Solar Panels Can’t Compete with Cheap Shale Gas

An article published today by NPR (no less) exposes the simple truth about solar energy: It just can’t compete with shale gas economically.

The article recounts the experience of a Pennsylvania family who installed 21 solar panels with government subsidies (that is, the government sliding their sticky fingers into your pockets to help pay for it). The end result? Even with taxpayer subsidies, the payback period for solar energy is 17 years—the lifetime of the system. At best it’s break-even, but in reality, it actually costs you more money than other forms of energy.

Barbara Scott had 21 solar panels installed last March on her house in Media, Pa. Scott’s family was the first in the community, and she was prepared to evangelize, "We can have open houses and write newsletter articles and promote the idea of solar," she said. But that was before the economics changed.

With government rebates and tax incentives, Scott says, her family spent $21,000 to install the system. She figured it would take eight years to recoup that investment.

A lot of other people had the same idea at the same time, which sent the price of solar energy credits down sharply in Pennsylvania. Scott says that added another seven years to the payback period.

On top of that, Scott says, electricity rates aren’t going up as quickly as she thought they would, thanks in part to low natural gas prices.

"So that, again, adds another two years to our payback period," she says. "We’re up to 17 years, which is, essentially, the life of the system. And we haven’t even considered what happens if the system breaks or what it’s going to cost to take the system off the roof and dispose of it. "

Despite this, Scott says she’s still happy to have the panels on her house.

"But now, knowing it’s — at best — a break-even proposition, we’re not so comfortable telling other people to do it," she says.*

MDN is not anti-solar. We would like nothing better than to stick up some solar panels and tell the local electric utility to take a hike! But it has to make sense economically. And right now, it doesn’t. That is the power of cheap, abundant and clean-burning natural gas.

*WNYC/NPR (Jan 5, 2012) – Solar Panels Compete With Cheap Natural Gas