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Term for Energy

Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | No Comments | Updated on Jun 30, 2011

Arguing for Locally Produced Electricity in Rural Communities

The content that follows was originally published on the Institute for Local Self-Reliance website at http://ilsr.org/arguing-locally-produced-electricity-rural-communities/

Rural areas aren’t just for energy export.

 

Dylan Kruse (Sustainable Northwest) at 2011 Rural Assembly from Center for Rural Strategies on Vimeo.

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The points in this great presentation are echoed in a recent Böll Foundation report called Harvesting Clean Energy on Ontario Farms, which notes that some farmers in northern Germany make $2.5 million in a good year growing wheat. They make $15 million harvesting the wind.

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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | 1 Comment | Updated on Jun 28, 2011

New York City Should Meet Half Its Peak Demand with Rooftop Solar PV

The content that follows was originally published on the Institute for Local Self-Reliance website at http://ilsr.org/new-york-city-should-meet-half-its-peak-demand-rooftop-solar-pv/

The City University of New York (CUNY) released a solar map of New York City last week, allowing building owners in the city to determine the amount of solar power their roof could host.  The cumulative impact is enormous, with city rooftops capable of providing half the city’s peak power, and 14% of its annual electricity consumption.

The city should immediately maximize solar power development and start saving millions in electricity costs.

At $3.50 per Watt installed, and with the federal 30% investment tax credit (ITC), solar power in New York City can provide electricity at 16 cents per kilowatt-hour (kWh), a full 4 cents lower than the average residential electricity price (as reported by the National Renewable Energy Laboratory’s PV Watts program). 

Commercial installations that can also use the federal depreciation tax deduction could deliver electricity for nearly 12 cents per kWh, 40% lower than the average residential rate.

These prices are well within reach.  Already in the U.S., aggregate purchasing has driven down residential solar PV prices as low as $4.22 per Watt.  The average cost of rooftop solar PV installations in Germany is between $3.40 and $3.70 per Watt.  In our new report, Democratizing the Electricity System, we show that even small-scale solar is being built for under $4 per Watt in the U.S.

As it turns out, when it comes to solar self-reliance, New York City is a microcosm of the state (in solar potential if not comparative electricity price).  In our 2009 analysis, Energy Self-Reliant States, we found that New York’s statewide rooftop solar PV potential was 15% of its electricity consumption, almost identical to CUNY’s estimate of 14% of the city’s electricity use.

Whether immediately (NYC) or in the near future (NY state), it’s clear that rooftop solar PV is the route to greater energy self-reliance and electricity cost savings.

Update 7/7/11: Wow, ConEdison already has 8.5 MW of solar PV on its system, only 1,791.5 MW to go!

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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | 1 Comment | Updated on Jun 27, 2011

Pricing CLEAN Contracts – feed-in tariffs – for Solar PV in the U.S.

The content that follows was originally published on the Institute for Local Self-Reliance website at http://ilsr.org/pricing-clean-contracts-feed-tariffs-solar-pv-us/

The price of solar is dropping fast, opening new opportunities for community-scale renewable energy across the country.  But despite the improving economics and tremendously sunnier skies, the United States lags far behind Germany in installing new solar power.  What might happen if the U.S.  adopted Germany’s flagship “feed-in tariff” policy, responsible for 10 gigawatts of solar in just two years?  Let’s take a look at how such a program would be priced.

First, we’re marketing conscious in America, so we’ll call it something better, like a CLEAN contract, for Clean Local Energy Accessible Now. 

Then we’ll need to adjust the German prices in three ways:

  1. Convert euros to dollars
  2. Adjust for U.S. sunshine
  3. Adjust for federal tax incentives 

But before we dive in to the German solar program, let’s quickly look at the raw cost of producing solar electricity in the U.S. along with the major federal incentive.   The following map (click here for an interactive version) illustrates the so-called “levelized cost” of solar PV, the total cost of the system (minus the 30% federal tax credit) divided by its expected electricity production over 25 years, based on an installed cost of $3.50 per Watt (common in Germany, and possible for distributed solar PV in the U.S.):

Levelized Cost of Solar PV @ $3.50/W over 25 years – 30% ITC included

Prices have fallen so much, that they are comparable to or lower than retail electricity rates in selected states in the Southwest (with great sun) or Northeast (with high electricity rates).  The following map illustrates (click here for an interactive version):

Average Residential Retail Electricity Rate (Feb. 2011)

So, solar is narrowing the gap with retail grid electricity rates.

Now, back to the analysis of a U.S. CLEAN contract program.  We start with the rates the Germans pay for solar PV under their feed-in tariff.  The euro to dollar exchange rate is currently around 1 to 1.4, giving us the following starting rates for rooftop solar PV projects in U.S. dollars per kilowatt-hour:

< 30 kW

30-100 kW

> 100 kW

> 1000 kW

$0.405

$0.385

$0.365

$0.304

The Germans pay these rates to anyone who can put up a solar panel, per kilowatt-hour sent to the grid, for 20 years.  These rates may seem high, but we’re just getting started.

Next, we have to adjust these rates down to account for the significantly better sunshine in the U.S.  For illustration, Albany (NY) has 33% better sunshine than Munich (Germany), even though Munich is in the “sunny south” of Germany.  Los Angeles gets almost 70% better sunshine than Munich.  We’ll pick St. Louis, MO, for its central location and average U.S. solar resource.  The following table illustrates the dramatic drop in the price required to offer a modest return on investment for a rooftop solar project.

< 30 kW

30-100 kW

> 100 kW

> 1000 kW

$0.27

$0.26

$0.25

$0.21

As good as these values look, we’re still leaving money on the table.  Almost every solar PV project built in the U.S. will take advantage of the 30% tax credit (even if they have to let a third party skim off up to half its value).  With a full 30% discount, however, the prices for solar PV projects in St. Louis would drop as follows:

< 30 kW

30-100 kW

> 100 kW

> 1000 kW

$0.21

$0.20

$0.19

$0.16

The following map provides a look at the prices for a CLEAN contract for rooftop solar PV (< 30 kW) in each state, based on one of the state’s sunnier locations (click here for an interactive version).  Prices would be up to 25% lower for the largest PV projects (over 1 MW).

CLEAN Rate for < 30 kW Rooftop Solar PV @ $3.50/W – ITC only

In many cases, commercial developers of PV can claim accelerated depreciation in addition to the federal 30% tax credit.  With this additional discount (worth around 20% of the project cost), the cost of a CLEAN contract falls even further, as shown on the map (click here for an interactive version).  Once again, prices would be up to 25% lower for PV projects 1 MW and larger.

CLEAN Rate for < 30 kW Rooftop Solar PV @ $3.50/W – ITC and depreciation

There’s a danger to looking at CLEAN contract rates with federal incentives, for two reasons:

1) Many individuals and entities (e.g. schools, cities, nonprofits) can’t effectively use a tax credit incentive.  

2) Tax incentive programs expire or are killed by “budget hawks” (or ideologues) in Congress.  

The 30% federal investment tax credit for solar is in statute until 2016, but let’s assume for a moment that it expired or that we want to look at the CLEAN contract rates for projects not able to use any federal incentives for solar power.  We still assume an installed cost of $3.50 per Watt.  

CLEAN Rate for < 30 kW Rooftop Solar PV @ $3.50/W – no incentives (click here for an interactive version):

This chart is a more accurate representation of the state of solar economics (without incentives).  It’s also the price required for the most democratic solar incentive program, one that would not be prejudiced against participants who couldn’t effectively use the federal tax incentives.

In the end, a CLEAN program in the U.S. will likely be premised on the use of one or both federal tax incentives and pay much less than this last chart.  It will make sense for ratepayers, but will probably not have the same democratizing effect as Germany’s flagship program.

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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | No Comments | Updated on Jun 23, 2011

The Electric System: Inflection Point

The content that follows was originally published on the Institute for Local Self-Reliance website at http://ilsr.org/electric-system-inflection-point/

A serialized version of our new report, Democratizing the Electricity System, Part 1 of 5 The 20th century of electricity generation was characterized by ever larger and more distant central power plants.  But a 21st century technological dynamic offers the possibility of a dramatically different electricity future: millions of widely dispersed renewable energy plants and… Continue reading

Pearl St. in Boulder, CO
Article, ILSR Press Room, Resource filed under Energy, Energy Self-Reliant States | Written by ILSR Admin | No Comments | Updated on Jun 22, 2011

John Farrell talks distributed generation and local authority on Boulder, CO’s KGNU

The content that follows was originally published on the Institute for Local Self-Reliance website at http://ilsr.org/john-farrell-talks-distributed-generation-and-local-authority-boulder-cos-kgnu/

I was on the air with local attorney and renewable energy guru Susan Perkins, interviewed by host Duncan Campbell.  A great conversation about Boulder’s effort to municipalize in order to have more control over its electricity system and energy sources. Click for show listing (and hit the tiny, blue play button) or just download an… Continue reading

Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | 1 Comment | Updated on Jun 14, 2011

Solar Economies of Scale (Update)

The content that follows was originally published on the Institute for Local Self-Reliance website at http://ilsr.org/solar-economies-scale-update/

In drafts of ILSR’s forthcoming report on a distributed generation future (check back June 22!), I took some flak for my solar PV economies of scale analysis.  In it, I used data from the California Solar Initiative (through 2009) to point out that most economies of scale in solar PV seem to be captured at a size of 10 kilowatts (a large residential-scale project). 

“The solar statements seem way off base,” wrote one reviewer. 

Upon further review, I stand by my initial claim.  But, I note that the critics have a point, as well.

For deeper analysis, I grabbed data from Lawrence Berkeley Labs’ 2010 report Tracking the Sun III, which provided a very nice breakdown of installed costs for solar PV by project size.  I then dropped those size ranges into the California Solar Initiative (CSI) data for the whole data set (2006-2011) as well as for just the past two years (2010 to present).  The following chart illustrates the findings:

The historic data confirms my earlier analysis, that most economies of scale are achieved at small size.  In the full CSI database, there’s a 23% decrease in per Watt cost when increasing project size from under 2 kW to 5-10 kW, but only a further 6% percentage point decrease in sizing up to over 1,000 kW.  The other two curves are quite similar.

But the historic U.S. data is not the only story. 

The Clean Coalition – a distributed generation advocacy organization – has different numbers on installed cost from their network of installer partners.  These figures, data on very recent or proposed installations, tell a different tale, illustrated below:

In the Clean Coalition data, the savings from 5 kW to 25 kW are about 10%, but the savings from upsizing to 100 kW are a cumulative 21%, and growing to 1,000 kW offers a total of 28% off the 5 kW price per Watt. In other words, economies of scale continue strongly through the 100 kW size range.

Their data is not alone.  In the German feed-in tariff, solar PV producers are paid a fixed price per kWh generated, with prices set according to the location of the solar PV plant (roof/ground) and by size (small, medium, large, etc).  Overall, Germany is simply cheaper, with average installed costs for 10-100 kW rooftop PV installations of just $3.70 per Watt.  But their economies of scale are also strong: there is a 10% price differential between rooftop solar arrays smaller than 30 kW and those  100-1000 kW, but an additional 15% price drop for projects over 1000 kW. 

The conclusion is murky.  Historical data in the U.S. supports my original assertion: economies of scale for solar PV are limited beyond 10 kW.  But recent installed cost data and the German experience both suggest that there are stronger economies of scale up to projects 1,000 kW (1 MW) in size.

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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | No Comments | Updated on Jun 10, 2011

How Technology Makes Distributed Renewable Energy Work

The content that follows was originally published on the Institute for Local Self-Reliance website at http://ilsr.org/how-technology-makes-distributed-renewable-energy-work/

A 3-day wind and solar forecast for Germany from the energy forecaster Enercast:

The forecast allows grid operators to plan ahead for the wind and solar capacity available at a given hour, making it easier to balance load.

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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | No Comments | Updated on Jun 9, 2011

Land Use Not a Barrier for Distributed Renewable Energy

The content that follows was originally published on the Institute for Local Self-Reliance website at http://ilsr.org/land-use-not-barrier-distributed-renewable-energy/

A column in the New York Times yesterday suggested that land use is the greatest environmental problem facing new renewable energy.  While getting the facts terribly wrong, it opens a door to talk about the advantages of distributed generation such as a unique proposal by Republic Solar Highways to put solar PV on highway right-of-way in California.

Robert Bryce’s column (the Gas is Greener) suggests that wind and solar have a large land footprint compared to gas and nuclear power, and therefore the latter are wiser environmental choices.  Of course, Bryce hasn’t read about the Germans, who have installed 10,000 megawatts of solar PV in the past two years, over 80 percent on rooftops.  Bryce’s concern for California meeting its 33% renewable energy standard by 2020 (the land use!) crumbles under the German’s torrid pace of rooftop solar development: if the same distributed solar PV program were done in California, the state could meet its RPS five years early without using a single acre of undeveloped land.

Bryce deserves a raspberry for his witless comment about wind farms, as well.  Before claiming that wind uses 128 acres per megawatts, he may have wanted to look at an actual wind power project.  Over 99 percent of a wind farm is simply the gaps between turbines to prevent interference (“wake turbulence”).  In fact, 80 percent of U.S. wind farms use less than an acre per megawatt, one reason that many farmers and ranchers are delighted to host revenue-generating turbines.

Despite its factual foibles, Bryce’s column underscores the fundamental problem with the renewable energy movement.  Too many people assume that wind can only be developed in 800 megawatt farms and solar power plants can only be built on hundreds of virgin desert, both linked into high-voltage transmission lines.  The Germans put the lie to this assumption with their solar program and wind power development.  And innovations in the U.S. also provide compelling counter-examples.

Republic Solar Highways, for example, has proposed a 15 megawatt solar PV project along the right-of-way on U.S. Highway 101 in California.  The plan would provide power for 3,000 homes and use land that currently gets an occasional mowing from the Department of Transportation, but is otherwise unused.  The idea has a lot of merit, as we explored in our 2010 report Energy Self-Reliant States:

On either side of 4 million miles of roads, the U.S. has approximately 60 million acres (90,000 square miles) of right of way. If 10 percent the right of way could be used, over 2 million MW of roadside solar PV could provide close to 100 percent of the electricity consumption in the country. In California, solar PV on a quarter of the 230,000 acres of right of way could supply 27% of state consumption.

There are environmental drawbacks to some centralized solar and wind projects and their attendant new transmission lines, but Bryce vastly overstates their land use requirements, and glosses over the additional land natural gas and nuclear grind up for mining and extraction.  Cost-effective distributed wind and solar power can be built in large numbers without using much undeveloped land, obviating the land use complaint.  

 

P.S. And distributed wind and solar don’t melt down, either.

Photo credit: Flickr user OregonDOT

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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | 3 Comments | Updated on Jun 3, 2011

Solving Wind’s Variability with More (Dispersed) Wind

The content that follows was originally published on the Institute for Local Self-Reliance website at http://ilsr.org/solving-winds-variability-more-dispersed-wind/

The solution to the variability of wind power is more wind.

The output from a single wind turbine can vary widely over a short period of time, as wind goes from gusty to calm.  The adjacent graphic (from this report) illustrates how a single turbine in Texas provided varying power output over a single day, varying from under 20 percent of capacity to near 100 percent!

But the same report also illustrated the smoothing effect when the output from these five wind sites was averaged.  The following chart shows (in dark orange), the smoothing effect of output when the wind output was averaged over five sites.

The impact is significant, and the optimized system varies from 15 to 50 percent of capacity, compared to individual turbine variability that’s twice as large.  Over a longer period (a year), the optimized (combined) system provides significantly more reliable power to the electric grid.  It reduces periods of zero output to a few hours per year, effectively zero probability.

Combining the output of the five sites also increases the probability that the output will be at least 5% or 10% of total capacity of the wind turbines.

Other studies have reinforced these findings.  For example, a report by Cristina Archer and Mark Jacobson in 2007 found that dispersing wind at 19 sites over an area the size of Texas increased the level of guaranteed output by 4 times. 

Wind power could not be the sole source of electricity for the grid without massive overbuilding of capacity, but its variability is an argument for more dispersed wind, rather than less of it.

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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | 7 Comments | Updated on Jun 1, 2011

Learning a Lesson about Net Metering

The content that follows was originally published on the Institute for Local Self-Reliance website at http://ilsr.org/learning-lesson-about-net-metering/

I just got a copy of a utility bill for a Minnesota business that has a 40 kilowatt (kW) solar PV array.  I’d hoped to get a sense for how quickly he’d pay off his array with the net metering revenue.  I was shocked. Payback time was 30 years.  Even if the business owner had… Continue reading