Solar Panels Too Costly, Says Study

A paper released last month by the UC Energy Institute and written by a UC Berkeley professor has concluded that the cost of solar panels outweighs their environmental benefits.

The paper, entitled The Market Value and Cost of Solar Photovoltaic Electricity Production, was the culmination of a study conducted by Severin Borenstein, professor at UC Berkeley's Haas School of Business and director of the UC Energy Institute.

Borenstein's detailed analysis took a variety of factors into account, including the power output of the panels versus the wholesale cost of electricity, as well as the benefits of reductions in greenhouse gas emissions and regional pollutants.

According to Borenstein, many people have considered the high cost of solar panels, but this study is the first to quantify solar expenses and incorporate them into a cost-benefit analysis.

"People have said to me, 'Well, solar costs more, but I want to do good for the society,'" Borenstein said. "But wind energy, geothermal energy, and biomass energy all do good for society. We have to be realistic about what we have, so that people don't get oversold and say 'Hey, this is a real rip-off'."

The panels are the only type of solar energy generator available to residences and commercial buildings. Borenstein's study focused on the real market value of the solar panels, not the value of the panels to individuals.

For Tom Kelly, director of KyotoUSA, a Bay Area organization dedicated to reducing greenhouse gas emissions, solar panels are well worth the price.

Kelly has recently directed plans to allow a local school to run entirely on solar power. He said he is very satisfied with the results of his own residential solar panels, which were installed in 2002.

"(The solar panels) have overperformed," he said.

Kelly said he does not believe that prospective solar users will have unrealistic expectations about the performance of the panels.

"When a solar project is being developed for home or commercial use, you know before a person puts a nail in the roof how much energy the panel will produce. The disappointment, if any, may occur before the project even starts," Kelly said.

Borenstein said that although solar panels are the only solar source currently available for individual use, central station solar thermal plants provide less costly ways of obtaining energy.

According to Borenstein, producing power with the solar stations costs half as much as solar panel usage. Many of the stations already exist.

Despite the report's findings on panels, Kelly said solar energy needs to be an essential part of society.

"The thing about solar panels is that people always want payback on them," Kelly said. "I think that we as a nation or as a people or individuals have to begin to look at solar as a necessity rather than as a luxury."

Tags: SOLAR