An article in the New York Times last week suggested that a dearth of financing is holding back solar power in the United States. In particular, the authors note that “the country needs to build large plants covering hundreds of … Read More
In by far the most exhaustive and detailed study to date, the National Renewable Energy Laboratory (NREL) found that solar homes sold 20% faster, for 17% more than the equivalent non-solar homes, across several subdivisions built by different California builders.
The study looked at a number of housing developments where the homes were otherwise identical except for the solar energy systems.
Also interesting was that buyers were more interested in solar when it was-preinstalled:
If solar was already on the house, and factored into the price already, buyers were more likely to pick a house with solar. But if it was just one more decision to be made at the point of purchase, the decision got shelved.
The death of German renewable energy advocate Hermann Scheer last week – dubbed the sun king or even the Stalin of renewables – is a unique opportunity to reflect on his largest legacy, the feed-in tariff, a policy responsible for the rise of the renewable energy industry.
The feed-in tariff offers prospective renewable energy producers three simple and powerful tools: a guaranteed connection to the grid, a long-term contract for their electricity, and a price for their power sufficient to make a reasonable return on investment. The result of the feed-in tariff is to make renewable energy generation easier to develop and easy to finance. It creates a sort of energy democracy where, to paraphrase the chef from the Disney movie Ratatouille, “anyone can generate”.
The feed-in tariff was the dominate policy in Denmark as wind power rose on the back of local cooperatives to provide as much as 20 percent of that country’s electricity. Thanks to Dr. Scheer, it was the policy that energized Germany’s solar industry, one that now generates gigawatts of new distributed solar PV every year. In fact, as the feed-in tariff policy spread to other nations, it has been responsible for the deployment of 75 percent of all solar PV projects and 45 percent of all wind projects worldwide.
Though many policy makers are not familiar with the feed-in tariff, the policy has spread to North America, shepherding $9 billion of investment to Ontario’s renewable energy market as well as shaping the market in Vermont, California, and Gainesville, Florida.
To learn more about the feed-in tariff, check out our 2009 report: Feed-in Tariffs in America: Driving the Economy with Renewable Energy Policy that Works or visit the Alliance for Renewable Energy or the FIT Coalition websites.
When we released our report on community solar power last month, we expected a few comments on the grades we gave to the nine featured community solar projects. We also generated a really robust conversation about the location (on buildings or on the ground) of community solar PV projects and made a disheartening discovery about the cost of roof repairs when a solar PV array is present.
In the report, our criteria for solar PV location gave high marks for rooftop solar PV systems because of their use of existing infrastructure, lower marks for ground-mounted systems in brownfields, and the lowest grades for greenfield systems. In one particular case, we gave a ‘C’ grade to the Clean Energy Collective’s project because while it used otherwise unusable land near a sewage treatment plant, it was still ground-mounted.
The response to their ‘C’ grade made us re-evaluate our grading system. On reflection, there are three major considerations for the location of a community solar (or any distributed renewable energy) project.
Location Criteria for Community Solar
- Preservation of Open Space
- Use of Existing Grid Infrastructure
- Lifetime Cost for Participants
The open space issue cannot be ignored, as demonstrated by the opposition to centralized concentrating solar thermal power and solar PV power plants in the Mojave Desert and San Luis Valley in Colorado. Projects that use rooftops will rarely encounter resistance on environmental grounds (although there can be issues with historic districts). From the perspective of open space, there is still a higher value in a rooftop project than a ground-mounted one.
Existing Grid Infrastructure
The issue of existing grid infrastructure is not as clear cut. In general, distributed solar PV projects minimize the need for new grid infrastructure by plugging into the grid at low voltages and in a variety of places.
Rooftop solar would seem to have an advantage in this. With few exceptions, a rooftop solar PV system can easily interconnect through the building’s grid connection. A rooftop solar PV system doesn’t change the capacity required by the local grid connection because net metering limits typically mean that no one installs a system that produces more than the building consumers.
But our error was to assume that ground-mounted systems would not take advantage of existing infrastructure, as well. In fact, the Clean Energy Collective solar project connects to existing infrastructure at an adjacent sewage treatment plant. Several other community solar projects in the report were constructed by utilities and presumably built next to existing substations where the new generation could easily be absorbed into the local grid. In other words, we should have graded this location criteria separately from the open space issue.
The third issue – and one we’d never considered – is that rooftop PV systems may have to be removed and reinstalled if the roof needs replacement or repairs. While PV systems typically lose a small portion of their potential output (< 1%) each year, the systems can operate for decades, far longer than the typical residential or commercial roof (20-25 years in Minnesota). In other words, there’s likely to be one roof replacement during the life of a PV system.
Reinstalling a residential rooftop PV system could cost $6,250 or 25% of the installed cost of the system
In our investigation, we found that moving residential PV systems to accommodate a roof replacement could cost as much as 25% of the initial system cost (and over 35% of the net cost after the application of the 30% federal tax credit). Moving systems on a commercial roof was less expensive, on the order of 15% of initial installed cost (around 25% of the system cost after the tax credit).
The following chart illustrates the range of costs we found relative to an initial installed cost of $5.00 per Watt for commercial and residential PV systems.
But this chart is somewhat disingenuous, because solar PV owners never pay the full installed cost. Instead, there are a slew of tax credits and rebates that reduce this initial price. The next chart shows these roof repair reinstallation costs relative to the net cost after the 30% federal tax credit.
The cost issue is also complicated by various ownership arrangements. If the building owner also owns the array, the cost of moving the PV system is their responsibility. But what if they lease the solar array? Does the leasing company bear the cost of system safety when the roof is repaired or replaced or is it still the responsibility of the building owner? Will that cost be assessed when the roof is repaired or escrowed from the start of the project?
A CEC representative noted, “I guarantee you that a building owner (lessee) will never sign a long term lease that requires them to pay the costs of reinstalling a system after roof repairs, etc.” If CEC’s recently completed 77 kW community solar array had been built on a rooftop and required a move, the cost to its individual investors would likely be around $2,000, increasing the upfront cost for those individuals by nearly 30%. In addition, CEC couldn’t have offered the utility or its customers a 50-year service level agreement.
Conclusion: Location is Complicated
Obviously, there’s much more to the ground v. rooftop issue than meets the eye, from interconnections to roof repairs. Look for a transformation in our Community Solar Report in the next few weeks reflecting on this complex issue.
Traditionally, the reliability of small PV systems’ power output has been a concern for utilities, project developers and grid operators, since all it takes is a few clouds to disrupt the power flow of a small array. But the Berkeley Lab study suggests that when PV plant arrays are spread out over a geographic area, the variability in power output is largely eliminated.
This means that for utilities, the distributed generation of small PV arrays could mean increased efficiency, reduced costs and a quicker path to a cleaner energy portfolio.
The boon of concentrating solar thermal power plants is their ability to deliver more consistent electricity, and to offer thermal storage (cheaper than batteries) to expand their daily coverage.
But it might be in serious trouble. And this time the culprit is not cheap natural gas, the Koch Brothers, nor the desert tortoise advocates.
…The relentless price declines of PV panels allows developers to build PV plants at a lower cost than their [concentrating solar thermal] CST cousins. This issue is illustrated in the following Capital Cost per watt chart (an excerpt from the upcoming GTM Research “CSP Report”). In 2010, the price to build a CSP park run by Troughs, Power Towers or Dish-Engines will cost between $5.00 and $6.55 per watt (AC). On the other hand, utility-scale PV projects can limbo below $3.50 a watt (DC).
Distributed solar photovoltaic (PV) proponents have recognized that solar is not without economies of scale – larger installations generally have lower installed costs per Watt of peak capacity. But new data suggests that these economies are significantly smaller than previously … Read More
Residential solar PV in Los Angeles is getting a huge boost from a new community solar buying group. With typical residential installation costs for crystalline solar PV, residents would see a 20-year payback on a solar PV installation or a … Read More
Rooftop solar is no longer the playground for granolas and Germans. But even when utilities join the solar PV game, they find that the distributed nature overcomes many of the technical and political barriers. A 2008 change in federal tax policy opened the door to utilities to invest in solar PV and utilities like PG&E are planning sizable installations (250 MW). PG&E will do a ground-mounted field of modules in the desert, but other utilities are finding distributed PV makes more sense:
Southern California Edison already plans to scatter 1 MW and 2 MW rooftop PV installations across its service territory, part of its goal to deploy 250 MW of PV over the next five years. Minimizing transient spikes is one reason. A second is that transmission remains the No. 1 barrier to renewable energy growth in California, says Mike Marelli, the utility’s director of renewable and alternative power contracts. “We can implement smaller systems with little or no transmission” additions, he says.
It’s hard to argue that transmission is a barrier when you’ve got 250 MW coming online without it! The good news is that the distributed solar also helps overcome some of the variability issues with solar power:
“During cloudy periods, the output from PV can get noisy with spikes,” which can have an effect on the grid, says Kelly Beninga, global director of renewable energy for WorleyParsons. PV installations around 20 MW in size can be managed without too much trouble. Larger than that and portions of the grid can be affected by passing clouds… To better understand the issue, NV Energy is studying power output variations that may result from deploying PV in and around Las Vegas. The study won’t be complete for another year, but Tom Fair says early data suggest that geographic dispersion helps dampen variability. A second finding is that solar facilities need to be placed on strong parts of the grid. “That leads us away from having huge amounts of PV at any one site,” Fair says. Ten to 20 MW at any one site might be the limit.
The utility interest in solar PV may help remove some of the stigma, and show that even small-scale modules can have a big-scale impact.
Photo credit: Schroeder, Dennis – NREL Staff Photographer