john b’s blog

I am familiar with City Bank’s credit card practices and do not want my tax dollars used to help City Bank survive their financial difficulties. City Bank and other banks have issued credit cards with usurious interest rates that have reached 30% annually. These rates have made tremendous sums of money for City Bank and other banks.

At the time City Bank was making large sums of money from their clients, they were and continue to be very unpleasant and difficult to contact and almost impossible to work with.

Now it turns out that they have miss managed the money they have earned from their usurious rates.

There needs to be some modicum of social justice. The men who developed the business that took 18% (or more) annually, while prime rates were < 5%, and treated their clients (benefactors) badly, need to suffer the consequences of their greed. It is not enough to say that letting these banks close will cause hardship for the employees of the banks and the banks vendors. It is true that it will cause hardship, but the business practices that take advantage of people and waste resources should not be rewarded.

Please do not let my tax dollars be use to take care of City Bank.

U.S.Air was having trouble selling their middle seats, so they contracted with United and the two companies came to an agreement on the price for the seats. United bought the seats and sold them as seats on a United flight. When I bought a discounted seat from United, I could not get a seat assignment, because it was not on United equipment and they were not tracking U.S.Air seat assignments.

On the short term U.S.Air wins a sale. On the short term United gets the margin between their sales cost and my purchase price, and I don’t get what I want for a lower cost.

On the long run United’s and U.S.Airs reputation is tainted in this customers mind and I avoid both companies, because I think they have forgotten they serve their customers (me) and I feel hood winked.

Sunday, flying home from Seattle on U.S. Air, I was asked, “Would you like something to drink?” I asked for some water and they said it would cost $2. I responded, “I don’t want bottled water, I would like tap water.” They responded, “There are no complimentary drinks, no complimentary water.”

Earlier, when I checked in at the curb they asked, “Do you want to check luggage?” I answered, “Yes, I want to check a bag.” They said, “That will be $17.”

This was an unusual flight. It was booked, as a United Airlines flight, through Expedia. When I went to select seats, during the purchase, selection was not available. I did not understand until I went to check in and found that the carrier was U.S.Air. Of course the seats were all middle seats. Fortunately, I could changed them to (my preferred) isle seats.

The market is differentiating. Everything of value in the air industry is being unbundled and priced separately. We are already accustomed to being charged for more space, bigger seats, and more-or-less service. We are getting use to being charged for not planning ahead, staying over a weekend, traveling one-way, food, and beverages. Perhaps, in the extreme middle seats will cost less that window seats, which will cost less than isle seats. Seats in the rear of the plane will cost less than middle and the front will be most expensive. Carry on luggage to be stored under the seat will cost less than luggage stored overhead, which will cost less than checked luggage. All of the services rendered in flight will cost: food, beverages, music, movies, and facilities. The same kind of differentiation is beginning to be applied to services at the airport. If you want to check in at the curb, you pay more than you pay at the check-in counter. In the future, when laws evolve, the cost of items may cost you more if you prefer them. Some people prefer window seats. Others prefer isle seats. Some may actually prefer middle seats. Our preferences are known and may influence the cost of our preferences.

The season of the red, gold and green leaves is upon us. The maples are the color of half the rainbow, green, yellow, orange and red; the birches are green yellow and brown. Nestled in the green oaks are tufts of yellow and the larches have just started to turn chartreuse. The spruce, steady in the seasons, but not in the wind, remain their forest green. We have passed the autumnal equinox and are progressing through the Analemma, shortening our days and watching the sun proceed further south. On the south side of the figure-eight the light is low and soft in the sky.

The deer have changed to their darker winter coat, the white of their tails and ears show, as they brazenly forage at dusk on the meadows. The warblers have passed through on their migration to South America. Only the Yellow Rumped warble with a short migration remain and they will soon move-on. The Jays raucously call to one another as they swoop from tree to tree. Fresh water loons bob on Casco Bay swells before they continue. Cool nights have all but muted the crickets. They crawl around trying to finish what they need before they end. We are about to loose our island to the next season’s inhabitants.

The ships of the armada and the boats of the flotilla are being withdrawn and dry docked in anticipation of the changing winds. The field of moorings looks barren, only populated by the boats from the floats. The floats will soon be stacked motionless, their floating carcasses no longer bumping and grinding in the swell. A few hearty souls sail Casco Bay on the last of the southern wind, admiring the russet islands that look like reclining beasts in the briny blue.

Sadly the Island Castles are being readied for what ever the next season brings; closed, drained, shuttered and emptied. Water is drained from pipes and antifreeze added to traps and toilets. The hot water heater’s endless torrent is pumped or drained. Curtains are lowered, washed, folded and put away. Beds undressed and the linens washed, folded and put in their closet. Porch furniture and hammocks from their grotto are put away and cushions fluffed and stored. The dregs from the pantry, refrigerator and larder are packed in coolers and bins, ready for the final trip to the main land. The beautiful fall light is dimmed, as the shutters are closed, to protect the sills from the winter wind and rain, sleet and snow. In the final act the power mains are switched and Jack and Jackie are called for a pickup.

We hello one another, as we walk down Ottawa to Civilian Dock and Harold’s boat. We talk of the closing, the dregs party, deer, the island, boats, the sadness of our fellow’s effort and loss, the happiness of another’s successful operation, and gossip about this ones warts and that ones eccentricity. Our dregs are removed to the landing float. We remix in groups, keeping the dogs apart, we start a new discourse. The St. Croix arrives. Everything is loaded. Harold calls. Some exit Civilian by the ramp onto the float clime the stairs to the St Croix. We wave to others and leave a Cushings Island Fall.

Solar power generation is very enticing. It has real appeal for consumers of electrical power for many reasons: it requires a free fuel, light. It does not generate pollutants as a byproduct of creating electrical energy. It releases us from purchasing a fuel from markets (companies, countries) outside of our control. And it keeps our electrical power generation fuel and power generation system inside our own country may be inside our own yards.

But trying to understand the economics of solar power is not trivial. To start, the note is going to begin from a household point of view. Most of us can relate to the electrical power needs of a household. Table 4 shows the Electricity Consumption by End Use in U.S. Households in 2001. It indicates that the average home consumes about 10,600 kWh in a year. Another way to look at this is to convert this into the power consumed in an day or an hour:

29kWh/day = 10,600kWh/year / 365 days/year

or 1.2kWh/hour = 10,600kWh/year / (24hr/day*365day/year)     (1)

Recognizing that a Watt is a Volt * amp and that house voltage in the U.S. is 110 Volts, another way of expressing 1.21 KW is:

11A = 1.21 kW / 110 Volts                                                             (2)

So, the average house in the U.S. draws on average 11 Amps from the electrical grid.  

We can use this observation or fact to determine the number solar panels our average U.S household will need to take care of its electrical needs and it is approximately 7 (180W/panel * 7panes = 1260 W or 1.26 kW) or 7 * (3ft * 5ft) = 105 ft².  The problem with this analysis is that the panels only generate electricity when the Sun shines on them. There are many variables that influence the Suns illumination: the Earth’ s rotation, the Earth’s precession, weather, latitude and altitude. Obviously the average household needs more than 7 solar panels (105 ft²) and, as we have said before it depends on a bunch of variables. Figure 1 presents the average daily sun in the U.S. in kWh/m²/day. Sunlight reaches the Earth’s outer atmosphere at strength of 1367 watts per square meter. Atmospheric losses reduce the sun’s power to about 1000 W/m² when the sun is directly overhead on a cloudless day. Figure1 shows the average daily sunlight falling on a square meter surface which has been tilted toward the southern horizon at an angle equal to the latitude of the location. Note that diffused as well as direct sunlight is considered, making this map applicable to flat plate collectors. It should be noted that of the 24hr in a day we get 3.9hr of effective light (at our latitude and weather pattern).We can use these figures to give us an estimate of the number ft² of solar panels we need, if we know the efficiency of our solar panels. The most efficient PV modules usually employ single-crystal silicon cells, with efficiencies up to 15%. Poly-crystalline cells are less expensive to manufacture but yield module efficiencies of about 11%. Thin-film cells are less expensive still, but give efficiencies to about 8% and suffer greater losses from deterioration. The commercially available solar cells are poly-crystalline, so we are about 11% efficient. We live in the Boston area so the average daily sunlight is 3.9 kWh/m²/day. Considering the efficiency of our solar panels and the average daily sunlight we can calculate the kWh/m²/day

3.9 kWh/m²/day *11% = .429 kWh/m²/day                                 (3)

To achieve the 29 kWh/day our household needs we are going to need 67 m² of panels:

 67 m² = (29 kWh/day / .429 kWh/m²/day)

or 720 ft² = 67 m² * 10.76 m²/ ft²                                             (4)

Each panel is 3ft X 5ft, so we need 58 panels:

58 panels = 720ft² / 15 ft²/panel                                                   (5)

Now we know approximately the number of solar panels we need to operate our average household, so we can start to talk about the cost of purchasing and installing them. We can get estimates on the life time of the panels from a bunch of sources. All of the life times are estimates because we have not been using the panels for their life time and their performance degrades gradually, so life time means the panel degrades below some level. From the cost of purchasing and installing the solar system, the life time and the total kWh of electrical power the panels produce, we can calculate the cost of the electrical power. Then we can compare it to the cost of other power generation systems (coal, gas, nuclear and petroleum).

So let’s begin calculating the hardware cost and the installation costs.  Table 1 shows cost estimates for California and for Massachusetts. It considers the cost of the hardware and installation, the possible rebates from the state and the federal government (there are other rebates available), cost of loan, cost of electricity saved and income tax deduction (31% of loan payment). The analysis shown in Table 1 indicates that the household monthly cost in California and Massachusetts would be less than the households electrical energy cost from the utility.

From a variety of sources the life time of polysilicon photovoltaic is about between 20 and 25years.

So let’s use the more conservative 20 years. During the twenty years of use the panels generated 10,600kWh/year or 212,000kWh of power. During the same time we spent the panels cost the house hold $528/year or $10560 in California and $912/year or $18240 in Massachusetts. So the cost of the power for the household per kWh during the 20 years was $0.0498/kWh in California and $0.086/kWh in Massachusetts.

Table 2 is shows the Electricity Production Costs in cents/kWh for coal, gas, nuclear and petroleum. The electrical power production cost for the household in California is less than the electrical industry electrical power cost of gas and Massachusetts is less than the electrical industry electrical power cost of petroleum, but more than the cost of coal, gas and nuclear. On the other hand the cost of electrical power production cost for both households cost much less than they would be charged for electrical power by electrical power industry. Table 3 shows the cost of power in various market segments by region and by sector.  The household in California would save $0.140-0.050 = $0.090/kWh or $954/year or $19080 over 20 years. The household in Massachusetts would save $0.176-0.086 = $0.090/kWh or $954/year or $19080 over 20 years, the same amount.

Cost of maintenance of the photovoltaic systems for both households has not been considered in this model. To be complete it must be considered.

Figure 1, Average sunlight in kWh/m2/day

Table 1, Financial Calculations for Installation Cost

Table 2 Electricity Production Cost

Table 3 Average Retail Price of Electricity to End Users

Table 4 Electricity Consumption U.S. Households