Can anyone with more knowledge of solar technology speak to this?
I know nothing about solar technology developments. I am interested in adding solar to my house some day, but concerned about spending a lot of money today for solar panels that will either (a) be much cheaper in 5-10 years, or (b) be replaced by much more effective panels in 5-10 years.
Assuming that the economics of it are the only motivation for going solar, and that with current technology and pricing the panels pay for themselves only after ~10 years, am I better off waiting a few years to get more efficient/cheaper panels, or is it unlikely we'll make significant advancements in these areas, and/or do current government incentives (which may be ephemeral) make up for the advantages of future tech?
I'd go for it. Prices will get cheaper (virtually guaranteed), but incentives will also go away (guaranteed, deadlines are already set).
If you only care about the financial decision, then to be honest... not much beats investing in e.g. a broad S&P 500 tracking index. 7% inflation adjusted annual returns + dividends which you can reinvest to go up to 8-9%. Over a 20 year period that's 5x. I'd tune that down to 4x given there's risks and historical returns have been better than they probably will in the future. But it still means at 4x that your $15k solar installation could also have made $60k in the same period.
And there's no way a $15k installation will generate $60k worth of energy, somewhere between $10k and $20k depending on the cost per watt, solar capacity factor and local energy prices. (California does quite nicely and is on the upper end of this spectrum). About a third you get back from the gov, so in a 20 year period in Cali, investing $15k (subsidies included) you may get $30k-$35k in savings if you go solar.
It's really nice but it doesn't beat the market, and most states have cheaper rates than California which is like 30% above average and much fewer sun hours, and less competition, too. Wouldn't be surprised if installation costs were relatively more competitive in California.
So my point being is: 1) it's a great investment and I'd personally go for it. 2) it's, purely financially, not the absolute best way to spend your money, even if it saves you money. So there's still an element of 'I think solar is important' at play. 3) solar tech will get cheaper, but subsidies will fade out.
My take: Further increases in efficiency could mean that you could install more capacity on your roof, or the same capacity in fewer panels. Assuming that you can fit enough panels to cover 95% of your demand on your roof, installing more panels doesn't make sense (over-generation is not really profitable today). At the same time, a lot of the installation costs are independent of number of panels (permitting, estimates, wiring to the junction box), so installing fewer panels won't bring the cost down tremendously.
At the same time, tax subsidies are scheduled to start phasing out, and utilities are making noises about discontinuing some of the more favorable rate plans that allow 100% net metering (generated power is credited at the full retail rate, not at the wholesale rate). Either of those changes would negatively impact ROI.
It's hard to know what will happen in the future, but with the current environment, many people can lock in a favorable 20-year ROI for a system today.
And advancements in fusion, fission, wind, etc that could make today's solar less worthwhile.
No one can predict how much the landscape can change in that time and I wonder if Googles 20-year savings model tries to account for predicted advancements -- and also importantly if their "savings" accounts for the time value of money -- the amount that could be had just by investing generally instead of investing in your own solar. Time to investigate....
Edit: Google "Assumes 2.2% annual increase in electricity prices." That's interesting. We should be talking present value terms so inflation is irrelevant. Are they assuming no tech advancements in the next 20 years? What would be driving up those costs other than inflation?
My personal take is to minimize the amount of temperature variance over time so I'd invest time and money in insulation, weather stripping, other upgrades first as well as reducing my electrical usage in general.
Right now, I'm at a point where I need to use a FLIR to investigate more improvements after which will I then think about solar but it's nice to read up on solar improvements.
If you do go for solar just make sure you install it before December 31, 2016 as that's when the 30% Federal tax credit expires (note: this is if you buy, not lease the panels. Leasing does not earn you the 30% credit).
The 30% federal tax credit does apply to leased systems. It's just that the leasing company gets the credit "on your behalf" (also known as keeping it for themselves) but includes it in the calculation of how much to charge you as the lease payment.
I know nothing about solar technology developments. I am interested in adding solar to my house some day, but concerned about spending a lot of money today for solar panels that will either (a) be much cheaper in 5-10 years, or (b) be replaced by much more effective panels in 5-10 years.
Assuming that the economics of it are the only motivation for going solar, and that with current technology and pricing the panels pay for themselves only after ~10 years, am I better off waiting a few years to get more efficient/cheaper panels, or is it unlikely we'll make significant advancements in these areas, and/or do current government incentives (which may be ephemeral) make up for the advantages of future tech?