[diemos]

I downloaded a pamphlet from NREL on payback times in solar PV systems and the numbers didn't seem to add up. http://www.nrel.gov/docs/fy04osti/35489.pdf

They said that a meter square panel would see 1700kWhrs/year in a good sunny location. At 12% efficiency that's 200kWhrs/year. Those numbers I understand and agree with. Then they claim it takes 600kWhrs to make the silicon (plus 200kWhrs for the other components of the panel) and determined an energy payback time of 4 years for amorphous silicon. So far so good.

Then I said to myself WTF? At $0.05/kwHr wholesale this panel is going to produce $10/year of electricity. If I assume $2/Wpeak (which I certainly wasn't finding retail in a casual web search) a m2 would be $240 giving an economic payback time of 24 years.

Why is the economic payback period so different from the energy payback period? Well, obviously it's got to be salaries and capital costs. So when we calculate EROEI don't we have to include the energy consumed when the workers spend their paychecks and the energy used to build the production plant? Does the oil industry extract oil with a lot fewer workers / capital costs?

Signed, perplexed

[Tyler_JC]

They have to cover the research and development cost of the technology.

You are buying a complex piece of technology.

The panel might cost $2000 to build on the margins but you have to pay for your tiny piece of the factory, the CEO salary, the tax bill, the water bill for the company restroom, etc, etc, etc. All of those costs add up and have nothing to do with energy.

Just like the cost of a sandwich at McDonald's isn't just the cost of the meat, bun, and ketchup. It is also the implied cost of the employees, building maintenance, advertisement campaigns, etc.

[Newfie]

Overheads and adders can be astounding.

In my consulting industry these are typical numbers:

$100 paid to the employee for consulting services.
$150 for overhead including benefits, taxes, retirement, health, marketing, offices, staff, etc.
$250 sub-total
$25 fee on sub total
$275 billing to client

[Keith_McClary]

I notice on this PO.com page there are "Ads By Google" for Earth4Energy

At Last! A complete step-by-step guide to make
solar panels at home and create electricity!

"Michael's complete step-by-step fully illustrated manual will have you generating your own electricity for less than $200!"

From the workshop of Michael Harvey
Renewable energy enthusiasts
and creator of Earth4Energy.com

(The Google Ads you see will vary according to the content of the page and possibly your location and other factors)

[kuidaskassikaeb]

Um, I think you also have to include the add ons for electricity. When I divide my electric bill/ by the KWH I don't get $0.05. It's more like $0.30. We don't use much, so that's high, because it includes fixed charges like hook up. But even the costs that track usage are like 0.15. Comparing wholesale costs might make sense for comparing a utility panel system with a coal plant, but for home use nah.

[vtsnowedin]

Solar panels do not make any sense now with grid power at .07 to .18 per kwh. After the peak when the grid is down or they are charging you 2.00/kwh they will make perfect sense but the demand will far exceed supply. So avoid the rush and get them now while the getting's good. If the grid never goes down you have an expensive toy that wastes less money then an RV and fishing boat and if the grid does go down you will be the family hero. This is a faith test for the Peak Oil religion. Truly penitent men will buy enough PV panels to be independent of the grid at least when the sun is shinning.

[AgentR]

The most useful thing about solar panels remains that they generate power where it is expensive or impossible to run commercial power to. This is especially true in locations where having no power is really annoying, but where having a small amount is very useful.

[vtsnowedin]

The most useful thing about solar panels remains that they generate power where it is expensive or impossible to run commercial power to. This is especially true in locations where having no power is really annoying, but where having a small amount is very useful.

I'm trying to think of a location where not having power would not be Really annoying...***###0(**.......$$%%^^^&&**.... Nope there isn't any.
Camping in the wilderness without power is fine .. for about three days.
If you have none, even a flashlight seems like a godsend.

[shortonoil]

diemos said:

Why is the economic payback period so different from the energy payback period?

You are comparing apples and oranges. To calculate the dollar value of your return you have to calculate the PV (present value) of the money. A dollar out 24 years from now is not worth a dollar today, or (another way of saying it) a stream of $1 for 24 years is not worth $24 dollars today. It depends on the interest rate you assume, and don’t forget inflation.

To calculate ERoEI there are two methods. Calculating the energy needed to complete the process or the dollar conversion method. Calculating the energy needed is usually almost impossible. For example: how much energy does an acre of corn require to be grown? You have the fertilizer, the fuel the tractor burns, the energy to produce the tractor, the energy to build the barn that the tractor is stored in, and etc. Usually if you can identify the three most energy intensive investments in the process you have captured over 90% of the total. Usually.

The dollar conversion method is usually more accurate and easier. For example, in the US in 2006 it took 8356 BTU to produce a dollar of GDP. It took 94,000 BTU to produce a dollar’s worth of steel (very energy intensive). You can usually make a good guess on the amount of energy it takes to produce a $s worth of product. A mortgage document doesn’t take very much, a pound of a steel a lot.

Anyway don’t take anyone’s estimate of what the energy return is on products. Probably they are also guessing. Rough out both methods, if possible, and you will probably be there by about 10%, one way or the other.

Available Energy