Solar Power - why it's a gimmick for most of you

"Save thousands of dollars a year on your energy bill by installing solar panels" - Stop. Just stop. Thousands?

"Yes, by installing 1 Kw worth of solar panels on your roof you can offset your energy bill by a ridiculous amount every year!" - All I have to do is install a bunch of panels on my roof and I save money?

"Oh yes, by using a grid tie system you sell us back the energy you don't use!"

Solar in and of it's self is not a scam, or a gimmick, or a bad idea whatsoever. It's the above statements that are killing me right now. Let's break this down kindergarten-style.

Solar panels or PV (Photovoltaic) cells capture some of the sun's light spectrum and turn it into DC current (usually 12 volts) which cannot be used by your home electronics.

Kentucky definition: When the sun is shinin' those bad boys make power, but the wrong kind.

DC (Direct Current) is a constant steady flow of electrons that must be converted into AC (Alternating Current) through a device known as an inverter.

Kentucky definition: Run that crap through that little box and the lights in your house come on!

A grid tie system (which is required in our area to sell energy back to the utility company, check your area) is a means by which the solar panels, through the inverter, direct their power into your house where it is consumed - or in the case of a power generation surplus, it is put back into the power grid.

Kentucky definition: The zap-juice makes loop-de-loops and either turn my garage beer-fridge cold, or I make money through electricity magic!

The above statements are all true, including you making money for selling unused energy back to the grid. Here's the flaw in the logic - or the gimmick most utility companies who offer grid tie systems hope you don't find out:

Right now, with solar technology at it's current levels, you are looking to spend just about $1 per watt for a solar panel. The most common size is a 100 watt panel, somewhere in the neighborhood of $100-$120. We used the term Kw earlier (Kilowatt) which is 1000 watts, so every 10 panels at 100 watts = 1 Kw

Each panel needs to be tied together either in parallel (all panels produce the same voltage, but it increases the total amperage available by the array) or in series (each panel adds it's voltage to the total voltage, but the total amperage of the array stays the same)

You then connect the array to the inverter, which converts that raw DC current into a stable sine wave safe for your home electronics. There is an efficiency loss here, but that's a topic for another time.

So now you've spent all this money on panels and an inverter - all that lets you do is plug something in on a sunny day IF it's power requirements are less than what the array can create. If you make a 1 Kw array, in series so that the voltages of all the panels together adds up to 120v, you can safely run something under 1000 watts (again, your actual available wattage won't be 1000 because of efficiency drops - it's just an example) as long as the sun is shining full blast. (No one runs their solar panels in a 120v series, again just an example. The inverter turns your 12v, 24v, sometimes even 48v into 120v power)

So now, while the sun is shining, you are producing 1 Kw of energy. The power company is glad to buy any of that which you aren't using (and at 1 Kw, your house is probably using most of it even when you aren't home unless you have an extremely efficient house with everything unplugged) but at a very low price.

Most power companies charge a lower rate during the day when you aren't home, so of course they will pay a lower rate for your electricity. Now, you come home and turn on the TV... but the sun has gone down, and you didn't spend the insane money on a 12 volt battery bank to save any of your power; you got convinced to sell it back to the grid.

You've entered peak-rate time now, since most people are headed home to do exactly what you are doing: turn on more electrical items. Your solar panels are useless at night, and the money you got from selling your meager bit of excess solar energy did little to offset your peak consumption.

Really, this needs to be a longer conversation, but suffice it to say solar without a battery storage system is not a way for you to save money, even with a government rebate for going green. It would take you FOREVER to pay off your investment, which could be put towards a more lucrative means of passive or near-passive income generation.

My next blog post will go into a little more detail about how you CAN use solar power as a stream of passive revenue, and some of the costs/options associated with it.

My neighbor told me he was getting solar panels. He has my respect, what a power move....

Go on, back to your lives.