Grid-Connected Solar Electricity

Grid-Connected Solar Electricity
Costs and Economics

Energy Options Behind the Farm Gate
Taber
2009 March 18
Gordon Howell, P.Eng.
Edmonton
Phone: +1 780 484 0476
E-mail: ghowell@hme.ca
Agriculture and Rural Development
1995-2009
(download this presentation from www.hme.ca/presentations)

Solar Energy Project Development Specialists

Content of presentations
z
Chapter 1
Solar Resource
Connecting to the grid
Components
Steps to get your own solar power
system
How does it work

z
Chapter 3
Chapter 2
Performance, size
Costs
Economics
Chapter 4 (your homework)

Get your electricity bills together
Download this presentation from
www.hme.ca/presentations
Take steps to get your own system
Until there is awareness there will be no consensus to change.
Martin Luther King Jr.

America
Background: Energy vs. Power
3.5
3.0
Area of brown bars

= total energy
= 18 kWh/day
= 6600 kWh/year
3.0
Height of brown
bars = hourly
electrical power
consumption [kW]
Area of green rectangle

= 18 kWh/day
2.0
= 6600 kWh/year
1.5
1.4
1.5
1.0
1.0
0.8 0.8
0.7
0.7
10
11
12
18
0.3
0.3
1.2
0.8
0.8
0.7
0.5
0.5
1.5
3.0
0.7
0.5
0.5
1.0
0.4
0.4
0.5
1.1
1.4
0.4
0.3
0.5 0.3 0.4 0.3 0.4 0.4
0.5 0.5 0.5 0.5
0.75
0.5
0.5
0.5
0.5
0.5 0.5
0.5
0.0
Average power
= 0.75 kW
1.2
1.1
0.3
Power [kW]
2.5
Average power used throughout the day,

represents the same amount of energy as
brown lines.
13
17
19
24
Avg
14
15
16
18
20
21
22
23
Time of Day [hour]
Energy = Power x Time

Distance = Speed x Time
kJ == kJ/s
kWh
kW xx hs Solar Energy Project Development
km = km/h
x h
Specialists
Background: Energy vs. Power
3.5
Electric companies need to

design and build their
electricity generating,
transmitting and delivery
systems to generate and
deliver this much electrical
power
3.0
Power [kW]
2.5
3.0
BUT they only get paid

for delivering this much
electrical energy
2.0
The ratio between the

height of the green line
and the height of the
tallest brown bar is the
capacity factor of the
electrical loads.
1.5
1.4
1.5
Area of brown bars

= total energy
= 18 kWh/day
= 6600 kWh/year
1.2
1.1
1.0
1.0
0.8 0.8
0.7
0.7
0.5 0.5
0.5
0.5 0.3 0.4 0.3 0.4 0.4
0.5 0.5 0.5 0.5
0.75
0.5
0.3
0.0
1
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Avg
Time of Day [hour]

PV System Capacity Rating

z
PV system sizes are shown as the number of kilowatts [kW] of

rated ability to generate electrical power (not energy).
2.4 kW typical size for a house (12 modules of 200 W each)
6.1 kW approximate size to supply all electricity for an average
house (36 modules of 170 W each)

0.1 kW smallest grid-connected system (1 module of 100 W)
11,000 kW biggest grid-connected system (150,000 kW ones are
under development) (36,650 modules of 300 W each)
Efficiency can save 75 percent of our electricity at a

Amory Lovins, 2006
Solar Energy Project
Development
Specialists
lower cost than making it at existing power plants.
Rocky
Mountain Institute

PV System Yield =
z
# of hours that the PV system effectively operates at its rated capacity in

order to generate its energy
Energy per year
rated generating capacity
kWh/year
hours
=
kW
year
Solar power system performance is affected by

z
z
z
z
z
z
tilt angle and orientation angle (or whether it is tracking the sun)
latitude and location of site
shading (trees, obstructing objects, buildings, snow cover)
soiling
PV module mis-match (keep them all the same)
Inverter and wiring efficiency
For more detailed calculations use the RETScreen analysis spreadsheet

free from Natural Resources
Canada www.retscreen.net

PV System Energy Production

z
System yield
Edmonton:
~1000 hours / year, south facing at optimum tilt angles

Calgary:
~1100 hours / year
Medicine Hat: ~1250 hours / year (similar to Taber and Lethbridge)
Could be reduced by 30% to 50% by shading and non-optimal
orientation.
z
Example calculation
3 kW solar PV system
x 1250 hours/year
= 3750 kWh/year of energy
Socialism collapsed because it did not allow the market to tell the economic truth.
ystein Dahle
Solar
Capitalism may collapse because it does not allow
theEnergy
market Project
to tell theDevelopment
ecological truth.Specialists
Exxon Norway

Rough PV array capacity

z
Add up your electricity consumption for 1 year or 2 years.
Use the performance numbers to determine your system capacity:

a) Your annual electricity consumption = _____________ kWh/year
b) PV performance is ~1250 hours/year in Taber for optimal tilt and
orientation angles
c) Find # of kW of capacity for 100% solar electricity = ________ kW
[= a) divided by b)]
d) Portion of your electricity that you want from the sun = _____%
e) Your PV array capacity = ________ kW
[= c) multiplied by d)]

PV Array Area
z
Use this to find the area of your PV array:

a) PV module efficiency:
13% to 17%
b) Module production-area:
130 to 170 W/m2 [= a) x 1000 W/m2]
c) Your PV array capacity:
_____________ kW
d) Your PV array area:
_____________ m2
Anyone who thinks they are too small to make a difference

African
Solar Energy ProjectProverb
Development Specialists
has never spent the night with a mosquito.

What to look for with PV prices

z
Modules
Price divided by rated power:
$/ W
Example: 200 W PV module for $1000 is $5 / W
Typically:
$4 to $6 / W wholesale,
$7+ / W retail
z
Inverter
Price divided by rated power:
Example: 6000 W inverter for $3400 is
Typically:
$/W
$0.57 / W
$0.50 to $0.80 / W
System
Small off-grid system:
$30 / W
House-sized off-grid system:
$20-$30 / W
On-grid system:
$8-$12 /W
Your system:
_______ kW x $_____/ W = $______k
10

PV System Sizing and Costing Summary

1.
If you consume 6000 kWh of electricity per year, then, for example:
You need a 5 kW PV array
2.
(6000 kWh/year / 1200 h/year)
Area of 5 kW PV array
31 m2 (5 kW/ 16% module eff.)
It will cost you $42,500
(5 kW x $8.50 / W * 1000)
If you spend $3000 on electrically efficient appliances, and thus only

consume 4000 kWh of electricity per year, then:
You need a 3.3 kW PV array(4000 kWh/year / 1200 h/year)
Area of 3.3 kW PV array
21 m2 (3.3 kW/ 16% module eff.)
(3.3 kW x $8.50 / W * 1000)
Spend $3000 on electrically efficiency saves you $14,000 on solar PV

11

PV System Sizing and Costing Summary

z
If you consume 120 kWh of electricity per month, this equals 1440 kWh
per year, then:
You need a 1.2 kW PV array
(1440 kWh/year / 1200 h/year)
Area of 1.2 kW PV array
7.5 m2 (1.2 kW/ 16% module eff.)
(1.2 kW x $9 / W * 1000)
12

System Cost Proportions

z
For large systems

60% to 65% for PV modules
20% installation
10% module mounting
5% to 7% inverter
4% design, regulatory approvals,
commissioning and project management fees
1% miscellaneous
The above % amounts vary with different

installation costs
13

Reducingyour
electricity
bills with
solar PV
the most
expensive
way
Where is it?
Purchased
Electricity
100%
Conventional
Electricity
#1
#2
#2
Inexpensive,
reliable energy
efficiency
75%
50%
Add
expensive
solar
electricity
Cost: $60k
(and decreasing)
25%
Net zero
electricity
home
0%
Conventional
Renewable
Efficient
Energy
Efficient &
Renewable
I am what I am not because of what I should be or have to be

but because what I am made to be.
14

Reducingyour
electricity
bills with
solar PV
the least
expensive
way
Purchased
Electricity
100%
Conventional
Electricity
#1
#2
#3
Inexpensive
energy efficiency
75%
(but
energy
efficiency is
emotionally
boring)
More
expensive
solar
electricity
50%
25%
Cost: $30k
(and decreasing)
0%
Conventional
Efficient
Efficient
Efficient&&
Efficient
Renewable
Renewable
Net zero
electricity
home
We have greatness within us -- innovative, giving, determined.

Solar Energy
It isProject
time for Development
the best in us toSpecialists
come out.
15

Reducing your
bills way
with solar PV
theelectricity
most exciting
Purchased
Electricity
100%
Conventional
Electricity
#1
#2
#3
Solar
electricity
75%
More
expensive
yeah, but
really exciting
Energy
efficiency:
most important,
least expensive
50%
25%
Cost: $30k
(and decreasing)
0%
Conventional
Renewable
Efficient
Energy
Efficient
Efficient &
&
Renewable
Renewable
Net zero
electricity
home
Energy efficiency is todays biggest global economic challenge.

Energy Project Development Specialists
Office of Energy Efficiency, Natural ResourcesSolar
Canada
16

How much solar equipment is needed?

z
Depends on your electricity consumption, goals for energy saving, budget,

location, sightlines and array angles.
Typically for 100% grid-connected solar electricity:

Household
Consumption Value
kWh/year $/year
large user
14,000
$1680
average
6600
$790
electrical wise 4000
$480
very efficient 2000
$240
PV system size PV system cost

# modules**
$
58
~$90 000
28
~$47 000
17
~$28 000
8
~$17 000
Average household, 100% off-grid solar with no backup $150 000+???
** assuming 200 W PV modules,

1200
hours
per
year ratedSpecialists
run-time
Solar
Energy
Project
Development
17
Profiles: Consumption and PV Generation

Active Power [kW]
when is it importing, when is it exporting?

2.6
2.4
2.2
2.0
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
What Really Happens?
Avg
Avg
P V system generatio n
Ho use electricity co nsumptio n
Solar energy:
Rated yield:
12
15
18
21
Tim e of day
Electrical consumption:
[hours]
190 W/m2,
4.6 sun-hours
3.2 hours of operation
773 W,
Solar PV generation:
312 W,
Portion of load supplied by PV: 40%
Excess electricity exported:
30%,
Deficit electricity imported:
72%,
24
18.6 kWh
7.5 kWh
2.2 kWh
13.3 kWh
18
How does "net metering" work?

Energy Retailer
& Electric Wires
Company
("net metering" means "running your meter backward")
- as solar power system owners see it

Exported electricity is carried to neighbour without extra
carriage fees, and displaces the electricity that would
have been otherwise provided by the Energy Retailer.
Electricity
distribution lines
1 kWh
Electricity
paid in full
1 kWh
2
1
Import
kWh
1 kWh
PV system owner runs the meter

backwards, sending the previously
imported electricity back for full
Export credit. In effect, the PV system
owner stores the Energy
Retailer's electricity but without
charging any storage fee.
Neighbour pays the ER and

the EWC full fees for the
4
electricity and its delivery.
kWh
Ordinary kWh
meter
Ordinary kWh meter

(goes both ways)
Neighbour
PV system owner
1 kWh supplied, 1 kWh paid for
1995-2009
19
How does net metering work?
Energy Retailer
& Electric Wires
Company
1 kWh
- how the Energy Retail sees it

The Electric Wires Company "stores" in its wires the
PV electricity produced in the daytime.
3
4
1 kWh
Electricity
paid in full
2
1
Import
PV system owner runs the meter

backwards, reversing the full charges for
the same amount of previously
imported electricity.
Export
Electricity
distribution lines
1 kWh
The Electric Wires Company
"re-delivers" the exported
electricity back to the PV
system owner at night,
offsetting the amount
exported in the daytime.
kWh
Ordinary kWh meter
(goes both ways)
Some Electric Wires Companies have said
that by reversing the meter, the PV system
owner steals electricity from the Energy
Retailer, the electricity that was previously
sold and delivered in step 1.
PV system owner
1995-2009
20
How does net billing work?
Energy Retailer,
Electric Wires
Company
Electricity is delivered to your neighbours by your

Electric Wires Company for their normal delivery fee.
3
1 kWh
1 kWh
1 kWh
1
2
Electricity
paid in full
12 /kWh
Import kWh
Electrical
energy credit
Electricity
paid in full
~10.5 /kWh
12 /kWh
Energy Retailer sells your

energy to your neighbour
for full retail price.
kWh
Export
Bidirectional
kWh meter
Electricity
distribution wires
Ordinary 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
- a premium feed-in (green) price.

PV system
owner
1995-2009
21

PV Economics
For a 5.6 kW system at $8.50 / W, system installed cost =

$47,000
Simple payback (cost/annual savings)
= 55 years (Calgary)
= 1.8% return on purchase costs
But only if
Financing costs are ignored

Increases in grid-electricity prices are ignored
Environmental, social and infrastructure benefits are ignored
22

Economics Indicators
z
Payback
easy to calculate
a bit of a red herring number
though everyone loves to have that

number
not much with which to compare
z
Return on Investment
can compare with stock market and
bank interest rates

z
Energy price (/kWh)

easy to understand and use
easy to compare with other values
complex to calculate
23
Consumer Price of Electricity Edmonton

15
14
California electricity issues
13
12
11
10
/kWh
9
8
7
6
5
4
3
2
1
rising at 4.8% per year

though there are increases of 5% to 20% in
the last few years as the government weans
us off the regulated rate option (RRO)
0
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
24

Declining PV Prices, Increasing Grid Prices

Solar PV Price
z unsubsidized
z no environmental
side-effects
25 /kWh
(PV using your own money)
12 /kWh
(2008 grid price
in Edmonton)
Grid Parity
Grid-Electricity Price
z highly subsidized
z fossil fuel
electricity does
not pay for the
damage it causes
to the
environment and
health care
2008 2015
Grid parity: Utility Solar Assessment Study
www.cleanedge.com, www.solarcatalyst.orgSolar Energy Project Development Specialists
25

Effect of Interest Rates on PV Energy Pricing

90
80
70
85 /kWh
Low-interest green loans have a very
significant affect on PV energy price
74.1
64.5
/kW h
60
50
85.1
56.4
49.4
25 /kWh
43.5
38.4
40
34.1
30.5
30
24.9
27.5
20
Grid
= 12 10
/kWh
0
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
Interest Rate [%/year]
3.5%
4.0%
4.5%
5.0%
26
Grid Parity in 2022
Price of Grid Electricity

Price of PV Electricity
/kWh
50
no PV subsidies
continuing fossil-fuel subsidies
45
40
35
Grid
parity
30
25
20
15
10
5
0
2008
2009
2010
2011
2012
2013
2014
2015 Energy
2016 2017Project
2018 2019
2020 2021 Specialists
2022 2023 2024 2025
Solar
Development
27
Grid Parity in 2011
/kWh
40
35

$15/T GHG levy

20 /kWh feed-in-tariff
$1/W drop in 2001 due to giant
factories
1% green loan interest rates
30
Grid
parity
25
20
15
10
0
2008 2009
2010
2011 2012
2013 2014
2015
2016 2017
2018
2019 2020
2021 2022
2023
2024 2025
28
Grid Parity Today, ROI 4%

/kWh
70
Grid
parity

80 /kWh feed-in tariff with 70% PV export
60
50
40
30
20
10
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
29

Context: Challenges with Solar Energy

z
Purchase costs are very 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-fired

utility electricity
Little previous consistent interest by governments in developing

policies and technology assistance programmes
Regulatory barriers slowly being resolved
Insanity is doing the same thing over and over

Benjamin
Solar
Energy Project Development Specialists Franklin
and expecting different
results.
30

Organisational Questions
z
Policies are answers to organisation questions

The changes to achieve this relate to how we want to organise
ourselves, they are not technical.
How do we want to organise ourselves as a society?

Do we want to continue to subsidise fossil fuels with our health care
budgets?
Do we want to value the environment, and thus put a money value
on it?
Do we want to encourage massive amounts of personal distributed
generation?
31

How do we want to organise ourselves?
Socialism collapsed
because it did not allow the market to tell the
economic truth.
Capitalism is heading the direction of collapsing

because it does not allow the market to tell the
ecological truth.
ystein Dahle
Exxon Norway
32

Government Response to our Solar Resource

Policies that facilitate
Now the new micro-generation regulation
Policies that subsidize
None
Development programmes
industrial capacity,
infrastructure, regulations,
research, standards, issues
None
Taxation policies
Solar power is treated like an industrial

power generator industrial taxes are 4x
the value of the electricity generated!
Policies that subsidize

competing
energy sources
Natural gas rebates in the winter

Low oil, gas, and coal royalty rates
Tax holidays for the tar sands
No environmental royalties !!
33

Government Policies
their policies need to facilitate change
instead of blocking change
z
z
z
z
z
z
z
Value the environment, and so place a value on it

Allow full cost recovery of all electricity fed into the grid
Value increasing Canadas solar industrial capacity
Mandate full-cost accounting for all energy sources
Remove fossil fuel subsidies
Require fossil fuels to pay for their environmental
damage
Provide ultra-low interest green loans
34

Characteristics of Solar Electricity

z
Proven technology
thousands of systems across Canada
Can provide energy security and independence
Inflation-proof
Political-proof
No noise
No emissions
Low or zero maintenance costs
When one tugs at a single thing in nature,

John Muir
Solar
you find it attached to the rest of the
world.
Conservationist
35

Why Use Solar Electricity?

Utility Costs
z
Reduce electricity bills you pay for solar electricity equipment up front
Reduce vulnerability to up and down electricity prices
Environmental Footprint
z
Reduce how much air pollution you cause from electricity generators to
emit on your behalf
Increase the reserve of coal and natural gas you leave for the next
generation
Political will arises from personal momentum

Energy
ProjecttoDevelopment
Specialists
We Solar
need to
be the leaders
our governments
and corporations.
36

Why Use Solar Electricity?
Social Opportunity
z
Provide the leadership that we need
Encourage the government to facilitate it instead of blocking it
Business Opportunity
z
Serve the growing public interest
Serve the multi-billion $ world markets
The superior man seeks what is right;

Confucius
the inferior one, what isSolar
profitable.
37
we hold our
childrens' future
in our hands
Download this presentation

and others from
www.hme.ca/presentations
Photo credits: Gordon Howell and several others
But will
they want
to live in
what we
are giving
to them?
Gordon Howell, P.Eng.

Howell-Mayhew Engineering
Edmonton
Phone: +1 780 484 0476
E-mail: ghowell@hme.ca
38
1995-2009

Grid-Connected Solar Electricity - Costs and Economics-Ok

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Costs and Economics

Agriculture and Rural Development

(download this presentation from www.hme.ca/presentations)

Energy Options Behind the Farm Gate

Connecting to the grid

Steps to get your own solar power

How does it work

Chapter 4 (your homework)

Until there is awareness there will be no consensus to change.

Martin Luther King Jr.

Energy Options Behind the Farm Gate

Background: Energy vs. Power

Agriculture and Rural Development

Area of brown bars

Area of green rectangle

0.5 0.3 0.4 0.3 0.4 0.4

0.5 0.5 0.5 0.5

Average power used throughout the day,

Time of Day [hour]

Energy = Power x Time

Energy Options Behind the Farm Gate

Background: Energy vs. Power

Agriculture and Rural Development

Electric companies need to

BUT they only get paid

The ratio between the

Area of brown bars

0.5 0.5 0.5 0.5

Time of Day [hour]

Solar Energy Project Development Specialists

Energy Options Behind the Farm Gate

PV System Capacity Rating

PV system sizes are shown as the number of kilowatts [kW] of

house (36 modules of 170 W each)

under development) (36,650 modules of 300 W each)

Efficiency can save 75 percent of our electricity at a

Energy Options Behind the Farm Gate

# of hours that the PV system effectively operates at its rated capacity in

rated generating capacity

Solar power system performance is affected by

For more detailed calculations use the RETScreen analysis spreadsheet

Energy Options Behind the Farm Gate

PV System Energy Production

~1000 hours / year, south facing at optimum tilt angles

Energy Options Behind the Farm Gate

Rough PV array capacity

Add up your electricity consumption for 1 year or 2 years.

Use the performance numbers to determine your system capacity:

Energy Options Behind the Farm Gate

Use this to find the area of your PV array:

130 to 170 W/m2 [= a) x 1000 W/m2]

c) Your PV array capacity:

d) Your PV array area:

Anyone who thinks they are too small to make a difference

Energy Options Behind the Farm Gate

What to look for with PV prices

Energy Options Behind the Farm Gate

PV System Sizing and Costing Summary

(6000 kWh/year / 1200 h/year)

31 m2 (5 kW/ 16% module eff.)

It will cost you $42,500

If you spend $3000 on electrically efficient appliances, and thus only