Calculating A Nation s Economic Solar Potential General Methodology And Results For The United States

Transcription

1 Calculating A Nation s Economic Solar Potential General Methodology And Results For The United States Richard Keiser May 14, 2012

2 Why Is This Important? How Should We (e.g., Spain) Most Economically Meet Our CO2 Emissions Targets? What Types Of Energy Policies Are In Our Country s Best Interest? Low Variability = Industrial Stability = Lower Cost How Quickly Should We Expect New Technologies To Be Adopted? How Much Will Our Policies Cost?!?! 2

3 Solar PV Cost Solar PV Cost vs. Solar PV Competitiveness Determines the cost of solar PV Electricity: LCOE $/W to $/kwh Says Nothing about whether solar PV is competitive Solar PV Competitiveness Comparison between the cost of PV electricity And the retail price of electricity $/kwh solar PV cost vs. $/kwh retail price Must be evaluated on a market-by-market basis 3

4 Drivers Of Solar PV Cost Cost Drivers Installed Cost Operating Cost Net Tax/Depreciation benefits (Incentives) Electricity Drivers Irradiation (kwh/m 2 ) Conversion losses (DCto-AC) Module Degradation = [(Installed Cost) (Tax/Depreciation- + (Operating Cost) - - Related Benefits) [(Irradiation) x (Conversion Losses) x (1-Degradation) ] t (Incentives) ] t 4

5 Total Installed Cost ($/W) Solar PV Cost Varies Significantly By Geography / Country $6.00 Solar PV Electricity Cost Vs. Installed Cost And Irradiation (Debt = 40%, Rate i = 6%, Term = 15Y, Rate d = 10%) $5.50 $5.00 $4.50 Germany US Morocco 2200 kwh/m kwh/m kwh/m kwh/m kwh/m2 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $ Solar Electricity Cost (Cents / kwh) Source: Keiser Analytics analysis 5

6 Solar PV Electricity Cost Must Be Compared To Retail Electricity Prices Electricity Consumption (billion kwh) Distribution Of U.S. Electricity Consumption, Volume By Price (2012E, Smoothed; Total Demand = 3,893 billion kwh) Cents / kwh Source: Keiser Analytics Industrial Commercial Residential Total 6

7 How To Calculate A Nation s Economic Solar PV Potential? Input Data: Installed Cost (Control Variable), Irradiation, Incentives, Retail Price of Electricity Assumptions: Rate of change of electricity consumption and price Direct consumption, net-metered rate Economic Model: Compare (1) NPV of all future purchases to the utility to (2) all costs and benefits associated with a PV array 7

8 Demand Can Be Economically Served By Solar PV When NPV 0 Summary Of Economic Model Structure Base Case vs. Install Solar PV NPV of all payments to NPV of all payments to the electric utility the electric utility + NPV(electricity generated and consumed locally x rate) + NPV(electricity generated locally and sold to utility x rate2) - NPV(all costs of building the solar array) + NPV(solar incentives; if applicable) Source: Keiser Analytics analysis 8

9 Point Example: At $2.50/W, 19b kwh Of FL Electricity Consumption Can Be Met With PV 9

10 At $3/Watt, Over 400 Billion kwh Of Demand Could Be Economically Served By Solar PV Summary Of US Distributed Solar PV Potential (2012E) Electricity Economically Served By Distributed Solar PV (Billion kwh) Equivalent Solar PV Capacity (GW) Solar Installed Cost ($/watt) Without the ITC With the ITC Without the ITC With the ITC $ $ $ $ $ $ $ $ $ , $ , ,438 $1.00 2,207 3,291 1,629 2, /11 Cost Range 2012 Cost Range Source: EIA, NREL, Keiser Analytics analysis 10

11 Electricity Consumption (billion kwh) Electricity Consumption Curve + Solar PV Cost = Potential PV Demand Solar PV Installed Cost ($/watt) Distributed Solar PV Demand: The Intersection Of U.S. Electricity Prices And Solar PV Installed Cost ($/watt) 800 $ Electricity Consumption That Can Be Economically Addressed With Distributed Solar PV ($4/W to $3/W > 300GW) 2. Solar PV Electricity Cost (with ITC) $6.00 $ B $4.00 $ U.S. Electricity Consumption Distribution (4 trillion kwh) A $2.00 $ $ Retail Electricity Price (US Cents/kWh) U.S. Electricity Consumption Electricity Consumption Addressible With Solar PV Solar PV Electricity Cost 11

12 Thank you!