It’s not exactly a state secret that markets can be analyzed. The “marketing universe”, the total pool of hypothetical customers for any given product, can be divided into the “early adopters”—those who will buy readily, those who, eventually, will buy, and those who will never buy. That’s true of everything whether you’re talking about soap or healthcare insurance, as the architects of the Affordable Care Act are learning. And it’s true of roof-top solar panels, as this Reuters article notes:
California for years has required utilities to purchase excess rooftop solar power, paying homeowners in credits that lower their utility bills. But this so-called “net-metering†mandate capped the number of people who qualified for the most attractive incentive. In June, the utility serving Scripps Ranch, Sempra Energy (SRE.N) unit San Diego Gas & Electric, was the first to reach its limit, and the state’s other large utilities are expected to reach theirs soon.
Scripps Ranch homeowners who put up panels now still will be able to sell power they don’t use to the utility at the same retail rates as those who got in before the cap. But they will have to pay $100 to $200 more per year in fees and charges to SDG&E. They also eventually will be shifted to new, time-of-use power rates, which could result in lower credits.
Installers say such changes will be meager compared to the thousands of dollars in savings over the life of a system. But customers seem skeptical. At the peak, installers were putting up 55 systems a month, on average, in Scripps Ranch. In July and August – typically good months – installations dropped to 15 and 36, respectively.
Residential solar connections were down 25 percent in the third quarter compared to a year earlier in the utility’s entire San Diego territory.
“The phones just aren’t ringing as much,” said Ian Lochore, director of residential sales at Baker Electric in nearby Escondido.
A less dramatic slowdown is playing out across California, which produces about 40 percent of the nation’s residential solar.
The sector saw slower growth in the first half of the year, and declines in the third quarter. Installations in Pacific Gas & Electric’s service territory in Northern and Central California fell 7 percent year-over-year, while in Southern California Edison’s territory they fell 4 percent.
One of the morals of this story is that if you’re seeing declines like this in the most favorable market in the country for your product you’re probably nearing market saturation. Once a market is saturated the only way to get new customers is to take them from somebody else, presumably by selling a better product.
The other moral is that the roof-top solar panel business is a creature of government policy and what the government hath given it can darn well taketh away. Relying on swift and prudent stewardship on the part of a government agency is living in another world.
An interesting market lesson. In addition to an adoption rate analysis of a market is equilibrium in the market triangle. The base would be a large TSM based on Everyman price, quality or other features. The top of the triangle would be those, much fewer in number, willing to buy, and pay, based upon more robust levels of a product or service feature, or not at all. Confuse Everyman for a few good men at your peril.
As for solar, the zealots don’t seem to understand that paying through the nose to save the world is not a universally held view. I read yesterday that the lying Dr Gruber wants to “fix” ObamaCare by increasing the penalty for not participating. It would work. But so would threat of incarceration or torture. What a creep.
Almost everyone I’ve broched the subject with, states that solar is the future. When I ask how, they say improvements in the technology are inevitable. Oil is dirty, oil is dangerous, oil is dead. I always bring up my prefered “fuel of the future”, compressed natual gas. It amazes me that most folks don’t even know what that is, and when I explain it’s the same stuff that heats your home, they look lost and say,
Hmmm. End of conversation.
As you say, an all powerful government CAN mandate that ALL energy shall be derived by SOLAR. All you have to to is legislate powerful incentive and disincentives.
Starts to sound like Soviet central planning, which we know always works, or at least it will now that we have such worldly, highly educated cental planners like B H O, and besides, even if central planning has its shortfalls, it’s neccessary because the Earth itself now hangs in the balance.
That has been validated by a concensus of meteorologists.
What Do You DO? How do you fight powerful, organised propagandists?
There is no Moore’s Law (that’s the rule of thumb on semiconductors—the reason that PCs have gotten so cheap so fast) with respect to solar panels. And we’re nearing the theoretical efficiency limit on them. Might there be some breakthrough? Sure. But where we are right now might be as good as it gets, too.
And that’s with the enormous subsides that we, the Europeans, and the Chinese have placed on solar panels. Solar is still touch-and-go economically and unworkable without backup power.
Dave, you and I know that. But in the schools and in the media it is gospel. And if you are applying for a position at a university, or applying for a federal research grant, It doesn’t matter what you believe, You want the professorship, or the grant? Regurgitate gospel, and you are in like Flynn.
Say what you really believe? FOOL. And an unemployed one at that.
Costs have been coming down pretty steadily for years. In the neighborhood of 10% per year. This is absent subsidies. No, it is not viable as a single power source, but if it can provide power more cheaply for some of our needs it has value. Same for wind.
Steve
steve:
Read what I wrote in response to GS again:
You don’t have to take my word for it. Look it up. “There is no Moore’s Law” means the progress cannot be depended on to continue. Don’t extrapolate from past experience. Heck, Moore’s Law is running out of steam, too.
Moore’s Law was just a prediction about transistor density. That did not necessarily predict over costs. Yes, it is running out of steam. As to solar panels, predictions have been made before that they had reached their limits. They kept getting cheaper. There are many people, including credible people in the industry and in the physics world, who think they will keep getting cheaper for a while. We will just have to wait and see.
As for solar panels on home rooftops, IIRC, we are already at the point where the installation costs more than the panels so we are hitting limits there. If you are a DIY type I think you break even in 7-8 years in lots of places, so I don’t think this is just a creature of govt policy. (Or maybe it is since govt funded research has helped it reach point where it is affordable in some areas and for some people.)
Steve
Steve
The subsidies are so broad and deep it’s hard to tell what the actual economics is. China is subsidizing the building of plants to make solar panels which lowers their price; purchasing them is subsidized; most jurisdictions require power companies to buy excess power from solar panel users—that’s a subsidy, too.
On reading my comments above I see that I may have incorrectly conveyed the impression that I’m against solar power. I’m not. I’m against subsidies.
I think that a prudent energy future is likely to include many different energy sources including solar, wind, hydro-electric, geothermal, coal, gas, and nuclear. Solar is fine for home purposes in some areas; wind in others. Neither is a reliable 24 hour source everywhere in the country, especially for industrial purposes. They shouldn’t be subsidized, at least not preferentially.
IMO if we’re going to subsidize something it should be mass-produced modular nuclear, especially thorium. Check out the story of Galena, Alaska to see how the federal government is putting a thumb on the scales to favor solar and wind.