US Environmental Groups Sue to Stop Tar-Sand Pipeline From Canada

Originally posted by TheRedneck

So while the cost of solar applications is indeed dropping slowly, the cost of materials is not. That is what I am referring to. How is the marketplace supposed to compete and drive prices down if smaller entities are not able to buy even surplus solar cells for anywhere like the cost of new solar cells to larger firms?

TheRedneck

So most of your post really meant nothing to me, sorry but it seemed to be a long rambling argument for nothing.

Solar power costs dropping 75% in 1 year is NOT prices slowly dropping. Sorry that is HUGE.

One of the main reasons the cost is dropping is the increase in volume of silicon and the drop in the price of silicon. We both know supply-demand.

Could you please clarify on this:

How is the marketplace supposed to compete and drive prices down if smaller entities are not able to buy even surplus solar cells for anywhere like the cost of new solar cells to larger firms?

Cheers

reply to post by Animal

The price is only dropping in solar applications, completed units you hook up and use right out of the box. The price for solar cells is not dropping. So if you want to use solar applications, you are forced to use what is supplied ready-assembled by larger firms.

That places the future of solar applications completely in the grasp of a handful of large solar companies. There can be no innovation or research into alternative uses for solar cells as long as the cost for the cells themselves is prohibitive.

I understand supply/demand (I do not understand a lack of silicon; did someone just discover a beach? ). I feel sure you understand the difference between retail markets and wholesale/research markets?

TheRedneck

reply to post by TheRedneck


This article mentions what I was talking about. It is not lacking 'silicon' but a lack in 'silicon feedstock' and 'silicon wafers' which are used in production.

I don't know as much as you do about "I feel sure you understand the difference between retail markets and wholesale/research markets?" But this is besides the point.

Solar technology is becoming massively less expensive for the consumer this can not be denied or ignored.

Cost inhibition has long been one of the key arguments against this technology and this argument is quickly being put to bed.

reply to post by Animal

I don't know as much as you do about "I feel sure you understand the difference between retail markets and wholesale/research markets?" But this is besides the point.

OK, it looks like we are seeing this from two completely opposing viewpoints. Let me explain the difference between retail and wholesale/research markets.

Retail is what you buy every day at the store. For purposes of our discussion, let's say we are thinking about buying a solar lighting system, perhaps one of those low-voltage driveway lighting systems. Yes, the price has dropped and will continue to drop. As prices drop, more people can buy, and there is incentive for companies to produce more of them.

The wholesale market is connected and works similarly, but it also works invisibly to most people. Let's say now in our scenario above, that the manufacturer of those driveway lights increases production to keep up with demand. That typically means that they buy more solar cells, more light bulbs, more batteries, and therefore they get a higher quantity discount. They also invest in larger production equipment which lowers their labor costs. Now the price can drop again, leading to more demand, and the spiral continues until a stable relationship is reached. Typically, that stability occurs when the materials cost is at maximum efficiency and production cost is at maximum efficiency as well.

The wholesale market is what determines the materials cost of producing that driveway light system. If it is costing your company $20 to buy all the materials to build one system, and your production costs are $10 per system, you cannot sell the units for less than $30. Even at that price, you will make no profit, so better figure an additional $5 for profit. Now the units are costing the producer $35.

They are then sold to a wholesaler who sells to individual stores. That's two markups, each of, say, another $7.50. Now the units appear in the store for $50. For the price to drop, someone has to spend or make less money getting that product to the store. If the producer manages to increase their volume, they may can cut their materials cost to $15 through volume discounts. Now that $5 savings can be passed on to the customer and the units are $45. Now more people buy the units, and the producer can cut their costs again, resulting in lower prices to the consumer.

Since the manufacturer of solar cells is now doing the same thing as the light system manufacturer, the cost of solar cells will drop as well. This opens a new window of opportunity for someone who wants to make a better lighting system. They can buy solar cells and begin manufacturing their own system to compete with the original system. Their price will be higher at first due to their lack of purchasing power, but if their idea is good enough, they will be able to compete on quality. Soon you have innumerable companies all making competing systems and this as well lowers consumer cost by introducing competition into the marketplace.

This is not happening with solar technology. While the price of completed systems sitting on your store shelves are dropping, the price of the raw parts and materials is not, at least not to the entire wholesale marketplace. A product cannot be made and sold for less than it costs to make it.

I have a unique window into the wholesale market through my research. Under the present economic conditions, there is no way I could manufacture anything concerning solar power without the final cost being astronomical compared to established manufacturers. I could easily begin producing LED-based lighting solutions, which lend themselves very well to solar power, but the cost of solar cells is so prohibitively high that it is impossible for me to accomplish. No one would pay $300 for a lighting system when they can get one a little less advanced for $50. Yet, that is what it would cost for me to produce one. The solar cells alone would cost me much more than it would cost to buy the completed system and rip the cells out of it. Something is wrong with this picture...

You know the little LED flashlights that are becoming popular? I can buy one for $5. I can build one for $4 and a lot of labor. Not very long ago, when the lights were costing $20, I could have built one for maybe $25. As the shelf price in the retail market came down, so did the cost of the white LEDs that are the heart of the units. Back then, when they were first available through Mouser, a white high-brightness T1 3/4 LED cost about $5. Now I can get them all day long for under $1. When they first came out on the surplus market, about a year after appearing in Mouser, They were about $4 if you bought a pack of 100. Now you can get 5 for $1 on occasion.

When solar cells came out in the surplus market, they ranged from $5 for a tiny one to $100 and up for larger cells. Now they range from $5 for a tiny one to a little under $100 for a large one (if you want, I can look up the price per watt... it will bear out with the general prices I am quoting here). There has been no substantial price decrease in the surplus market. And remember that solar cell technology is much older than white LED technology, and therefore the price should be dropping faster than white LEDs.

What I am being told by my suppliers (most of which I am on a first-name basis with) is that they are as surprised at the wholesale market as I am. They would expect the prices to be a tenth of what they are now. Apparently somewhere the prices have dropped in the wholesale market, as there is no way anyone could manufacture solar systems at the cell price I see, but why has that wholesale price decline not been passed on to the entire wholesale market?

I hope this sounds less like rambling... I do believe this is a concern, especially if you want solar prices to decline substantially. Competition is always the answer to high pricing.

TheRedneck

reply to post by TheRedneck


honestly I know you are knowledgeable but it appears to be that you are more interested in pointing out the flaws of alternative energy in every way shape and form.

First off, you don't buy 'completed systems' off the shelf'. Whats more a complete solar system is comprised of much more than the panels. It also includes a fair amount of standard technology used in every energy type system.

Some but not all of the raw materials have come down in price for the creation of solar cells.

We are currently looking at 40%-70% decrease in the price for consumers. It is huge, write all the posts you want about the finer details of economics, but the fact remains the same. The technology is rapidly becoming affordable to your average consumer.

While I applaud you for stating you support these technologies I must inform you that as an 'put side' observer you do nothing but talk about their draw backs.

While it is important to be critical of everything in the pursuit of progress there is a clear distinction that can be made positive and negative critique.

reply to post by Animal

While I applaud you for stating you support these technologies I must inform you that as an 'put side' observer you do nothing but talk about their draw backs.

There's an easy explanation for that.

So far every alternate energy source (actually every energy source, alternative or traditional) we have comes with disadvantages. Why would I spend time and energy trying to point out what works? If it works, it works, and no further attention is needed to it.

On the other hand, I believe many if not all of the disadvantages of the various alternate energy sources have solutions. Spending time and energy in pursuit of fixing a problem would seem to me to be a much better thing than spending the same time and energy looking into what is already working correctly.

If my car engine doesn't spin and start tomorrow morning, I can promise you I will first check the battery, then the starter, then the engine. I will spend no time admiring the amount of tread on the tires, nor will I bother making sure the transmission has fluid at that point. I will try to address and correct the problems.

I have what is called an "engineering mentality" (according to a lifetime of comments from engineers, scientists, professors, and friends). Translated, that means I am always looking for better, more efficient, simpler, and less destructive ways to accomplish things. That's just what I do and how I am. I don't consider it a bad thing, as those same qualities are what causes technological advances like the very computer you type on and the Internet we use to communicate.

So don't mistake comments about what's wrong as a dismissal of the idea itself. Take it as an attempt to improve what's wrong without worrying about what's right.

TheRedneck


[edit on 9/5/2009 by TheRedneck]

reply to post by TheRedneck


I appreciate your efforts and your goals I simply find them difficult to deal with some times.

In this thread for example I have shown the massive decrease int he cost of solar pv panels yet you do your best to show this is not, necessarily, the case.

While I can not argue with your Superior knowledge on the subject there is clearly a case for what I am saying.

While I am not looking for you to pamper me and pat me on the back and say 'good job' when ever I feel it is deserved, more acknowledgment of what I bring to the table rather then outright dismissal would be so much easier to deal with.

40%-70% decrease in price is huge for consumers and should not be overlooked. Alternatives such as solar have been given a bad rap for issues such as cost and when improvements are made they deserve to be noticed.

While I appreciate your realistic outlook on the topic and your approach to important I s]till find it difficult to deal with as well.

reply to post by Animal
OK, I think I see where we got on different tracks here. Let me apologize; my forte is engineering and science, not social interaction.

In that light, I probably did come off as ignoring your point, even though it is an apt one. Prices are decreasing, yes, and I expect them to continue to decrease. I only wish they would decrease faster, and the problem I spoke of above seems to me to be tied in to the reason the prices at the retail level are decreasing slower than I would expect them to.

Remember, solar cells are not new technology! They have been around at least 30 years, and probably longer than that. I believe there are forces at the upper economic levels who are actively holding back the technology from advances in economic viability.

So yes, I not only acknowledge your position, but I agree with it. I simply want the prices to fall faster.

TheRedneck

reply to post by TheRedneck


If only everyone at ATS could interact like you we would be much better off.