got ten years left on my roof’s 25 year warranty. It’s been 100% waterproof so far. Would having guys drill holes in it to attach solar panels void the warranty and/or open it up to leaks?

9 lxm January 11, 2018 at 3:16 pm

“…home solar is hugely ugly….”

So are garages.

But we overlook the ugliness of garages because of their utility. So maybe ugliness is not the right parameter to use to judge the usefulness of rooftop solar. Maybe utility is the correct parameter, that is how useful are solar panels on your roof. Maybe that is the question to be answered. And not what they look like. If you judge solar by what they look like rather than their utility then one can only wonder about how sound your judgement is about anything.

The last time, a few years ago, when I looked into solar for my rooftop, my investment would have paid for itself in about 10 years. After that I would have been making money on it. If I also installed a battery my neighbors would all have been knocking on my door when the local utility failed to provide us electricity which it does all too often. Now I didn’t install the solar panels because my roof still had maybe 8-10 years of life left in it and I just wasn’t ready. And, now several years later, I am not sure if the same rebates exist as existed then.

And, of course, I would have had to argue with my local Property Owners Association that ugliness was not a very practical standard because that is their argument against solar. Ugliness appears to be a standard argument against solar panels. And ugliness is not a very economic or practical standard.

Today solar is even cheaper and you can even get solar shingles which look like regular roofs. I do not know how well these roofs work but they certainly make the ugliness argument go away. And then we get to the real objections to rooftop solar: Rooftop solar for all its benefits, primarily that it makes our vulnerable power grid less vulnerable, is a big, big change and many people cannot handle it.

Like you.

10 Chip January 10, 2018 at 1:39 am

Large swathes of Australia have also suffered blackouts due to a badly managed transition to renewables, while electricity prices have soared in recent years.

And I suspect it’s those prices that really explain why Australia has more installations. High Australian solar subsidies (which are now being fazed out) coupled with much higher prices for energy in general, make solar more financially attractive than in the US.

11 carlospln January 10, 2018 at 1:47 am

Australia has gone from the cheapest energy prices on Earth [electricity, gas] to the most expensive [early ’90’s -> 2018]

Two levels of government [federal, States] and the National Electricity Market regulator have done one heck of a job.

12 clockwork_prior January 10, 2018 at 2:00 am

Fascinating – ‘While former prime minister Tony Abbott once boasted that abolishing the carbon tax would provide instant relief from rising power prices, the impact was short lived with prices now higher than they have ever been in all cities except in Hobart, Darwin and Melbourne.

Power prices jumped on July 1 after three major retailers announced increases of up to 20 per cent and $600 a year for the average customer in some states.’

The article also lists increasing market concentration among utilities, Australian gas exports, and it appears as if investment will be required regardless – ‘But he said the country’s coal fleet was old and coming to the end of its design life, with about 68 per cent of existing coal generating plants reaching 50 years of age by 2035.’ http://www.news.com.au/finance/money/costs/the-real-reasons-why-our-power-prices-are-going-up/news-story/c61b12ecd56001bfbcd2b9f45c581d7b

13 Tom T. January 10, 2018 at 8:29 am

German energy prices have spiked as well, coincident with its heavy shift to renewables. Managing the fluctuation in production is apparently quite expensive.

14 We live in interesting times January 10, 2018 at 12:09 pm

Merkel also pushed back the 2020 carbon dioxide goal.

15 Chip January 10, 2018 at 1:23 pm

With blackouts as a bonus. It’s really quite incredible.

Even as the modern world hurtles along with amazing gains in wealth and technology, there are governments that have doubled the cost of energy while making that energy unreliable.

And hardly anyone says stop.

16 clockwork_prior January 10, 2018 at 1:49 am

Links please.

Especially as this event is not an example – ‘The South Australian blackout of 2016 was a widespread power outage in South Australia that occurred as a result of storm damage to electricity transmission infrastructure on 28 September 2016. The cascading failure of the electricity transmission network resulted in almost the entire state losing its electricity supply.’ https://en.wikipedia.org/wiki/2016_South_Australian_blackout

A dozen years ago, when this occurred in Europe, a certain style of media reporting blamed German windpower, though it had nothing to with what actually happened – ‘The cause of this major blackout was a planned routine disconnection of the Ems powerline crossing in Northwest Germany to allow a ship to pass beneath the overhead cables. In September, the shipyard had requested the lines, called Conneforde–Diele red and white, to be shut off starting at 01:00 on 5 November. This change was communicated to the neighboring TSOs and they did simulations to ensure stability. As a result, the planned power flow between TSOs was decreased for 00:00 to 06:00 5 November. On 3 November, the shipyard requested the shut-off to be advanced to 2200 on 4 November. E.ON Netz thought that this would be more favorable and approved the request. However, this change was not communicated to the neighboring TSOs until very late so a full analysis was not done. Also, the transfer capacity had already been sold and it was not possible to change it except for force majeure.’ https://en.wikipedia.org/wiki/2006_European_blackout

17 Chip January 10, 2018 at 1:18 pm

You spend too much time writing and not enough time reading. The wiki link you provided discusses the reason for the failure – faulty software settings at wind farms.

The official study of the blackout said the same.

“Overly sensitive protection mechanisms in some South Australian wind farms are to blame for the catastrophic statewide blackout in September last year, the Australian Energy Market Operator (AEMO) says.”

As I said, it was a badly managed transition to renewables.

18 clockwork_prior January 10, 2018 at 2:27 pm

‘You spend too much time writing and not enough time reading.’

So, here is the sequence of events from that wikipedia article – ‘The weather had resulted in localised power outages throughout the day and by around 3:50 p.m. local time, almost the entire state power grid had been cut out. Early indications were that as the transmission lines in the Mid North failed due to damaged pylons, the automatic safety features in the network isolated the generators to protect both the generation facilities and the end consumers’ equipment. Over a short period, this resulted in most of the state’s distribution network being powered down as the transmission network acted to protect the infrastructure.’

With that as background, this becomes relevant – ‘One second later (7 seconds before the state went dark), the Hallett Wind Farm reduced output by 123 MW. Four seconds later, a third 275 kV transmission line showed a fault, the Davenport – Mount Lock is on the other side of the same towers as Davenport–Belalie, and the fault was estimated to be 1 km (0.62 mi) further on. The damaged power lines caused 5-6 voltage glitches which stressed the ride-through capability of most of the wind farm capacity, causing 9 of them to shut down:[10] Finally, all within one second, the Hornsdale Wind Farm reduced output by 86 MW, Snowtown Wind Farm reduced output by 106MW, the Heywood interconnector flow increased to over 850 MW and both of its circuits tripped out due to the overload. Supply was then lost to the entire South Australian region of the National Electricity Market, as the Torrens Island Power Station, Ladbroke Grove Power Station, Murraylink interconnector and all remaining wind farms tripped.

The preliminary report from the Australian Energy Market Operator (AEMO) identified that problems started 90 seconds before the eventual failure. The first line to trip was a 66 kV line near Adelaide, and it was automatically reset. The first major fault was 47 seconds later when two phases of the 275 kV line between Brinkworth and Templers grounded. The Davenport–Belalie line tripped with one phase to ground, was automatically reset, but tripped again nine seconds later, so was isolated for manual inspection, with the fault estimated to be 42 km (26 mi) from Davenport. ”

Basically, a major storm stressed the system(s) to the breaking point. And afterwards, measures were taken to avoid such problems in the future, as software tends to be fairly easy to update. This is how one gains experience during a transition. Though as an American example shows, having 90 days worth of fuel on hand and not having windpower involved is no guarantee against bad weather – ‘Perry had argued that coal and nuclear power plants would fare better in extreme weather such as the polar vortex that gripped large parts of the nation just four years ago. Yet opponents of Perry’s plan said the current bout of extreme cold undercut Perry’s argument as regional grids had excess power on hand and many power plants switched from natural gas to oil largely because of cheaper prices. One of the few major outages was the result of a failed transmission line that took a New England nuclear plant offline.’ https://www.washingtonpost.com/news/energy-environment/wp/2018/01/08/trump-appointed-regulators-reject-plan-to-rescue-coal-and-nuclear-plants/

19 clockwork_prior January 10, 2018 at 2:39 pm

Shorter summary – bad weather caused an electrical grid to fail. As happens regularly, regardless of how electricity fed into the is generated.

20 Hamish McKinnon January 12, 2018 at 10:24 am

As an Australian, I can attest that it was a major storm that crippled SA’s power. Many right wing politicians and anti-renewable groups were quick to blame South Australia’s unusually high reliance on renewables, but were incorrect. After this disaster, Elon Musk provided what I believe to be the world’s largest Li-Ion battery in SA as a backup system in case this happens again. Now, the state has one of the most advanced and reliable electricity systems the world over.

21 MikeW January 10, 2018 at 8:04 am

“… make solar more financially attractive than in the US.”

That’s the big missing piece from the linked article. With Australia’s average electricity cost double that of the U.S., and the insolation (sunny hours-per-day) of Australian homes much higher than the average American home, maybe it just makes more financial sense for an Aussie homeowner to install solar.

Even if total U.S. installation costs-per-watt were brought down to Australia levels, I’m skeptical I could ever justify the cost of a home solar system here in cloudy Illinois, where I pay 10 cents per kilowatt-hour.

22 Mulp January 10, 2018 at 10:09 am

Can you justify roofing that lasts longer than ten years?

Average ownership tenure is less than ten years for single family homes. Why pay for roof when you will not benefit?

23 TMC January 10, 2018 at 10:46 am

Most people sell the house when they move. Oddly, the new people like roofs.

24 mickslam January 10, 2018 at 10:54 am

The studies have been done. Most people in Chicagoland can’t have rooftop solar. This is already known.

Even if I pull a Mr. T and cut down all the trees on my property, I still can’t get enough Sq. Ft to justify a solar installation, and I live in the burbs.

25 Mark Bahner January 10, 2018 at 11:07 pm

“Even if total U.S. installation costs-per-watt were brought down to Australia levels. I’m skeptical I could ever justify the cost of a home solar system here in cloudy Illinois, where I pay 10 cents per kilowatt-hour.”

If the installed cost of the entire system was equal to $1.34 per peak AC watt, you would almost certainly be generating electricity at less than 10 cents per kilowatt-hour. I’m too lazy to do the exact calculations myself, but here’s a DOE site that makes it clear you could generate electricity at less than 10 cents per kilowatt-hour if you could get the entire system cost down to $1.34 per peak AC watt:


Now, maybe it still wouldn’t be *enough* below 10 cents per kilowatt-hour and *enough* electricity for you to want to do it, but it would be below 10 cents/kWh.

26 Careless January 11, 2018 at 4:59 pm

This is not a source that says anything but a brief and irrelevant press release. Wrong link?

Anyway, it’s January 11th in Illinois. Solar energy is something like 20% at noon of what it is at noon in summer and the day is half as long.

27 Smith UndWesson January 10, 2018 at 2:27 am

Guns were also banned in the Jewish Concentration Camps, which is why they had such good infrastructure and universal health care. In fact, the infrastructure of the gas chambers was so good that it outpaced the health care, leading to no longer needing any health care . . .

28 Bill Kilgore January 10, 2018 at 2:36 am

In fairness to prior- it’s been a couple of decades since the Germans wiped out tens of millions of people. Surely the fact that the next time they go for it, their targets will be nearly completely disarmed should be a badge of pride for any reasonable person.

On the flip side, US subways cost too much to build. This effectively eliminates the virtue of not having tried to eliminate entire cultures of people.

29 clockwork_prior January 10, 2018 at 3:25 am

‘Surely the fact that the next time they go for it’

Will first involve repealing the laws that ban Nazi propaganda and symbols in Germany – including using them online. No slippery slope in Germany when it comes to not allowing people to call for genocide again, after all. Particularly as no one is letting Germans forget what what they did more than two generations ago.

30 clockwork_prior January 10, 2018 at 3:19 am

‘Guns were also banned in the Jewish Concentration Camps’

Not for the SS – you do know your history, right? Especially considering that they were Nazi concentration camps, not Jewish ones.

31 Peter Akuleyev January 10, 2018 at 7:15 am

With all due respect, the “Nazi gun control caused the Holocaust” argument is one of the stupidest arguments ever made. Nearly a million Jews actually had plenty of weapons – because they were fighting in the Polish Army, the French Army, or the Soviet Army. The Germans just killed the people with guns, and then came for the rest. Germans didn’t just drag away unarmed Jews who were shocked and surprised to suddenly find armed Germans at their door. For the most part Germans destroyed resistance the old fashioned way, by conquering territory and shooting down armed defenders, killing and torturing the families of people who did try to take up arms and starving civilians into submission. World War II, like most of history, shows how futile armed militias or armed individual resistance is against a better organized, better trained and more determined opponent.

32 Candide III January 10, 2018 at 3:31 am

> it’s obvious to all that the jobs in solar are in sales and installation, not in manufacturing
And in regulation! Where does Mr. Birch think those two extra bucks go, to Australia? Given that American overhead is four times as large as Australian overhead, solar will be as successful as a jobs program (with solar capacity utilization factors being what they are, and the requirement for storage tacked on, solar doesn’t make sense otherwise, see e.g. https://wattsupwiththat.com/2016/04/01/a-solar-power-plant-vs-a-natural-gas-power-plant-capital-cost-apples-to-apples/) in America with an installed capacity the quarter of Australian. Moreover, it will have achieved this result with less impact on trade balance with China per watt, and the jobs created by American solar are better-paid jobs for college graduates.

33 Aristophanes January 10, 2018 at 4:21 am

Australian here, currently living in the US. Since I’ve moved here, it’s become rather apparent that the US has a lot more costly over-regulation and other government-produced inefficiencies than Australia does. Complicated permitting requirements, occupational licensing rules that reduce competition, laws that reduce individual employee flexibility, and so forth. To limit myself to one example, at one point I wanted to get some electrical work done at home, but an arcane and poorly designed feature of the residential electrical code meant that the most sensible (and safety-improving!) option was illegal, so either we had to spend a huge amount of money on a silly work-around, or make do with an unappealing status quo.

Strangely enough, in Australia the common narrative given by the mainstream press is that the US has an extremely laissez-faire free market economy desperately needing more regulation to protect “the little guy” from pernicious business interests. At least in my corner of the US, that couldn’t be further from the truth.

34 Ray Lopez January 10, 2018 at 6:01 am

You are correct, in that the USA is moving towards the rest of the world in bureaucracy.

Bonus trivia: most solar energy produced by small scale producers and sold to utilities is subsidized by taxpayers. In Greece, I know a few ‘farmer Fred-opolos’ types in the mountains who got rich from EU subsidies to build solar panels, then sold the energy produced to the utility company, until the Greek state/EU cracked down. Still Greece, like the Philippines, produces relatively little ‘green power’, which is more expensive than fossil fuel electricity (especially coal, they even have a dirty coal electric plant in Lhasa, Tibet when I visited, polluting the rarefied air).

“In days when men were men (And you should have seen us then)”- Aristophanes, ‘The Frogs’

35 RW Force January 10, 2018 at 6:06 pm

You’ll be happy to hear that the plant in Lhasa has been converted to natural gas. Blue skies when I was there in November. http://www.industryabout.com/country-territories-3/1705-china/fossil-fuels-energy/33323-dongga-gas-power-plant

36 edgar January 10, 2018 at 11:48 am

Thank you very much for your comment. It is always useful to get a fresh perspective from outside. Australia’s long history of meaningful regulatory reform efforts continues to the present and should be a justifiable source of pride for Australians and would serve as an excellent model for the USA: https://www.oecd.org/gov/regulatory-policy/49090946.pdf

37 chuck martel January 10, 2018 at 6:04 am

And the winner in the battle for most pervasive bureaucracy is?

38 We live in interesting times January 10, 2018 at 12:14 pm



Property Values?

39 dearieme January 10, 2018 at 6:54 am

“Australia … where guns have been more or less banned.” Except that they haven’t if the Wikipedia page is any guide.

Why do so many Americans simply lie about guns laws elsewhere? What shortcomings of character drive this activity? Is it indulged in by both the gun loonies and the anti-gun loonies? Do even the sane lie on this subject too?

40 rayward January 10, 2018 at 6:57 am

What Cowen omits is who is behind the burdensome regulation. From the linked article: “Despite our entering the new year saddled with a protectionist federal government focused on prolonging outdated and uncompetitive combustion technology, the good news is that state and city policy dominates the solar opportunity.” “Combustion technology”? Who might that be? .

41 P Burgos January 10, 2018 at 9:48 am

Um, it looks like like municipalities are behind the most burdensome parts of the regulation. “The figure below highlights the relative mass of valueless work required to satisfy current city-level bureaucracy in the U.S., which adds between two and six months to delivery time and 47 cents per watt of cost directly to the installed system,” and “because solar is so much cheaper, as well as faster and easier to buy, it’s also much cheaper, faster and easier to sell. Acquisition costs in Australia average $400 per installed customer, compared to $2,500 in the U.S.” Granted the whole “U.S. National Electrical Code dictates a best practice that more than doubles the installation time relative to Australia, and adds incremental hardware expense — together adding 49 cents per watt to the cost of solar. There is no discernable difference in the quality and safety of solar installations overseas relative to the U.S.” thing may well be the work of industries invested in fossil fuels (and possibly electricians? They do have unions), it looks like it is mostly just another storing of zoning and NIMBYism in the US, which shouldn’t be at all surprising to anyone living in the US. Getting permits for making any sort of changes to your property in the US is a confusing, time consuming process, and if you are paying someone else to do so on your behalf, that time and expertise costs money.

42 lbc January 10, 2018 at 8:07 am

yes, the US is a protectionist country. we knew that already.

43 clockwork_prior January 10, 2018 at 9:43 am

Burnished to the sort of glossy sheen in which DeLong basks, seeing only his own perfected reflection.

44 Tom T. January 10, 2018 at 8:25 am

prior usually makes at least a nominal effort to tie his pre-written comment to the topic at hand, but not today. He must have been getting frustrated that this one had been sitting in his queue for a long time with no opportunity to use it.

45 QuillGordon January 10, 2018 at 8:40 am

One of the main drivers of the over-regulation is the firefighting community who advocates for things like rapid shutdown of the modules to kill electrical signals on the roof if firefighters need to go up during a fire. This essentially eliminates centralized string inverters and forces the adoption of micro-inverters or optimizers which are per-module electronics, and more expensive, harder to replace and less reliable (at least currently). Rapid shutodown is not a crazy idea but wouldn’t pass any kind of cost/benefit analysis. Another driver is AHJs (authorities having jurisdiction) like LA County. These entities don’t neccessarily think in a cost/beneift way and overregulate safety of rooftop PV systems in several ways, both electrical and structural (mounting systems), as well as permitting and inspections. A further driver are trades (roofing, electrical contractors) who don’t want to see home-owners doing the install work themselves. There is an unholy feedback loop between AHJs, trades, standards organizations like UL, and code devleopment bodies. Some utilities make things slower and more expensive than necessary. The final result is that a system that costs $4/watt installed, where realistically $2.00/watt is about right. The components now cost about $1.50/watt.

46 hoonose January 10, 2018 at 9:53 am

I have 2 central inverters and they specifically shut it all down instantly will a local grid outage. This is tested as part of the necessary permitting process for grid tied systems.

In order to benefit from tax and utility credits, your solar system needs to meet certain criteria. Including tilt, orientation to south, and avoidance of shade. I don’t see how this can be avoided without a permitting/inspection process.

I had a friend complain about someone installing solar between him and our lake, obstructing his view. It was obvious to me that the panels were not properly oriented, and they soon came down.

47 ʕ•ᴥ•ʔ January 10, 2018 at 10:46 am


“In order to benefit from tax and utility credits, your solar system needs to meet certain criteria. Including tilt, orientation to south, and avoidance of shade. I don’t see how this can be avoided without a permitting/inspection process.”

I would prefer a more free market approach, using a carbon tax rather than energy subsidies of any kind, but given subsidies, they have to make sure installations are not scams.

48 QuillGordon January 10, 2018 at 12:39 pm

Your central (string) inverters will not comply with NEC 2017 for new installations if it is a roof mounted system. Rapid shutdown is a different requirement than anti-islanding which is what you are describing. I just bought a string inverter for a barn installation in Colorado. Since they have adopted NEC 2017, the electrical inspector would not approve it.

49 hoonose January 10, 2018 at 6:57 pm

I can only hope that I’m grandfathered.

Integrated inverters were uncommon when I installed, but I’d rather have gone that way since they are guaranteed along with the panel. 20-25 years. My 2 inverters have only a 10 year warranty. This fall one gave some error and they replaced it, about 9 y/o. The other checked out fine but they gave me a new cover and read out panel for it.

50 Transnational Pants Machine January 10, 2018 at 8:58 am

In my part of the US, any evil corporation that installs a solar system is given a barrel of taxpayer money to the tune of about $2000. Curiously, any installed system costs about two thousand dollars more than it should.

It’s completely baffling. I don’t know if anyone here studies economics, but if you know someone who does, perhaps you could ask them to look into this.

And calm down, I was kidding about the “evil”! It’s only non-solar corporations that are evil, obviously. The ones that sell solar are pure as the driven snow!!

51 Jonathan January 10, 2018 at 9:27 am

And that driven snow is highly reflective!

52 Scoop January 10, 2018 at 9:16 am

And in many cases the added costs continue forever. Municipalities typically raise the tax value of your home by the cost of any improvements. Where I live, a $21,000 solar installation would cost me $400 more in annual property taxes than a $7,000 solar installation.

53 hoonose January 10, 2018 at 9:48 am

In AZ home solar is specifically not included in home tax assessment.

54 Mulp January 10, 2018 at 10:24 am

A three times capacity system has three times the value.

Property is assessed on value, not the price paid.

Market price is used to celebrate value metrics.

It would be absurd if a ten year old solar system that cost $20k is valued at twice a new $10k system with twice the power output.

55 Scoop January 10, 2018 at 11:35 am

The point was that the regulations that tripled the price of a solar installation (without increasing the output at all) would indeed triple the tax impact.

You’re right that this shouldn’t be true in theory because the same amount of solar power should increase the selling value of your home by the same amount, regardless of what it cost to install. And your taxes should reflect sale value.

But calculating actual added value is hard, so the township just adds whatever you paid. Thus, if you stupidly choose a bad vendor, you not only pay too much for your solar but you keep paying more every year.

56 Dino January 10, 2018 at 9:32 am

It’s awfully difficult for me to take seriously any piece that starts with the proposition that regulation and tariffs are “un-American,” what with the regulation of commerce and the power to levy taxes on imports written into the republic’s founding document. And the individual states’ power to regulate pretty much anything within their own borders has always been even more expansive than federal power to do so.

57 Anonymous January 10, 2018 at 2:21 pm

So literally anything allowed by law is “American”?

58 albigensian January 10, 2018 at 10:15 am

Electrical safety regulation in the USA can be both too lax and too strict

It’s hardly uncommon for homeownders to do their own electrical work even if permits are supposedly required since, if it’s inside, who’s going to know? And sometimes such work is done well but it can be very bad indeed. At least, I’ve come across more than a few horrors in the suburban houses I’ve owned; for example, supplying power to a duplex outlet via 18 AWG lamp cord hidden above ceiling tiles.

And on the other side, some cities still require rigid conduit everywhere, presumably to protect the union labor that usually installs it.

And then there are all the no-name electrical outlets, switches, etc. found everywhere in home improvement stores. Most countries require these to meet national standards before they may be offered for sale, but the USA does not. Often the quality of these is abysmal.

In any case, rooftop photovoltaics do present some unique hazards, one of which is the difficulty in disconnecting it if/when there’s a problem. When power is entirely from the utility, one can be reasonably sure power is off when this is disconnected. With solar, the PV cells may continue feeding power into a fire if there’s a fault in the rooftop wiring and there’s sun on the PVs; further, the battery storage and power inverter will back-feed the system if these are not disconnected, and the disconnection point may be difficult to access in a fire or badly implemented (such as not having a single, easily operated disconnect).

On the other side, government subsidies for residential solar installations often require the homeowner to use a solar-approved contractor, and this requirement seems to go beyond insuring a safe installation toward political payback directed toward politically connected contractors.

There is, I think, concern that narrowly directed government subsidies tend to be immortal, as those who receive them care a great deal to maintain them while those who pay form a much larger group, and thus the cost is spread over a much larger population, who are thus less likely to care much about ridding themselves of the subsidy. This seems a particular concern when establishing “temporary” policies which (for example) require utilities to pay retail price for solar power whenever a homeowner wishes to sell it (aka “net metering”), along with inadequate compensation to the utility for providing backup power.

59 JWatts January 10, 2018 at 11:06 am

“And then there are all the no-name electrical outlets, switches, etc. found everywhere in home improvement stores. Most countries require these to meet national standards before they may be offered for sale, but the USA does not. Often the quality of these is abysmal.”

Even the cheapest plugs are UL listed. (example: $0.38 wall outlet)


60 Sigivald January 10, 2018 at 5:50 pm

You’re both sort of right on that.

No Big Box will sell you electrical components (like that) that aren’t UL listed, in practice.

But no law (that I know of) requires this; it’s just that contractors won’t buy non-listed stuff because inspectors will reject their work, and small contractors are the real customers of places like Home Depot, honestly.

NEC requires installed equipment be either inspected and approved by the local governing body or be approved/listed/labeled by an appropriate testing body, of which UL is one. I don’t believe NEC mandates that only NEC-pre-approved stuff can be sold, however, since it explicitly offers detailed inspection and local approval as acceptable for using anything.

61 QuillGordon January 10, 2018 at 10:38 pm

You are correct sir. In practice only listed stuff hits the market due to AHJs (authorities having jursidiuction), inspections and building codes requring it. Also interestingly, UL started as a testing lab for insurance companies.

62 fastdave January 10, 2018 at 2:14 pm

“And on the other side, some cities still require rigid conduit everywhere, presumably to protect the union labor that usually installs it.”

There are practical reasons for this. Go to any (Northeast) city with rowhomes and look at how the electrical service comes into the building. Any building with “rubber conduit tacked tacked to walls” will show different levels of degradation unless it is brand new. Worst case scenario, which is depressingly common, is the jacket cracks or rips and the bundled aluminum or copper starts to become exposed. Rigid conduit can also be PVC (depending on some circumstances) which is dirt cheap and easy to install (no bends in the field). There are parts of the code and then there are industry standards which evolve with knowledge and technology and then there is good old logic. Sometimes things hit all three points with no ulterior motive.

63 Crikey January 12, 2018 at 7:15 pm

The flexible conduit used to house solar system cables in Australia is not made out of rubber. That would not survive.

64 Dylan January 10, 2018 at 10:54 am

Individual solar should probably be banned for reasons of economic efficiency and distributive fairness. Individual solar cost shifts the regulated capital cost recovery of existing transmission and generation infrastructure to those ratepayers who do not have solar, raising their costs equal to the cost savings of the individual solar owners. The rich buy solar panels to save money and feel good, the poor pay more for the overall infrastructure.

Utilities still have to provide full service to those with solar panels, so the transmission/distribution network doesn’t shrink, and since most usage peaks are around and after dusk, necessary generation capacity is barely affected by solar production during the day. You can get some capacity savings by selling surplus solar generation east, which is why CAISO is expanding their energy imbalance market to neighboring regions in an effort to dump their excess solar/wind on their neighbors, but there are limits to this.

65 ʕ•ᴥ•ʔ January 10, 2018 at 11:14 am

Home solar is inefficient, and I am not really sure why we have it. It is possible that the subsidy authors were bad engineers, or it is possible that given path dependence, this was the option they had.

The richest houses, with pool and A/C are the biggest daily customers, and here is a way to offset them, without reinventing the grid.

Poor houses are low load customers and can ignore this, while benefiting a bit from fewer heat wave brown-outs.

66 Sigivald January 10, 2018 at 5:40 pm

We have it because hippies like to think they’re personally doing something about something they can’t personally do anything about.

It’s pure posturing or virtue signaling or both.

(If someone is serious about, say, CO2 emissions or fossil fuel use, they should lobby for nuclear power plants, not cover their house in PV cells…

But that’s Scary and also it doesn’t feel as satisfying and personal…)

67 Mark Bahner January 10, 2018 at 6:28 pm

“If someone is serious about, say, CO2 emissions or fossil fuel use, they should lobby for nuclear power plants,…”

In light of events at V.C. Summer and Vogtle, lobbying for nuclear power plants doesn’t seem like a good idea.


68 hoonose January 10, 2018 at 7:03 pm

I hear you. I hate to give tax credits to rich folks. They don’t pay enough tax as it is.


69 MarkB January 10, 2018 at 11:33 am

Once more, a writer is proclaiming the low cost of solar without mentioning the subsidies. I wouldn’t trust such people as far as I could throw them, if they had a bad of bricks on their backs.

70 Sigivald January 10, 2018 at 1:13 pm

Australia is also ~15 degrees closer to the equator than the United States is [close enough for the point], making solar power more efficient there because of physics.

71 Ray Lopez January 10, 2018 at 1:24 pm

Also Australia does not matter, for Hubbert Peak Oil purposes, since the entire population is something like 25 million, about the size of Greater NY or LA.

Bonus trivia: *Net* Hubbert Peak curves show that oil started declining (the wrong side of the curve) at about the time of the Dot com bust and the Great Recession. Coincidence? I think not, recall how oil shot up just before the Great Recession. Net Hubbert Peak accounts for the fact it’s more energy intensive to get the remaining oil/gas out of the ground (and that includes fracking). By 2025 the world will have as much oil/gas as it had in 1980, and with bigger populations. Can Hubbert’s Peak explain the Great Stagnation? FUEL for thought!

72 Sigivald January 10, 2018 at 5:38 pm

… given that I wasn’t talking about Peak Oil blather, but solar power, that is utterly irrelevant to a goddamn thing I said.

73 carlospln January 11, 2018 at 1:38 am

“Also Australia does not matter, for Hubbert Peak Oil purposes”

So you’ve transformed yourself from a pederast to a judge?

For your next trick, maybe you can challenge yourself to write clearly-your second para is a howler.

74 Axa January 10, 2018 at 7:30 pm

In any rich country labor is more expensive than hardware. This is good indeed.

For a budget where hardware is more expensive than labor, go to emerging economies and figure why…

75 Crikey January 11, 2018 at 7:28 am

Rooftop solar supplies about 3.5% of Australia’s electricity consumption. The state of South Australia had high electricity prices and people responded to this by installing more rooftop solar than the rest of the country. Around 8% of the electricity generated in South Australia is from rooftop solar. Today at about 11 am it meeting 22% of the state’s power demand. At around noon on Christmas day it was 45%. The record so far is about 48%.

In Australia subsidies combined with high retail electricity prices meant that people could save money by installing rooftop solar. As a result the industry has seen a lot of competition on price in order to appeal to people who want to save money. The lower income half of Australia has installed more solar systems than the higher income half.

As the cost of rooftop solar falls in the US it should take off their as well as it becomes increasingly cost effective, although permitting might need to be simplified.

Comments on this entry are closed.

Previous post:

Next post: