Anybody Buying Yet? Where’s the Bottom?

[Nick87]

I almost pulled the trigger on solar. Made a lot of sense. I’ve checked it out 4-5 times throughout the years. I think a lot of the price gougers went out of business when the tax credit went away and the tariffs went into effect. I think a lot of the low overhead, American sourced companies are eager for buisness. Assuming a 4% annual increase on KW/h I’d have about 22 years of electricity for free assuming the studies showing 30 year life are accurate(which I believe they are). Lots of un-utilized roof square footage out there.

I've came close several times. Just not sure.

 

[PoleX]

I've came close several times. Just not sure.

I’m getting my roof done and roofs get beat to hell in Montana so if I was going to do it, now makes the most sense. The only reason I’m not is I could see us moving before it pays itself off. Otherwise I’d probably do it and trade my run around car in for an electric and speed up the return. I’d also do a metal roof if my HOA allowed.

 

[Nick87]

I’m getting my roof done and roofs get beat to hell in Montana so if I was going to do it, now makes the most sense. The only reason I’m not is I could see us moving before it pays itself off. Otherwise I’d probably do it and trade my run around car in for an electric and speed up the return. I’d also do a metal roof if my HOA allowed.

I cant stand the sight on the roof. Or the weight or well pretty much any of it. I've got plenty of room on the south side of the property though. Just a complete eye sore and I take a lot of pride in my house.

 

[SAJ-99]

I am not very well-versed on this, and this is a genuine question, but my understanding with solar has been that the generation isn’t necessarily a problem, it’s the upkeep/maintenance and replacement as panels wear out, get dirty, breakdown, etc. I assume that natural gas, nuclear, etc. all have a much higher upfront cost to construct and get running. But how does that compare to the ongoing maintenance cost for solar?

The LCOE is based on lifetime. I’m not sure you can exclude the building cost difference from the equation. Maintenance costs for solar continue to decline but they are generally pretty low at baseline. I’m not sure what they are for coal and nat gas but the 24/7/365 power plant is a myth. Everything has some maintenance and remediation costs. My big question is labor - I’ve seen estimates that are wildly high but I’ve also seen guys working for wind contractors at hotels and there are quite a lot of them. Any estimates will probably vary by source. Total, all-in cost really isn’t a question anymore.

The problem people have with renewables (particularly HT) is usually the footprint and connection cost. It takes more land and that land might be far away from grid. I can agree with all that and would prefer decentralized rooftop solar, but utility scale renewables w/batteries is happening regardless, mostly on private land.

 

[Nick87]

The LCOE is based on lifetime. I’m not sure you can exclude the building cost difference from the equation. Maintenance costs for solar continue to decline but they are generally pretty low at baseline. I’m not sure what they are for coal and nat gas but the 24/7/365 power plant is a myth. Everything has some maintenance and remediation costs. My big question is labor - I’ve seen estimates that are wildly high but I’ve also seen guys working for wind contractors at hotels and there are quite a lot of them. Any estimates will probably vary by source. Total, all-in cost really isn’t a question anymore.

The problem people have with renewables (particularly HT) is usually the footprint and connection cost. It takes more land and that land might be far away from grid. I can agree with all that and would prefer decentralized rooftop solar, but utility scale renewables w/batteries is happening regardless, mostly on private land.

My grandparents farm is about 1/4 mile from a substation. The offers they have received to lease it for solar is absolutely mind boggling, I mean insane. However nobody will offer to buy it for solar when asked. I find that telling. Thankfully my grandparents who are getting way up there in age do too.

 

[SAJ-99]

My grandparents farm is about 1/4 mile from a substation. The offers they have received to lease it for solar is absolutely mind boggling, I mean insane. However nobody will offer to buy it for solar when asked. I find that telling. Thankfully my grandparents who are getting way up there in age do too.

Somebody is taking the offer. When you think about it, what’s the difference between farming 500 acres of corn that will be used for Ethanol and 500 acres of solar panels that will generate electricity? Besides the cost of the tractor, combine and trucks, not much.

 

[jryoung]

My grandparents farm is about 1/4 mile from a substation. The offers they have received to lease it for solar is absolutely mind boggling, I mean insane. However nobody will offer to buy it for solar when asked. I find that telling. Thankfully my grandparents who are getting way up there in age do too.

Lower up front capital costs and no burden of taxes other than personal property. Margins rule.

 

[bayoublaster7527]

The vilification of O&G is mostly a narrative created by lobbyists. No politician wants higher fuel prices, but there are certainly differences in the approaches.

The stock market doesn't lie and it disagrees with the "never come close" part. It's just a matter of time. Most of the US economic growth is coming from tech infrastructure, which is power hungry. The only way to add power as fast as you can build datacenters is through solar and wind, which is why they make up 90% of the additions to utility-scale electrical production. There are already some European countries that produce more than half of their electricity from various renewables. California gets an overwhelming majority of its electricity from renewables, and even Texas inches closer to that 50% mark every year. Again, it's just a matter of time.

O&G is certainly not going away anytime soon and will never be 0%, but "all of the above" is the only way to meet future demand. Some countries have figured this out. We continue to make it a d*@%-measuring contest.

“The vilification of O&G is mostly a narrative created by lobbyists.”

That statement is not even remotely accurate if you live in Colorado and watch the statements made by members of the ruling party in the General Assembly. However, their statements and that narrative many times don’t actually match how they vote. Which speaks to your point that most don’t want higher fuel prices.

 

[BigHornRam]

I am not very well-versed on this, and this is a genuine question, but my understanding with solar has been that the generation isn’t necessarily a problem, it’s the upkeep/maintenance and replacement as panels wear out, get dirty, breakdown, etc. I assume that natural gas, nuclear, etc. all have a much higher upfront cost to construct and get running. But how does that compare to the ongoing maintenance cost for solar?

Solar upfront costs are much higher than for a natural gas generation facility. Solar only generates electricity when the sun shines, so you will need natural gas generation for back up, and peak demand support.

Construction Costs for Gas-fired Power Remains Well Below Those for Solar and Wind - IER https://share.google/7EQa3hGDEbnuhZAi8

 

[SAJ-99]

“The vilification of O&G is mostly a narrative created by lobbyists.”

That statement is not even remotely accurate if you live in Colorado and watch the statements made by members of the ruling party in the General Assembly. However, their statements and that narrative many times don’t actually match how they vote. Which speaks to your point that most don’t want higher fuel prices.

So the war on O&G is some people saying a bunch of mean things about them and hurting their feelings before letting them drill? Ok.

 

[Bonasababy]

https://www.startribune.com/minneapolis-federal-reserve-neel-kashkari-interest-rates-iran-war-strait-of-hormuz/601828820?utm_source=gift

 

[406dn]

So the war on O&G is some people saying a bunch of mean things about them and hurting their feelings before letting them drill? Ok.

No, it's quite a bit more than that. There should be a rigorous debate on smart policy and regulations. But my side of the aisle too often goes quite a ways out on the point of diminishing returns.

A half a lifetime ago, when I was first employed by big oil, the sulfur content in diesel was capped at 0.50%. Some years later, to reduce SO2 emissions, the limit was lowed to 500ppm. The refinery had to make some investments to make meet this limit. Then a few year before I retired the limit was reduced to 15ppm. The effect of that is that the diesel leaving the refinery is essentially sulfur free. This is since any contamination outside of the refinery can make the diesel outside of the regulation.

To do this, they had to not use the heaviest molecules that had historically become diesel. The way a refinery strips sulfur from a molecule is causing a reaction with hydrogen, that takes the sulfur off the molecule, and creates a H2S molecule. On large molecules, this reaction also often cracks the molecule into two or more smaller molecules, unsuitable for diesel.

Refineries cannot produce as much diesel from a barrel of crude, as before. This is one reason there is the spread between gasoline and diesel.

Switching subjects, but still on the point of diminishing returns. There is an oncoming requirement for new home construction to put in furnaces that are 95% efficient. This requires a more complicated furnace and installation. I recently decided to replace our 20 year old furnace. We went with an 80% efficient furnace. Out of curiosity, I got a bid on the cost of a 95% furnace. It was ~$3k more than the other one. Since our gas bills run around $100/month. During the non heating season, the gas bill is $25 or so.

So the gas to heat our home is ~$75/month for say five months. The 95% efficient furnace would knock about $12/month off the bill. The pay off would be ~50 years.

This is the kind of regulation that pushes many people away from the Democratic party.

 

[Bonasababy]

No, it's quite a bit more than that. There should be a rigorous debate on smart policy and regulations. But my side of the aisle too often goes quite a ways out on the point of diminishing returns.

A half a lifetime ago, when I was first employed by big oil, the sulfur content in diesel was capped at 0.50%. Some years later, to reduce SO2 emissions, the limit was lowed to 500ppm. The refinery had to make some investments to make meet this limit. Then a few year before I retired the limit was reduced to 15ppm. The effect of that is that the diesel leaving the refinery is essentially sulfur free. This is since any contamination outside of the refinery can make the diesel outside of the regulation.

To do this, they had to not use the heaviest molecules that had historically become diesel. The way a refinery strips sulfur from a molecule is causing a reaction with hydrogen, that takes the sulfur off the molecule, and creates a H2S molecule. On large molecules, this reaction also often cracks the molecule into two or more smaller molecules, unsuitable for diesel.

Refineries cannot produce as much diesel from a barrel of crude, as before. This is one reason there is the spread between gasoline and diesel.

Switching subjects, but still on the point of diminishing returns. There is an oncoming requirement for new home construction to put in furnaces that are 95% efficient. This requires a more complicated furnace and installation. I recently decided to replace our 20 year old furnace. We went with an 80% efficient furnace. Out of curiosity, I got a bid on the cost of a 95% furnace. It was ~$3k more than the other one. Since our gas bills run around $100/month. During the non heating season, the gas bill is $25 or so.

So the gas to heat our home is ~$75/month for say five months. The 95% efficient furnace would knock about $12/month off the bill. The pay off would be ~50 years.

This is the kind of regulation that pushes many people away from the Democratic party.

Can't disagree with anything here, but I think what's needed should be considered non-partisan, but would scare the h#ll out of many and cause very wealthy people to rebel. Which is why in our political system won't allow it, and displays what's wrong when that gets in the way of real substantive and smart change.

If we ever wondered the war in Iran made it crystal clear. Energy sources can be a threat to national security and the economy as a whole.

But here in the US we allow companies to manage it not to maintain our security but to profit as they see fit. That includes taking non-renewable resources and shipping them right out of our country, when the national interest would better be served by giving priority to what's best for us.

This is why so many have problems with the energy industry IMO, at least Oil/Gas and coal. Its not partisan IMO.

It has unmistakable value to US Citizens, yet is managed not for them but for the highest profit.

The best thing for the country would be a sane approach that better hoards energy sources that are limited for us, where environmental harm is likely that is never allowed if product doesn't stay in the US, and that looks at Oil/Gas and Coal as a bridge to nuclear and renewables (I treat them together as others have mentioned).

This is an area where the US is far behind other developed countries. We need to do better.

 

[SAJ-99]

No, it's quite a bit more than that. There should be a rigorous debate on smart policy and regulations. But my side of the aisle too often goes quite a ways out on the point of diminishing returns.

Fair. Most of what you describe came from rigorous debate and smart policy (clean air act was 1970, back when both parties could talk to each other). But it is defined by perspective. Regarding those changes, your position defined it as a "war on O&G" while I most saw it as a move toward cleaner air. Someone has to be at least 50yo to remember how SO2 and acid rain slowly ate away at the paint on cars, not to mention the negative impacts on aquatic ecosystems. I don't want to go back to that, so the price difference between diesel and Rbob will just have to exist. I'll deal with the price inflation. And let's be honest, despite all those regulatory changes, the refinery you worked at is still in business, still employing people, still kicking out products, still making a profit, and i'm sure still crying about how all the regulation is so onerous. I have learned not to listen to them just like I don't listen to those people screaming about how we all need to totally go away from O&G. It's just noise with no practical solutions.

I have found the same thing you did on trying to improve the home, be it solar panels, heat pumps, or your furnace. It is why I argue that government rules can't mandate things without also addressing how dealers will take advantage of the consumer. You might be surprised how willing the HVAC guy would be to negotiating the price down...considerably.

Chart below on SO2 shows that we made very good progress over the time you mentioned. I think that is a win.

U.S. sulfur dioxide emissions 1970-2023| Statista

SO2 emissions in the United States have fallen by more than 90 percent between the years 1970 and 2023.

www.statista.com

 

[SAJ-99]

But here in the US we allow companies to manage it not to maintain our security but to profit as they see fit. That includes taking non-renewable resources and shipping them right out of our country, when the national interest would better be served by giving priority to what's best for us.

Yep. I can't wait until the recent export numbers are released. "Energy independence" means selling our oil to China.

 

[bayoublaster7527]

So the war on O&G is some people saying a bunch of mean things about them and hurting their feelings before letting them drill? Ok.

So here is an example that hits a bit closer to home, the hunting community here in Colorado. Below is a link to “Colorado Backcountry News” article. Which is neither a backcountry nor a news outlet. It is a thin-veiled propaganda page for the anti-hunting groups in Colorado that aims to smear the sportsmen community. They intentionally used that name to try leverage the name brand notoriety of BHA. Obviously not associated with BHA in any way.

Colorado Backcountry News (@coloradobackcountrynews)

Dan keeps telling on himself. Read that again and strip away the polished conference language. Chevron table. Boone and Crockett dinner. SCI crowd. Furtakers of America. Industry insiders. Political strategists. The same closed loop of people congratulating each other while calling it...

substack.com

They call out Dan Gates from Coloradans For Responsible Wildlife (major sportsmen org in CO, beat Prop 127) for sitting at the Chevron table at a Boone & Crockett and SCI event. The fact that they caught him associated with Chevron is this big “gotcha” moment. Almost like they got him colluding with Al Qaeda or something.

 

[406dn]

Regarding whether we should keep all of our fossil fuels for domestic use.

Every refinery is engineered to run a crude supply with somewhat unique physical properties, available to them. Not every type of crude oil can be refined in every refinery. Keeping all the oil onshore would likely mean that many refineries would have to modify their processing units. Also different crudes produce different amounts of the various products. Forcing all crude to remain onshore could well mean shortages of some products, and a glut of other products. I am ok with oil companies trading crude, to find both the best price, and the best outlet for a particular crude.