Transcript Slide 1

Economics of
Photovoltaic Systems
Original Presentation by J. M. Pearce, 2006
Email: [email protected]
PV Economics Basics
• Solar Photovoltaic Cells convert sunlight directly into
electricity
• They are sold on a $/Wp basis or $/power
• Wp is the power in Watts for Peak sun hours -- the
equivalent number of hours per day, with solar
irradiance equaling 1,000 W/m2, that gives the same
energy received from sunrise to sundown.
• To convert power to energy simply multiply by the
amount of time that the cell is illuminated
– W * hr = 1 W-hr
• Electricity (energy) is normally billed $/kW-hr
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Economics of a Solar Electric Home
• A typical American uses ~ 9,000 kW-hrs/year
• A well-designed U.S. home needs 4kW-5kW
of PV to provide for its energy needs
averaged throughout the year
– Depends on location (solar flux)
– Energy use of home
– Because calculating on /Wp basis you do not
need to worry about efficiency
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How much for a
Solar Electric House?
• The 2nd presentation discussed the
components of a grid-tied solar home system
• The price tag for the complete installed
system including all labor as of 2006 is
between $5/Wp to $10/Wp
• For a 4kW system:
– 4000Wp x $5/Wp = $20,000
– 4000Wp x $10/Wp = $40,000
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Cost of Energy Production
Photovoltaic cells: $0.20-0.40 per kW-hr
Wind turbines:
$0.04-0.05 per kW-hr
Gas:
$0.02-$0.03 per kW-hr
Coal:
Economics of Photovoltaic Systems
< $0.03 per kW-hr
5
Financing PV
• For new homes a PV system can be folded
into the mortgage – long term low interest
loan
• For retrofits of existing homes PV can be
economic with:
– Financial assistance through grants, subsidies, or
other incentives
– High costs of electricity in your area
– Green power purchase agreements
– Off-grid Applications
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PV Incentives
• One stop shop for financial incentives is www.dsireusa.org/
• The Database of State Incentives for Renewable Energy
(DSIRE) is a comprehensive source of information on state,
local, utility, and federal incentives that promote renewable
energy.
• Lists includes:
– Corporate Tax Incentives
– Direct Equipment Sales
– Grant Programs
– Leasing/Lease Purchase Programs
– Loan Programs
– Personal Income Tax Incentives
– Production Incentives
– Property Tax Incentives
– Rebate Programs
– Sales Tax Incentives
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Where PV makes
Economic Sense Now
• Remote sites that are too far from power
• Or where the power is too unreliable for a
given application (e.g. internet server)
– Costs for power lines range from $8000 to
$75,000 per mile.
– As a general rule, if you are more than ½ mile
from a line, solar is probably the best alternative.
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PV : Cheap Electricity
for Road Work
In areas that have
grid power, where
the cost of
tearing up the
streets and/or
other
construction are
expensive.
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Portable Radio Station
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The Developing
World
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Stand Alone Systems
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Coast Guard Stations
and Aircraft
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Bus Stops and
Emergency Phones
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Solar in
Space
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Parking Lights
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Running Trails and
Lighthouses
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Solar
powered
monasteries
!
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When will PV make economic
sense for me?
Economy of Scale
$3.12/Wp to $3.56/Wp
0 subsidies
Grid-tied
Market
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Industry-Developed PV Roadmap
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World PV Module Production (MW) Increases
500
400
300
World PV installations in 2004 rose to 930MW -growth of 62 % Consolidated world production of
PV now 1.15 GW+
U.S.
Japan
Europe
Rest of world
512.2
390.5
287.7
201.3
200
154.9
125.8
100
0
77.6 88.6
69.4
55.4 57.9 60.1
46.5
40.2
33.6
1988 1989 1990 1991 1992 1993 19941995 1996 1997 1998 1999 2000 2001 2002
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Source: PV News, March 2003
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PV System vs. Electricity Costs
44
Cost of Generated Electricity (cents/kWh)
40
Capacity Factor = 0.2
(U.S. Average)
36
32
28
Japanese Retail Rate
24
20
German Retail Rate
Capactiy Factor = 0.25
(South West U.S)
16
Pennsylvania Retail Rate
12
8
4
0
$9.00
Additional Assumptions:
System Lifetime = 20 years
Real Interest Rate = 6%
O&M = 0.1 cent per kWh
$8.00
$7.00
California Retail Rate
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
Installed PV System Cost ($/Wp)
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What you can do
• Energy consumers would sign up on www.iwillifyouwill.org
• Give names, addresses, phone numbers, e–mail addresses,
and "pledge levels."
• Your pledge level would indicate how many peak Watts of
solar panels you would be willing to purchase based on the
price of an installed system.
• Your identifying information would be kept confidential;
however, your participation level would be posted on a
publicly accessible Web site.
• In this way consumers become "subcontractors" to the
major solar cell manufacturers providing needed market
data
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New Technology
Could Play a Role
• Heterojunction with Intrinsic
Thin-layer
• Sanyo
• 18.5%
• 30MW (by the end of FY 2003:
coupled with current
production boost total output to
60MW)
• Annual production is increased
to 120 MW in 2005.
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Built-in Incentives
Building Material Replacement Value
Material
Credit
Material avoided
by BIPV Installation
$1/sq-ft
Asphalt Shingle roof,
monolithic glazing
Laminated glass w/coatings
metal roofing/cladding
Roofing slates, clay tile,
high performance coatings
Stainless steel,
photochromic glass
$5/sq-ft
$10/sq-ft
$20/sq-ft
Economics of Photovoltaic Systems
$/W Value
$0.10/W
$0.50/W
$1/W
$2/W
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Utilizing Financial Incentives
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Subsidies for Fossil Fuel
• Fossil fuels and nuclear energy receive 90% of the
government money, (with PV receiving <3%).
• Hidden costs that we all subsidize for the energy
industry which include:
– Military (U.S. military spends billions/yr just
defending the oil supplies in the Persian Gulf).
– Air pollution leads to the death of 120,000
Americans every year and costs $40 billion in health
care annually.
– Hidden Subsidies – pollution, global climate change, war
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The Question of Energy
Unemployment
• If we switch to solar what about all the fossil
fuel jobs?
• A 1997 Pembina Institute report found that
for every million dollars invested:
– 36.3 jobs are created in the energy efficiency
sector
– 12.2 in the renewable energy sector
– conventional energy only 7.3 jobs are created.
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PV: Net Job Producer!
Jobs created with
every million
dollars spent on:
– oil and gas
exploration: 1.5
– on coal mining: 4.4
– on producing solar
water heaters: 14
– on photovoltaic
panels: 17
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Jobs
Coal vs. Solar
– Coal only employs 80,000
– By 2010, approximately
70,000 new jobs could be
created as a result of the
increased demand
through the installation of
only one million solar
energy systems (3%).
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People Want Solar
• The Program on International Policy
Attitudes found that the American public
wants the federal budget for renewable energy
research like solar PV to increase by 1090 %.
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Solar Photovoltaics
is the Future
Acknowledgements
• This is the fourth in a series of presentations
created for the solar energy community to
assist in the dissemination of information
about solar photovoltaic cells.
• This work was supported from a grant from
the Pennsylvania State System of Higher
Education.
• The author would like to acknowledge
assistance in collecting information for this
presentation from Heather Zielonka.
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