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Title: {Mine} Is solar power really economical?
Source: SoSo
URL Source: http://www.northfortynews.com/pvrea ... ommunity-solar-farm-goes-live/
Published: Jan 30, 2015
Author: North Forty News
Post Date: 2015-01-30 17:24:02 by SOSO
Keywords: None
Views: 18713
Comments: 59

Air National Guard couple set to deploy Larimer County’s Senior Tax Work-Off applications accepted starting Feb. 2 PVREA’s second community solar farm goes live By NFN On January 29, 2015 In Dispatches · Add Comment

Poudre Valley Rural Electric Association initiated into production on Jan. 29 the cooperative’s second community solar farm.

The 632 kW Community Solar Farm II, located north of Fort Collins, is generating power for members of PVREA who have purchased panels to offset their electric use. In a partnership with Clean Energy Collective, this project makes two community solar farms for PVREA.

“We recognized the demand for another renewable energy option from our membership, and the overwhelming success and 100 percent sellout of the first solar farm provided us the incentive to establish our second community solar farm,” PVREA CEO Jeff Wadsworth commented.

The cooperative’s first solar farm located at the co-op headquarters is 116 kW powered by 494 solar panels. The second solar farm is more than four times larger with more than 2,200 panels generating 632 kW. Members who are interested have the opportunity to purchase solar panels through Clean Energy Collective. The energy generated from their purchased panels is deducted from their monthly bill.

According to Clean Energy Collective, the average residential member is estimated to see a bill credit of $5 per month per panel and will receive their return of investment in a little over 13 years.

This solar farm adds to the cooperative’s growing renewable energy portfolio, which already includes the cooperative’s first solar farm project, over 160 net-metering applications, the Carter Lake Hydroelectric project and the Green Power Program.

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Begin Trace Mode for Comment # 21.

#1. To: Willie Green, All (#0)

According to Clean Energy Collective, the average residential member is estimated to see a bill credit of $5 per month per panel and will receive their return of investment in a little over 13 years.

Though the article says ROI of over 13 years it appears to be referring to the pay back period. If that is so, a 13 year payback period is not a good (i.e. - competitive) investment at all.

SOSO  posted on  2015-01-30   17:26:21 ET  Reply   Untrace   Trace   Private Reply  


#3. To: SOSO (#1)

If that is so, a 13 year payback period is not a good (i.e. - competitive) investment at all.

It all depends on what you compare it to.
You have to pay for electricity anyway, so a 13 year payback is a helluva lot better than no payback at all.

Willie Green  posted on  2015-01-30   18:36:16 ET  Reply   Untrace   Trace   Private Reply  


#4. To: Willie Green (#3)

You have to pay for electricity anyway, so a 13 year payback is a helluva lot better than no payback at all.

Are you serious? Where did you learn what you know about economics and finance?

SOSO  posted on  2015-01-30   18:49:27 ET  Reply   Untrace   Trace   Private Reply  


#7. To: SOSO (#4)

Where did you learn what you know about economics and finance?

I have an MBA from the Smeal College of Business at Penn State.

Yes I am serious.
"Payback period" is a simplistic metric with severe limitations. But it does have some useful purpose when comparing similar investments... (such as solar farm v wind farm) or the alternative to "do nothing" (i.e. continue paying full price for your electricity)

However, using "payback period" to compare this solar farm investment to (perhaps) investing in a fast food franchise would be somewhat meaningless.

Willie Green  posted on  2015-01-30   19:20:18 ET  Reply   Untrace   Trace   Private Reply  


#9. To: Willie Green (#7)

Yes I am serious.

"Payback period" is a simplistic metric with severe limitations. But it does have some useful purpose when comparing similar investments... (such as solar farm v wind farm) or the alternative to "do nothing" (i.e. continue paying full price for your electricity)

Yes, it is not a cash flow type of analysis but it is a good first indicator of the economics of an investment.

What you fail to understand is that, except for remote locations or specialized service requests, your out-of-pocket investment to obtain power from your local utility is zero, as in no bucks, nada pesos, zippo coin, nothing. The cost of the investment is borne by the utility and the return on that investment is embedded in the rate you pay the utility per kWh.

The cost of installing or buying into a solar installation is a real outflow of cash money from your pocket, over an above the nothing you pay to be hooked up to your utility provider, and which DOES NOT need to be made. But if one chooses to invest one should expect a reasonable return on that investment. For the most part 13 year payout projects are not wise investments, especially if the useful life of that investment may only be 15 years or so (there is some evidence that then useful life of original installed residential type solar installations is less than 15 years).

"However, using "payback period" to compare this solar farm investment to (perhaps) investing in a fast food franchise would be somewhat meaningless."

Please explain why. I would expect a favorable return on any investment that I make. All things equal (including risk assessment), why would anyone choose not to invest in a fast food franchise over the solar farm if the franchise yielded the superior return on my investment?

SOSO  posted on  2015-01-30   20:12:39 ET  Reply   Untrace   Trace   Private Reply  


#15. To: SOSO (#9)

What you fail to understand is that,

If you want a serious discussion, please don't insult me with false assumptions about what I understand.

For the most part 13 year payout projects are not wise investments, especially if the useful life of that investment may only be 15 years or so (there is some evidence that then useful life of original installed residential type solar installations is less than 15 years).

We are not discussing residential installations.
The solar "farm" is designed, built and maintained to the same standards as any other commercial utility. I would expect the economic lifespan of such properly maintained facilities to be between 20 to 30 years... well beyond the 13 year payback period.
It is also a relatively low-risk investment, especially compared to the volatility of fossil fuel powered plants.

Please explain why. I would expect a favorable return on any investment that I make.

Frankly, I don't think that this should even be viewed as an "investment." At least not in the sense that you would invest in stocks or mutual funds and expect to sell at some later date at a higher price. It is more like choosing to "invest" in higher priced LED or compact flourescent light bulbs instead of lower priced incandescents. The flourescents pay for themselves (payback period) because they use less electricity over the same time frame.

So if you're looking for an investment to actually MAKE money, yes by all means, invest in a stock market mutual fund or a fast food franchise or whatever other business venture you choose. But if you're "investing" to SAVE money that you would otherwise be spending as an "expense," then making an "investment" in this windfarm is a legitimate alternative to other methods of obtaining electrical service.

So why would you expect a "return on your investment" when you're actually analying the most cost effective alternative for minimizing your electrical expense?

Willie Green  posted on  2015-01-31   12:11:51 ET  Reply   Untrace   Trace   Private Reply  


#16. To: Willie Green (#15)

Frankly, I don't think that this should even be viewed as an "investment."

And therein lies your problem. You demonstrate the ability to rationalize what you claim to have be educated on merely to serve you ideology. The economic and financial criteria, including risk assessment, for investing doesn't change based on the arena of the invesment.

"I would expect the economic lifespan of such properly maintained facilities to be between 20 to 30 years... I would expect the economic lifespan of such properly maintained facilities to be between 20 to 30 years... "

Of course you would, it fits your ideology. But in the real wold it doesn't fit the facts. Manufactures claim that useful life of inverters is 10-15 years. Most only warrent the full installation for 10 years. The panels themself have a stated expected life of up to 25 years but that is just one component of the system. If used, which is a must if you are going completely off grid, the useful life of batteries is 6-12 years.

Juist a modicum of honest research on your part would have revealed that:

"3. Product Performance Over Time

Like other building components assessed during a property condition assessment, solar photovoltaic systems have a “useful life” (the duration before the system starts to deteriorate and no longer delivers the required output). Due to a variety of environmental (weather for example, as discussed above) and system efficiency factors, all solar panels provide less energy than their maximum rated output.

According to a paper by National Semiconductor PV operating levels are expected at the outset to be 77% of rated output, dropping down to 67% 21 years out. Advances in technology will continue to improve the output of solar panels, but Useful Life is an important consideration when assigning the value a solar system will have on a long-term property investment."

I am more than willing to have an honest discussion on this subject with you based on readily available, verifiable credible facts but you seem incapable of that. From my honest discussions with many, many professional energy and finance people over decades there is certainly areas of legitimate disagreement as to the economic and financial value of invetsment in solar, as well as other alternative energy generation systems. But when you posit that a 13 year payback period for an electric light bulb is an acceptable investment you are willfully ignoring everything you claimed to have learned about economics and finance.

SOSO  posted on  2015-01-31   14:04:08 ET  Reply   Untrace   Trace   Private Reply  


#17. To: SOSO (#16)

The economic and financial criteria, including risk assessment, for investing doesn't change based on the arena of the invesment.

Hey, if you want to "invest" in highly leveraged commodity futures because they promise a much higher ROI and quicker payback period than paying your own utility bill, go right ahead... I'm not gonna waste my time trying to talk you out of it.

The panels themself have a stated expected life of up to 25 years but that is just one component of the system. If used, which is a must if you are going completely off grid, the useful life of batteries is 6-12 years.
Now you're showing that you don't even understand your own post.
Nobody's proposing going off the grid, either completely or partially.
Poudre Valley Rural Electric Association is a not-for-profit electric cooperative serving 37,000 members. PVREA generates solar power for the grid and PVREA's members receive $5/panel credit on their monthly bill for power they receive from the grid.
According to a paper by National Semiconductor PV operating levels are expected at the outset to be 77% of rated output, dropping down to 67% 21 years out. Advances in technology will continue to improve the output of solar panels, but Useful Life is an important consideration when assigning the value a solar system will have on a long-term property investment."
A drop-off from 77% to 67% would be cause for concern if PVREA had to pay for fossil fuel to generate electricity. But sunshine is free, so even a drop-off to 57% or even 47% wouldn't warrant end-of-useful life replacement. As long as marginal revenue of electricty produced continues to exceed the marginal cost of panel annual maintenance, might as well keep the panel plugged in and generating electricity. It's only when the panel starts costing more to maintain than the revenue it generates that you would want to consider replacing it with more efficient solar technology. Even if 87% or 97% is available 21 years from now, it would be best to use the new ones IN ADDITION to the older ones. No sense pitching them aside if they still work.

Willie Green  posted on  2015-01-31   15:05:46 ET  Reply   Untrace   Trace   Private Reply  


#19. To: Willie Green (#17)

A drop-off from 77% to 67% would be cause for concern if PVREA had to pay for fossil fuel to generate electricity. But sunshine is free, so even a drop-off to 57% or even 47% wouldn't warrant end-of-useful life replacement

No not quite as it would require additional investment by the utility or the end user to replace the drop off in generation capacity. That or have the end user do with less electricity over the life of the original facility. It's amazing how you are so willfully blind to the realities of the world. With what does either the utility or the end user replace the lost generation capacity? I am betting you are going to say they should do without it.

SOSO  posted on  2015-01-31   15:14:07 ET  Reply   Untrace   Trace   Private Reply  


#20. To: SOSO (#19)

No not quite as it would require additional investment by the utility or the end user to replace the drop off in generation capacity.

Not true. There is no requirement to match individual share of capacity ownership with individual electrical consumption. It is pooled capacity that is share by the co-op members. An individual may invest in two panels and obtain the two-panel monthly credit regardless of whether the individual's average actual consumption is ½, 1, 2, 3 or even more panels worth of electricity.
You keep forgetting, the solar farm supplies power to the grid and any excess power generated by the farm and not consumed by members also gets supplied to the grid. And any power consumed by members that is NOT generated by the solar farms is coming from other "green" resources on the grid: wind, hydro, etc. etc.

All investment in a certain number of solar panels does is entitle you to a certain credit on your monthly bill for "owning" those panels. It does NOT require you to consume any more or any less than whatever those panels actually generate.

Willie Green  posted on  2015-01-31   15:52:41 ET  Reply   Untrace   Trace   Private Reply  


#21. To: Willie Green (#20)

No not quite as it would require additional investment by the utility or the end user to replace the drop off in generation capacity.

Not true. There is no requirement to match individual share of capacity ownership with individual electrical consumption.

You can't be that dense, can you?.

An individual may invest in two panels and obtain the two-panel monthly credit regardless of whether the individual's average actual consumption is ½, 1, 2, 3 or even more panels worth of electricity."

What is the color of the sky in your world? The credit from the utility is based on the actual amount of electricity that the original two panels produce during each billing period not some theoretical or fictous number. If the sun doesn't shine the credit is zero.

The end consumer must certainly replace that capacity whether in kind or otherwise. Further if your investment generates less and less electricity over time the eocnimics of that investment is negatively impacted whether you replace the lost generation or not. Either way the payback period increases as there is less and less annual savings from the investment over time.

There is no use continuing this discussion with you as you are really dumb, which I don't believe is the case, or just intellectually dishonest, which I firmly believe you are. Take the last word, I'm done with you on this.

SOSO  posted on  2015-01-31   16:03:02 ET  Reply   Untrace   Trace   Private Reply  


Replies to Comment # 21.

#22. To: SOSO (#21)

Either way the payback period increases as there is less and less annual savings from the investment over time.

No... either way, the 21 years that it takes the panel efficiency to drop from 77% to 67% greatly exceeds the 13 year original payback period.

In other words, the panels have already paid for themselves for 8 years. And virtually every photon that they convert to electricity, whether it's at 77%, 67%, 57% or 47% is pure PROFIT.

You'd have to be dumb as a rock to want to replace the panels while they're still generating usable electricity after they already paid for themselves.
DUMB AS A ROCK. LOL!

Willie Green  posted on  2015-01-31 16:24:10 ET  Reply   Untrace   Trace   Private Reply  


End Trace Mode for Comment # 21.

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