Re: silicon photovoltaics

Michael S. Lorrey (
Mon, 14 Jun 1999 12:45:35 -0400

Ron Kean wrote:

> On Mon, 14 Jun 1999 09:49:27 -0400 "Michael S. Lorrey" <>
> writes:
> >Ron Kean wrote:
> >> That must be $0.12-0.25 per watt, rather than per kwh?
> >>
> >No. Per kwh. The last I heard on this was in 1995. It was a joint
> >development project between US Solar Corp, the Energy Department, and
> another
> >solar company, to develop the manufacturing process and some test bed
> structures.>--
> If a small panel produces 20 watts in full sun, and has a wholesale price
> of $5.00, then the panel could be said to cost $0.25 per watt of
> electrical power output in full sun. But if the panel is described as
> costing $0.25 per kwh, what sort of analysis would be used to arrive at
> that expression of cost, assuming the selling price of the panel and its
> electrical ratings are known?

You need to amortize the intitial investment in the panel, as well as incidental expenses to install and wire up the panels, over the period of use, involving your discount rate, the inflation rate, etc... You need to use this discounting method in order to properly compare it with a pay-as-you-go grid based service.

I used to do the reverse with the exit sign retrofit kit I developed, to show that the rate of return on investment was so high they'd have to have had stock in Microsoft to get a better return.

Essentially, you figure out your own discount rate, then you subtract inflation for that year from your discount rate for that year to get your adjusted discount rate, plus you need to discount the cell output degradation. Here's an example:

Solar panels: 1000 watts total peak
Hours of operation per annum: 4000 hours Avg. output: 500 watts.
Total annual output: 2 million watthours or 2000 kwh per annum* *(this is intitial, estimate cell output degradation of 5% per annum) Period of use: 10 years.
Cost of panels and installation: $5000.00 Personal Discount Rate: 6.5%
Inflation rate: 1.5%
Adjusted Discount Rate: 5%

Year            Output(kwh)     Discounted output (kwh)
1                  2000                1900
2                  1900                1805
3                  1805                1715
4                  1715                1629
5                  1629                1548
6                  1548                1471
7                  1471                1396
8                  1396                1316
9                  1316                1251
10                1251                1188
Total discounted output:     15219 kwh

Discounted cost per kwh: $0.329

So thats how it works.


Michael S. Lorrey
Owner, Lorrey Systems
Director, Grafton County Fish & Game Assoc.
Member, Extropy Institute
Member, National Rifle Association
"Live Free or Die, Death is not the Worst of Evils."
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