Economics of Photovoltaic Systems

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Economics of Photovoltaic Systems
Original Presentation by J. M. Pearce, 2006
Email profpearce_at_gmail.com
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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 lt
0.03 per kW-hr
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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 Stationsand 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?
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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
World PV installations in 2004 rose to 930MW --
growth of 62 Consolidated world production of
PV now 1.15 GW
Source PV News, March 2003
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PV System vs. Electricity Costs
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What you can do

• Energy consumers would sign up on
  www.iwillifyouwill.org
• Give names, addresses, phone numbers, email
  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
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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 lt3).
• 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
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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.