Rooftop solar – Part 1: Reality check

Almost all environmentally conscious people love solar power and would gladly host a few shiny panels on their roofs. Indeed, from an ideological viewpoint, it is hard to find anything more attractive than the promise of abundant clean energy offered by solar power. However, even though rooftop solar can be a good way in which to reduce your personal carbon footprint, it is important to remain objective about the potential of this technology.

Given the enormous amount of positive press that has surrounded solar power over the past decade or so, one would think that it is taking over. The reality is, however, that solar power contributed only 0.17% of global energy in 2012 (BP Statistical Review). Despite rapid growth, solar remains a tiny energy source (about a tenth of the thin orange slither in the figure below).

Global primary energy by source

Yes, it is certainly true that the cost of solar panels has been coming down very impressively for many years now. In fact, the panels themselves are now mostly less expensive than all the other equipment and labour required to establish a working solar power installation. However, the graphic below from the International Renewable Energy Agency clearly shows that solar power remains substantially more expensive than all other sources.

Renewable energy prices IRENA

Residential rooftop solar panels are the most expensive kind of solar power available. These installations cannot benefit from economies of scale, are often installed at non-ideal angles to the sun and also present practical challenges stemming from the simple facts that a slanted roof presents a difficult working environment and that every roof is different.

Solar advocates would claim that rooftop solar in some locations is now cheaper than grid electricity (e.g. the picture below). Unfortunately, it is incorrect to value solar power at retail prices which include the cost of fuel, powerplant infrastructure, powerplant operation and maintenance, and electricity transmission and distribution. In very hot regions where solar power coincides well with maximum electricity demand from air conditioning, solar power can potentially defer investment in future power infrastructure, but in most locations, the only major cost avoided by rooftop solar power is the fuel that is burned in power plants. This cost is typically around $0.04/kWh, implying that the cost of rooftop solar in most locations remains 5-10 times greater than the cost it avoids.


Of course, if you use solar power to go completely off-grid, you can fairly claim that solar power has displaced the entire retail cost of electricity. Unfortunately, off-grid systems are much more expensive than grid-tied systems because they include batteries. Living completely off-grid also requires lifestyle changes than very few people in our modern society will be able to make.

It is therefore clear that large-scale deployment of rooftop solar will be a very expensive business. If all of these costs are carried by the environmentally conscious person installing the panels, this would not be a problem, but the reality is that the wide range of incentives for solar PV is socializing these costs in a highly unsustainable manner. For example, Germany is currently in a position where generous solar PV subsidies is creating a rather perverse wealth transfer from poor people who spend a substantial portion of their disposable income on energy to rich people who can afford the initial solar PV capital investment.

One should therefore carefully consider any decision to install rooftop solar. The next post will go into a little more detail on when rooftop solar can be a good idea.

Filed under: Consumption patterns – The green economy

PS: Those with a more technical interest in intermittent renewables such as solar PV and wind can check out the articles on this page. Most of these articles are also published on the popular energy discussion forum, The Energy Collective, where they have been discussed by a wide range of energy enthusiasts. More specifically, a good scientific overview of the potential of rooftop solar in one of the most ideal countries, Australia, can be viewed here

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