Victor Alfonso MSRE 517 Feb. 25, 2014 University of San Diego MSRE Program Photovoltaics Image Source: techhamlet.com
Photovoltaics Photovoltaics ( PV ) utilizes solar cells that act as semiconductor devices to convert sunlight into DC electricity Sun light is absorbed by the n type layer, causing electrons to disconnect from the atoms Disconnected electrons flow to the absorber or p type layer N type layer becomes positively charged, p type layer negatively charged Electrons are forced to flow back from p type layer to n type due to p n junction, creating a direct electric current Images Source: solarlove.org
Photovoltaics DC electricity passes through an inverter where it is converted to AC AC electricity from the inverter is sent to the main circuit breaker panel for the home Excess electricity can be stored or sent back to grid Image Source: http://buckscountycleanenergy.com/
Photovoltaics Inverters Central ( String ) Inverters Typical Cost: $0.18 $0.25/W 10 15 year warranty Modules are connected in a series The entire array is jeopardized by one module 9% shading can result in 54% array performance loss Micro Inverters Located on each module Typical Cost: $0.35 $0.45/W 20 25 year warranty Easily pinpoint issues (independently controlled modules) Images Source: www.renewablegreenenergypower.com
Photovoltaics The U.S. Market Q3 13: 35% growth vs prior year / 420% growth vs Q3 10 Dramatic utility growth in 2 years (SDG&E: Top 4 in US in Q3 13) CA, AZ, NC, MA, NV top 5 states in US for PV installations Graph Source: http://seia.org/
Photovoltaics Benefits Benefits of Photovoltaics Fuel (sunlight) is free No noise or pollution Minimal maintenance Long service lifetime (25+ years) Modular / Expandable Transportable (in some cases) No moving parts Excess electricity generated can be sold back to utility grid or stored
Photovoltaics Challenges Challenges of Photovoltaics Upfront costs remain high Inconsistent fuel source (dependent upon sun light exposure) Requires cleaning and maintenance Large surface area required (inefficient) Lack of storage capability without battery Utility grid constraints (Hawai i, Germany)
Photovoltaics Economics Economics are driven by four main factors: System cost: Component, installation and maintenance costs Financing: Ownership, term, real interest rates Incentives: Federal tax credit, state rebates, state and utility production incentives System performance: Efficiency, maintenance & service, sunlight Graph Source: http://seia.org/
Photovoltaics Financing Financing Structures: Self Financing Cash Home Equity Loan (HEL), or Home Equity Line of Credit (HELOC) Cash out mortgage refinancing (COMR) Third Party Ownership (Private Sector) Power Purchase Agreements Solar Leases Utility and Public Financing: Utility Financing Public loans (credit enhanced and revolving loan) Property Assessed Clean Energy (PACE)
Photovoltaics Third Party Owned Power Purchase Agreements: Solar Finance Company (SFC) designs/purchases/installs/maintains the system Homeowner purchases energy at a specified rate (fixed or escalations) Moving can get complicated: buy out (15 20 yr. contract) or transfer to new buyer Low availability due to local incentives and rebates needed to make pricing competitive Solar Leases: Similar to PPAs except homeowner makes monthly lease payments (fixed or escalation); no electricity is sold Graph Source: http://seia.org/
Photovoltaics Utility/Public Financing Utility Loans: On bill Financing: Customer repays principal + int. on utility bill (tied to borrower) Metered Secured: Typically separate bill; loan is tied to the meter/property Public Loans: Credit enhanced: 3 rd party capital (bank) funds a portion of the loan, local gov. either funds the remainder or provides a credit enhancement for lender s portion Loan loss reserves, subordinated debt, interest rate buy down Revolving Loan Funds: Initially funded by appropriations or public benefit funds, provides direct loans to the homeowner that is replenished by the loan payments PACE (Property Assessed Clean Energy): Local gov. creates special tax assessment district Homeowners can opt in, thus agreeing to a senior tax lien on property in exchange for funds for approved projects Homeowner repays via property tax payments Image Source: http://nrel.gov/
Photovoltaics Incentives Federal Incentive: 30% of installed cost as tax credit, no max State/Utility Incentives:
Photovoltaics Technology Crystalline Silicon PV: Solar cells that are cut from either a single silicon crystal (mono) or a block of silicon that has multiple crystals (poly) Image Source: solarcellcentral.com; Graph Source: solarbuzz.com
Photovoltaics Technology Polysilicon Module Pricing 2010 to 2013 Image Source: www.greentechmedia.com
Photovoltaics Technology Polysilicon Module Pricing 2013 to 2017 Estimates Image Source: www.greentechmedia.com
Photovoltaics Technology Thin film PV: Thin layers of amorphous silicon (a Si), cadmium telluride (CdTe), copper indium gallium (CIGS) or Dyesensitized solar cells (DSC) Image Source: solarcellcentral.com; Graph Source: solarbuzz.com
Photovoltaics Technology Single junction silicon efficiency has matured, while Thin Film has considerable room for improvement: *CdTe Thin Film Image Source: www.greentechmedia.com
Photovoltaics Technology Monocrystalline Polycrystalline Amorphous (Thin Film) CdTe (Thin Film) CIS/CIGS (Thin Film) Typical Module Efficiency Best research efficiency Area required for 1 KWp Lowest price/watt (module only) Temp Resistance 17 22% 14 18% 7 9% 10 14% 11 13% 25.0% 20.4% 13.4% 19.6% 20.8% 6 9m 2 8 9m 2 13 20m 2 11 13m 2 9 11m 2 $0.75/watt $0.55/watt $0.69/watt $0.59/watt 10 15% perf. drop in high temps More tolerant than mono Tolerates extreme heat Tolerates extreme heat Tolerates extreme heat
Photovoltaics Technology Image Source: www.nrel.gov
Photovoltaics The Future Perovskite Calcium Titanium Oxide mineral as absorption material 3% efficient in 2009, 16%+ today Can be semi transparent (façade applications, solar paint?) Sustainable and abundant; potential for <$0.15/watt Challenges: durability, degradation and device toxicity Quantum Dots Nanocrystals made of semiconducting materials Generates more electrons than absorbed photons Potential for 66% efficiency Same challenges as perovskite Image Sources: http://geotech.com, http://ee.t.u tokyo.ac.jp
Photovoltaics Payback Considerations Payback Considerations: Local incentives (very difficult to achieve <7 year payback without them) Current utility prices and how much to forecast utility price increases in the future Solar panel degradation typically 0.5%/year Accelerated Depreciation: Accelerated Depreciation via the Modified Accelerated Cost Recovery System Photovoltaic systems are eligible for a cost recovery period of 5 years Significant tax implications (and thus demand driver) for businesses Tax Strategy for REITs: Taxable REIT Subsidiary (TRS) REITs aren t allowed to be in the business of selling electricity; a TRS can be setup TRS can take advantage of federal and local tax grants and incentives TRS makes money by selling the property electricity at the equivalent utility rate TRS pays the property rent to use roof space (rent payment has net zero effect) Image Source: http://nrel.gov/
Photovoltaics Payback Model
Questions?
References Solar Market Insight 2013 Q3 http://www.seia.org/research resources/solar marketinsight 2013 q3 Photovoltaic (Solar Energy) http://www.seia.org/policy/solar technology/photovoltaicsolar electric Solar Explained http://www.eia.gov/energyexplained/index.cfm?page=solar_home Palmer, Roxanne (2013). Solar Power Growing Pains: How Will Hawai i and Germany Cope with the Boom in Alternative Energy? http://www.ibtimes.com/solar power growing painshow will hawaii germany cope boom alternative energy 1518702 Federal Tax Credits for Consumer Energy Efficiency http://www.energystar.gov/index.cfm?c=tax_credits.tx_index State Tax Incentives (Slide 15) http://www.dsireusa.org/summarymaps/index.cfm?ee=1&re=1 Speer, Bethany (2012). Residential Solar Photovoltaics: Comparison of Financing Benefits, Innovations and Options. http://www.nrel.gov/docs/fy13osti/51644.pdf Rinaldi, Nicholas (2013). Solar PV Module Costs to Fall to 36 Cents per Watt by 2017 http://www.greentechmedia.com/articles/read/solar pv module costs to fall to 36 cents perwatt
References Osborne, Mark (2013). First Solar Hits Cost Reduction Milestone http://www.pvtech.org/news/has_first_solar_retaken_the_lowest_cost_pv_manufacturer_mantle Maehlum, Mathias (2013). Solar Comparison Chart http://energyinformative.org/solar cellcomparison chart mono polycrystalline thin film/ Arzvizu, Dan (20120). Solar Photovoltaic Technology Status, Challenges and Promise. http://www.nrel.gov/director/pdfs/12062012_solar_pv_technology_status.pdf Fehrenbacher, Katie (2013). Introducing New Solar Gear That Could Change The Game http://gigaom.com/2013/03/26/introducing new solar gear that could change the game/ Inverter, Storage and PV System Technology http://www.pv systemtech.com/fileadmin/user_upload/2013/pdf/insyst13_gw ES.pdf Zyga, Lisa (2014). Perovskite Solar Cells Become Even More Promising with Cheaper Materials. http://phys.org/news/2014 01 perovskite solar cells cheaper materials.html NRL Achieves Highest Open Circuit Voltage for Quantum Dot Solar Cells. http://phys.org/news/2013 09 nrl highest open circuit voltage quantum.html Wesoff, Eric (2013). First Solar s CTO on Improving PV Module Performance. http://www.greentechmedia.com/articles/read/slide Show First Solars CTO on Improving PV Module Performance