About a decade ago, I started a company building off-grid solar systems. We combined solar panels with lithium iron phosphate batteries—LiFePO₄—to bring electricity to places where the grid was unreliable, too expensive or nonexistent. We even had Department of Energy contracts for projects in Puerto Rico and developing countries.
The economics were simple. If the alternative was diesel fuel, miles of new power line or no reliable electricity at all, solar and batteries made sense. For an ordinary American house connected to the grid, they usually didn’t.
Then Donald Trump took office in 2017. Our federal contracts were canceled with about two weeks’ notice. We closed the company, and I stopped paying attention to the business.
I should have kept watching.
The hardware we were using has become dramatically cheaper. Solar modules now trade for a fraction of what they did then, and LiFePO₄ battery cells that once cost hundreds of dollars per kilowatt-hour can now be bought for a small fraction of that. The decline is large enough that systems we once thought made sense only in remote places are starting to raise questions about the ordinary electric grid.
The average American household uses roughly 30 kilowatt-hours of electricity a day. In much of the country, an eight- or nine-kilowatt solar array can produce about that much electricity on an annual-average basis. At today’s cheapest world-market prices, the photovoltaic modules themselves for such a system contain only about $1,000 worth of hardware. Thirty kilowatt-hours of low-cost LiFePO₄ cells—roughly one average day’s consumption—might represent another $1,500 to $1,800.