A correspondent for the Economist in California (they don't use names) writes about considering a move to solar power for his house. He is well located, getting 300 days of sun per year with good exposure, and his well-insulated house rarely needs air conditioning. With his low-e windows and his compact fluorescent bulbs, he consumes only 8,300 KWh per year, costing him $ 900.
However if he wants to go solar, he would have to shell out $ 48,000 to get enough solar panels to feed the house, plus inverters, switches and installation bringing the cost up to $ 65,000. He concludes that financing the project after grants and assistance "would mean repayments of roughly $600 a month for ten years, even after setting the interest charges against tax. And all that just to feel good about saving $75 of electricity a month. Better to buy a couple of tons worth of carbon offsets each year for $70 and have done with it."
He is right, of course, it will never make sense if you deal with supply but ignore demand.
Slapping silicon on a roof in quantities necessary to power a single-family house, even a well insulated one, is never going to be cost-effective unless the house and its systems are designed or redesigned from the ground up to maximize it.
When Andy Thomson designed his miniHome, energy management was critical. The key decision was to use a variety of power sources in the most efficient way; propane gas is used for heating, cooking and refrigeration because it is efficient, there are no transmission losses, and it packs a lot of BTUs. Electricity is used for electronics and light only, and directly at 12 volts instead of losing efficiency through the inverter. He also installed a small wind turbine, as there is often wind when there is no direct sun. He also kept his home small, because power requirements are proportional to size.
Result? $ 2500 worth of solar panels is all he needs to go for days without sun.
Installing photovoltaics is only one portion of a design strategy- solar works wonders for hot water, wind often packs much more power, new efficient appliances might drop the required load significantly. To say "Going solar is a luxury few can afford" and write it off is silly. ::Economist