Why can the government or industry not build solar power at an industrial scale, and then bring it to people's homes via the existing infrastructure at a price that makes this kind of micro-scale setup completely uneconomical?
It's bad enough when we have to put solar panels on actual roofs to reduce electricity bills. This is just absurd. Where are the economies of scale? Why are individuals having to take responsibility for their own energy generation? Are we doing our own sewer and water supplies next?
Why not approach the problem from all sides? There are big renewable projects in Germany as well, of course, but they take time to build, the grid needs to be adapted to handle them and there are many, many people/organizations who oppose all big installations that "block their view of nature" or whatever, so the big projects take even longer. By the way, this (nasty neighbours) would be a big issue for Balkonkraftwerke as well if they had not added them to a list of privileged things you are allowed to equip your house with (without permission process).
Oh wow, that's an interesting position. I'm really curious to hear where you live and/or from what background you say this?
Btw, this article is about putting a solar panel not on your roof, but on your balcony. People do it because it's cheap and saves money on electricity.
Think of it like growing herbs on your balcony. Sure, industrial farms have economies of scale, but you still save money growing your own basil (and it's fresh!). Same principle. Slightly higher yield.
You grow herbs at home because it's kitsch, fun, or even convenient, not to save money. Store harvested herbs die in the fridge, electricity does not.
In Australia, our government massively subsidizes putting solar panels on our roof, and batteries in our garages, for a $/kWh price wildly higher than could be achieved with economies of scale in an industrial installation.
Batteries are even more egregious than solar, why install batteries .one. .at. .a. .time. behind switchboxes where they can only be used individually rather than a suburban installation that allows them to be used in aggregate?
I can only imagine how badly the numbers stack up somewhere suboptimal for solar like a German balcony. What if everyone instead gave their 1000 euros to a state organization that built a big solar farm that everyone shared?
Oh wait - that's exactly how the state is meant to work!
The subsidy question is interesting, but in Germany these balcony panels are ~ €600 unsubsidized (depending on the exact kit; see my numbers elsewhere in this discussion) and still pay back in 5 years. The economics work with and/or without government help.
The fact the economics of DIY make sense, is the evidence of the market/state failure. (whether they really do make sense without fanciful efficiency calculations, I leave to you).
I think you need to make some better arguments to convince. Your argument only makes sense when wholesale cost of solar panels is significantly cheaper than retail. The better the economics of scale (i.e the smaller the difference between wholesale and retail) the more favourable "DYI" becomes, because the person had home does not need to cover the overheads that are necessary for large scale installations (financing, management, transmission, planning...). It's the same reason that hiring a vps to run all your compute is not necessarily cheaper than buying your own pc.
It makes sense for two reasons: firstly there's limited economies of scale in solar panels: they more or less make the same amount of energy per unit area and per dollar regardless of the size of the installation (rooftop is usually more expensive for installation but these systems have near zero installation cost). Secondly, because the generation is local you're not paying for any margin, co-ordination costs, or transmission costs. This secondary effect is already enough to offset the increased cost of rooftop installation in many cases.
(And maybe you can consider this a market failure, in that it doesn't fit some naïve idea of an efficient market, but you're always going to be paying for someone to make and take on the risk of the big, centralised version of things)
Where I live, in Argentina, every house has a water tank on the roof, which is filled from the water main through a float valve, like a toilet tank. Many houses need a pump to drive the water up to the water tank because the water main has such low pressure. This is somewhat expensive, and the pumps, float valves, and water tanks fail sometimes, which is inconvenient. And the tank is not really that high up, so the water pressure at the faucet is not that high, and it's somewhat variable, which is inconvenient when it changes the temperature of the shower.
Some other places I've lived, such as various places in the US, instead have a large shared water tank for an entire neighborhood, town, or even city—a so-called "water tower". If you've been to the US, you may have seen these. Making this work involves several expenses:
- Larger-diameter water mains to reduce head loss when water demand is high.
- Highly responsive repair crews to respond rapidly to water main breaks, because the higher-pressure water with a high flow capacity can be very destructive.
- The construction and maintenance of the large water tower, which is very dangerous if done badly.
- A high-powered pump to get water up the water tower in the first place.
However, these expenses turn out to be significantly smaller per person than the expenses of small per-house water tanks and water pumps. And they provide better service. (Also, because people are stupid, in the US they build many of their houses out of wood, so they need fire hydrants, which require the larger water mains anyway.)
So, the fact that people in my neighborhood Argentina are spending more to get worse water service is a failure of coordination.
Of course, people in the US can still put water tanks in their houses if they want to. In earthquake areas, it's even recommended to have a store of potable water that isn't dependent on the water main. But, because they have succeeded in collectively building excellent municipal water systems, they generally don't need to.
The claim that plantain is making is that people actually choosing balcony solar panels is a symptom of a similar failure of coordination. To me that seems plausible but not necessarily correct, for reasons I've explained in https://news.ycombinator.com/item?id=45487051.
People are entitled to do as they want, even if it's not profitable. I am just pointing out that if the economics of this add up, people have been seriously let down by their governments.
According to the article, the economics of balcony solar pay off in less than ~5 years. That's really pretty good compared to approximately any other point in the history of solar power. The payoff is small, but the investment is also small.
Now, sure: That quick payoff is only possible because electricity in Germany is very expensive, but there's reasons for that, too: Unlike some nations, Germany isn't sitting on a ton of high-quality fossil fuels.
They do have lots of lignite, and they do mine it and use it, but lignite is so low-energy that transportation becomes a serious financial burden: A train full of lignite can cost more to move around than it can produce, Joule per Joule. They've solved some of that problem by putting power plants right next to the mines (which is smart: build transmission lines instead of rail lines!), but their domestic fossil fuel resources are not a matter of policy. They're limited to whatever they have in the ground.
And for reasons that must make sense to someone, they've completely phased out their domestic nuclear power. (I'm not interested in discussing whether that's good or bad, but it remains fact.)
As far as I can tell, electrical production and distribution in Germany is comprised of a mixture of private entities (eg, companies with profit motive) and public (government-operated) entities -- similar to how it is where I am here in the States, and also where you are in Australia.
And quite clearly: The private entities are obviously interested in maximizing their potential profit. They are, after all, principally in the business of making money.
It's easy to say that it's a governmental failure that ultimately allows balcony solar to have such a quick return... but private enterprise is also involved, so they get to share the blame as well.
If it is profitable to do solar power at utility scale, in Germany, then: Why isn't more of it being done? If the answer is "just rent a few thousand hectares at a few hundred euros per year and cover it all with solar," then why does the private sector not cash in on all the easy money of utility-scale solar power?
That seem to be the conclusion when you start with the assumption "vertical scaling is always the best option". When you don't start with that assumption, maybe you reach a different conclusion.
The fact that balcony solar has such short payback periods really emphasizes the scale of the failure. Why can't utility scale operators use bulk purchases of the exact same panels, in a more optimal installation (south facing, unshaded etc) to achieve similar or better payback periods?
Balcony solar is a whole lot like Uber, a way to side step onerous regulators, landlords that won't permit/invest in rooftop installations, planning approvals, transmission bottlenecks (eg. SuedLink [1] being forced to use underground cables) etc. The German government tolerates it because it keeps voters happy and helps reduce dependence on foreign gas.
At the end of the day though balcony solar is better than nothing, so let's not let perfect be the enemy of the good.
> Why can't utility scale operators use bulk purchases of the exact same panels, in a more optimal installation (south facing, unshaded etc) to achieve similar or better payback periods?
Utility scale operators added about 17 GW (peak) solar in 2024, so about 20x as much.
Exactly! Wind expansion has been going great as-well.
I guess the more fundamental question is why these expansions haven't led to savings for energy consumers and why the economics of these micro-systems are so attractive.
It may be actually better (in the welfare-economics sense) to build the micro-scale setups because the economies of scale may actually be inverted by cheap solar panels. See my analysis in https://news.ycombinator.com/item?id=45487051.
That page, although it was written only four months ago, is citing LCOE figures from 02021, when mainstream solar panels cost €0.25 per peak watt. Now they cost €0.100 per peak watt—see https://www.solarserver.de/photovoltaik-preis-pv-modul-preis.... Power electronics and batteries are also enormously cheaper now. Also, note that the LCOE numbers it cites are for the US, where most of the costs stem from the US government's anti-renewable-energy policies such as punitive tariffs, policies that are not in effect in Germany.
That page also undermines its credibility by citing the hypothesis that the low cost at the time (which it acknowledges was already down to 36% of the number in 02012) was because the "massive wave of imports" was "subsidized by China’s central bank"; if that were the case, you'd expect that once China owned the world's solar market, the prices would have gone back up to reflect the true costs of manufacturing the panels, so that China's central bank could stop hemorrhaging money in these subsidies. Instead, the prices have continued to drop. They've dropped as much in the four years since that report as they had in the nine years before it. And, if you read the Department of Commerce filings justifying the "anti-dumping" tariffs, you will find that the arguments being made about "subsidies" are transparently ridiculous; the supposed "subsidies" include the fact that Chinese panel manufacturers pay their workers less than Turkish electronic assembly workers, and the fact that they have good public infrastructure to use.
It also incorrectly claims that solar panels need to be replaced after 25–30 years (that's just the warranty period) and that doing so would add US$20–30/MWh to Lazard's US$36/MWh LCOE, which is an obviously an arithmetic error that's off by orders of magnitude.
But its central claim, that rooftop solar is much more expensive than utility-scale solar, is actually true. The reason for this is mostly that rooftop solar requires much more labor and enjoys poorer economies of scale. You have to pay someone to design custom racking for your particular roof and a custom inverter and battery storage system for your house, pay someone to climb up on your roof and possibly die, pay for permitting and inspection, etc. You can find a more detailed breakdown of "turnkey installed cost" in SEIA's Solar Market Insight Report https://www.seia.org/research-resources/solar-market-insight....
However, all of these factors are completely the other way around for balcony power plants. You don't climb on the roof; you walk out onto the balcony. You don't design custom racking; you buy an off-the-shelf retail product. The same thing for battery storage, if you buy a system with battery backup. Instead of spending thousands of dollars, you just hang the solar panel off your balcony like a potted plant and plug the plug into the outlet. The engineering is being done at the factory for a mass-market product, not for your house or for a single utility-scale solar farm. So you're spending less in engineering and permitting and construction costs than a utility-scale solar farm would, not more.
There is one way in which balcony power plants are worse than rooftop solar: they are at terrible angles, so they don't get much sun. But that just means you get less power, maybe two or three times less than you'd get in an optimally-designed utility-scale plant. That matters much less now that solar modules are so cheap.
> Why can the government or industry not build solar power at an industrial scale
Because there is always a good amount of loss in transmissions.
For solar, the best thing for grid and consumers is to have it very very close to consumption.
Ideally, a home with a good capacity battery, coupled with solar panels, and a smart grid connected controller that charges the batteries based on grid conditions of demand and supply, would be a great system. Costly, but good for the grid.
The transmission losses are trivial. 5-10% max. It makes no sense to isolate batteries behind meters. Sharing batteries on a neighborhood or suburban level would make far more sense. We are meant to be a society, not libertarians living in proximity.
Perhaps the explanation is that it's not something that's useful or rational, but rather, something that fulfills emotional needs of some customers. It makes them feel good. And the manufacturers found they can profit from selling these things, so they sell these things.
Plus the time getting the material, driving to the hardware store another time to get something you forgot, doing the registration, plus the time needed for planning/ calculation of economical feasibility/ decision making. Even at a very moderate 50 € per hour rate (for the typical Gamer) the material cost is the smallest part of the project. Treat it as a hobby, but don’t tell me it is an investment.
You get everything you need shipped from Amazon. You open the box and install it. These things are designed to be set up by amateurs. It’s half a dozen screws per panel. To hardest part is lifting the panels outside the balcony.
As with many things, the hardware store is probably going to be rather expensive and transport is a hassle (most people do not have a car with enough space to transport solar panels). So you order this stuff from specialized companies who will deliver it to your doorstep in one more or less convenient shipment. Same for pretty much any bigger, more expensive things needed when building or extending a house. Hardware stores are convenient if you quickly need something but that's mostly it, IMO.
Founder, CEO, serial entrepreneurs, who have pivoted from micro-services to blockchain to ai bill their time out to themselves at $100,000 per hour. ROI - its all in the grindset.
Solar power is fundamentally different from traditional power plants because it's modular. Since the panel is the basic unit, a network of rooftop systems is as effective as a single large installation. A rooftop installation makes perfect sense.
Paying contractors to climb on rooftops one at a time and cable up a million distinct houses is clearly not comparable to an industrial installation. Similarly the generation from a balcony on a bad angle, and from walking around Germany, typically shaded, makes no sense.
You are completely ignoring the biggest cost: land. In a dense country like Germany, using millions of existing, "free" rooftops is vastly more efficient and economical than buying and dedicating scarce, expensive land for an industrial-scale farm. Also rooftop solar generates power at the point of consumption. This significantly reduces the need for new, expensive high-voltage transmission lines.
Power consumption in the EU has flatlined and is even falling. New HV transmission lines are not needed - put the solar farms next to some of the shut down nuclear plants (as we now do with big batteries in Australia and decrepit coal plants).
For context, a hectare (10000 m²) directly facing the sun receives 10 megawatts of sunlight at 1kW/m². The city of Kiel is at 54°19' north, so at the equinox a hectare near it receives about cos(54°19') ≈ 58% of that: 5.8 megawatts. If you were to cover the whole field with horizontal solar panels with a mainstream 22% efficiency, the peak electrical power generated that day would be 1.28 megawatts. But you'd need 2.20 peak megawatts of solar modules to do it, because the modules are rated based on directly facing the sun and getting 1kW/m² of sunlight, which they could never do in this situation. According to the prices on https://www.solarserver.de/photovoltaik-preis-pv-modul-preis... those modules are currently 0.100€/Wp, so that's 280 kiloeuros of solar panels. This is about an order of magnitude more expensive than the land under them.
The average produced would only be on the order of 100–200kW, because Germany's capacity factor is for shit. Kiel is in an especially terrible place, with only about 2.7kWh/m² per day on average, according to https://solargis.com/resources/free-maps-and-gis-data?locali....
In real life people tilt the panels in a solar farm toward the sun and leave space between rows of panels so they don't shade each other even in the winter. That is because, even at today's historically record low prices, the panels cost enormously more than the land they're sitting on, so it makes sense to economize a bit on panels even at the cost of needing more land.
This isn't a government failure. The government is correctly pricing the true cost of industrial land use: the loss of farmland and natural space.
Rooftop solar is cost-effective because it cleverly avoids that cost by using land that's already developed. It's not winning because of bureaucracy, but because it's using a limited resource in a smarter way.
That could start happening if Germany's electrical energy consumption were to grow 100× or so, yeah. That might sound like I'm being sarcastic, but no, cheaper forms of energy tend to lead to more energy usage, and solar energy is cheaper, so we might see a lot more energy usage. But we're talking about problems we'll have in 20 years after we've solved global warming.
It happens already. Lease for green land (probably wrong terminus) and arable land went up by more than 30% in ten years [1]. PV is arguably a very small factor of influence yet. But the pressure is real.
That page doesn't say anything about PV. https://www.ise.fraunhofer.de/content/dam/ise/en/documents/p... says that 17 million hectares are used for agriculture in Germany, 48000 hectares are used for golf courses, and (as of 02021) 32000 hectares were used for photovoltaics, which would be 0.2% of the agricultural area. I'm having a hard time finding current figures, but I doubt photovoltaics are more than 2% of the agricultural area yet. I don't think that's why land prices have risen 30%.
Thanks for looking up the numbers, and it wasn’t my intention to exaggerate the influence of PV. I just wanted to point out there is a lot of pressure and it may be a sensible policy to use up rooftops first instead of arable land (even though the influence of PV on land lease rates might be negligible today).
Most people in Germany don't live big and don't have any intentions of doing so. No AC and people have real concerns about the environment and our impact on it.
Obviously it won't happen anywhere from air conditioning. But, for example, atmospheric carbon capture (putting the CO₂ back in the ground) could use a lot of energy.
Most likely, though, it will be things we can't even imagine today.
Imagine that you're in 01980 trying to predict how people will use personal computers in 02000. Would you predict the World-Wide Web, Usenet erotica newsgroups, virtual reality, banner ads, Geocities, MUDs, and spam?
Or, in 01903 trying to predict how people will use flying machines or automobiles in 01923. Would you predict metal airplanes, women getting pilots' licenses, dogfights between forward-firing fighter planes, transatlantic airline flights, strategic bombing from the air, helium airships, and French airmail service to Morocco? Or, would you predict Henry Ford would be making two million Fords a year?
Things change. The last time we had a new cheaper source of energy like this was 250 years ago.
So by bringing up shading and suboptimal angle you're already admitting that for an unshaded balcony these things make sense? The overhead of hanging one of these over the rail of your balcony is pretty minimal, compared to industrial scale installations. There is plenty of overhead with finance, management, billing, land use, and utility profits. That's why it makes sense.
The cost of solar power is close to independent of scale, so the benefit of doing those industrial scale plants is often smaller than the one for repurposing some bit of underused land.
From your source, it's "at least 4 times more expensive", while at the same time it doubts the correctness of the numbers on large-scale plants and thinks it's too low.
Besides, it's all numbers from 4 years ago, when people weren't all putting solar panels on their balconies. And the report about gains from scale mention things like the lack of tracking in small scale installations, that the large-scale ones haven't used for many years now. So propose that your numbers are all wrong.
This is exactly right. Germany has failed to provide low cost electricity at scale and has now incentivised placing panels everywhere, even on those beautiful balconies we once invested in. It is not surprising that you are being downvoted by the solar stasi.
'Industrial scale' projects are also happening and they are quite easy to find on Google Maps, for instance around Berlin there are some pretty big areas covered in solar panels:
(interestingly most of those seem to be located in former East Germany - probably because land ownership isn't fragmented as much as in former West Germany due to the forced farmland sequestration after WW2).
It's mainly corruption, ignorance and incompetence. Germany has a strong fossil-lobby, because of industries and ancient home-tech. Around 15 Years ago, Germany had a strong solar-industry too, until the government basically buried it and sold it out to China, because of "failures" happening. Till today, there are forces trying to feed on nuclear-power and cheap Russian gas, while simultaneously sabotaging all renewables and electrification. It's so bad, they are willing to destroy whole industries for this BS.
Why can the government or industry not build solar power at an industrial scale, and then bring it to people's homes via the existing infrastructure at a price that makes this kind of micro-scale setup completely uneconomical?
It's bad enough when we have to put solar panels on actual roofs to reduce electricity bills. This is just absurd. Where are the economies of scale? Why are individuals having to take responsibility for their own energy generation? Are we doing our own sewer and water supplies next?