7 kw 35 solar PV modules 340 kw 1700 solar PV modules Solar Electricity from Dreamer s s Paradise to Everyday Use 2010 March 16 6,000 kw 30,000 solar PV modules Gordon Howell, P.Eng. 11,000 kw 55,000 solar PV modules Edmonton 2006-2010
Intro: My Goals To update you on: what is happening to the costs of solar electric systems; how this is affecting the price of solar electricity; what is happening to the price of grid electricity; how this all affects the economics of solar electricity It appears that solar electricity could be cheaper than electricity from the grid for homeowners within 2 to 4 years in Alberta. 2.2 kw solar PV systems Premier Gardens, California 2
Intro: Me We are solar electric system project developers working with solar energy since 1977 and with solar electricity since 1984 We manage, design, supply and commission solar electric systems We participate in provincial, national and international standards writing committees We have no vested interests in any one solar electric technology my house 2.3 kw since 1995 ~100% solar electricity 3
My Obligations as a Professional Engineer Professional engineers are required by law to present to you the truth. In my view, we are legally obligated to NOT: over-hype any technology; neglect to bring to your attention any pertinent matter. I seek and welcome any questions, comments, suggestions, challenges and criticism of anything I present here. This is a work in progress. Gordon Howell. P.Eng. is APEGGA member # 28241 Howell-Mayhew Engineering, Inc. holds APEGGA permit # 4284 4
Focus of Presentation Quick overview of the technology Market growth Solar electric system costs The price of solar electrical energy The price of grid electrical energy Economics of solar electricity 5
Declining Solar Prices, Increasing Grid Prices 55 /kwh (solar, with 5% mortgage) Solar Electricity Price 23 /kwh (solar, using your own money) Grid-Electricity Price 10.4 /kwh (2009 grid price in Edmonton) Grid Parity Grid parity: Utility Solar Assessment Study www.cleanedge.com, www.solarcatalyst.org 2009 2012 to 2014 6
Solar Photovoltaics (PV) A semiconductor device much like a computer chip The photovoltaic effect (but we only call it PV ) The energy in the photons knocks electrons out of their orbital shell 1 electron for 1 photon The semiconductor separates the charges The electric field generated causes the electric current. 7
Solar Electricity Solar PV Cell Solar PV Module PV can generate any amount of electricity. Large PV systems = more PV modules. Solar PV Array 5,000 modules 1000 kw 170,000 modules (200 W ea.) 34,000 kw PV array PV Terms 30,000 modules, 6000 kw 8
Solar PV System Major Components Solar inverter to convert to AC electricity Solar PV module to generate DC electricity Solar battery to store DC electricity maybe 9
Context: PV Modules Module manufacturers and countries: First Solar Evergreen Uni-Solar SunPower BP Solar Canadian Solar Day4Energy Suntech Photowatt Kyocera Sharp Sanyo Sharp Shell Isofoton and many more (America) (America) (America) (America) (Britain) (Canada) (Canada) (China) (France) (Japan) (Japan) (Japan) (Japan) (Netherlands) (Spain) single crystal silicon Technologies: single-crystal silicon (Si) multi-crystalline silicon (Si) amorphous silicon thin-film (CdTe/CdS( CdTe/CdS,, CIGS, CIS, GaAs..) multi- crystalline silicon 3500 modules available from 279 module manufacturers thin-film CdTe/CdS 10
Context: DC to AC Inverters Each: 1 kw to 7 kw, 1 phase Each: 505 0 kw to 1000 kw, 3 phase 640 inverters available from 55 manufacturers 11
Context: Can We Really Get Connected? Yes The solar electric or the microwind electric system is typically connected to the home, business, or farm. Solar or Wind Electric Customers House voltages: 240 and 120 V Transformer and electrical delivery pole Electricity generating plants Transmission grid from 25,000 volts to 250,000 volts High voltage transmission tower Electrical substation Delivery grid 25,000 volts and lower 12
Connecting to the Grid Alberta's Regulatory Process for connecting Micro-Generators (MG) to the electric grid as of 2009 January 01 5 paperwork steps to receive approvals for a house-sized solar power system the system is connected to your Electric Wires Company (EPCOR Distribution and Transmission, ATCO Electric, Fortis Alberta ) Another 1 step to sell your electricity your electricity will be sold to your Electricity Retailer price is negotiated, with a minimum equal to the energy purchase price 13
Grid-dependent Solar PV System 4 major components: PV array DC disconnect Solar inverter AC disconnect Solar PV 1 array No energy storage Simple to design, install, operate Most common grid-connected configuration 500 in Canada??? 120 in Alberta? 5+ million around the world? 2 3 4 14
Riverdale NetZero Energy House, Edmonton www.riverdalenetzero.ca Solar Electric System: 33 m 2, 5.6 kw Sanyo solar PV array 53 tilt for annual optimum generation sells surplus to the grid almost every day 15 SunnyBoy 6000 W inverter
Electric Wires Company s electrical distribution grid Import meter Export meter kwh kwh 1 2 3 Solar electric array DC Inverter Solar electric array DC to AC Inverter How can you generate solar electricity into a house and also back into the grid? 4 AC All electrical circuits in a house or building 1995-2010 Sells to the grid when there is a site surplus. Buys from the grid when there is a site shortage. 16
How does Alberta s net billing work? Energy Retailer, Electric Wires Company Electricity paid in full 10.4 /kwh 1 kwh 1 kwh 1 kwh Import 1 2 kwh Electricity is delivered to your neighbours by your Electric Wires Company for their normal delivery fee. Electrical energy credit 8.0 /kwh Export 3 Electricity paid in full 10.4 /kwh 4 kwh Electricity distribution wires Energy Retailer sells your energy to your neighbour for full retail price. Ordinary kwh meter Bidirectional kwh meter Net billing allows exported electricity to be valued at any price, such as: -a discounted wholesale price, - a price equal to the import price, or Neighbour PV system owner -a premium feed-in (green) price. 1 kwh supplied, 1 kwh paid for 1995-2010 17
Context: World-Wide Solar PV Growth MW of Rated Generating Capacity 13,000 12,000 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 45% growth World-Wide per year Grid-Connected over the Solar last PV Market 15 years Equivalent of 1,800,000 homes added in 2008 Total equivalent of 4,200,000 homes in 2008 USD 40 billion in 20 IEA PVPS countries in 2008 110,000 jobs in 2008 $30 billion per year market See www.iea-pvps.org for more information Grid-connected Solar PV Annual Addition World-Wide Grid-connected Solar PV Installed Capacity World-Wide 2,000 1,000 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 18
Context: Installed Solar PV Capacity Figure 1 Cumulative installed PV power in the 20 OECD countries (in 20 IEA PVPS countries, not including China and India) 14,000 Cum ulative installed capacity (M W ) 13,000 12,000 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Grid-connected centralized Grid-connected distributed Off-grid non-domestic Off-grid domestic 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 19
Context: Canadian Solar PV Market MW of Rated Generating Capacity 35 30 25 20 15 10 Canadian Solar PV Market 25% growth per year over the last 15 years Est. 600 grid-connected PV systems in Canada Est. 120 grid-connected PV systems in Alberta plus thousands of off-grid systems 2090 solar PV jobs Total Solar PV Annual Addition in Canada Total Solar PV Installed Capacity in Canada 5 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20
Edmonton Examples: Donsdale new Size: 2 kw. 38 GE tile modules Cost of solar PV system: $14,000 (? if installed today) Generates $200 of electricity per year 21
Edmonton Examples: Mill Creek retrofit 16 modules Cost of solar PV system: $20,000 (?) Generates $260 of electricity per year 22
Edmonton Examples: Strathearn retrofit 10 PV modules Cost of solar PV system: $15,000 (?) Generates $190 of electricity per year 23
West of Henday Freeway retrofit Size: 1.44 kw. 12 AstroPower 120 W modules Cost of solar PV system: $12,000 (?) Generates $130 of electricity per year 24
Edmonton Examples: Inglewood retrofit Size: 2 kw. 16 AstroPower 120 W modules Cost of solar PV system: $17,000 (?) Generates $180 of electricity per year 25
Edmonton Examples: Whyte Avenue retrofit Size: 2.4 kw 12 Sanyo 200 W modules Cost of solar PV system: $20,000 (?) Generates $260 of electricity per year 26
Riverdale NetZero Energy House new www.riverdalenetzero.ca Size: 5.6 kw x 2. 28 Sanyo 200 W modules x 2 Cost of solar PV system: $37,000 x 2 Generates $560 of electricity per year x 2 27
Mill Creek NetZero Energy House new Cost of solar PV system: $40,000 when completed Generates $600 of electricity per year 28
Belgravia NetZero Energy House new Cost of solar PV system: $40,000 when completed Generates $650 of electricity per year 29
Dick d Alquen House retrofit Size: 4.4 kw 22 Canadian Solar 200 W modules Cost of solar PV system: $30,800 Generates $510 of electricity per year (2009 prices) 30
Laebon CHESS NetZero Energy House new Red Deer Size: 2.2 and 4.5 kw. 36 Sharp 187 W modules Cost of solar PV system: $50,000 (?) Generates $750 of electricity per year 31
Avalon Discovery III NetZero Energy House new Red Deer Size: 8.3 kw. 244 Open Energy 34 W roof tiles Cost of solar PV system: $55,000 (?) Generates $800 of electricity per year 32
Avalon Discovery II NetZero Electricity House new Red Deer Size: 3.7 kw. 32 Evergreen 115 W modules Cost of solar PV system: $26,000 (?) Generates $400 of electricity per year 33
Calgary retrofit 36 modules, 200 W each Cost of solar PV system: $48,000 (?) Generates $900 of electricity per year 34
Calgary retrofit Cost of solar PV system: $14,000 (?) Generates $270 of electricity per year 35
Calgary retrofit 24 PV modules Cost of solar PV system: $15,000 (?) Generates $280 of electricity per year 36
Acreage Near Devon new Size: 5.6 kw. 28 Sanyo 200 W modules Cost of solar PV system: $42,000 (?) Generates $650 of electricity per year 37
Farm Near Gunn retrofit Size: 2.4 kw. 12 Sanyo 200 W modules Cost of solar PV system: $18,000 (?) Generates $300 of electricity per year 38
Premier Gardens, California new 39
Ota City, Japan retrofit 40
340 kw California Solar PV System on Parking Lot, California 41
Electricity Bill EPCOR-RRO (2009) Time-based connection fee + energy-based fee Energy fee = amount of electricity purchased and delivered + city access fee + GST For a typical household, the potential savings are $685 (75% of your bill). Electricity bill = Electricity price x electricity consumption + grid-connection fee Electricity bill ($) Average household bill: $914 per year Energy fee $685 Annual connection fee ($229 per year, 25% of energy costs) { $0 0 Average household electricity bill 6600 kwh/year Amount of electricity used (kwh) Actual price of electricity including purchase, delivery, taxes & GST (10.4 /kwh) (2009 average) Average household electricity consumption 42
Consumer Price Consumer of Electricity price of electricity EPCOR RRO /kwh 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 California electricity issues /kwh historically rising at 4% per year though there have been increases of 5% to 20% in the last few years as the government weans us off the regulated rate option (RRO) 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 43
$/yearelectricity Connection Consumer electricity connection Fees fees EPCOR D&T $300 $250 2009: $229 per year $200 $/year $150 $100 $50 $0 historically rising at 5% per year natural gas connection fee is $464 per year in 2009 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 44
Challenge in Presenting Economics $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 PV system Size: 4.4 kw. Installed price: $7/W Purchase cost: $30,800 installed Energy generated: 5585 kwh per year 25-year price of energy: 23 /kwh Perceived average energy savings of $360 per year Perceived economics: payback of 87 years or 1.1% return on investment What is the life-cycle cost of PV? compared to What is the life-cycle cost of utility bills? 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 based on perceived 5.4 /kwh electricity price (which is not correct) 45
Economics Indicators Payback easy to calculate a bit of a red herring number though everyone loves to have this number skews peoples understanding of economics cannot easily compare against much else Return on Investment can compare with stock market and bank interest rates our preference Energy price ( /kwh) easiest to understand and use easiest to compare with prices of other energy forms complex to calculate 46
Year x Year Economic Analysis Calculates the amortised PV electrical energy price ( /kwh) Takes into consideration: Complete cost of installed system PV performance (1 st year and declining ½% per year) Inflation rate, financing costs, amortisation period, discount rate Maintenance costs Present-day grid-electrical energy prices for purchase and delivery Increase in grid-electricity prices (due to inflation, transmission lines, GHG fees, carbon capture and storage, coal-fired air-pollution-based health care costs) Accelerated Capital Cost Allowance (50% per year) (for businesses) Solar PV incentives (feed-in tariffs, buy-down programmes, when applicable) 47
Year x Year Economic Analysis What I found The price of coal- and natural gas-electricity appears to be artificially cheap because of: Very low coal royalty rates ($16 million per year only, = 0.034 /kwh) Low prices for GHG emissions, presently $15/tonne No payments for damage to our health care system (caused by the air pollution and resulting sickness and death from burning coal and natural gas) or damages to the environment They say we will also soon paying for: Increases in the price of GHG emissions, likely rising to $100/T by 2020 Costs for carbon capture and storage (CCS) Costs of new transmission lines 48
Homeowner s Electricity Pricing 40 /kwh PV price $7/W, 25-year, own money Grid price in 2009, 25-year, 4% escalation with escalation with new transmission lines with GHG fees 23 /kwh 17 /kwh PV price $5/W, 25-year, own money Grid price, in 2009 10.4 /kwh 13 /kwh 13.8 /kwh 18.5 /kwh 0 /kwh 2009 2012 2009 only 25-year average 25-year average 25-year average 49
Homeowner s Electricity Pricing 40 /kwh PV price $7/W, 30-year, own money Grid price in 2009, 30-year, 4% escalation with escalation with new transmission lines with GHG fees 19.9 /kwh 14.4 /kwh PV price $5/W, 30-year, own money Grid price, in 2009 10.4 /kwh 13.7 /kwh 14.3 /kwh 19.1 /kwh 0 /kwh 2009 2012 2009 only 30-year average 30-year average 30-year average 50
Declining Solar PV Prices, Increasing Grid Prices 56 /kwh (solar, with 5% mortgage) 42 /kwh (solar, with 3.5% mortgage) Solar Electricity Price unsubsidized no environmental side-effects 32 /kwh (solar, with 2% mortgage) 23 /kwh 10.4 /kwh (2009 grid price in Edmonton) (solar, using your own money) Grid parity: Utility Solar Assessment Study www.cleanedge.com, www.solarcatalyst.org 2009 Grid Parity 2012 to 2014 Grid-Electricity Price huge environmental effects highly subsidized fossil fuelled electricity does not pay for the damage it causes to the environment and to our health care budgets 51
Strengths with Solar PV 1. Highly attractive to public 2. Fully renewable energy source 3. Proven technology thousands of systems installed 4. Can be easily scaled from homes, to businesses, to municipal-scale, to industrial-scale, to utility-scale 5. Can be located throughout society s infrastructure 6. Zero operating emissions or noise 7. Inflation-proof 8. Political-proof 9. Low or zero maintenance and operating costs 52
Energy and Emissions Payback Solar PV is zero-emission electricity. Payback for emissions and energy used in its manufacture, transportation and installation: 1 to 4 years depending on its application. In contrast, what is the energy payback for coal-, gas- or nuclear-sourced electric generating station? (no-one seems to ask but it is just as important if you build them too fast then you increase your energy issues, not decrease them) 53
Weaknesses with Solar PV 1. Not dispatchable (with present technology) same as many energy efficiency measures 2. High capital costs are a deterrent is this different than the tar sands of 30 years ago? 3. Needs innovative financing mechanisms is this different than the tar sands of 15 years ago? 4. Takes up a lot of land area but we have lots of space throughout our infrastructure to accommodate much of this 54
Present Challenges with Solar Electricity Purchase costs are high though typically decreasing by 10% per year Not a lot of broad-based experience in Canada supply and installation chain is growing in its experience and depth Has to compete with highly subsidized coal- and natural gas-electricity from the grid Previously, little interest by governments in developing policies and programmes that facilitate it (Ontario, Saskatchewan and Medicine Hat (www.hatsmart.ca) now have incentive programmes) 55
How Do We Want To Organise Ourselves? Biggest issue is public awareness of what is possible so how do we train people (design professionals, trades, supply chains) on how to design, install, sell PV systems? The bottom line: How do we want to organise ourselves as a society to value the environment to change attitudes, perceptions and policies so we can take advantage of these sustainable business and environmental opportunities? 56
Our Designs Today With the economics of solar PV looking great, we need to be making all our buildings and infrastructure PV ready Ready to accommodate solar PV in the near future Ensure that the design decisions being made now do not prevent or encumber solar PV being installed later. 57
we hold the future in our hands www.greenedmonton.ca www.riverdalenetzero.ca www.solaralberta.ca Download this presentation and others from www.hme.ca /presentations www.ecosolar.ca We welcome any feedback, questions, suggestions, comments and challenges to anything we present. Photo credits: Gordon Howell and several others Gordon Howell, P.Eng. Howell-Mayhew Engineering Edmonton Phone: +1 780 484 0476 E-mail: ghowell@hme.ca 58 1995-2010