Solar panel

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Is it time to go Solar?

English: Solar panel installation at an inform...

Solar panel installation (Photo credit: Wikipedia)

We’re all about self-sufficiency and sustainability.  But, for those who don’t have money to burn, sustainability must first be applied at the individual, economic  level, avoiding debt, paying as you go, using resources wisely and demanding a good return on invested funds.   With PV panel prices over $1/watt, the ROI simply isn’t there.   And . . . when outgo exceeds income, it’s simply not sustainable.

Here is a good industry article indicating that solar panel manufacturers will go through a major consolidation this year. Shorthand:  It may finally be a good time to invest in renewable, solar energy if other fundamentals are in place.

Longhand analysis:

Consolidation is a weeding out of the smaller, less efficient manufacturers in favor of low-cost, high-volume, efficient manufacturers.  The remaining suppliers will benefit from lower supply and less intense pricing pressures.  It remains to be seen whether prices will increase in the aftermath of lower supply.  Prices may continue to decline, despite decreased market pressure, as new, more efficient technologies and manufacturing techniques are developed.  Or, consolidation may signal the bottoming out of PV panel prices. 

There seems to be some improvement in the economy, at least in some sectors.  This could release pent-up demand from homeowners who have been waiting to invest in solar out of fear over a potential job loss or from businesses waiting for better times.  If we have industry consolidation (lower supply) that coincides with higher demand, the remaining suppliers will benefit from even higher economies of scale, resulting in higher profitability and perhaps lower prices as low-cost suppliers further consolidate market-share.

By observing general trends in the silicone based high-tech sector, one could conclude that prices will continue to decline.  That is, unless there is some other major disruption in the supply chain (like war, political upheaval, etc.)  If prices begin to increase post-consolidation, this may trigger more government intervention and subsidization, which could also be an offsetting factor.  But once consolidation has occurred, companies may use subsidies to simply pad their bottom lines, further strengthening their balance sheets and staying power in the market rather than reduce prices.

Achieving self-sufficiency and sustainability is expensive.  Achieving it without bankrupting yourself requires a long-term, plodding approach.  Like Maslow’s heirarchy of needs, (remember that from college psychology or sociology classes?) one does not achieve self-actualization until the more basic needs are covered.  PV solar, is at the top of the pyramid.  Nice to be there, but not doable without a solid foundation.  First, you cover basics like food, water and shelter.  Next is energy in the form of least costly and highest efficiency.  Energy for heat and cooling falls in this category.  Passive solar or bio-mass solutions are a much better alternative.    Never try to provide these using Photo Voltaics.  That would be like trying to survive in a famine on an all-corn-fed-beef diet where it takes 15 pounds of grain to produce one pound of meat.  Inefficient and unsustainable.

Industry consolidation is just one factor to consider in determining when is the right moment to invest in Solar technology.  My sense is that now is a much better time for solar PV than a few years ago.  I’m glad I waited, opting for low-tech, high ROI alternatives in the meantime.  But the question remains, should I wait longer?  The economy looks to be improving in the short term, but the world still looks extremely fragile.  This may be the perfect moment to invest in self-sufficiency, whether it is a modest amount of solar PV or a more secure location on which to place it.

If you would like to become more self-sufficient, off-grid and better prepared, consider the benefits of doing that in a community of like-minded people who will help you get there on a solid foundation.  Inquire here.

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Extreme Consolidation in the Solar PV market expected this year

This is a good industry article indicating that solar panel manufacturers will go through a major consolidation this year.

Consolidation is a weeding out of the smaller, less efficient manufacturers in favor of low-cost, high-volume, efficient manufacturers.  The remaining suppliers will benefit from lower supply and less intense pricing pressures.  It remains to be seen whether, in the aftermath of lower supply, prices will increase.  They may continue to decline, despite decreased pressure on prices, as new, more efficient technologies and manufacturing techniques are developed.  Or, it may signal the bottoming out of PV panel prices.  Also, there does seem to be some improvement in the economy, at least in some sectors.  This could release pent-up demand from people who have been waiting to invest in solar out of fear over a potential job loss.  If we have industry consolidation (lower supply) that coincides with higher demand, the remaining suppliers will benefit from even higher economies of scale, resulting in higher profitability and perhaps lower prices as low-cost suppliers further consolidate market-share.

By observing general trends in the high tech sector based on silicone chips, one could conclude that prices will continue to decline.  That is, unless there is some other major disruption in the supply chain (like war, political upheaval, etc.)  If prices begin to increase post-consolidation, this may trigger more government intervention and subsidization, which could also be an offsetting factor, although generally, once consolidation has occurred, fewer companies may use subsidies to simply pad their bottom lines, further strengthening their balance sheets and staying power in the market rather than reduce prices.

Industry consolidation is just one factor to consider in determining when is the right moment to invest in Solar technology that moves us further in the direction of off-grid self-sufficiency while staying fiscally conservative.  My sense is that now is at least a much better time to invest in solar than a few years ago.  I’m glad I waited.  Cost per KWh is still higher than grid-supplied electricity.  But the question remains, should I wait longer?  The economy looks to be improving in the short term.

I consider small-scale home based Solar PV not for its economic efficiencies, but more for its insurance value. Long-term, the world still looks extremely fragile.  With the short-term improvement in the economy, this may be the perfect moment to invest in self-sufficiency, whether it is a modest amount of solar PV or a more secure location on which to place it.

Achieving self-sufficiency and sustainability without bankrupting yourself requires a long-term, plodding approach.  Like Maslow’s heirarchy of needs, (remember that from college psychology or sociology classes?) one does not achieve self-actualization until the more basic needs are covered.  PV solar, is at the top of the pyramid.  First, you cover basics like food, water, shelter, Next is energy in the form of least costly and highest efficiency.  Energy for heat and cooling falls in this category.  Passive solar or bio-mass solutions are a much better alternative.    Never try to provide these using Photo Voltaics.  That would be like trying to survive in a famine on an all-corn-fed-beef diet where it takes 15 pounds of grain to produce one pound of meat.  Inefficient, unsustainable.