UNIVERSITY OF MASSACHUSETTS LOWELL GRID CONNECTED SOLAR ELECTRIC SYSTEMS, SOLAR ENERGY IN TEXAS

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1 UNIVERSITY OF MASSACHUSETTS LOWELL GRID CONNECTED SOLAR ELECTRIC SYSTEMS, SOLAR ENERGY IN TEXAS Source: r_arrray1.jpg Report by: Vivek T. Shah Grade: P a g e 1 16

2 Section 1: State of PV in Texas Texas is a large state in the southern U.S. with deserts, pine forests and the Rio Grande, a river that forms its border with Mexico. It is the second largest state in USA. In its biggest city, Houston, the Museum of Fine Arts houses works by well-known Impressionist and Renaissance painters, while Space Center Houston offers interactive displays engineered by NASA. Austin, the capital, is known for its eclectic music scene. 1 Latitude and longitude of Texas is 25 50' N to 36 30' N and 93 31' W to ' W. 2 The 2% avg. high temperature in Austin is 37 0 C and extreme min temperature is 7 0 C. 3 Area: 696,241 km² (268, sq. miles) - 2 nd largest state in USA 4 Population- 27 million - 2 nd most populated in USA Texas in the world map Source: P a g e 2 16

3 a. Current PV penetration Texas has always been an energy leader, from the oil boom that began in the 20th century to wind power today. Powered by growth across all solar sectors, Texas recorded its best-ever Q1 with 49 megawatts (MW) of newly installed solar capacity coming online, according to the recently released U.S. Solar Market Insight Report compiled by GTM Research and the Solar Energy Industries Association (SEIA). In the first quarter of this year, Texas trailed only five states California, Nevada, New York, North Carolina and Massachusetts in new capacity, kicking off what s expected to be a banner year in Texas is now on pace to install more than 200 MW of new solar capacity in 2015 alone. That s a huge jump nearly three times more than was installed in Texas added 41.6 MW of utility-scale solar in Q1, along with 4.3 MW of residential and 3 MW of commercial, bringing its statewide total to 379 MW enough to power more than 66,000 homes. The report went on to point out that $87 million was invested in Texas in the first quarter in new solar installations and nearly $340 million since the beginning of To put Texas remarkable progress in some context, the 379 MW of solar installed in the state today is nearly as much as the entire country had in What s more, from an environmental perspective, solar installations in Texas are helping to offset more than 410,000 metric tons of harmful carbon emissions, which is the equivalent of removing 86,000 cars off the state s roads and highways, or not consuming 46 million gallons of gasoline. 5 P a g e 3 16

4 Source: U.S. Energy Information Administration, Form EIA-923, Power Plant Operations Report. P a g e 4 16

5 b. 3 Largest PV installations Alamo 1, a 41 MW solar farm that sits on 445 acres of privately-owned land located off Blue Wing Road south of Loop 410, is the first of seven total solar farms planned throughout Texas as part of a deal. Alamo 1 s 167,000 photovoltaic panels rated at 295W each produce enough energy to power 6,600 homes and curb CO2 emissions by 57000t. Alamo 1 costs about $110 million. 6 The Alamo 4 (39.6 MW) project, located in Brackettville, about 201km west of San Antonio, is spread over 600 acres of privately-owned land. The 39MW project was installed with approximately 150,000 PV panels. It came online by the end of 2014 and served approximately 6,000 homes in San Antonio. Alamo 4 is OCI Solar Power's first Texas project outside of metropolitan San Antonio and employed approximately 550 people during construction. 7 P a g e 5 16

6 The 35 MW Webberville Solar Farm, located in Webberville, Texas, is the photovoltaic array in Texas. It is made up of 127,728 TrinaSolar solar panels, mounted on single axis trackers, covers an area of 380 acres (150 ha), and was built at a cost of $250 million. P a g e 6 16

7 It was expected to generate 61 GWh in the first year of operation, and 1.4 billion kwh over its 25 year life. It went live on Dec 20, While most cites list it as a 30 MW plant - its nominal AC capacity, the NREL database lists it as 34 MWP(DC).Austin Energy, which is purchasing the power generated under a 25 year PPA, has a goal of generating 35% of power consumed from renewable resources by Upcoming Alamo Projects in Texas 9 1. Alamo 5 95 MW Uvalde, TX Under Construction 2. Alamo MW Bakersfield, TX Under Construction 3. Alamo MW Haskell, TX Under Development c. Cost of Electricity d. Sources of electrical energy P a g e 7 16

8 State Profile and Energy Estimates 2014 Texas produces more electricity than any other state, generating almost twice as much as the next largest generating state. More than two-thirds of the electricity generated is from independent power producers. Almost half of the electricity generated in Texas comes from natural gas-fired power plants, while coal-fired power plants account for about one-third of the net electricity generation. Six of the state's 10 largest power plants are coal-fired. Two nuclear plants, Comanche Peak and South Texas Project, supply nearly one-tenth of the state's electric power generation. The rest of the electricity generated in Texas is powered by renewable resources, primarily wind. Texas is the largest electricity-consuming state. Unlike other regions where large net interstate electricity deliveries are available, the Texas power grid is largely isolated from the interconnected power grids serving the eastern and western United States. This isolation means the state is, for the most part, dependent on its own resources to meet its electricity needs, and it is not subject to federal rules. Among the contiguous 48 states, Texas is the only one that has a stand-alone electric grid entirely within the state. The largest share of retail electricity sales in Texas is to the residential sector. Almost six-tenths of the households in the state use electricity as their primary heating fuel. The residential use of electricity is higher in Texas than in other states, in part because of population size, but also because of high demand for air conditioning during the hot summer months and the widespread use of electricity for home heating during the generally mild winter months. 10 P a g e 8 16

9 e. Top 3 module suppliers and inverter suppliers SunEdison, Inc., the world's largest renewable energy development company, announced on 18 th March, 2015, that it will construct new solar plants in West Texas to supply the City of Georgetown with 150 megawatts of solar power for 25-years. The SunEdison solar plants will be interconnected in 2016, and will provide over 9,500 gigawatt-hours of clean energy to Georgetown through 2041, enough to power more than 24,000 homes a year for 25 years. Upon completion, SunEdison expects to offer this project for investment to TerraForm Power, Inc., a global owner and operator of clean energy power plants. This project will create close to 800 jobs in Texas during construction. 11 P a g e 9 16

10 First Solar, Inc. on September 4, 2014, announced the completion of Phase 1 of the Barilla Solar Project in Pecos County, Texas, bringing approximately 18 MWAC of generating capacity to the Texas competitive wholesale market. First Solar will offer electricity generated by the Barilla plant on a competitive open contract basis, making it the first such solar asset in Texas. First Solar developed, constructed and will operate the power plant, which incorporates a suite of advanced controls and capabilities essential to supporting grid stability and reliability within the ERCOT region. 12 SolarCity is the leading full-service solar provider in Texas taking care of you every step along the way and making your transition to clean, solar power as smooth as possible. We make it easy and affordable for Texas homeowners and businesses to go solar with system design, financing, free solar panel installation, and system monitoring included. Our solar installer team works with Texas building departments and utilities to help Texans take advantage of sunny days and generous solar rebates and tax credits. 13 Longhorn Solar in Texas: Most solar power inverters require the solar panels to produce at least 250 to 300 volts for the power inverter has enough power to boot up in the morning and shut off in the afternoon when power production drops. The Power-One inverters startup voltage is 140 volts, which means the power inverter start producing solar power 45 minutes earlier in the morning and produces power 45-minutes later in the afternoon. Adding almost 2-hours of extra solar power production per day adds up to a lot of extra power over the course of a year. On the flip side, the Power-One inverter also allows the maximum voltage possible, which enables longer strings of panels to be installed. 14 P a g e 10 16

11 KACO new energy debuts 1,500 kva inverter optimized with Ampt Used in combination with Ampt String Optimizers, the blueplanet 1500 TL3 achieves a 50 percent increase in rated output power, thereby lowering the specific cost of a system inverter solution by 33 percent.15 Alba Energy utilizes SolarEdge Inverters & Power Optimizers on both residential and commercial solar panel installations because they maximize power generation while lowering the cost of energy produced by the photovoltaic (PV) system. Tesla Motors recently announced a partnership with SolarEdge on their new rechargeable lithium-ion battery packs, which further illustrates the company s bankability. 16 f. Local PV manufacturing There are currently more than 417 solar companies at work throughout the value chain in Texas employing 7000 people. These companies provide a wide variety of solar products and services ranging from solar system installations to the manufacturing of components used in photovoltaic panels. These companies can be broken down across the following categories: 89 manufacturers, 22 manufacturing facilities, 145 contractor/installers, 36 project developers, 41 distributors and 107 engaged in other solar activities including financing, engineering and legal support. Some manufacturers in Texas are Connexa Energy LLC, Applied Materials Inc, Graphene Energy,etc 17 P a g e 11 16

12 g. Government incentive programs Austin Energy- Residential Solar PV Rebate Program Smart public policies, like the solar Investment Tax Credit (ITC), are providing a tremendous boost to the state s economy, creating thousands of new jobs and generating hundreds of millions of dollars a year in economic activity. What s really encouraging is the way municipal utilities, such as the ones in San Antonio, Austin and Georgetown, are leading the way in solar adoption with effective policies that deliver important benefits to their citizens, including competitive costs and stable rates over long periods of time, avoiding the volatility of fossil fuel prices and other market P a g e 12 16

13 whims. There are approximately 34 different financial incentives for PV installations. The incentives are classified as grant programs, loan programs, rebate programs, performance based incentive, corporate tax deduction, industry recruitment, property tax incentive and personal tax incentive. The eligibility criteria is based on the type of customer- residential, non- residential or utility. The sectors implementing the incentives are - State, Federal, Local, Non- Profit or Utility. 18 Section 2: Specific challenges for growing the PV Development Texas is the leading natural gas producer in the US presently. Texas produced 50.4% of its net electricity from natural gas in June This amounts to 33.3% of the U.S average natural gas production. The EIA July 2015 suggests that Texas generated 24,505 thousand MW of electricity (all sectors) from Natural Gas, which is the highest produced by any state in USA. More importantly, the second highest natural gas electricity producing state Florida produces slightly greater than half of Texas generation. The total electricity production was 40,712 thousand MWh in Jun-15, from which renewable power (excluding hydroelectric) generated 4191 thousand MWh which is around 10% of the total. Also, out of the 4191 thousand MWh, solar comprises only 47 thousand MWh (0.12% of total Texas generated electricity). This data clearly shows that Natural gas is the biggest rival to PV development in Texas. The residential cost of electricity (mainly generated by natural gas) in Texas is cents/kwh which is below the national US average price. This leads to a steep drop in consumer acceptance of residential solar panel installations. There are federal tax credits, but there are no state mandates or subsidies which discourages companies from constructing large scale solar plants. Texas currently has only 193 megawatts of large-scale solar arrays. 20 P a g e 13 16

14 3990 thousand MWh of electricity, out of the total 4191 thousand MWh generated from renewables came from wind power in Jun-15 in Texas. Although, wind can t be called a rival to solar energy, it does affect the growth of PV Development to a great extent. 19 Section 3: Market Penetration Strategy Texas has the highest solar potential throughout the United States. But, sadly it is ranked 6 th in solar energy generation in the US. There are several obstacles to be tackled for a good market penetration in Texas. Texas produces most of its electricity from Natural gas since it has an abundance of it which, leads to low costs of electricity. The costs of natural gas generated electricity should be increased for solar to look cheaper comparatively in the market. In fact, the cost of natural gas has already shown a gradual increase from Mar-15 to Jul-15. This would create an overall solar acceptance in the state. The Govt. incentives for solar energy are quite less compared to the other states. In fact, the Federal Tax Credit for solar energy was established recently in Incentives encourage the people to accept solar as a feasible option since money is what matters the most. Hence, General Solar should strike a deal with the Government wherein, it ensures that x amount of electricity will be produced from Solar Energy by x year. In return, it should ask for increased Govt. incentives for PV installations for public to accept General Solar. There are already close to 400 solar companies in Texas, hence we should be looking forward to the industrial and large-scale sector more than the residential and small-scale sector. Also, OCI solar power has projects of Alamo 5, 6 and 7, each having a capacity of about 100MW. General Solar should think of partnering with the Company since these plants would provide electricity to a considerable part of Texas. More than 90% of the renewable energy electricity produced in Texas is from wind energy. General Solar should merge with the top company generating large- scale P a g e 14 16

15 wind energy. Wind energy is unreliable in the summers in Texas and hence, the vast amount of sunlight can be used for most of the electricity generation in those times. Overall, the competition in the PV market in Texas is cut-throat but with some help from the Government, wide consumer acceptance can be created in the small scale sector too. P a g e 15 16

16 References &oe=UTF-8#q=texas 2. mapsofworld.com html Electric Power Monthly with Data for July All tables from here P a g e 16 16