Graphis of Excess Energy to the Grid

How Solar PV Can Become the Primary Electrical Energy Source

In order to have this discussion, it is necessary to look at electrical energy consumption patterns. Our energy sources have to match the timing of our consumption. The graphs below show the typical daily electrical energy consumption patterns for residential and commercial consumers.

Time of Day End of Hour

 

Overall peak energy consumption is from 2:00 PM to 6:00 PM. Residential peak consumption is from 4:00 PM to 10:00 PM. Peak solar PV production is typically from 9:00 AM to 3:00 PM. The majority of the solar PV energy is being produced during non-peak consumption hours. If the solar PV system is sized to provide base-loads only, this addresses part of the issue. However, it changes the load demand on the utility grid and makes it difficult to maintain stability of the grid voltage and frequency. The chart below shows the changes to the load demand when solar is added to the grid during the peak solar hours of the day.

2012 represents very little solar generation. Each year shows the actual added solar generation effect and projected solar generation effect on total load demand.

It becomes increasingly difficult and expensive for the utility to meet this type of demand load variation. One solution is to face the PV array toward the afternoon sun. This would help with overall consumption patterns but not for residential consumption patterns. It doesn’t address the issue of cloudy days with little or no solar PV generation. This brings in energy storage as the best solution. The energy storage capacity needs to be large enough to absorb the excess solar PV energy produced during peak solar hours.

Overgeneration risk

Energy storage is the only real solution for solar PV to become a primary electrical energy generation source (EEGS). There are several types of energy storage: Batteries are the fastest growing type of energy storage with Lithium-ion being the leader of that group; the conversion efficiency is pretty high (80% to 90%). Pumped water storage has been used by utilities for this purpose in some sectors of the electrical grid; the energy conversion efficiency is a little lower (70% to 80%). Other forms of energy storage such as fuel cells and capacitors may develop further in the near future but they are not competitors at this time.

Battery storage is the most versatile means of energy storage and it is crossing the barrier of cost effectiveness for shifting loads to a different time of day. To effectively compete with the other EEGS, solar PV with energy storage must have a levelized cost of energy (LCOE) that is lower than the other sources. To calculate the LCOE, divide the total cost of energy by the energy generated during the life-cycle of the EEGS. Twenty-five years is the typical life cycle used for PV systems. The cost of energy includes initial cost and all operating costs during the period of analysis. The kilowatt hour of generation during the period of analysis must be de-rated for non-operational hours and the warranted degradation of the PV output.

Examples:

Residential:

8kW PV system with energy storage:       Net Cost: $3.30/W = $26,400

8kW x 5 sun-hours x .85 x 365 days x 25 years x 90% = 279,225 kWh

$26,400 ÷ 279,225 = .094/kWh

Commercial:

500kW PV system with energy storage:  Net Cost: $2.60/W = $1,300,000

500kW x 5 sun-hours x .85 x 365 days x 25 years x 90% = 17,451,562 kWh

$1,300,000 ÷ 17,451,562 = .0745/kWh

Utility:

20MW PV system with energy storage:  Net Cost: $2.00/W = $40,000,000

20,000kW x 5 sun-hours x .85 x 365 days x 25 years x 90% = 698,062,500 kWh

$40,000,000 ÷ 698,062,500 = .0573/kWh

The above examples show LCOE rates that are competitive in some markets but not in all. The installed cost of solar PV is continuing to drop and the energy storage industry continues to improve and reduce costs. As these trends continue into the very near future, solar PV with energy storage will meet and beat the LOCE of most of its competitors in all markets.

Kelly Provence
Certified Master PV Trainer
CEO, Solairgen School of Solar Technology

Is everyone a potential solar PV customer?

The short answer is yes since electrical utility companies generate a portion of their electrical energy from solar energy; indirectly everyone is a solar PV customer if they purchase electrical energy from one of these utilities. The better question is who is a direct customer of a solar energy system; the type that will offset or replace electrical energy that would have been purchased from an electrical utility. To clearly see who these customers are, we need to break them down into categories. The first breakdown is between residential and commercial electrical consumers. The second breakdown is stand-alone off-grid customers and grid connected customers. For this blog we will look at the residential customer, both grid-connected and off-grid.

Residential: To be a potential solar customer they must be owners of the property and they must have enough sun exposed space on the roof or ground to support the PV array relative to their level of electrical consumption. They must also have the financial capacity to purchase the system. The four basic criteria are, (1) ownership of the property, (2) extent of solar exposure for a PV array, (3) % of monthly/annual electrical consumption to be offset by solar and (4) the financial capacity to purchase. With evidence of ownership established, the sun exposed space is compared to their electrical consumption to determine the size of the solar PV system and the approximate electrical consumption it will offset. If a method of payment can be established, this is a potential solar customer. There are however four other factors that should also be considered (5 – 8), (5) utility interconnection limits, fees and purchase rates, (6) rate of financial return on investment and cash flow, (7) building covenants or restrictions and (8) understanding the customer’s motivations. Contact the customer’s utility company and find out all requirements, fees and rates that will be offset by solar electrical production; this affects the type of system, cost of the system and the return on investment. Find out about homeowner’s associations or local ordinances that may restrict or even prohibit the installation of the PV array where it is publicly visible. Most solar customers want to offset their energy bills and save money in the process but there are many other motivators such as environmental concerns with conventional energy, independence from the utility or to be gird connected but consume all the energy generated from the solar PV system and have some off-grid capacity during utility power outages. Look at all eight of these considerations to determine who is a potential solar customer.

Residential off-grid: These customers are typically located in rural areas without utility access. That being the case, we can eliminate considerations 5, 6, and 7 above but #8 become much more important. This customer needs a high level of self-reliance and independence with the solar system. Other forms of power generation should be considered as well such as wind, hydro and a fuel generator.

In a follow-up blog, we will look at the criterial of a potential commercial customer.

Kelly Provence
Solairgen School of Solar Technology

The Good and Bad of Net Energy Metering

MeterRealities in Net Energy Metering (NEM)

The term net metering has several definitions and interpretations. There is one most of us agree on as the standard model – the owner of a solar PV system may offset up to 100% of their electrical energy usage during the course of any one-month period at the retail rate. This is the one that solar contractors and customers like but it is also the one that utilities would like to see go away. There can be some drawbacks for the customer under this NEM.

Monthly metering fees are usually added, monthly processing fees are sometimes added, some utilities require the customer to shift to time of use (TOU) metering under NEM agreements and occasionally the utility will raise the base rate for customers with NEM agreements. The actual rate offset by the PV system is usually less than it appears when these other costs are factored in. Producing energy above the NEM point would be compensated at a lower rate called the “avoided cost rate” or “possible not allowed”.

The average size of the installed PV system offsets at least 50% of the total energy consumed and sends at least 50% of that energy into the grid during midday hours. Without a NEM agreement, the digital meter will charge the customer for the energy sent back into the grid. Even though 50% of the usage is offset at the retail rate, the other 50% will be charged to the customer and the cost of the system will never be recovered.

There are other options but they are not necessarily optimum. Ideally all energy produced by a customer’s PV system should offset load demand and should not flow out into the grid. This can be achieved in one or more ways.

The simplest way is to design the PV system small enough so that the premises consumes all the energy produced. This is easier for a business to do because most of the energy is consumed during the day when the PV system is operating. A typical residence consumes most of its energy during the morning and evening hours (non-solar hours). Because of this, the PV system size should be restricted to offset only around 20% of the total energy consumed; a NEM agreement would not be needed and the monthly fee would be avoided.

Another option is to design the PV system with energy storage. The nice part of energy storage is having some electrical power during an electrical outage. The bad part is that it adds between 50% to 100% more cost to the PV system. The system functions as stand-alone with support from the utility and does not sell any energy to the utility so the NEM agreement and monthly fee is avoided. The big drawback to this type of system operation is that it restricts PV production during midday to prevent overcharge of the batteries.

Smart energy storage systems provide key benefits to NEM. These systems require a battery type that can be left in a partial state of discharge for prolonged periods without causing internal damage to the battery. The systems meter usage and production; energy produced during midday can be temporarily stored and released during the highest TOU rate periods of the day (afternoon and evening). Some smart energy storage systems can prevent the system from selling into the grid; in that case there is no need to participate in an NEM agreement with the utility and the monthly fees can be avoided. Smart energy storage PV systems will cost 100% more than an interactive PV system without energy storage.

Net metering values need to be calculated for each customer, and the effects and benefits will be different for every one of them. There are no one-size fits-all with PV systems and NEM.

Kelly Provence
Solairgen School of Solar Energy
www.solairgen.com